DiaMedica Inc. Announces Filing of Final Prospectus

MINNEAPOLIS, MINNESOTA--(Marketwired - Dec. 16, 2013) -

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

DiaMedica Inc. (TSX VENTURE:DMA), announced today that it has filed a final short form prospectus, dated December 13, 2013 relating to its previously announced offering (the "Offering") of units of the Company (the "Units"). The Company will offer 2,778,000 Units at a price of $0.90 per Unit for gross proceeds to the Company of $2,500,200. The Offering is being placed on a commercially reasonable efforts agency basis by Jordan Capital Markets Inc. (the "Agent"). The Company has granted to the Agent an option exercisable in whole or in part at any time within 30 days of the closing date of the Offering, to increase the number of Units offered by up to 15% on the same terms and conditions.

DiaMedica intends to use the net proceeds from the offering for research and development, including a Phase II clinical trial for Type 2 diabetes, for manufacturing activities in support of such research and development programs and for working capital and general and administrative purposes as described in the prospectus.

Each Unit will consist of one common share in the capital stock of DiaMedica (a "Common Share") and one half of one common share purchase warrant (each whole warrant, a "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share for the price of $1.10 within two years from the closing date of the Offering, subject to an acceleration of the expiry date of such Warrants in certain circumstances as more particularly described in the Prospectus.

The Company has received the conditional approval of the TSX Venture Exchange (the "Exchange") for the listing of Common Shares forming part of the Offering. Listing is subject to DiaMedica satisfying all requirements of the Exchange.

The closing of the Offering is anticipated to take place on or about December 20, 2013, or such other date as the Agent and DiaMedica may determine.

About DiaMedica

DiaMedica Inc. (TSX VENTURE:DMA) is a biotechnology company developing first-in-class treatments for the treatment of diabetes. DiaMedica's lead compound, DM-199, is a recombinant human protein for the treatment of both Type 1 and Type 2 diabetes and their complications. The Company is also developing the first therapeutic GPCR agonist monoclonal antibody, DM-204, for the treatment of Type 2 diabetes and cardiovascular disease. DiaMedica's shares trade on the Toronto Stock Exchange Venture (TSX VENTURE:DMA). For more information please visit www.diamedica.com.

FORWARD-LOOKING STATEMENTS

The statements made in this press release that are not historical facts contain forward- looking information that involves risk and uncertainties. All statements, other than statements of historical facts, which address DiaMedica's expectations, should be considered forward-looking statements. Such statements are based on management's exercise of business judgment as well as assumptions made by and information currently available to management. When used in this document, the words "may", "will", "anticipate", "believe", "estimate", "expect", "intend" and words of similar import, are intended to identify any forward-looking statements. You should not place undue reliance on these forward-looking statements. These statements reflect a current view of future events and are subject to certain risks and uncertainties as contained in the Company's filings with Canadian securities regulatory authorities. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results could differ materially from those anticipated in these forward- looking statements. The Company undertakes no obligation, and does not intend, to update, revise or otherwise publicly release any revisions to these forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of any unanticipated events. Although management believes that expectations are based on reasonable assumptions, no assurance can be given that these expectations will materialize.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of the contents of this News Release.