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Difference Capital Funding Inc. Provides Update on Investments

- DCF positioned for growth with strategic investments in QuickPlay Media Inc., FemMED Formulas Limited Partnership, CRAiLAR Technologies Inc., ePals Corporation, InfraReDx, Inc., GuestLogix Inc. and U.S. real estate holdings

TORONTO, ONTARIO -- (Marketwire) -- 12/04/12 -- Difference Capital Funding Inc. (TSX VENTURE:DCF) ("DCF" or the "Company") is pleased to provide a general update on recent strategic investments.

In addition to previously announced investments in Gotham Analytics LLC and Lignol Energy Inc., from August 1, 2012 to November 30, 2012, DCF has made strategic investments totaling more than $14 million in QuickPlay Media Inc., FemMED Formulas Limited Partnership, Crailar Technologies Inc., ePals Corporation, InfraReDx, Inc. and GuestLogix Inc. Consistent with the Company's investment strategy, $10 million of these investments have been made by convertible loans with an average yield of 8.9%.

Further, the Company extended its interest to include American real estate, with holdings in income producing single-family homes in the southeastern United States expected to have a net cash yield of 11-12% as well as an opportunistic land investment in the southwestern United States. Real estate property investments total US$9.25 million to date.

"As a well-capitalized merchant bank professionally managed by an experienced executive team, DCF is creating shareholder value and positioning itself for significant growth with this set of strategic investments," said Michael Wekerle, Executive Chairman of the Board.

In June 2012, DCF completed a non-brokered private placement offering of common shares at a price of $0.30 per common share for aggregate consideration of approximately $30 million. In October and November 2012, DCF completed a non-brokered private placement offering of special warrants at a price of $0.35 per special warrant for aggregate consideration of approximately $54 million. Collectively, DCF has raised approximately $84 million through the non-brokered private placements.

Capital deployed to date in the Company's investment portfolio is approximately $49 million. In addition, as at November 30, 2012, DCF has approximately 14% of its capital, or about $11.6 million, invested in an opportunistic trading portfolio, which, since the beginning of October 2012, has generated $1.7 million in realized profit and about $0.4 million in unrealized profit. Average capital deployed in this strategy was about $15 million, resulting in a return over the two-month period of about 14.5%. As DCF identifies additional strategic investments, the trading book can be harvested to generate cash as required. DCF is also engaging in new and follow-on investments of approximately $11.5 million that are expected to close prior to December 31, 2012.

The September 30, 2012, Interim Financial Statements and the Management Discussion and Analysis are available for Difference Capital Funding Inc. on the Company's website and through www.sedar.com.

RECENT INVESTMENTS

About QuickPlay Media Inc. ("QuickPlay")

www.quickplay.com

QuickPlay is the leading provider of managed solutions for the distribution of premium video to IP-connected devices. Successfully used by the world's largest communications and media companies, QuickPlay's OpenVideo platform provides the most scalable and secure way for companies to deliver engaging multiscreen entertainment experiences.

About FemMED Formulas Limited Partnership ("FemMED")

www.femmed.com

FemMED is a mass channel retail brand of doctor-formulated, condition-specific supplements designed specifically to address women's most common health concerns. FemMED launched in April 2008 to provide women with access to a trusted brand of best-in-class natural health remedies, and in so doing, filled a glaring gap in the multi-billion dollar nutraceutical industry.

About CRAiLAR Technologies Inc. ("Crailar")

www.crailar.com

CRAiLAR Technologies Inc. produces environmentally friendly, sustainable natural fibers from flax, hemp and other bast fibers for use in textile, industrial, medical and composite material applications. Produced using a fraction of water and chemical inputs when compared with other fibers, CRAiLAR Flax aims to supplement the impending fiber gap caused by the increased demand from emerging global markets of natural, synthetic and cellulosic fibers. The Company currently supplies its CRAiLAR Flax to HanesBrands, Georgia-Pacific, Target, Tuscarora Yarns and Brilliant Global Knitwear for commercial use, and to Levi Strauss & Co., Cintas, Carhartt, Ashland, Lenzing and PVH Corp for evaluation and development. The Company was founded in 1998 as a provider of socially responsible clothing.

About ePals ("ePals")

www.epals.com

ePals Corporation is a leading education media and safe social learning company connecting K-12 schools, students, teachers and parents around the world for shared, 21st century learning. ePals operates the K-12 market's premier social learning network, connecting millions of users in over 330,000 schools for collaboration around high quality content and educational projects.

About InfraReDx, Inc.

www.infraredx.com

InfraReDx, Inc. is a privately-funded medical device company dedicated to helping provide practitioners with the information needed for enhanced clinical decision making in treating coronary artery disease. The company is committed to improving the safety and efficacy of coronary stenting and ultimately serving as part of a strategy to prevent initial coronary events.

About GuestLogix Inc.

www.guestlogix.com

GuestLogix Inc. is the leading global provider of onboard store technology and payment solutions designed and developed to help airlines and other travel operators create, manage, and control onboard retail environments that are tailored to their needs and the needs of their passengers. Serving approximately 90% of the North American airline passenger traffic and 46% of the global airline passenger traffic, GuestLogix brings a decade of expertise as a trusted onboard transaction processing partner to airlines around the world.

About Difference Capital

DCF is a publicly listed merchant bank focused on creating shareholder value through strategic investments in, and advisory services for, growth companies.

For further information on the DCF, 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 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 information concerning possible or assumed future results of operations of DCF. 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, anticipated returns on investments, 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 TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contacts:
Difference Capital Funding Inc.
Neil Johnson
Chief Executive Officer
416 649 5088
www.differencecapital.com

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