DiaMedica warns going-concern doubt remains
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Filing Summary
DiaMedica Therapeutics Inc. (DMAC) reported a $31.5 million net loss for the nine months ended September 30, 2026, versus $24.0 million a year earlier. Research and development expense was $25.4 million, compared with $17.9 million, and operating cash use was $26.0 million versus $21.3 million. The company attributed higher research spending to clinical programs, manufacturing work and team expansion.
At September 30, cash, cash equivalents and marketable securities totaled $34.9 million, and working capital was $28.0 million. DiaMedica says substantial doubt about its ability to continue as a going concern is not alleviated; it will likely seek additional funding in the next 12 months and says inadequate financing could require operational cutbacks.
The ReMEDy2 stroke trial enrolled its 200th participant in October 2026, with interim results expected by the end of the first quarter of 2027; the company reports slower-than-expected site activation and enrollment. In the PE study, combined final highest-dose cohorts comprising 15 subjects had statistically significant, sustained maternal blood-pressure reductions at the prespecified five-minute post-infusion point, with systolic pressure below 160 mmHg at all measured times over 24 hours.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- None.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Unalleviated going-concern doubt; additional funding likely sought within 12 months.
- Moderate pointNine-month net loss widened to $31.5 million from $24.0 million.
- Moderate pointNine-month operating cash use reached $26.0 million, versus $21.3 million.
Filing Explained
At September 30, $86.2 million remained as ATM sale capacity, not completed financing; only future share sales would increase the share count and dilute holders.
DiaMedica’s
The report also lists 11,858,556 shares reserved for future issuance, including 8,338,245 issuable on option exercise, alongside 53,957,474 shares issued and outstanding at September 30.
Those reserved shares are not already issued; any later issuance would increase the share count and reduce existing holders’ percentage ownership.
Key Figures
Key Terms
going concern financial
adaptive design medical
modified Rankin score medical
investigator-sponsored trial medical
at-the-market offering financial
pharmacodynamic activity medical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much cash does DMAC have?
What is the enrollment plan for DMAC’s ReMEDy2 trial?
How much capacity remains in DMAC’s at-the-market offering?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
FORM
(Mark one)
For the quarterly period ended
or
For the transition period from ________________ to __________________
Commission File Number:
____________________
(Exact name of registrant as specified in its charter)
|
(State or other jurisdiction of incorporation or organization) |
Not Applicable (I.R.S. Employer Identification No.) |
|
(Address of principal executive offices) (Zip Code) |
|
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
|
|
|
The |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ NO ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ NO ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
Large accelerated filer ☐ |
Accelerated filer ☐ |
|
|
Smaller reporting company Emerging growth company |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES
As of November 9, 2026, there were
DiaMedica Therapeutics Inc.
FORM 10-Q
September 30, 2026
TABLE OF CONTENTS
| Description | Page |
|
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS |
1 |
|
|
PART I. |
FINANCIAL INFORMATION |
|
|
Item 1. |
Financial Statements |
3 |
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
16 |
|
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk |
23 |
|
Item 4. |
Controls and Procedures |
23 |
|
PART II. |
OTHER INFORMATION |
|
|
Item 1. |
Legal Proceedings |
24 |
|
Item 1A. |
Risk Factors |
24 |
|
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
24 |
|
Item 3. |
Defaults Upon Senior Securities |
24 |
|
Item 4. |
Mine Safety Disclosures |
24 |
|
Item 5. |
Other Information |
24 |
|
Item 6. |
Exhibits |
24 |
|
SIGNATURE PAGE |
25 |
|
_________________
This quarterly report on Form 10-Q contains certain forward-looking statements that are within the meaning of Section 27A of the United States Securities Act of 1933, as amended, and Section 21E of the United States Securities Exchange Act of 1934, as amended, and are subject to the safe harbor created by those sections. For more information, see “Cautionary Note Regarding Forward-Looking Statements.”
As used in this report, references to “DiaMedica,” the “Company,” “we,” “our” or “us,” unless the context otherwise requires, refer to DiaMedica Therapeutics Inc. and its subsidiaries, all of which are consolidated in DiaMedica’s condensed consolidated financial statements. References in this report to “common shares” mean our voting common shares, no par value per share.
We own various unregistered trademarks and service marks, including our corporate logo. Solely for convenience, the trademarks and trade names in this report are referred to without the ® and ™ symbols, but such references should not be construed as any indicator that the owner of such trademarks and trade names will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend the use or display of other companies’ trademarks and trade names to imply a relationship with, or endorsement or sponsorship of us by, any other companies.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in this report that are not descriptions of historical facts are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 that are based on management’s current expectations and are subject to risks and uncertainties that could negatively affect our business, operating results, financial condition, prospects and share price. We have attempted to identify forward-looking statements by terminology including “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “intends,” “may,” “plans,” “potential,” “predicts,” “should,” “will,” “would,” the negative of these terms or other comparable terminology and the use of future dates.
The forward-looking statements in this report are subject to risks and uncertainties and include, among other things:
|
● |
our plans to obtain U.S. Food and Drug Administration approval for the clinical study of DM199 for preeclampsia (PE) and fetal growth restriction (FGR) and ultimately to obtain regulatory approval for and commercialize our DM199 product candidate for the treatment of PE, FGR and acute ischemic stroke (AIS); |
|
● |
our ability to conduct successful clinical testing of our DM199 product candidate for PE, FGR and AIS and meet certain anticipated or target milestones and dates thereof with respect to our clinical studies; |
|
● |
the ability of our physician collaborators to successfully complete the current Phase 2, proof-of-concept investigator-sponsored clinical trial of DM199 for the treatment of PE and FGR, our reliance on these physician collaborators to conduct the study, and our expectations related to the timing of Part 1b and Parts 2 and 3 of this study; |
|
● |
our ability to meet anticipated site activations, enrollment and interim analysis timing with respect to our Phase 2/3 ReMEDy2 clinical trial of DM199 for the treatment of AIS, especially in the light of slower than expected site activations and enrollment which we believe are due, in part, to hospital and medical facility staffing shortages; inclusion/exclusion criteria in the study protocol; concerns managing logistics and protocol compliance for participants discharged from the hospital to an intermediate care facility; use of artificial intelligence and telemedicine which have enabled smaller hospitals to retain AIS patients not eligible for mechanical thrombectomy instead of sending these patients to the larger stroke centers which are more likely to be sites in our trial; and competition for research staff and trial subjects due to other pending stroke and neurological clinical trials; |
|
● |
the success of the actions we are taking to mitigate the impact of the factors adversely affecting our ReMEDy2 trial site activations and enrollment rate, including significantly expanding our internal clinical team and bringing in-house certain trial activities, such as study site identification, qualification and activation, clinical site monitoring, supporting vendor management and overall program management; globally expanding the trial; and making certain changes to the study protocol; and risks associated with these mitigation actions; |
|
● |
uncertainties relating to regulatory applications and related filing and approval timelines, especially in light of recent changes in funding and staffing levels for the U.S. Food and Drug Administration (FDA) and other government agencies; |
|
● |
pending and future government agency requests for additional pre-clinical studies or modifications to clinical studies that could lead to uncertainty and potential delays in obtaining results from the same; |
|
● |
the possible occurrence of future adverse events associated with or unfavorable results from current trials and their potential to adversely affect other current or future trials; |
|
● |
the adaptive design of our ReMEDy2 trial, which is intended to enroll approximately 300 patients at up to 100 sites globally, and the possibility that the final sample size, which will be determined based upon the results of an interim analysis of 200 participants, may be up to 728 patients, according to a pre-determined statistical plan, other possible changes in the trial, including as a result of input from the FDA, and the results of the interim analysis as determined by our independent data safety monitoring board; |
|
● |
our expectations regarding the perceived benefits of our DM199 product candidate over existing treatment options for PE, FGR and AIS; |
|
● |
our ability to partner with and generate revenue from biopharmaceutical or pharmaceutical partners to develop, obtain regulatory approval for, and commercialize our DM199 product candidate for PE, FGR and AIS; |
|
● |
our or any future partner’s ability to commercialize, market and manufacture DM199; |
|
● |
the potential size of the markets for our DM199 product candidate for PE, FGR and AIS and our or any future partner’s ability to serve those markets, the rate and degree of market acceptance of and ability to obtain coverage and adequate reimbursement for, our DM199 product candidate for PE, FGR and AIS both in the United States and internationally; |
|
● |
the success, cost and timing of our clinical trials, as well as our reliance on our key executives, clinical personnel, advisors and third parties in connection with our trials; |
|
● |
expectations regarding U.S. federal, state and foreign regulatory requirements and developments affecting our pending and future clinical trials and regulatory approvals of our DM199 product candidate for PE, FGR and AIS and future commercialization and manufacturing of such products if required regulatory approvals are obtained; |
|
● |
our expectations regarding our ability to obtain and maintain intellectual property protection for our DM199 product candidate; |
|
● |
expectations regarding competition and our ability to obtain data exclusivity for our DM199 product candidate for PE, FGR and AIS; and |
|
● |
our estimates regarding expenses, market opportunity for our product candidates, future revenue, and capital requirements; our anticipated use of the net proceeds from our prior private placements; how long our current cash resources will last; and our need for and ability to obtain additional financing to fund our operations, including funding necessary to complete our current clinical trials and obtain regulatory approvals for our DM199 product candidate for PE, FGR and/or AIS. |
These forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described under “Part I. Item 1A. Risk Factors” in our annual report on Form 10-K for the fiscal year ended December 31, 2025 and those described above and that may appear elsewhere in this report, including under “Part II. Item 1A. Risk Factors.” Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the forward-looking events and circumstances discussed in this report may not occur and actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Forward-looking statements should not be relied upon as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance or events and circumstances reflected in the forward-looking statements will be achieved or occur. Except as required by law, including the securities laws of the United States, we do not intend to update any forward-looking statements to conform these statements to actual results or to changes in our expectations.
