WINNIPEG, MANITOBA--(Marketwire - May 8, 2012) - DiaMedica (TSX VENTURE:DMA) is very pleased to announce that it has received proceeds of $3,166,800 pursuant to the early exercise warrant incentive program (the "Program") previously disclosed in its press release dated April 2, 2012 relating to the early exercise of the warrants that were previously issued in connection with DiaMedica's short form prospectus offering in July, 2011 (the "July 2011 Warrants"). The Program resulted in the exercise of 2,111,200 July 2011 Warrants at $1.50 per share which represents 67% of the outstanding July 2011 Warrants. The holders of July 2011 Warrants who exercised their July 2011 Warrants pursuant to the Program were issued, in addition to the common share they would otherwise receive under each July 2011 Warrant exercised, an additional half of one warrant (each whole warrant a "New Warrant").

"We view this exercise as a vote of confidence from our shareholders in our ongoing effort to create shareholder value," Stated Mr. Rick Pauls, Chairman and CEO of DiaMedica. "This funding completed in a challenging market materially strengthens our balance sheet as we continue to advance our promising programs."

Pursuant to the Program, DiaMedica issued 1,055,600 New Warrants which entitle to holder to acquire one common share of DiaMedica at a price of $2.50 until May 8, 2014 (the "New Warrant Expiry Date"). In the event the volume-weighted average trading price of DiaMedica's common shares on the TSXV (or such other exchange as the Company's common shares may be listed on) exceeds $3.00 per share for a period of 10 consecutive trading days following the date the New Warrants are issued, DiaMedica may, at its option, accelerate the New Warrant Expiry Date by delivery of a notice (a "Warrant Acceleration Notice") to the holders of New Warrants (the "New Warrantholders") and issuing a press release announcing such acceleration (a "Warrant Acceleration Press Release"), and, in such case, the New Warrant Expiry Date shall be deemed to be the 30th day following the later of: (i) the date on which the Warrant Acceleration Notice is sent to New Warrantholders; and (ii) the date of issuance of the Warrant Acceleration Press Release.

A total of 993,800 July 2011 Warrants were not exercised pursuant to the Program; these July 2011 Warrants will continue to be exercisable in accordance with their original terms, namely at an exercise price of $1.50 to acquire one common share of DiaMedica for each July 2011 Warrant held until July 22, 2013.

About DiaMedica

DiaMedica is a biopharmaceutical company focused on discovery and development of novel therapeutic compounds for diabetes and other major, medically-unmet diseases. DiaMedica's lead compound, DM-199, is a recombinant human protein that represents a novel approach to treating Type 1 and Type 2 diabetes. In a Type 1 diabetes model, DM-199 halted the autoimmune attack on beta cells by stimulating regulatory T-cells, and resulted in a 12-fold increase in C-peptide levels. In Type 2 diabetes models, DM-199 treatment stimulated proliferation of insulin producing beta cells, resulting in significant improvement in glucose control. DiaMedica is also developing a novel monoclonal antibody, DM-204 as a treatment for Type 2 diabetes. Chronic treatment with DM-204 in a Type 2 diabetes model resulted in significant improvement in blood glucose control and HbA1c levels and also significant decreases in blood pressure and serum cholesterol.

Diamedica's DM-199 and DM-204 were both named Windhover's "2011 Top 10 Cardiovascular/Metabolic Projects to Watch".

The Company is listed on the TSX Venture Exchange under the trading symbol 'DMA'.

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.

Publication Contributing Sources

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