Difference Capital Announces Underwritten $50 Million Convertible Debentures Offering and Prices Equity Offering

TORONTO, ONTARIO--(Marketwired - June 19, 2013) -

NOT FOR DISSEMINATION IN THE UNITED STATES OR THROUGH U.S. NEWSWIRE SERVICES

Difference Capital Financial Inc. ("DCF") (TSX VENTURE:DCF) is pleased to announce that further to its press release of June 18, 2013 it has:

• Signed an underwriting agreement to sell $50 million of convertible debentures; and
• Priced its concurrent fully-marketed equity offering at $3.90 per share, representing a discount of 5% to the closing price of DCF's common shares on the TSXV on June 18, 2013

In connection with the proposed public offering of convertible unsecured subordinated debentures (the "Debentures"), DCF has entered into an underwriting agreement with a syndicate of underwriters bookrun by National Bank Financial Inc. ("NBF") as lead underwriter for the Offering together with Canaccord Genuity Corp., TD Securities Inc., Dundee Securities Ltd., GMP Securities L.P., Byron Capital Markets Ltd. and Global Securities Corporation (collectively, the "Underwriters"), pursuant to which the Underwriters will purchase an aggregate of $50 million Debentures at a price of $1,000 per Debenture (the "Debenture Offering").

DCF has also granted the Underwriters an option (the "Over-Allotment Option") to arrange for purchases of up to an aggregate of $7.5 million additional Debentures sold under the Debenture Offering to cover over-allotments, if any, and for market stabilization purposes. The Over-Allotment Option is exercisable in whole or in part for a period of 30 days following closing under the same terms as the Debenture Offering.

The Debentures will mature on July 31, 2018 (the "Maturity Date") and will accrue interest at the rate of 8% per annum payable on a semi-annual basis. At the holder's option, the Debentures may be converted into common shares in the capital of DCF (the "Common Shares") at any time prior to the close of business on the earlier of the business day immediately preceding the Maturity Date and the business day immediately preceding the date fixed for redemption of the Debentures. The conversion price will be $5.75 for each Common Share (the "Conversion Price"), subject to adjustment in certain circumstances.

The Debentures will be direct, unsecured obligations of DCF, subordinated to other indebtedness of DCF for borrowed money and ranking equally with all other unsecured subordinated indebtedness.

The Debentures will not be redeemable before July 31, 2016. On and after July 31, 2016 and prior to July 31, 2017, the Debentures may be redeemed from holders selected by DCF, in whole or in part, from time to time at the option of DCF on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest, provided that the current market price on the date on which the notice of redemption is given is not less than 125% of the Conversion Price. On or after July 31, 2017 and prior to the Maturity Date, the Debentures may be redeemed in whole or in part at the option of DCF on not more than 60 days and not less than 30 days prior notice at a price equal to their principal amount plus accrued and unpaid interest.

The Debenture Offering is scheduled to close on or about July 4, 2013 and is subject to certain customary conditions including, but not limited to, the receipt of all necessary approvals, including the approval of the TSX Venture Exchange ("TSXV"). The Debentures will be offered in all of the provinces of Canada (other than Québec) by short form prospectus, and in the United States on a private placement basis, and in other jurisdictions outside of Canada and the United States which are agreed to by DCF and NBF, where the Debentures can be issued on a private placement basis, exempt from any prospectus, registration or other similar requirements.

As previously announced, DCF has also filed a preliminary short form prospectus in relation to a concurrent offering of Common Shares to be marketed on a commercially reasonable best efforts basis by the Underwriters under the terms of an agency agreement to be entered into for gross proceeds of up to $50 million (the "Equity Offering"). The Common Shares under the Equity Offering have been priced at $3.90 per share, representing a discount of 5% to the closing price of the Common Shares on the TSXV on June 18, 2013. Completion of the Debenture Offering is not conditional upon the completion of the Equity Offering and likewise completion of the Equity Offering is not conditional upon the completion of the Debenture Offering.

The net proceeds of the Debenture Offering will be used by DCF to pay certain indebtedness, for general corporate purposes and to make strategic investments in debt and equity securities in both privately held and public target companies, with a focus on technology-related and intellectual property-rich companies.

A preliminary short-form prospectus for each of the Debenture Offering and Equity Offering were previously filed with the securities regulatory authorities in all provinces of Canada, except Québec. An amended and restated preliminary short-form prospectus in respect of the Debenture Offering is expected to be filed with the securities regulatory authorities in all provinces of Canada, except Québec, as soon as possible.

No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

About Difference Capital Financial Inc.

Difference Capital Financial Inc. is a publicly-listed, Toronto-based specialty finance company focused on creating shareholder value through strategic investments in, and advisory services for, growth companies, particularly in the technology, media and healthcare sectors, as well as through opportunistic investments in undervalued financial assets and real property.

Cautionary Notes

This press release contains forward-looking statements regarding future growth, results of operations, performance, business prospects and opportunities involving DCF. Words such as "expects", "anticipates", "intends", "plans", "believes", "estimates", or similar expressions, are forward-looking statements within the meaning of securities laws. Forward-looking statements include, without limitation, the closing of the Offering. These statements are not historical facts but instead represent only management's and the board's expectations, estimates and projections regarding future events. These statements are not guarantees of future performance and involve known and unknown risks, assumptions, uncertainties, and other factors that may cause actual results or events to differ materially from what is expressed, implied or forecasted in such forward-looking statements. In addition to the factors DCF currently believes to be material such as, but not limited to, market conditions, the ability to secure additional financings, the ability to close on future investments, the ability of DCF to achieve its investment objectives, its dependence on the efforts of management, risks associated with fluctuations in net asset value and valuation of DCF's portfolio, its ability to operate on a profitable basis, changes in interest rates, evaluation of its provision for income and related taxes, and other factors, such as general, economic and business conditions and opportunities available to or pursued by DCF, not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although DCF has attempted to identify important risks and factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors and risks that cause actions, events or results not to be anticipated, estimated or intended. Accordingly, shareholders should not place any undue reliance on forward-looking statements as such information may not be appropriate for other purposes. DCF does not undertake any obligation to update or release any revisions to these forward-looking statements to reflect events or circumstances after the date of this press release except as required by applicable law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) has in any way passed upon the merits of the proposed transactions and neither of the foregoing entities has approved or disapproved of the contents of this press release.