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
DiaMedica Therapeutics Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share amounts)
|
September 30, 2026 |
December 31, 2025 |
|||||||
|
(unaudited) |
||||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
Cash and cash equivalents |
$ | $ | ||||||
|
Marketable securities |
||||||||
|
Prepaid expenses and other assets |
||||||||
|
Amounts receivable |
||||||||
|
Total current assets |
||||||||
|
Non-current assets: |
||||||||
|
Deferred offering costs |
||||||||
|
Property and equipment, net |
||||||||
| Operating lease right-of-use asset, net | ||||||||
|
Total non-current assets |
||||||||
|
Total assets |
$ | $ | ||||||
|
LIABILITIES AND EQUITY |
||||||||
|
Current liabilities: |
||||||||
|
Accounts payable |
$ | $ | ||||||
|
Accrued liabilities |
||||||||
|
Operating lease obligation |
||||||||
|
Finance lease obligation |
||||||||
|
Total current liabilities |
||||||||
|
Non-current liabilities: |
||||||||
|
Operating lease obligation |
||||||||
|
Finance lease obligation |
||||||||
|
Total non-current liabilities |
||||||||
|
Shareholders’ equity: |
||||||||
|
Common shares, par value; authorized; |
||||||||
|
Paid-in capital |
||||||||
|
Accumulated other comprehensive income (loss) |
( |
) | ||||||
|
Accumulated deficit |
( |
) | ( |
) | ||||
|
Total shareholders’ equity |
||||||||
|
Total liabilities and shareholders’ equity |
$ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
DiaMedica Therapeutics Inc.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(In thousands, except share and per share amounts)
(Unaudited)
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Operating expenses: |
||||||||||||||||
|
Research and development |
$ | $ | $ | $ | ||||||||||||
|
General and administrative |
||||||||||||||||
|
Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Other income, net |
||||||||||||||||
|
Loss before income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Net loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Other comprehensive loss |
||||||||||||||||
|
Unrealized gain (loss) on marketable securities |
( |
) | ( |
) | ||||||||||||
|
Net loss and comprehensive loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Basic and diluted net loss per share |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
|
Weighted average shares outstanding – basic and diluted |
||||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
DiaMedica Therapeutics Inc.
Condensed Consolidated Statements of Shareholders’ Equity
For the Three and Nine Months Ended September 30, 2026 and 2025
(In thousands, except share amounts)
(Unaudited)
|
Common Shares |
Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total Shareholders’ Equity |
||||||||||||||||
|
Balances at December 31, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized loss on marketable securities |
— | ( |
) | ( |
) | |||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at March 31, 2026 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized loss on marketable securities |
— | ( |
) | ( |
) | |||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at June 30, 2026 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized loss on marketable securities |
— | ( |
) | ( |
) | |||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at September 30, 2026 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Common Shares |
Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Total Shareholders’ Equity |
||||||||||||||||
|
Balances at December 31, 2024 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized loss on marketable securities |
— | ( |
) | ( |
) | |||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at March 31, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
|
Issuance of common shares in settlement of deferred stock units |
— | — | — | — | ||||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized loss on marketable securities |
— | ( |
) | ( |
) | |||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at June 30, 2025 |
$ | $ | ( |
) | $ | ( |
) | $ | ||||||||||||
|
Issuance of common shares under Private Placement net of offering costs of $ |
||||||||||||||||||||
|
Sale of common shares, net of offering costs |
||||||||||||||||||||
|
Issuance of common shares upon the exercise of stock options |
||||||||||||||||||||
|
Issuance of common shares upon the vesting and settlement of restricted stock units |
||||||||||||||||||||
|
Share-based compensation expense |
— | |||||||||||||||||||
|
Unrealized gain on marketable securities |
— | |||||||||||||||||||
|
Net loss |
— | ( |
) | ( |
) | |||||||||||||||
|
Balances at September 30, 2025 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
See accompanying notes to the condensed consolidated financial statements.
DiaMedica Therapeutics Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
|
Nine Months Ended September 30, |
||||||||
|
2026 |
2025 |
|||||||
|
Cash flows from operating activities: |
||||||||
|
Net loss |
$ | ( |
) |
$ | ( |
) |
||
|
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
|
Share-based compensation |
||||||||
|
Amortization of discounts on marketable securities |
( |
) | ( |
) | ||||
|
Non-cash lease expense |
||||||||
|
Depreciation |
||||||||
|
Changes in operating assets and liabilities: |
||||||||
|
Amounts receivable |
( |
) | ||||||
|
Prepaid expenses and other assets |
( |
) | ||||||
|
Deposits |
||||||||
|
Accounts payable |
||||||||
|
Accrued liabilities and operating lease liabilities |
( |
) | ||||||
|
Net cash used in operating activities |
( |
) | ( |
) | ||||
|
Cash flows from investing activities: |
||||||||
|
Purchase of marketable securities |
( |
) | ( |
) | ||||
|
Maturities and sales of marketable securities |
||||||||
|
Purchases of property and equipment |
( |
) |
( |
) |
||||
|
Net cash provided by (used in) investing activities |
( |
) | ||||||
|
Cash flows from financing activities: |
||||||||
|
Proceeds from the sale of common shares, net of offering costs |
||||||||
|
Proceeds from the exercise of common stock options |
||||||||
|
Deferred offering costs |
( |
) | ||||||
|
Principal payments on finance lease obligation |
( |
) |
( |
) |
||||
|
Net cash provided by financing activities |
||||||||
|
Net increase (decrease) in cash and cash equivalents |
( |
) | ||||||
|
Cash and cash equivalents at beginning of period |
||||||||
|
Cash and cash equivalents at end of period |
$ | $ | ||||||
|
Supplemental disclosure of cash flow information: |
||||||||
|
Cash paid for income taxes |
$ | $ | ||||||
See accompanying notes to the condensed consolidated financial statements.
DiaMedica Therapeutics Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
1. Business
DiaMedica Therapeutics Inc. and its wholly owned subsidiaries, DiaMedica USA Inc. and DiaMedica Australia Pty Ltd. (collectively, we, us, our, DiaMedica and the Company), is a clinical stage biopharmaceutical company focused on developing novel treatments for preeclampsia (PE), fetal growth restriction (FGR) and acute ischemic stroke (AIS). DiaMedica’s lead product candidate, DM199, is the first pharmaceutically active, and clinically studied, recombinant (synthetic) form of the human tissue kallikrein-1 (KLK1) protein, an established therapeutic modality in Asia for the treatment of preeclampsia, acute ischemic stroke and other vascular diseases. Our common shares are publicly traded on The Nasdaq Capital Market under the symbol “DMAC.”
2. Risks and Uncertainties
DiaMedica operates in a highly regulated and competitive environment. The development, manufacturing and marketing of pharmaceutical products require approval from, and are subject to ongoing oversight by, the United States Food and Drug Administration (FDA) in the United States, the European Medicines Agency (EMA) in the European Union, and comparable agencies in other countries. We are in the clinical stage of development of our lead product candidate, DM199, for the treatment of PE, FGR and AIS. We have not completed the development of any product candidate and do not generate any revenues from the commercial sale of any product candidate. Our lead product candidate, DM199, requires significant additional clinical testing and investment prior to seeking marketing approval and is not expected to be commercially available for at least three to four years, if at all.
