Press Release

Difference Capital Announces Closings of a Series of Offerings for Total Gross Proceeds of $101 Million

Written on July 26th, 2013

TORONTO, ONTARIO–(Marketwired – July 26, 2013) – Difference Capital Financial Inc. (“DCF”) (TSX VENTURE:DCF) announced today that it has closed its previously announced public offering of common shares of the Company (the “Common Shares”), pursuant to which the Company sold 12,000,000 Common Shares for aggregate gross proceeds of $45,000,000 (the “Common Share Offering”). The Common Share Offering was completed following the closing on July 4, 2013 of the previously announced offering of convertible unsecured subordinated debentures (the “Debentures”) together with the closing of the over-allotment option on July 19, 2013, for aggregate gross proceeds of $56,079,000 (the “Debenture Offering” and, together with the Common Share Offering, the “Offerings”). Together, the Offerings amounted to approximately $101 million in gross proceeds, and brings the total capital raised by DCF through convertible debt and equity financings since May 2012 to approximately $185 million.

The Common Share Offering and the Debenture Offering were completed pursuant to an agency agreement and underwriting agreement, respectively, by a syndicate of investment dealers led by National Bank Financial Inc. and including Canaccord Genuity Corp., TD Securities Inc., Dundee Securities Ltd., GMP Securities L.P., Byron Capital Markets Ltd. and Global Securities Corporation.

“We are pleased by the participation in the Offerings by some of Canada’s largest financial institutions and family offices, and are confident in our strategy. In our first year of operation, we have emerged as one of the best capitalized specialty finance companies for the growth sector in Canada and look forward to the future,” said Michael Wekerle, Executive Chairman of DCF.

DCF intends to use the net proceeds from the Offerings to make strategic investments in debt and equity securities in both privately held and public companies, with a focus on intellectual property-rich technology, media and healthcare related companies, and for general corporate purposes.

The Common Shares are traded on the TSX Venture Exchange under the symbol “DCF”. The Debentures are traded on the TSX Venture Exchange under the symbol “DCF.DB”.

DCF also announces that it has closed on the previously announced purchase of 3,829,795 common shares of Blue Ant Media Inc. (“Blue Ant”), for total cash consideration of approximately $4.7 million pursuant to a share purchase agreement dated July 10, 2013. Blue Ant, an independent media company, is a content leader in lifestyle, travel, documentary, music and entertainment across all screens.

Certain insiders of DCF have directly and/or indirectly participated in the Common Share Offering, acquiring 3,791,000 Common Shares, representing approximately 31.6% of the Common Share Offering. The participation by these insiders in the Common Share Offering is considered a “related party transaction” under Multilateral Instrument 61-101 (“MI 61-101″) but is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as the fair market value of the transaction, insofar as it involves interested parties, is less than 25% of DCF’s market capitalization. DCF did not file a material change report more than 21 days before the closing of the Common Share Offering as required by MI 61-101 as the details of the participation by the insiders in the Common Share Offering were settled only recently.

The Common Shares and the Debentures have not been and will not be registered under the United States Securities Act of 1933 and accordingly will not be offered, sold or delivered, directly or indirectly within the United States, its possessions and other areas subject to its jurisdiction or to, or for the account or for the benefit of a U.S. person, except pursuant to applicable exemptions from the registration requirements.

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.

Caution Concerning Forward-Looking Statements

This press release contains forward-looking statements including regarding use of proceeds from the Offerings. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates”, or similar expressions, are forward-looking statements within the meaning of securities laws. 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 the intended use of proceeds from the Offerings to differ materially from those described above. Although DCF has attempted to identify important risks and factors that could cause the intended use of proceeds from the Offerings to differ materially from those described above, there may be other factors and risks that could cause an adjustment to the intended use of proceeds from the Offerings which are not currently 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.

Contact Information

Difference Capital Financial Inc.
Neil Johnson
Chief Executive Officer
416 649 5088
http://www.differencecapital.com


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