Difference Capital Funding Inc. ("Difference Capital" or the "Company") (TSX VENTURE:DCF) is pleased to announce a non-brokered private placement of special warrants ("Special Warrants") for gross proceeds of a minimum of $50 million (the "Offering") at a price of $0.35 per Special Warrant as well as its corporate expansion.

Expansion of Business Activities

In response to the additional funding, the Company will expand the focus of investment opportunities to include growth companies in other non-resource industries while continuing to concentrate on the technology sector. The management of Difference Capital believes this uniquely positions the Company amongst publicly listed merchant banks in Canada, while diversifying the scope of opportunities.

"We are strategically positioning to capitalize on emerging opportunities in non-resource growth companies," said Mr. Wekerle. "We believe our strategy will generate attractive returns and create significant shareholder value."

To complement gains from capital appreciation in investee companies, Difference Capital is introducing advisory and consulting services to assist its clients. Revenues from the new services will build value in the Company for the benefit of shareholders. Management believes the breadth of experience from the Difference Capital executives is of value to clients looking to accelerate the growth of their business, add Board members, and/or pursue international opportunities.

Additionally, the Company is intending to introduce a new dividend policy in 2013. "Most of our investments to date are in convertible, yield-bearing securities which is our preferred investing structure." said Mr. Wekerle. "By 2013, we expect to be in a position to introduce a dividend policy for shareholders."

Executive Expansion and Board Changes

Difference Capital is also pleased to announce that Michael Wekerle has been appointed to the Board of Directors as the Company's Executive Chairman, and effective immediately Neil Johnson has been appointed as Chief Executive Officer.

Based in Toronto, Mr. Johnson was most recently with Canaccord Genuity, and is the former Head of European Investment Banking and Global Head of Technology. His experience spans technology research analysis and investment banking in Canada and the United Kingdom. Mr. Johnson has a total of 20 years experience in international capital markets, and holds a degree from the Richard Ivey School of Business at the University of Western Ontario (HBA) and is a Chartered Financial Analyst (CFA).

"We are very pleased Neil has joined the Difference Capital team," said Michael Wekerle, Executive Chairman, "Neil is a proven executive with international expertise, and his relationships and deep industry knowledge are critical for us as we grow and expand our merchant banking activities."

"I am excited to join the Difference Capital team, and believe we have the right strategy to invest and provide advisory and consulting services for growth companies." said Mr. Johnson, Chief Executive Officer. "With the strength, experience and knowledge of our management team, Difference Capital is ideally positioned to provide value-added services to clients while creating a new revenue stream for the Company."

Structure of the Offering

Each Special Warrant will entitle the holder to receive one unit (a "Unit") of the Company, for no additional consideration, upon the exercise or deemed exercise of the Special Warrants. Each Unit will be comprised of one common share of the Company and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to purchase one common share of the Company at an exercise price of $0.60 for a period of twenty-four months following the closing date.

Proceeds from the Offering will be used for general expenses and to diversify the Company's investment strategy to include mid-market non-resource growth opportunities.

The Special Warrants will be deemed to be exercised on the earlier of: (a) the date that is four months and one day following the closing of the Offering, and (b) the fifth business day after a receipt is issued for a final prospectus ("Qualification Prospectus") qualifying the distribution of the Units. Difference Capital will use commercially reasonable efforts to obtain a receipt for the Qualification Prospectus within 75 days of the closing of the Offering.

Pursuant to applicable Canadian securities laws, until a receipt is issued for the Qualification Prospectus the Special Warrants and any underlying securities issuable on exercise thereof will be subject to a four-month and one-day hold period from the closing of the Offering.

Certain insiders of Difference Capital, including management, members of the board of directors and significant shareholders will be participating in the Offering.

The Offering is subject to certain conditions including, but not limited to, the receipt of all necessary approvals, including the final approval of the TSX Venture Exchange, and any other applicable regulatory and shareholders approvals required in connection with insider participation in the Offering.

The private placement will close in one or more tranches, the first of which is expected to take place on Wednesday October 3, 2012.

About Difference Capital

Difference Capital Funding Inc. is a publicly listed merchant bank focused on creating shareholder value through strategic investment in, and advisory services for, non-resource growth companies.

With the changes announced today, the Company's Board of Directors are: Michael Wekerle, Executive Chairman; Paul Sparkes, Executive Vice Chairman; Wes Hall, Chairman of the Board; John Albright, Independent Director; Riyaz Lalani, Independent Director. The Company's Management are: Michael Wekerle, Executive Chairman; Neil Johnson, Chief Executive Officer; Paul Sparkes Executive Vice Chairman; and Henry Kneis, Chief Operating Officer and Chief Financial Officer.

Difference Capital's portfolio of investee companies includes Virgin Gaming, Appinions Inc., Gotham Analytics LLC, Lignol Energy Corporation, Fem Med Formulas Limited Partnership, Naturally Advanced Technologies Inc. and Neulion Inc.

For further information on the Company, its management, board and portfolio of investee companies, please visit [ www.differencecapital.com ].

Cautionary Notes

This press release contains forward-looking statements regarding future growth, results of operations, performance, business prospects and opportunities involving the Company. 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 information concerning possible or assumed future results of operations of the Company. 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 the Company currently believes to be material such as, but not limited to, successful completion of the Offering and the ability of the Company to achieve the objectives contemplated thereby and by its investment objectives generally, its ability to declare and pay dividends in the future, its dependence on the efforts of management, risks associated with fluctuations in net asset value and valuation of the Company'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 the Company, not currently viewed as material could cause actual results to differ materially from those described in the forward-looking statements. Although the Company 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. The Company 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.

This news release does not constitute an offer to sell or the solicitation of an offer to buy any of these securities in the United States. Securities may not be offered or sold in the United States absent registration under the United States Securities Act of 1933, as amended, and applicable state securities laws, or an available exemption from such registration requirements.

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.

Contributing Sources

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Difference Capital Funding Inc. Announces Minimum $50 Million in Special Warrant Financing and Corporate Expansion

Difference Capital Funding Inc. Announces Minimum $50 Million in Special Warrant Financing and Corporate Expansion