With respect to our PE clinical program, a Phase 2 open-label, single center, single-arm, safety and pharmacodynamic, proof-of-concept, investigator-sponsored trial (IST) of DM199 for the treatment of PE is currently being conducted at the Tygerberg Hospital in Cape Town, South Africa. This Phase 2 trial consists of three studies (Parts 1a, 1b and 2) in PE and a single study (Part 3) in FGR as follows:
Preeclampsia (PE)
|
● |
Part 1a: dose-escalation study evaluating single intravenous (IV) / single subcutaneous (SC) DM199 doses in late-onset PE subjects enrolled within 72 hours of delivery, including a confirmatory extension cohort of up to 12 participants at the cohort 10 dose level, which was completed in June 2026. |
|
● |
Part 1b: dose-expansion study evaluating continuous IV infusion in up to 30 late-onset PE subjects enrolled within 72 hours of delivery, using a dosing level identified in Part 1a; initial enrollment expected by the end of 2026. |
|
● |
Part 2: evaluation of repeated SC dosing of DM199 in early-onset PE subjects until delivery (expectant management), using three dose levels identified in Part 1a; initial enrollment expected by the end of 2026. |
Fetal Growth Restriction (FGR)
|
● |
Part 3: evaluation of a single IV and SC loading dose of DM199, followed by repeated SC dosing in FGR subjects until delivery (expectant management), using three dose levels identified in Part 1a; enrollment commenced in June 2026 and the first two cohorts of 5 and 10 µg/kg have completed enrollment of six participants per cohort. The dose for the third cohort will be between 1 and 15 µg/kg based on results from the first two cohorts. |
Up to 90 women with PE and potentially an additional 30 subjects with FGR may be evaluated. Interim results from cohorts 1 through 9 (N=28) of Part 1a of the study were released in July 2025 and additional data from the extension cohort was released in August 2026. The interim results demonstrated that DM199 appears safe and well-tolerated with clinically-relevant pharmacodynamic activity with no evidence of placental transfer of DM199. In the combined final, highest-dose cohorts, which consisted of 15 PE subjects, three from the initial dose escalation phase and 12 additional subjects enrolled in the extension cohort, DM199 produced clinically meaningful and statistically significant, sustained reductions in maternal blood pressure at the pre-specified time point of five minutes after completion of the IV infusion. Systolic blood pressure (SBP) was maintained below 160 mmHg at all measured time points over 24 hours. Detailed Part 1a results, including pharmacokinetic and pharmacodynamic analyses, are expected to be presented at an upcoming medical conference and submitted for publication. The acceptance by the FDA of study data from clinical trials conducted outside the United States, including this IST, may be subject to certain conditions or may not be accepted at all. If the FDA does not accept such data, it would result in the need for additional participants or trials, which would be costly and time-consuming and delay regulatory approval and commercialization of our DM199 product candidate.
With respect to our AIS clinical program, we are currently conducting a Phase 2/3, adaptive design, randomized, double-blind, placebo-controlled trial of DM199 for the treatment of AIS, (the ReMEDy2 trial). Our ReMEDy2 trial is intended to enroll approximately 300 participants at up to 100 sites globally. The adaptive design component includes a pre-specified interim analysis by our independent data safety monitoring board to be conducted after the first 200 participants have completed the trial based upon a primary efficacy endpoint analysis of the proportion of subjects with a modified Rankin score of 0 or 1 at Day 90 indicating an excellent outcome. Based on the results of the interim analysis, the study may then be stopped for futility or the final sample size will be determined, ranging between 300 and 728 patients, according to a pre-determined statistical plan. We are currently conducting the trial in the United States, Canada, the United Kingdom and the European Union. In October 2026 we announced the enrollment of the 200th participant in this trial and that results from the interim analysis are expected to be available by the end of the first quarter of 2027.
We have experienced and continue to experience slower than expected site activations and enrollment in our ReMEDy2 trial. We believe these conditions may be due to hospital and medical facility staffing shortages; inclusion/exclusion criteria in the study protocol; concerns managing logistics and protocol compliance for participants discharged from the hospital to an intermediate care facility; concerns regarding prior clinically significant hypotension events; use of artificial intelligence and telemedicine which have enabled smaller hospitals to retain AIS patients not eligible for mechanical thrombectomy instead of sending these patients to the larger stroke centers which are more likely to be sites in our trial; and competition for research staff and trial subjects due to other pending stroke and neurological trials. We continue to reach out to our study sites to understand the specific issues at each study site. To mitigate the impact of these factors, we have significantly expanded our internal clinical team and have brought in-house certain trial activities, including site identification, qualification and activation, clinical site monitoring, supporting vendor management and overall program management. We continue to work closely with our contract research organizations and other supporting vendors to develop procedures to support both U.S. and global study sites and potential participants as needed. We intend to continue to monitor the results of these efforts and, if necessary, implement additional actions to enhance site activation and enrollment in our ReMEDy2 trial; however, no assurances can be provided as to the success of these actions and if or when these issues will resolve. Failure to resolve these issues may result in further delays in our ReMEDy2 trial and increase the difficulty in forecasting enrollment.
Our future success is dependent upon the success of our development efforts, our ability to demonstrate clinical progress for our DM199 product candidate in the United States or other markets, our ability, or the ability of any future partner, to obtain required governmental approvals of our product candidate, our ability to license or market and sell our DM199 product candidate and our ability to obtain additional financing to fund these efforts.
As of September 30, 2026, we have incurred losses of $
Our principal source of cash has been net proceeds from the issuance of equity securities. Although we have previously been successful in obtaining financing through equity securities offerings, there is no assurance that we will be able to do so in the future. This is particularly true if our clinical data are not positive or if economic and market conditions deteriorate.
We expect that we will need substantial additional capital to further our research and development activities and complete the required clinical studies, regulatory activities and manufacturing development for our product candidate, DM199, or any future product candidates, to a point where they may be licensed or commercially sold. The amount and timing of our future funding requirements will depend on many factors, including, but not limited to, timing and results of our ongoing development efforts; our current ReMEDy2 trial and the rate of site activation and participant enrollment in the study; the Phase 2 PE trial; the potential expansion of our current development programs; and other factors on our clinical trials and our operating expenses. We may require significant additional funds earlier than we currently expect and there is no assurance that we will not need or seek additional funding prior to such time, especially if market conditions for raising capital are favorable.
The accompanying interim condensed consolidated financial statements have been prepared assuming that we will continue as a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business and do not include any adjustments relating to the recoverability or classification of assets or the amounts of liabilities that might result from the outcome of these uncertainties. Our ability to continue as a going concern, realize the carrying value of our assets and discharge our liabilities in the ordinary course of business is dependent upon a number of factors, including our ability to obtain additional financing, the success of our development efforts, our ability to obtain marketing approval for our initial product candidate, DM199, in the United States, the European Union or other markets and ultimately our ability to market and sell our initial product candidate. These factors, among others, raise substantial doubt about our ability to continue operations as a going concern which is not alleviated. See Note 3 titled “Liquidity, Management’s Plans and Going Concern.”
3. Liquidity, Management’s Plans and Going Concern
As of September 30, 2026 and December 31, 2025, the Company has an accumulated deficit of $
Additional funding will be required to continue the Company’s research and development and other operating activities. In the next 12 months we will likely seek to raise additional funds through various sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This risk would increase if our clinical data were not positive or economic and market conditions deteriorate.
Our most recent equity financings include our July 2025 private placement in which we issued and sold an aggregate of
If we are unable to obtain additional financing when needed, we would need to scale back our operations taking actions that may include, among other things, reducing use of outside professional service providers, reducing personnel or personnel compensation, significantly modifying or delaying the development of our DM199 product candidate, licensing to third parties the rights to commercialize our DM199 product candidate or ceasing operations.
Our future success is dependent upon our ability to obtain additional financing, the success of our development efforts, our ability to demonstrate clinical progress for our DM199 product candidate in the United States or other markets, our ability to obtain required governmental approvals of our product candidate and ultimately our ability to license or market and sell our DM199 product candidate. If we are unable to obtain additional financing when needed, if our clinical trials are not successful or if we are unable to obtain required governmental approvals, we would not be able to continue as a going concern and would be forced to cease operations and liquidate our company.
There can be no assurances that we will be able to obtain additional financing on commercially reasonable terms, or at all. The sale of additional equity securities would likely result in dilution to our current shareholders.
4. Summary of Significant Accounting Policies
Interim financial statements
We have prepared the accompanying condensed consolidated financial statements in accordance with accounting principles generally accepted in the United States (US GAAP) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities and Exchange Commission (SEC). Accordingly, the condensed consolidated financial statements do not include all of the information and footnotes required by US GAAP for complete financial statements. These condensed consolidated financial statements reflect all adjustments consisting of normal recurring accruals which, in the opinion of management, are necessary to present fairly our condensed consolidated financial position, condensed consolidated results of operations and comprehensive loss, condensed consolidated statement of shareholders’ equity and condensed consolidated cash flows for the periods and as of the dates presented. Our fiscal year ends on December 31. The condensed consolidated balance sheet as of December 31, 2025 was derived from our audited consolidated financial statements. These condensed consolidated financial statements should be read in conjunction with our annual consolidated financial statements and the notes thereto. The nature of our business is such that the results of any interim period may not be indicative of the results to be expected for the entire year.
