DiaMedica Inc. (TSX VENTURE:DMA) ("DiaMedica" or the "Company"), is pleased to
announce the completion today of its $2.26 million short form prospectus
offering of units (the "Offering") and its previously announced acquisition (the
"Acquisition") of Sanomune Inc., a privately held biopharmaceutical company
focused on neurological disorders ("Sanomune"). 


The Offering

Pursuant to the completion of the Offering, DiaMedica has issued a total of
5,650,000 units (each a "Unit") at a price of $0.40 per Unit for aggregate gross
proceeds of $2.26 million. Each Unit is comprised of one common share in the
capital of the Company (each a "Common Share") and one Common Share purchase
warrant (each a "Warrant"), with each Warrant entitling the holder thereof to
acquire a further Common Share until the second anniversary of the closing of
the Offering. The expiry date of the Warrants is subject to acceleration if the
volume-weighted average trading price of the Common Shares on the TSX Venture
Exchange (the "TSX-V") exceeds $0.75 per share for a period of 10 consecutive
trading days. 


The Offering was led by Bolder Investment Partners, Ltd., as agent ("Bolder").
In connection with the completion of the Offering, Bolder exercised its agent's
option to increase the size of the Offering by 13%, or 650,000 Units. 


The net proceeds of the Offering will be used to fund DiaMedica's ongoing
research and development programs, including planned pre-clinical trials for our
lead products, and for general working capital purposes. 


As compensation for its services as agent, Bolder received a cash commission of
$226,000, and received broker warrants to acquire up to 565,000 Common Shares
exercisable at the price of $0.40 per share at any time on or prior to June 30,
2011.


The Acquisition

Pursuant to the completion of the Sanomune Acquisition, DiaMedica has issued a
total of 12,807,377 Common Shares to Sanomune shareholders as consideration for
all of the issued and outstanding shares of Sanomune.


"With the completion of this financing and the strategic acquisition of
Sanomune, we have brought together two of Canada's Top 10(TM) Life Sciences
Companies," stated Mr. Rick Pauls, President and Chief Executive Officer of
DiaMedica. "This acquisition allows us to take advantage of a unique opportunity
to strengthen our patent portfolio and expand into neurological and autoimmune
disorders targeted by our lead program, DM-99/199, which has demonstrated neural
protection (protects brain cells) and neural cell proliferation (creates brain
cells)".


As a result of the Acquisition, in addition to Sanomune's lead compound, SAN-61,
DiaMedica also acquires a panel of monoclonal antibodies that trigger the
inhibition of glycogen synthase kinase 3 beta (GSK-3ss). GSK-3ss plays an
important role as a regulatory switch for numerous cell-signaling pathways and
has been linked to diabetes, cancer, infectious diseases and a variety of
neurological disorders. It is anticipated that the monoclonal antibody program
will compliment DiaMedica's DM-99/199 program, which has also been shown to have
GSK-3ss inhibiting properties.


As announced in its April 20, 2010 press release, DiaMedica obtained the
required minority shareholder approval (the "Minority Approval") for the
Acquisition under Multilateral Instrument 61-101 - Protection of Minority
Security Holders in Special Transactions ("MI 61-101"), by securing written
consents to the transaction from shareholders representing approximately 65% of
the Common Shares held by parties eligible to vote for approval of the
transaction under Part 8 of MI 61-101. This is in excess of the simple majority
requirement (i.e., 50%+1) set out in MI 61-101 for such Minority Approval. 


In addition to the related parties described in DiaMedica's February 18, 2010
press release regarding the Acquisition (each a "Related Party" and
collectively, the "Related Parties"), Common Shares held by two investment
funds, Manitoba Science & Technology Fund ("MST") and Crocus Investment Fund
("CIF") were also excluded for the purposes of obtaining Minority Approval for
the Acquisition. MST and CIF each hold approximately 24.75% of the voting common
shares of Genesys Ventures Inc., a Related Party, and are therefore each "a
related party of an interested party" as described in MI 61-101. Immediately
prior to the completion of the Acquisition and the Offering, the Related
Parties, in the aggregate, beneficially owned, or exercised control or direction
over, a total of 5,493,523 Common Shares, or 28.60% of the total issued and
outstanding Common Shares. To the knowledge of the Company, based on public
filings by each of MST and CIF, immediately prior to the completion of the
Acquisition and the Offering, MST and CIF held, in the aggregate, a total of
3,065,764 Common Shares, or 15.96% of the total issued and outstanding Common
Shares.


Management Changes

DiaMedica further announces the appointment of Mr. Pauls to the full-time
position of President and Chief Executive Officer and the appointment of Dr.
Mark Williams to Vice-President, Research. Dr. Stephen Waters has resigned from
his interim role as Executive Vice-President and Interim Chief Scientific
Officer.


Mr. Pauls, who has been an active board member since 2005, and is currently the
Chairman of the Board of DiaMedica, has served as the acting President and Chief
Executive Officer of the Company since July 2009. Mr. Pauls was previously the
Managing Director of CentreStone Ventures Inc., a life sciences venture capital
fund which he was involved with from inception. While with CentreStone, Mr.
Pauls led investments in Orasi Medical Inc., winner of the Red Herring Global
100; LED Medical Inc., winner of Red Herring Canada 50 award in the Health
category; as well as DiaMedica and Sanomune, both named among Canada's Top
10(TM) Life Sciences Companies. Prior to his role with CentreStone, Mr. Pauls
was employed by Centara Corporation, another early stage venture capital fund. 


