DiaMedica Inc. Announces Filing of Final Prospectus

   DiaMedica Inc. ("DiaMedica" or the "Company") (TSX VENTURE: DMA), announced today that it has filed a final short form prospectus, dated July 7, 2011 relating to its previously announced offering (the "Offering") of units of the Company (the "Units"). The Company will offer 2,700,000 Units with each Unit consisting of one common share in the capital stock of the Company (a "Common Share") and one common share purchase warrant (a "Warrant"). Each Warrant will entitle the holder thereof to purchase one additional Common Share for the price of $1.50 within two years from the initial 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 (as defined below).

Sora Group Wealth Advisors Inc. (the "Agent") will offer on a "commercially reasonable efforts" agency basis, pursuant to an agency agreement dated as of the date hereof (the "Agency Agreement"), 2,700,000 Units at a price of $1.25 per Unit for gross proceeds to the Company of $3,375,000. The Company has granted to the Agent an option exercisable in whole or in part at any time prior to the closing date of the Offering, to increase the number of Units offered by up to 15% on the same terms and conditions.

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 July 21, 2011, or such other date as the Agent and the Company may determine in accordance with the Agency Agreement and applicable laws.

About DiaMedica

DiaMedica is a biopharmaceutical company that develops novel therapeutic products designed to improve the lives of people with Type 1 diabetes, Type 2 diabetes and other large, medically unmet diseases. DiaMedica's lead product candidate, DM-199, has been shown to protect and proliferate beta cells and significantly improve glucose metabolism in preclinical models.

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.

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.

Contacts: DiaMedica Inc. Rick Pauls President and CEO 204.477.7590 [e-mail]