Segments
We operate in a segment focusing on developing potentially transformative treatments for severe ischemic diseases. Consistent with our operational structure, our chief operating decision maker manages and allocates resources for the Company at a consolidated level. Therefore, results of our operations are reported on a consolidated basis for purposes of segment reporting. Substantially all of our tangible assets are held in the United States.
Cash and cash equivalents
We consider all bank deposits, including money market funds and other investments, purchased with an original maturity to the Company of three months or less, to be cash and cash equivalents. The carrying amount of our cash equivalents approximates fair value due to the short maturity of the investments.
Marketable securities
Our marketable securities may consist of obligations of the United States government and its agencies, bank certificates of deposit and investment grade corporate obligations, which are classified as available-for-sale. Marketable securities which mature within 12 months from their purchase date are included in current assets. Securities are generally valued based on market prices for similar assets using third-party certified pricing sources and are carried at fair value. The amortized cost of marketable securities is adjusted for amortization of premiums or accretion of discounts to maturity. Such amortization or accretion is included in interest income. Realized gains and losses, if any, are calculated on the specific identification method. Interest income is included in other income in the condensed consolidated statements of operations.
We conduct periodic reviews to identify and evaluate each available-for-sale debt security that is in an unrealized loss position in order to determine whether an other-than-temporary impairment exists. An unrealized loss exists when the current fair value of an individual security is less than its amortized cost basis. Declines in fair value considered to be temporary and caused by noncredit-related factors of the issuer, are recorded in accumulated other comprehensive income or loss, which is a separate component of shareholders’ equity. Declines in fair value that are other than temporary or caused by credit-related factors of the issuer, are recorded within earnings as an impairment loss. There were no material other-than-temporary unrealized losses as of September 30, 2026.
Fair value measurements
Under the authoritative guidance for fair value measurements, fair value is defined as the exit price, or the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as of the measurement date. The authoritative guidance also establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs market participants would use in valuing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the factors market participants would use in valuing the asset or liability developed based upon the best information available in the circumstances. The categorization of financial assets and financial liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The hierarchy is broken down into three levels defined as follows:
Level 1 Inputs — quoted prices in active markets for identical assets and liabilities
Level 2 Inputs — observable inputs other than quoted prices in active markets for identical assets and liabilities
Level 3 Inputs — unobservable inputs
As of September 30, 2026, we believe that the carrying amounts of our other financial instruments, including amounts receivable, accounts payable and accrued liabilities, approximate their fair value due to the short-term maturities of these instruments. See Note 5 titled “Marketable Securities” for additional information.
Deferred offering costs
Deferred offering costs represent legal, accounting and other direct costs related to the Company’s efforts to raise capital through a public sale of the Company’s common shares under the 2025 Sales Agreement, see Note 11. Costs related to the public sale of the Company’s common shares are deferred until the completion of the applicable offering, at which time such costs are reclassified to additional paid-in-capital as a reduction of the proceeds. See Note 11 titled “Shareholders’ Equity” for additional information.
Recently issued accounting pronouncements
In November 2024, the Financial Accounting Standards Board (FASB) issued ASU No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (ASU 2024-03), which is intended to improve disclosures about a public business entity’s expenses by requiring disaggregated disclosure, in the notes to the consolidated financial statements, of certain categories of expenses included in the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. ASU 2024-03 may be applied either on a prospective or retrospective basis, and early adoption is permitted. The Company is currently evaluating the potential impact of the adoption of ASU 2024-03 on its consolidated financial statement disclosures.
5. Marketable Securities
The available-for-sale marketable securities are primarily comprised of investments in commercial paper, corporate bonds and government securities and consist of the following, measured at fair value on a recurring basis (in thousands):
|
Fair Value Measurements Using Inputs Considered as of: |
||||||||||||||||||||||||||||||||
|
September 30, 2026 |
December 31, 2025 |
|||||||||||||||||||||||||||||||
|
Total |
Level 1 |
Level 2 |
Level 3 |
Total |
Level 1 |
Level 2 |
Level 3 |
|||||||||||||||||||||||||
|
Government securities |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
|
Commercial paper and corporate bonds |
||||||||||||||||||||||||||||||||
|
Total |
$ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Maturities of individual securities are less than 12 months, and the amortized cost of all securities approximated fair value as of September 30, 2026, and December 31, 2025. Accrued interest receivable on marketable securities is included in amounts receivable and was $
There were no transfers of assets between Level 1 and Level 2 of the fair value measurement hierarchy during the nine months ended September 30, 2026.
6. Prepaid Expenses and Other Assets
Prepaid expenses and other assets consist primarily of insurance premiums, yearly subscriptions for services and deposits expected to be recovered during the next twelve months.
7. Amounts Receivable
Amounts receivable consisted primarily of accrued interest receivable on marketable securities of $
8. Property and Equipment
Property and equipment, net, consisted of the following (in thousands):
|
September 30, 2026 |
December 31, 2025 |
|||||||
|
Computer equipment |
$ | $ | ||||||
|
Furniture and equipment |
||||||||
|
Leasehold improvements |
||||||||
|
Less accumulated depreciation |
( |
) | ( |
) | ||||
|
Property and equipment, net |
$ | $ | ||||||
9. Accrued Liabilities
Accrued liabilities consisted of the following (in thousands):
|
September 30, 2026 |
December 31, 2025 |
|||||||
|
Clinical trial costs |
$ | $ | ||||||
|
Compensation |
||||||||
|
Professional services fees |
||||||||
|
Research and development services |
||||||||
|
Other |
||||||||
|
Total accrued liabilities |
$ | $ | ||||||
10. Operating Lease
Office lease
Our operating lease costs were $
Future minimum operating lease obligations as of September 30, 2026 are (in thousands):
|
2026 |
$ | |||
|
2027 |
||||
|
2028 |
||||
|
Total lease payments |
||||
|
Less interest portion |
( |
) | ||
|
Present value of operating lease obligation |
||||
|
Less current portion of operating lease |
( |
) | ||
|
Operating lease obligation, non-current |
$ |
11. Shareholders’ Equity
Authorized capital stock
DiaMedica has authorized share capital of an unlimited number of voting common shares, and the shares do not have a stated par value. Common shareholders are entitled to receive dividends as declared by the Company, if any, and are entitled to one vote per share at the Company’s annual general meeting and any extraordinary or special general meeting.
Equity issued during the nine months ended September 30, 2026
During the nine months ended September 30, 2026,
Equity issued during the nine months ended September 30, 2025
On July 21, 2025, we entered into securities purchase agreements with accredited investors, pursuant to which we agreed to issue and sell an aggregate of
In connection with the July 2025 private placement, we entered into a registration rights agreement (2025 Registration Rights Agreement) with the investors pursuant to which we agreed to file with the SEC a registration statement registering the resale of the shares sold in the July 2025 private placement (2025 Resale Registration Statement). The 2025 Resale Registration Statement was filed with the SEC on August 1, 2025 and declared effective by the SEC on August 8, 2025. Under the terms of the 2025 Registration Rights Agreement, we agreed to keep the 2025 Resale Registration Statement effective at all times until the shares are no longer considered “Registrable Securities” under the 2025 Registration Rights Agreement and if we fail to keep the 2025 Resale Registration Statement effective, subject to certain permitted exceptions, we will be required to pay liquidated damages to the investors in an amount of up to
During the nine months ended September 30, 2025,
At-the-Market Offering Program
We are party to a sales agreement (2025 Sales Agreement) under which we may, from time to time, sell voting common shares having an aggregate offering price of up to $
Shares reserved
Common shares reserved for future issuance are as follows:
|
September 30, 2026 |
||||
|
Issuable upon exercise of employee and non-employee stock options |
||||
|
Issuable upon settlement of deferred stock units |
||||
|
Issuable upon vesting and settlement of restricted stock units |
||||
|
Available for grant under the Amended and Restated 2019 Omnibus Incentive Plan |
||||
|
Available for grant under the 2021 Employment Inducement Incentive Plan |
||||
|
Total |
||||
12. Net Loss Per Share
We compute net loss per share by dividing our net loss (the numerator) by the weighted-average number of common shares outstanding (the denominator) during the period. Shares issued during the period and shares reacquired during the period, if any, are weighted for the portion of the period that they were outstanding. The computation of diluted earnings per share, or EPS, is similar to the computation of basic EPS except that the denominator is increased to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. Our diluted EPS is the same as basic EPS due to common equivalent shares being excluded from the calculation, as their effect is anti-dilutive.
