On June 21, 2023 DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biopharmaceutical company focused on developing novel treatments for neurological disorders and kidney diseases ("DiaMedica" or the "Company"), reported that it has entered into definitive agreements to sell its common shares in a private placement with accredited investors (Press release, DiaMedica, JUN 21, 2023, View Source [SID1234632820]). The transaction is expected to result in gross proceeds of $37.5 million.

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Pursuant to the terms of the securities purchase agreements, the Company will issue a total of 11,011,406 common shares at a purchase price of $3.40 per share, equal to the average per share closing price of the Company’s common shares for the five trading days ended June 20, 2023, except in the case of DiaMedica management who agreed to a higher purchase price of $3.91 per share, equal to the closing sale price of the Company’s common shares on June 20, 2023. The private placement is expected to close on or about June 23, 2023, subject to the satisfaction of customary closing conditions.

The Company expects to use the net proceeds from the private placement to continue its clinical and product development activities for DM199, including its pivotal Phase 2/3, ReMEDy2 clinical trial, and for other working capital and general corporate purposes. The Company believes that with the addition of this funding, the Company’s cash resources will be sufficient to fund the Company’s ReMEDy2 trial through the completion of the interim analysis.

Earlier today, DiaMedica also announced that the U.S. Food and Drug Administration ("FDA") has removed the clinical hold on the Company’s Phase 2/3 ReMEDy2 clinical trial studying the use of the Company’s product candidate, DM199, to treat acute ischemic stroke patients.

Craig-Hallum Capital Group LLC acted as the placement agent for the private placement investment by certain of the investors. Lake Street Capital Markets, LLC acted as financial advisor to the Company. Fox Rothschild LLP and Pushor Mitchell LLP acted as counsel to DiaMedica in the private placement and Mintz Levin acted as counsel for certain investors in the private placement.

The offer and sale of the foregoing securities in the private placement have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), or any state or other applicable jurisdiction’s securities laws, and may not be offered or sold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and applicable state and other securities laws. The Company has agreed to file a registration statement with the U.S. Securities and Exchange Commission registering the resale of the common shares issued in the private placement.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy the foregoing securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.