DiaMedica Inc.
TSX VENTURE : DMA

DiaMedica Inc.

June 24, 2008 14:25 ET

DiaMedica is to Raise Approximately $2.0 Million

WINNIPEG, MANITOBA--(Marketwire - June 24, 2008) - DiaMedica Inc. (TSX VENTURE:DMA) ("DiaMedica" or the "Company"), a drug discovery and development company focused on novel treatments for Type 2 diabetes, today announced that it has filed a preliminary short form prospectus in connection with the offering of a minimum of 1,250,000 common shares and a maximum of 2,500,000 common shares at a price of $1.20 per common share to raise minimum gross proceeds of $1.5 million and maximum gross proceeds of $3 million (the "Offering"). The Offering is being led by Dundee Securities Corporation and includes Loewen, Ondaatje, McCutcheon Ltd. (collectively, the "Agents").

The closing of the Offering is expected to occur on or about July 18, 2008 and is subject to receipt of all necessary regulatory approvals, including TSX Venture Exchange approval.

The Company has agreed to pay the Agents a cash commission of 9% of the proceeds raised from the Offering.

The net proceeds of the Offering will be used to fund the Company's ongoing research and development programs, including clinical trials for its lead products, DM-71, DM-83 and DM-99, and for general working capital purposes.

THE COMPANY'S COMMON SHARES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS ABSENT REGISTRATION OR AN APPLICABLE EXEMPTION FROM U.S. REGISTRATION REQUIREMENTS.

About DiaMedica

DiaMedica is developing novel treatments for various stages of type 2 diabetes. The Company completed a successful phase IIa clinical trial with its lead product DM-71 which demonstrated the ability to reduce HbA1c levels and weight in man. The Company has two other drugs in its clinical pipeline, DM-83 and DM-99, both of which will be completing phase II trials in 2008.

Caution Regarding Forward-Looking Information

Certain statements contained in this press release constitute forward-looking information within the meaning of applicable Canadian provincial securities legislation (collectively, "forward-looking statements"). These forward-looking statements relate to, among other things, our objectives, goals, targets, strategies, intentions, plans, beliefs, estimates and outlook, including, without limitation, our anticipated future operating results, and can, in some cases, be identified by the use of words such as "believe," "anticipate," "expect," "intend," "plan," "will," "may" and other similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements.

These statements reflect management's current beliefs and are based on information currently available to management. Certain material factors or assumptions are applied in making forward-looking statements, and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things: DiaMedica's early stage of development, lack of product revenues and history of operating losses, uncertainties related to clinical trials and product development, rapid technological change, uncertainties related to forecasts, competition, potential product liability, additional financing requirements and access to capital, unproven markets, supply of raw materials, income tax matters, management of growth, partnerships for development and commercialization of technology, effects of insurers' willingness to pay for products, system failures, dependence on key personnel, foreign currency risk, risks related to regulatory matters and risks related to intellectual property and other risks detailed from time to time in DiaMedica's filings with Canadian securities regulatory authorities, as well as DiaMedica's ability to anticipate and manage the risks associated with the foregoing. Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this news release, as well as under the heading "Risk Factors" contained in DiaMedica's annual information form dated May 23, 2008. DiaMedica cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on DiaMedica's forward-looking statements to make decisions with respect to DiaMedica, investors and others should carefully consider the foregoing factors and other uncertainties and potential events.

These risks and uncertainties should be considered carefully and prospective investors should not place undue reliance on the forward-looking statements. Although the forward-looking statements contained in this press release are based upon what management believes to be reasonable assumptions, DiaMedica cannot provide assurance that actual results will be consistent with these forward-looking statements. DiaMedica undertakes no obligation to update or revise any forward-looking statement, except as required by securities legislation.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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