The following table summarizes our calculation of net loss per common share for the periods presented (in thousands, except share and per share data):
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Net loss |
$ | ( |
) |
$ | ( |
) |
$ | ( |
) | $ | ( |
) | ||||
|
Weighted average shares outstanding—basic and diluted |
||||||||||||||||
|
Basic and diluted net loss per share |
$ | ( |
) |
$ | ( |
) |
$ | ( |
) | $ | ( |
) | ||||
The following outstanding potential common shares were not included in the diluted net loss per share calculations as their effects were not dilutive:
|
For the Three- and Nine-Month Periods Ended September 30, |
||||||||
|
2026 |
2025 |
|||||||
|
Common shares issuable upon exercise of employee and non-employee stock options |
||||||||
|
Common shares issuable upon settlement of deferred stock units |
||||||||
|
Common shares issuable upon vesting and settlement of restricted stock units |
||||||||
13. Share-Based Compensation
Amended and Restated 2019 Omnibus Incentive Plan (2019 Plan)
The 2019 Plan permits the Board, or a committee or subcommittee thereof, to grant to the Company’s eligible employees, non-employee directors and certain consultants non-statutory and incentive stock options, stock appreciation rights, restricted stock awards, restricted stock units (RSUs), deferred stock units (DSUs), performance awards, non-employee director awards and other share-based awards. We grant options to purchase common shares under the 2019 Plan at no less than the fair market value of the underlying common shares as of the date of grant. Options granted to employees and non-employee directors have a maximum term of years and generally vest over to years. Options granted to non-employees have a maximum term of years and generally vest over year. Subject to adjustment as provided in the 2019 Plan, the maximum number of the Company’s common shares authorized for issuance under the 2019 Plan is
2021 Employment Inducement Incentive Plan (2021 Inducement Plan)
The 2021 Inducement Plan permits the Board, or a committee or subcommittee thereof, to grant non-statutory options, stock appreciation rights, restricted stock awards, restricted stock units, performance awards and other share-based awards, to new employees who satisfy the standards for inducement grants under Nasdaq Listing Rule 5635(c)(4) or 5635(c)(3), as applicable. The Inducement Plan has a term of
Prior stock option plan
The Company ceased granting awards under its Amended and Restated Stock Option Plan in conjunction with shareholder approval of the 2019 Plan. Awards outstanding under the prior plan remain outstanding in accordance with and pursuant to the terms thereof. Options granted under the prior plan have terms similar to those used under the 2019 Plan. As of September 30, 2026, options to purchase an aggregate of
Prior deferred stock unit plan
The Company ceased granting awards under its Deferred Share Unit Plan in conjunction with shareholder approval of the 2019 Plan. Awards outstanding under that plan remain outstanding in accordance with and pursuant to the terms thereof. As of September 30, 2026, there were
Share-based compensation expense for each of the periods presented is as follows (in thousands):
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
General and administrative |
$ | $ | $ | $ | ||||||||||||
|
Research and development |
||||||||||||||||
|
Total share-based compensation |
$ | $ | $ | $ | ||||||||||||
We recognize share-based compensation for options awards based on the fair value of each award as estimated using the Black-Scholes option valuation model. Ultimately, the actual expense recognized over the vesting period will only be for those options that actually vest.
A summary of option activity is as follows (in thousands except share and per share amounts):
|
Shares Underlying Options |
Weighted Average Exercise Price Per Share |
Aggregate Intrinsic Value |
||||||||||
|
Balances at December 31, 2025 |
$ | $ | ||||||||||
|
Granted |
||||||||||||
|
Forfeitures |
( |
) | ||||||||||
|
Exercised |
( |
) | ||||||||||
|
Expired |
( |
) | ||||||||||
|
Balances at September 30, 2026 |
$ | $ | ||||||||||
Information about stock options outstanding, vested and expected to vest as of September 30, 2026, is as follows:
|
Outstanding, Vested and Expected to Vest |
Options Vested and Exercisable |
|||||||||||||||||||||
|
Per Share Exercise Price |
Shares |
Weighted Average Remaining Contractual Life (Years) |
Weighted Average Exercise Price |
Options Exercisable |
Weighted Average Remaining Contractual Life (Years) |
|||||||||||||||||
| $ |
- |
$ |
$ | |||||||||||||||||||
| $ |
- |
$ |
||||||||||||||||||||
| $ |
- |
$ |
||||||||||||||||||||
| $ |
- |
$ |
||||||||||||||||||||
| $ |
- |
$ |
||||||||||||||||||||
| $ |
- |
$ |
||||||||||||||||||||
| $ | ||||||||||||||||||||||
14. Segment Information
An operating segment is identified as a component of an enterprise that engages in business activities about which separate discrete financial information and operating results is regularly reviewed by the chief operating decision-maker (CODM) in making decisions regarding resource allocation and assessing performance. The Company's CODM is the Chief Executive Officer. The Company operates in a operating segment focused on the development of its drug product candidate DM199 for the treatment of severe ischemic disease. The CODM manages and allocates resources to the operations of the Company on a total company basis. Further, the CODM reviews and utilizes functional expenses (i.e., research, development and general and administrative) at the consolidated level to manage the Company's operations. Other segment items included in consolidated net loss are share-based compensation, interest income, other income (expense), net, and income tax expense, which are reflected in the condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheet as total consolidated assets.
The following table presents financial information, including significant segment expenses, which are regularly provided to the CODM and included within segment and consolidated net loss:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Operating expenses, excluding share-based compensation |
||||||||||||||||
|
Research and development |
$ | $ | $ | $ | ||||||||||||
|
General and administrative |
||||||||||||||||
|
Total operating expenses, excluding share-based compensation |
||||||||||||||||
|
Share-based compensation |
||||||||||||||||
|
Research and development |
||||||||||||||||
|
General and administrative |
||||||||||||||||
|
Total share-based compensation |
||||||||||||||||
|
Operating loss |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Interest income |
||||||||||||||||
|
Other income (expense), net |
( |
) | ( |
) | ( |
) | ||||||||||
|
Income tax expense |
( |
) | ( |
) | ( |
) | ( |
) | ||||||||
|
Segment and consolidated net loss |
$ | ( |
) | $ | ( |
) | $ | ( |
) | $ | ( |
) | ||||
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is based upon accounting principles generally accepted in the United States of America and discusses the financial condition and results of operations for DiaMedica Therapeutics Inc. and our subsidiaries for the three- and nine-month periods ended September 30, 2026 and 2025.
This discussion should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this report and our annual report on Form 10-K for the year ended December 31, 2025. The following discussion contains forward-looking statements that involve numerous risks and uncertainties. Our actual results could differ materially from the forward-looking statements as a result of these risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements” for additional cautionary information.
Business Overview
We are a clinical stage biopharmaceutical company focused on developing novel treatments for preeclampsia (PE), fetal growth restriction (FGR) and acute ischemic stroke (AIS). Our lead product candidate DM199 (rinvecalinase alfa; rhKLK1) is the first pharmaceutically active recombinant (synthetic) form of the human tissue kallikrein-1 (KLK1) protein (serine protease enzyme) to be clinically studied in patients. KLK1 is an established therapeutic modality in Asia for the treatment of AIS, PE and other cardiovascular diseases. We plan to advance DM199 through required clinical trials to create shareholder value by establishing its clinical and commercial potential as a therapy for PE, FGR and AIS. Longer term, we plan to develop DM300, our patented recombinant human ulinastatin, a broad-spectrum serine protease inhibitor, as a potential therapy for severe acute pancreatitis.
DM199 is a recombinant form of the naturally occurring protease enzyme KLK1 (rhKLK1) and the first rhKLK1 undergoing global clinical development studies in PE, FGR and AIS. DM199 has been granted Fast Track designation from the United States Food and Drug Administration (FDA) for the treatment of AIS. Naturally occurring KLK1 (extracted from human urine or porcine pancreas) has been an approved therapeutic agent in Asia for decades in the treatment of AIS and hypertension associated with cardiorenal disease. DM199 is produced using recombinant DNA technology without the need for extracted human or animal tissue sources and thereby eliminates risk of pathogen transmission.
