DiaMedica Therapeutics Announces $11.8M Private Placement

DiaMedica Therapeutics Inc. (Nasdaq: DMAC), a clinical-stage biopharmaceutical company dedicated to creating innovative treatments for severe ischemic diseases, has revealed that it has finalized agreements to sell its common shares in a private placement to accredited investors. This transaction is anticipated to yield gross proceeds of $11.8 million, and no placement agent was involved in this private placement.

According to the terms outlined in the securities purchase agreements, DiaMedica will issue 4,720,000 common shares at a price of $2.50 per share. The private placement is slated to close around June 28, 2024, contingent upon the fulfillment of customary closing conditions.

The funds secured from this private placement will be allocated towards the ongoing clinical and product development activities for DM199 (rinvecalinase alfa), including the pivotal Phase 2/3 ReMEDy2 trial for treating acute ischemic stroke, as well as clinical expansion into preeclampsia. Additionally, the proceeds will support other working capital and general corporate needs. This financing is projected to extend DiaMedica’s financial runway into the third quarter of 2026.

In conjunction with the private placement announcement, DiaMedica also disclosed its intentions to broaden its clinical trials to include preeclampsia, a hypertensive disorder during pregnancy that currently lacks approved therapeutic options from the U.S. Food and Drug Administration (FDA).

The offer and sale of the common shares in this private placement have not been registered under the U.S. Securities Act of 1933 or any relevant state or jurisdiction securities laws. Consequently, these shares cannot be offered or sold in the United States without an effective registration statement or an applicable exemption from the registration requirements of these laws. DiaMedica has committed to filing a registration statement with the U.S. Securities and Exchange Commission to register the resale of the common shares issued in this private placement.

It is important to note that this press release does not constitute an offer to sell or a solicitation of an offer to buy these securities. Such an offer, solicitation, or sale would be illegal prior to registration or qualification under the securities laws of any jurisdiction.

Furthermore, DiaMedica has received binding commitments from certain non-management related parties to participate in the private placement, totaling $6.0 million or 2,400,000 common shares. This categorizes the private placement as a “related party transaction” under Multilateral Instrument 61-101 of the Canadian Securities Administrators. However, the private placement is exempt from the valuation and minority shareholder approval requirements due to the fair market value of the common shares and the consideration paid not exceeding 25% of DiaMedica’s market capitalization.

About DM199 (rinvecalinase alfa)

DM199 is a synthetic version of human tissue kallikrein-1 (rhKLK1) in clinical development for acute ischemic stroke (AIS) and preeclampsia. KLK1 is an enzyme critical in regulating various physiological processes by increasing the production of nitric oxide, prostacyclin, and endothelium-derived hyperpolarizing factors. In AIS, DM199 aims to enhance blood flow and promote neuronal survival by dilating arterioles around the vascular occlusion site and inhibiting apoptosis (neuronal cell death). This also aids neuronal remodeling through the promotion of angiogenesis. In preeclampsia, DM199 is intended to lower blood pressure, improve endothelial health, and enhance perfusion to maternal organs and the placenta.

About DiaMedica Therapeutics Inc.

DiaMedica Therapeutics Inc. is a clinical-stage biopharmaceutical company committed to improving the lives of individuals suffering from severe ischemic diseases, with a focus on acute ischemic stroke and preeclampsia. DiaMedica’s leading candidate, DM199, is the first pharmaceutically active synthetic form of the KLK1 protein, a therapeutic modality established in Asia for treating acute ischemic stroke and other vascular diseases.

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