"We would like to express our gratitude to Dr. Stephen Waters for his valuable
contributions to our strategic planning efforts and we look forward to working
with him as a consultant," continued Mr. Pauls. "The Board of Directors of
DiaMedica joins me in thanking Dr. Waters for his efforts, and we wish him
continued success in his future endeavors".


In conjunction with these management changes, the Board of Directors has
approved a grant of 457,500 stock options to certain directors, executives and
employees under the terms of the Company's stock option plan. The options have
an exercise price of $0.42 per share and are exercisable for a period of 5
years. This grant of such options is subject to acceptance by the TSX-V.


Please visit DiaMedica's new company website at www.diamedica.com.

About DiaMedica and Sanomune

DiaMedica is a biopharmaceutical company, focused on developing novel treatments
for diabetes and neurological disorders. The Company's diabetes program is based
on a critical liver nerve signaling mechanism involved in enhancing insulin
sensitivity after meal consumption. Two of DiaMedica's products have
demonstrated human efficacy in lowering blood sugar levels in diabetics based on
this novel nerve signaling mechanism.


As a result of the Sanomune Acquisition, DiaMedica plans to expand its DM-199
program into neurological and autoimmune disorders. Sanomune has demonstrated
that its lead compound, SAN-61, a naturally occurring protein, confers neural
protection (protects brain cells) and triggers neural stem cell proliferation
(creates brain cells) for the treatment of numerous neurological disorders
including Alzheimer's disease. DiaMedica has also acquired from Sanomune a panel
of monoclonal antibodies targeting diabetes, neurological disorders and cancers
through the inhibition of GSK-3ss.


Both DiaMedica and Sanomune were recognized as one of Canada's Top 10(TM) Life
Sciences Companies in 2008/2009. DiaMedica is listed on the TSX Venture Exchange
under the trading symbol "DMA".


For further information please visit www.diamedica.com.

Caution Regarding Forward-Looking Information

Certain statements contained in this press release constitute forward-looking
information within the meaning of applicable Canadian provincial securities
legislation (collectively, the "forward-looking statements"). These
forward-looking statements relate to, among other things, DiaMedica's
objectives, goals, targets, strategies, intentions, plans, beliefs, estimates
and outlook, and can, in some cases, be identified by the use of words such as
"believe," "anticipate," "expect," "intend," "plan," "will," "may" and other
similar expressions. In addition, any statements that refer to expectations,
projections or other characterizations of future events or circumstances are
forward-looking statements. Specifically, this press release contains
forward-looking statements regarding matters such as, but not limited to, the
anticipated use of proceeds from the Offering, management's assessment of
DiaMedica's future plans, information with respect to the advancement of
DiaMedica's research and development programs, and DiaMedica's other estimates
and expectations. 

These statements reflect management's current beliefs and are based on
information currently available to management. Certain material factors or
assumptions are applied in making forward-looking statements, and actual results
may differ materially from those expressed or implied in such statements.
Important factors that could cause actual results to differ materially from
these expectations include, among other things: uncertainties and risks related
to our research and development programs, the availability of additional
financing, risks and uncertainties relating to the anticipated use of proceeds,
changes in debt and equity markets, uncertainties related to clinical trials and
product development, rapid technological change, uncertainties related to
forecasts, competition, potential product liability, additional financing
requirements and access to capital, unproven markets, the cost and supply of raw
materials, management of growth, effects of insurers' willingness to pay for
products, risks related to regulatory matters and risks related to intellectual
property matters. Additional information about these factors and about the
material factors or assumptions underlying such forward-looking statements may
be found in the body of this news release, as well as under the heading "Risk
Factors" contained in DiaMedica's 2009 annual information form. DiaMedica
cautions that the foregoing list of important factors that may affect future
results is not exhaustive. When relying on DiaMedica's forward-looking
statements to make decisions with respect to DiaMedica, investors and others
should carefully consider the foregoing factors and other uncertainties and
potential events. Such forward-looking statements are based on a number of
estimates and assumptions which may prove to be incorrect, including, but not
limited to, assumptions regarding the availability of additional financing for
research and development companies, and general business and economic
conditions. These risks and uncertainties should be considered carefully and
investors and others should not place undue reliance on the forward-looking
statements. Although the forward-looking statements contained in this press
release are based upon what management believes to be reasonable assumptions,
DiaMedica cannot provide assurance that actual results will be consistent with
these forward-looking statements. DiaMedica undertakes no obligation to update
or revise any forward-looking statement. Additional risk factors, factors which
could cause actual results to differ materially from expectations, and
assumptions relating specifically to our acquisition of Sanomune may be found in
our press releases dated February 18, 2010 and April 20, 2010.
iShares Global Infrastru... (TSX:CIF)
Historical Stock Chart
From Nov 2024 to Dec 2024 Click Here for more iShares Global Infrastru... Charts.
iShares Global Infrastru... (TSX:CIF)
Historical Stock Chart
From Dec 2023 to Dec 2024 Click Here for more iShares Global Infrastru... Charts.