KLK1 is a serine protease enzyme that plays an important role in the regulation of diverse physiological processes via a molecular mechanism believed to enhance endothelial health, microcirculatory blood flow and tissue perfusion by increasing production of nitric oxide, prostacyclin and endothelium-derived hyperpolarizing factor. In PE and FGR, DM199 is intended to lower blood pressure, enhance endothelial health and improve perfusion to maternal organs and the placenta, potentially disease modifying results that improve both maternal and perinatal outcomes. In the case of AIS, DM199 is intended to enhance blood flow and boost neuronal survival in the ischemic penumbra by dilating arterioles surrounding the site of the vascular occlusion and inhibiting apoptosis (neuronal cell death) while also facilitating neuronal remodeling through the promotion of angiogenesis.
Our product development pipeline is as follows:
* Investigator-Sponsored Trial
We are developing DM199 to address substantial unmet needs. In PE and FGR, there are currently no approved agents in any global market to safely lower maternal blood pressure and/or reduce the risk of FGR. Historically, the major issue is that traditional vasodilators that are commonly used to reduce essential hypertension (e.g., beta-blockers, angiotensin converting enzyme inhibitors (ACEi)) can readily cross the placental barrier and enter into the fetal circulation and cause harm to the developing fetus. We believe that DM199 is uniquely suited to treat PE since its inherent molecular size, approximately 26 kilodaltons (KD) is typically too large to cross the placental barrier, as was demonstrated in the interim results noted below, and therefore may reduce blood pressure and enhance microcirculatory perfusion to the maternal organs and placenta without entering fetal circulation, a potentially significant safety advantage. Additionally, we believe DM199 has the potential to not only address hypertension of PE, but also to confer disease modifying outcomes for both maternal and perinatal outcomes, including FGR. In AIS, up to 80% of AIS patients are not eligible for treatment with currently approved clot-busting (thrombolytic) drugs or catheter-based clot removal procedures (mechanical thrombectomy). DM199 is intended to enhance collateral blood flow and boost neuronal survival in the ischemic penumbra by inhibiting neuronal cell death (apoptosis) and promoting neuronal remodeling and neoangiogenesis, and accordingly, offer a potential treatment option for AIS patients who otherwise have no therapeutic options.
Preeclampsia / Fetal Growth Restriction Program and Phase 2 Investigator-Sponsored Trial
PE is a serious pregnancy disorder that typically develops after the 20th week of gestation, characterized by high blood pressure and damage to organ systems, often the kidneys and liver. Affecting up to 8% of pregnancies worldwide, PE can pose significant risks to both the mother and baby, including risk of stroke, placental abruption, progression to eclampsia, premature delivery, and death. Symptoms may include severe headaches, vision changes, upper abdominal pain and swelling in the hands and face. Delivery of the baby, often very prematurely, is the only available option for stopping the progression of PE. Women who have had PE have three to four times the risk of high blood pressure and double the risk for heart disease and stroke and there are currently no approved therapeutics for PE in the United States or Europe. FGR is a closely related condition of fetal undergrowth due to a poorly functioning placenta – the life support system of the unborn child. FGR is the leading cause of stillbirth. For the fetuses that survive the pregnancy, unhealthy fetal development in utero leaves a legacy of poor health echoing across the child’s lifespan. Currently, no approved treatment exists for this condition in any marketed territory (US, Europe, Asia).
Our clinical development program in PE and FGR consists of five clinical studies: four from an on-going Phase 2 investigator-sponsored trial (IST) and one global Phase 2 trial to be conducted in North America (United States and Canada) and the United Kingdom (UK) as follows:
|
● |
The investigator-sponsored trial is a safety, tolerability and pharmacodynamic, proof-of-concept Phase 2 trial in PE patients being conducted at the Tygerberg Hospital, Cape Town, South Africa. It consists of three studies in PE (Part 1a, dose-escalation; Part 1b, dose-expansion; and Part 2, expectant management) and a fourth study in FGR (Part 3, expectant management) in which enrollment commenced in June 2026. Part 1a study results were used to identify dosing levels for Parts 1b, 2, and 3. Up to 90 women with PE and potentially an additional 30 subjects with FGR may be evaluated. Interim results from cohorts 1 through 9 (N=28) of Part 1a of the study were released in July 2025 and additional data from the extension cohort was released in August 2026. The interim results demonstrated that DM199 appears safe and well-tolerated with clinically-relevant pharmacodynamic activity with no evidence of placental transfer of DM199. In the combined final, highest-dose cohorts, which consisted of 15 PE subjects, three from the initial dose escalation phase and 12 additional subjects enrolled in the extension cohort, DM199 produced clinically meaningful and statistically significant, sustained reductions in maternal blood pressure at the pre-specified time point of five minutes after completion of the IV infusion. Systolic blood pressure (SBP) was maintained below 160 mmHg at all measured time points over 24 hours. Detailed Part 1a results, including pharmacokinetic and pharmacodynamic analyses, are expected to be presented at an upcoming medical conference and submitted for publication. The acceptance by the FDA of study data from clinical trials conducted outside the United States, including this IST, may be subject to certain conditions or may not be accepted at all. If the FDA does not accept such data, it would result in the need for additional participants or trials, which would be costly and time-consuming and delay regulatory approval and commercialization of our DM199 product candidate. |
|
● |
We are preparing for an open-label, dose range finding global Phase 2 trial of DM199 in participants with early onset PE to be conducted in North America (United States & Canada) and the United Kingdom (UK). In March 2026 we received approval from Health Canada to initiate this Phase 2 trial, and we are currently finalizing plans to commence site activation by the end of this year. We are also preparing to expand this Phase 2 trial to include sites in the UK and the United States. Regarding the status of this clinical program in the United States, in the fourth quarter of 2025, we participated in a productive, in-person pre-investigational new drug (IND) meeting with the FDA to discuss the planned Phase 2 trial, at which the FDA requested an additional non-clinical, 10-day modified embryo-fetal development and pre- and post-natal development (ePPND) study in a rabbit model. Preliminary results of the rabbit study suggested that the animals developed an antibody response to DM199, a humanized recombinant protein, preventing us from completing the requested ePPND study in the rabbit model. We proposed to FDA performing the ePPND study in a second rodent model. In June 2026, we announced that the FDA provided written feedback regarding the need for additional nonclinical reproductive toxicity data to support continued development of DM199 for the treatment of PE. We believe, based on the FDA’s feedback, that the previously completed rat reproductive toxicity study may be acceptable to support a U.S. investigational new drug (IND) application, provided that we can demonstrate sufficient evidence of DM199 exposure and enzymatic activity throughout the previous completed rat studies, as well as adequate pharmacologic effect in rats to support their use as an appropriate toxicology species. To address the FDA’s request, we have initiated a pharmacokinetic (PK) (drug exposure) and pharmacologic activity study of DM199 in rats. The in-life portion of this study completed in October 2026, and a final report is due in November 2026. Upon completion of the rat PK study, we plan to submit the requested information to FDA for review. |
AIS Program and Phase 2/3 ReMEDy2 Trial
Our clinical program in AIS centers on our ReMEDy2 clinical trial (NCT05065216) of DM199 for the treatment of AIS. Our ReMEDy2 clinical trial is a Phase 2/3, adaptive design, randomized, double-blind, placebo-controlled trial intended to enroll approximately 300 participants at up to 100 sites globally. The adaptive design component includes a pre-specified interim analysis by our independent data safety monitoring board to be conducted after the first 200 participants have completed the trial based upon a primary efficacy endpoint analysis of the proportion of subjects with a modified Rankin score of 0 or 1 at Day 90 indicating an excellent outcome. Based on the results of the interim analysis, the study may be stopped for futility or the final sample size will be determined, ranging between 300 and 728 patients, according to a pre-determined statistical plan. We are currently conducting the trial in the United States, Canada, the United Kingdom and the European Union. Early this year, we commenced enrollment in six European countries. As previously disclosed, we have experienced and continue to experience slower than expected site activations and enrollment in our ReMEDy2 trial. We believe these conditions may be due to hospital and medical facility staffing shortages; inclusion/exclusion criteria in the study protocol; concerns managing logistics and protocol compliance for participants discharged from the hospital to an intermediate care facility; concerns regarding the prior clinically significant hypotension events; use of artificial intelligence and telemedicine which have enabled smaller hospitals to retain AIS patients not eligible for mechanical thrombectomy instead of sending these patients to the larger stroke centers which are more likely to be sites in our trial; and competition for research staff and trial subjects due to other pending stroke and neurological trials. We continue to reach out to our study sites to understand the specific issues at each study site. To mitigate the impact of these factors, we have significantly expanded our internal clinical team and have brought in-house certain trial activities, including site identification, qualification and activation, clinical site monitoring, supporting vendor management and overall program management. We continue to work closely with our contract research organizations and other supporting vendors to develop procedures to support both U.S. and global study sites and potential participants as needed. We intend to continue to monitor the results of these efforts and, if necessary, implement additional actions to enhance enrollment in our ReMEDy2 trial; however, no assurances can be provided as to the success of these actions and if or when these issues will resolve. Failure to resolve these issues may result in further delays in our ReMEDy2 trial and increase the difficulty in forecasting enrollment. In October 2026 we announced the enrollment of the 200th participant in this trial and that results from the interim analysis are expected to be available by the end of the first quarter of 2027.
Financial Overview
We do not have commercial approval to market any product, nor have we ever had such approval. We have financed our operations principally by the public and private sales of equity securities. We have received additional capital from the exercise of warrants and stock options, interest income on funds available for investment and government grants. We have incurred a net loss in each year since our inception. Our net losses were $31.5 million and $24.0 million for the nine months ended September 30, 2026 and 2025, respectively. As of September 30, 2026, we had an accumulated deficit of $204.3 million. Substantially all of our operating losses resulted from expenses incurred in connection with our research and development (R&D) activities and general and administrative (G&A) support costs associated with our operations.
We expect to continue to incur significant expenses and operating losses for at least the next few years. We anticipate that our quarterly expenses will increase moderately relative to recent prior quarterly periods as we continue to advance our DM199 clinical development program into PE and we continue our ReMEDy2 trial, including the activation of additional study sites in the U.S. and Europe and the enrollment of additional participants in the trial. Our efforts to expand our team to provide support for our clinical programs and administrative operations will also likely contribute to such increases.
We expect our rate of future negative operating cash flows per quarter will generally increase moderately relative to recent prior quarterly periods as we continue our clinical development programs in PE, FGR and AIS. However, the amount and timing of our future funding requirements will depend on many factors, including timing and results of our ongoing development efforts, including the current Phase 2 PE trial, our current ReMEDy2 trial and in particular the rate of site activation and participant enrollment in the study, the potential further expansion of our current development programs and other factors. We may require or otherwise seek significant additional funds earlier than we currently expect. We may elect to raise additional funds even before we need them if market conditions for raising additional capital are favorable.
If we are unable to obtain additional financing when needed, we would need to scale back our operations taking actions that may include, among other things, reducing use of outside professional service providers, reducing staff or staff compensation, significantly modifying or delaying the development of our DM199 product candidate, licensing to third parties the rights to commercialize our DM199 product candidate for acute ischemic stroke, chronic kidney disease or other applications that we would otherwise seek to pursue, or ceasing operations.
Our future success is dependent upon our ability to obtain additional financing, the success of our development efforts, our ability to demonstrate clinical progress for our DM199 product candidate in the United States or other markets, our ability to obtain required governmental approvals of our product candidate and ultimately our ability to license or market and sell our DM199 product candidate. If we are unable to obtain additional financing when needed, if our clinical trials are not successful or if we are unable to obtain required governmental approvals, we would not be able to continue as a going concern and would be forced to cease operations and liquidate our company.
There can be no assurances that we will be able to obtain additional financing on commercially reasonable terms, or at all. The sale of additional equity securities would likely result in dilution to our current shareholders.
Components of Our Results of Operations
Research and Development Expenses
R&D expenses consist primarily of fees paid to external service providers such as contract research organizations; clinical support services; clinical development including clinical site costs; outside nursing services; and laboratory testing. R&D costs also include non-clinical testing; fees paid to our contract manufacturing and development organizations and outside laboratories for development of DM199 and related manufacturing processes; costs for production runs of DM199; consulting resources with specialized expertise related to the execution of our development plan for DM199; and personnel costs, including salaries, benefits, non-cash share-based compensation expense; and other personnel costs. Our R&D efforts have been primarily focused on developing DM199. At this time, due to the risks inherent in the clinical development process and the clinical stage of our product development programs, we are unable to estimate with any certainty the costs we will incur in completing the development of DM199 through marketing approval. The process of conducting clinical studies necessary to obtain regulatory approval and manufacturing scale-up to support expanded development and potential future commercialization is costly and time consuming. Any failure by us or delay in completing clinical studies, manufacturing scale-up, or in obtaining regulatory approvals could lead to increased R&D expenses and, in turn, have a material adverse effect on our results of operations.
General and Administrative Expenses
G&A expenses consist primarily of salaries and benefits, including non-cash share-based compensation related to our executive, finance, business development and support functions. G&A expenses also include insurance, including directors’ and officers’ liability coverage, rent and utilities, travel expenses, patent costs, and professional fees, including for auditing, tax and legal services.
Other Income, Net
Other income, net consists primarily of interest income earned on marketable securities.
Results of Operations
Comparison of the Three- and Nine-Month Periods Ended September 30, 2026 and 2025
The following table summarizes our unaudited results of operations for the three- and nine-month periods ended September 30, 2026 and 2025 (in thousands):
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
|||||||||||||||
|
2026 |
2025 |
2026 |
2025 |
|||||||||||||
|
Research and development expenses |
$ | 9,243 | $ | 6,437 | $ | 25,383 | $ | 17,915 | ||||||||
|
General and administrative expenses |
2,378 | 2,596 | 7,218 | 7,269 | ||||||||||||
|
Other income, net |
$ | (319 | ) | $ | (419 | ) | $ | (1,132 | ) | $ | (1,176 | ) | ||||
Research and Development Expenses
R&D expenses increased to $9.2 million for the three months ended September 30, 2026, up from $6.4 million for the three months ended September 30, 2025. R&D expenses increased to $25.4 million for the nine months ended September 30, 2026, up from $17.9 million for the nine months ended September 30, 2025. The increases are primarily due to cost increases driven by the expansion of our clinical team; our ongoing ReMEDy2 clinical trial, including its global expansion; the start-up of our Phase 2 PE trial in Canada and the UK; additional reproductive toxicity testing being performed in support of our PE program in the United States; increased manufacturing development activity and increased non-cash share-based compensation. We expect that our R&D expenses will moderately increase in future periods relative to recent prior periods as we continue enrollment in our ReMEDy2 trial and start-up of our Phase 2 PE trial.
General and Administrative Expenses
G&A expenses were $2.4 million and $2.6 million for the three months ended September 30, 2026 and 2025, respectively. G&A expenses were $7.2 million and $7.3 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease for the three-month period was driven primarily by decreased professional fees partially offset by increased non-cash share-based compensation expense. The decrease for the nine-month period resulted primarily from a reduction in current-year legal and other professional fees, partially offset by increased personnel costs incurred in conjunction with staff expansion. We expect G&A expenses to remain steady in future periods as compared to recent prior periods.
Other Income, Net
Other income, net, was $319 thousand and $419 thousand for the three months ended September 30, 2026 and 2025, respectively, and $1.1 million and $1.2 million for the nine months ended September 30, 2026 and 2025, respectively. The decreases were driven by decreased interest income recognized during the current-year periods.
Liquidity and Capital Resources
The following tables summarize our liquidity and capital resources as of September 30, 2026 and December 31, 2025, and our cash flows for each of the nine-month periods ended September 30, 2026 and 2025, and are intended to supplement the more detailed discussion that follows (in thousands):
|
September 30, 2026 |
December 31, 2025 |
|||||||
|
Cash, cash equivalents and marketable securities |
$ | 34,905 | $ | 59,890 | ||||
|
Total assets |
36,153 | 61,371 | ||||||
|
Total current liabilities |
7,454 | 5,132 | ||||||
|
Total shareholders’ equity |
28,659 | 56,111 | ||||||
|
Working capital |
28,038 | 55,497 | ||||||
|
Nine Months Ended September 30, |
||||||||
|
2026 |
2025 |
|||||||
|
Cash Flow Data |
||||||||
|
Cash flow provided by (used in): |
||||||||
|
Operating activities |
$ | (26,028 | ) | $ | (21,297 | ) | ||
|
Investing activities |
16,518 | (10,187 | ) | |||||
|
Financing activities |
663 | 31,785 | ||||||
|
Net increase (decrease) in cash |
$ | (8,847 | ) | $ | 301 | |||
Working Capital
We had aggregate cash, cash equivalents and marketable securities of $34.9 million, current liabilities of $7.5 million and working capital of $28.0 million as of September 30, 2026, compared to aggregate cash, cash equivalents and marketable securities of $59.9 million, $5.1 million in current liabilities and $55.5 million in working capital as of December 31, 2025. The decreases in our combined cash, cash equivalents and marketable securities and in our working capital are due primarily to the net cash used to fund our current operations.
Cash Flows
Operating Activities
Net cash used in operating activities for the nine months ended September 30, 2026 was $26.0 million compared to $21.3 million for the nine months ended September 30, 2025. The increase in cash used in operating activities resulted primarily from the increased net loss, partially offset by changes in operating assets and liabilities during the current year period.
Investing Activities
Investing activities consist primarily of purchases and maturities of marketable securities. Net cash provided by investing activities was $16.5 million for the nine months ended September 30, 2026, compared to net cash used in investing activities of $10.2 million for the nine months ended September 30, 2025. This change resulted primarily from net maturities of our marketable securities during the current-year period compared to the investment of proceeds from the July 2025 private placement in the prior-year period.
Financing Activities
Net cash provided by financing activities was $663 thousand and $31.8 million for the nine months ended September 30, 2026 and 2025, respectively. The amounts consist primarily of proceeds from the exercise of stock options in 2026 and net proceeds from the sale of common shares in our July 2025 private placement.
Capital Requirements
Since our inception, we have incurred losses while advancing the development of our DM199 product candidate. We have not generated any revenues from product sales and do not expect to do so for at least three to four years, if at all. We do not know when or if we will generate any revenues from product sales or out-licensing of our DM199 product candidate or any future product candidate. We will not generate any revenue from product sales unless and until we obtain required regulatory approvals. We expect to continue to incur substantial operating losses until such time as any future product sales, licensing fees, milestone payments and/or royalty payments are sufficient to generate revenues to fund our continuing operations. We expect our operating losses to moderately increase as compared to recent prior periods as we continue the research, development and clinical studies of, and seek regulatory approval for, our DM199 product candidate, including, in particular, the expansion of our PE clinical development program and the continuation and global expansion of our ReMEDy2 trial. In the long term, subject to obtaining regulatory approval of our DM199 product candidate, or any other product candidate, and if we are unable to secure the assistance of, or out-license to, a strategic partner, we expect to incur significant commercialization expenses for product marketing, sales, manufacturing and distribution.
Accordingly, and notwithstanding the sale of common shares during 2025, in which we received net proceeds of approximately $43.3 million, we expect we will need substantial additional capital to complete our R&D activities, including current and anticipated future clinical studies, regulatory activities, and otherwise develop our product candidate, DM199, or any future product candidate, to a point where the product candidate may be out-licensed or commercially sold. Although we are striving to achieve these plans, there is no assurance that these and other strategies will be achieved or that additional funding will be obtained on favorable terms or at all. We expect our rate of future negative quarterly cash flows will vary depending on our clinical activities and the timing of expenses incurred and will increase moderately relative to recent prior periods as we initiate our global Phase 2 PE trial in early-onset patients and continue our ReMEDy2 trial. The amount and timing of our future funding requirements will depend on many factors, including timing and results of our ongoing development efforts, including our current ReMEDy2 trial and the initiation of our global Phase 2 PE trial, the potential further expansion of our current development programs and other factors on our operating expenses. We may require significant additional funds earlier than we currently expect and there is no assurance that we will not need or seek additional funding prior to such time, especially if market conditions for raising additional capital are favorable. The accompanying interim condensed consolidated financial statements included in this report have been prepared assuming that we will continue as a going concern and do not include any adjustments relating to the recoverability or classification of assets or the amounts of liabilities that might result from the outcome of these uncertainties.
Historically, we have financed our operations primarily from the public and private sale of equity securities. We have received additional capital from the exercise of warrants and stock options, interest income on funds available for investment and government grants. Our most recent equity financings include our July 2025 private placement in which we issued and sold an aggregate of 8,606,425 common shares pursuant to a securities purchase agreement at a purchase price of $3.50 per share to accredited investors. As a result of the offering, we received net proceeds of $30.0 million, after deducting offering expenses. Additionally, we sold 1,724,472 common shares under our at-the-market offering for net proceeds of $13.3 million. We do not have any existing credit facilities under which we could borrow funds. We may seek to raise additional funds through various sources, such as equity or debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure additional sources of funds to support our operations, or if such funds are available to us, that such additional financing will be sufficient to meet our needs or on terms acceptable to us. This is particularly true if our clinical data are not positive or economic and market conditions deteriorate.
To the extent we raise additional capital through the sale of equity or convertible debt securities, the ownership interests of our shareholders will be diluted. Debt financing, if available, may involve agreements that include conversion discounts, pledging our intellectual property as collateral or covenants limiting or restricting our ability to take specific actions, such as incurring additional debt or making capital expenditures. If we raise additional funds through government or other third-party funding, marketing and distribution arrangements or other collaborations, or strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates or grant licenses on terms that may not be favorable to us. The availability of financing will be affected by the status of our clinical trials; our clinical data and other results of scientific and clinical research; the ability to obtain regulatory approvals and other regulatory actions; market acceptance of our product candidates; the state of the capital markets generally with particular reference to pharmaceutical, biotechnology and medical companies; the status of strategic alliance agreements; and other relevant commercial considerations.
If adequate funding is not available when needed, we may be required to scale back our operations by taking actions that may include, among other things, implementing cost reduction strategies, such as reducing use of outside professional service providers, reducing the number of our employees or employee compensation, modifying or delaying the development of our DM199 product candidate; licensing to third parties the rights to commercialize our DM199 product candidate for PE, FGR, AIS or other indications that we would otherwise seek to pursue, or otherwise relinquishing significant rights to our technologies, future revenue streams, research programs or product candidates or granting licenses on terms that may not be favorable to us; and/or divesting assets or ceasing operations through a merger, sale, or liquidation of our Company.
Critical Accounting Estimates
There have been no material changes to our critical accounting estimates from the information provided in “Part II. Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies,” included in our annual report on Form 10-K for the fiscal year ended December 31, 2025.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
As a smaller reporting company, we are not required to provide disclosure pursuant to this item.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the United States Securities Exchange Act of 1934, as amended (Exchange Act)) that are designed to provide reasonable assurance that information required to be disclosed by us in the reports we file or submit under the Exchange Act, is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered in this report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of such period to provide reasonable assurance that information required to be disclosed in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the three months ended September 30, 2026 that has materially affected or is reasonably likely to materially affect our internal control over financial reporting.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to various ongoing or threatened legal actions and proceedings, including those that arise in the ordinary course of business, which may include employment matters and breach of contract disputes. Such matters are subject to many uncertainties and to outcomes that are not predictable with assurance and that may not be known for extended periods of time. We are not currently engaged in or aware of any threatened legal actions.
ITEM 1A. RISK FACTORS
There have been no material changes to the risk factors previously disclosed by us in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025. The risk factors included our Annual Report continue to apply to us and describe risks and uncertainties that could cause actual results to differ materially from the results expressed or implied by the forward-looking statements contained in this Quarterly Report. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also impair our business, financial condition and results of operations.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5. OTHER INFORMATION
Rule 10b5-1 Plan and Non-Rule 10b5-1 Trading Arrangement Adoptions, Terminations, and Modifications
During the quarterly period ended September 30, 2026, of our directors or “officers” (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408, respectively, of SEC Regulation S-K.
ITEM 6. EXHIBITS
The following exhibits are being filed or furnished with this quarterly report on Form 10-Q:
|
Exhibit No. |
Description |
Manner of Filing |
||
|
3.1 |
Notice of Articles of DiaMedica Therapeutics Inc. dated May 20, 2025 |
Incorporated by reference to Exhibit 3.1 to DiaMedica’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 |
||
|
3.2 |
Amended and Restated Articles of DiaMedica Therapeutics Inc. Effective May 17, 2023 |
Incorporated by reference to Exhibit 3.1 to DiaMedica’s Current Report on Form 8-K as filed with the Securities and Exchange Commission on May 18, 2023 |
||
|
10.1 |
Amended and Restated DiaMedica Therapeutics Inc. 2019 Omnibus Incentive Plan (as amended through May 20, 2026) |
Filed herewith |
||
|
31.1 |
Certification of Chief Executive Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
Filed herewith |
||
|
31.2 |
Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14(a)/15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
Filed herewith |
||
|
32.1 |
Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Furnished herewith |
||
|
32.2 |
Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
Furnished herewith |
||
|
101 |
Financial statements from the quarterly report on Form 10-Q of DiaMedica Therapeutics Inc. for the three and nine months ended September 30, 2026, formatted in Inline XBRL: (i) the Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations and Comprehensive Loss, (iii) Condensed Consolidated Statements of Shareholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, (v) Notes to the Condensed Consolidated Financial Statements, and (vi) the information set forth in Part II, Item 5 |
Filed herewith |
||
|
104 |
Cover Page Interactive Data File |
Embedded within the Inline XBRL document |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
|
DIAMEDICA THERAPEUTICS INC. |
|
|
Date: November 12, 2026 |
/s/ Rick Pauls |
|
Rick Pauls President and Chief Executive Officer |
|
|
(Principal Executive Officer) |
|
|
Date: November 12, 2026 |
/s/ Scott Kellen |
|
Scott Kellen Chief Financial Officer |
|
|
(Principal Financial Officer and Principal Accounting Officer) |