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Novadaq Corp. Reports First Quarter 2010 Financial Results


5/12/2010 11:12:25 AM

TORONTO, ONTARIO--(Marketwire - May 12, 2010) - Novadaq® Technologies Inc. (TSX: NDQ), a developer of real-time imaging systems for use in the operating room, today announced 2010 first quarter revenues of $2,419,408 compared to revenue of $3,014,000 in first quarter 2009. Recurring revenues for the SPY® System increased by 30% compared to Q1 2009 and by 22% compared to Q4 2009. Capital sales in Q1 2010 were $166,000 compared to $1,015,000 in the same period in 2009.

Financial Results

As at March 31, 2010, the Company had cash and cash equivalents of $7,967,770. The Company's cash used in operating activities in Q1 2010, which included a further reduction in working capital, was $1,248,667 compared to $355,111 in Q1-2009. On February 19, 2010, the Company successfully completed a private placement, netting cash proceeds of $6,610,157 to assist in future cash requirements. Novadaq's Q1-2010 net loss of $2,690,268 or $0.10 per share, compared to net loss of $2,471,360 or $0.10 per share in Q1-2009. Unless otherwise indicated, all dollar amounts expressed in this press release are United States (U.S.) dollars.

Comment

"The financial data reported today continues to reflect our sales model transition from capital sales to a focus on driving recurring revenues," said Dr. Arun Menawat, Novadaq CEO and President. "Accomplishments over the past six months, which include gaining the support of key opinion leaders in plastic surgery such as those at Duke, Stanford, the Medical College of Illinois, Cleveland Clinic and Emory, confirm that the value proposition of SPY imaging is strong. We continue to be in dialog with multiple multinational companies to partner on sales and marketing, one of our key strategies to increase our market presence and further drive growth."

Conference Call

Novadaq is pleased to invite all interested parties to participate in a conference call on May 12th, at 10:00 a.m. Eastern Time during which the results will be discussed.

To access the live audio webcast:

Please login 5-10 minutes prior to the event start time.

Go to website: http://www.investorcalendar.com/IC/CEPage.asp?ID=157972

Select "1st Qtr. 2010 Financial Results", fill in login information, and then click 'OK'

A pop-up window will open to display the audio web conference

To access the live conference call:

Live Participant Dial-In (Toll Free): (877) 407-0778

Live Participant Dial-In (International): (201) 689-8565

A telephonic replay of the conference call will be made available until midnight on 6/12/10 and can be accessed by dialing 1-877-660-6853 (within Canada and the United States) or 1-201-612-7415 (international callers) and entering the account number 286 and the conference identification number 350104 when prompted. The call will be archived for 365 days on the company's website at http://www.novadaq.com under the "Events" tab in the Investors section. In addition, a replay of the call will be available for download to a portable audio player or computer, as an MP3 or podcast file, at the same location on Novadaq's website.

About Novadaq Technologies Inc.

Novadaq Technologies develops and markets real-time fluorescence imaging technology products for use in the operating room. The company's primary core technology platform, SPY Imaging, provides clinically relevant, anatomic and physiologic images during a variety of complex open and minimally invasive surgical (MIS) procedures. SPY empowers surgeons treating life threatening diseases to more effectively treat vascular blockages; assess tissue perfusion; identify cancerous tumors and delineate margins; and visualize relevant lymph nodes for removal. More than 30 peer-reviewed publications demonstrate that SPY imaging leads to fewer post-operative complications and reduced hospital costs. The endoscopic SPY system (a SPY scope) combines all of the capabilities of SPY imaging with state-of- the- art high definition (HD) white light visualization offered by conventional endoscopes. The company's key markets include plastic reconstructive, gastrointestinal, cardiac and general surgery. To realize the full potential of its technology platform, Novadaq explores technology alliances. Novadaq announced its first alliance with Intuitive Surgical Inc. in January 2009, to integrate SPY imaging into the 3-D HD imaging capabilities of the da Vinci® Surgical Robotic System. In addition, Novadaq is the exclusive United States distributor of PLC Medical's CO2 HEART LASER System. For more information, please visit the company's website at http://www.novadaq.com.

Forward-Looking Statements

Certain statements included in this press release may be considered forward-looking. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results, performance or achievements to be materially different from those implied by such statements, and therefore these statements should not be read as guarantees of future performance or results. The closing of the private placement of the units described in this press release is subject to customary conditions precedent, including regulatory approval, and therefore there is a risk that the private placement of the units will not close. All forward-looking statements are based on Novadaq's current beliefs as well as assumptions made by and information currently available to Novadaq and relate to, among other things, results of future clinical tests of the SPY Imaging System and SPY scope, anticipated financial performance, business prospects, strategies, regulatory developments, market acceptance and future commitments.

Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Due to risks and uncertainties, including the risks and uncertainties identified by Novadaq in its public securities filings actual events may differ materially from current expectations. Novadaq disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.


INTERIM CONSOLIDATED BALANCE SHEET
(Unaudited)
(expressed in U.S. dollars)

As at          As at
March 31,   December 31,
2010           2009
$              $
------------------------------

ASSETS
Current
Cash and cash equivalents                          7,967,770      2,524,958
Accounts receivable                                1,482,854      1,398,593
Current portion of prepaid expenses and other
receivables                                       2,137,015      2,003,681
Inventory                                            893,213      1,017,268
------------------------------
Total current assets                              12,480,852      6,944,500
------------------------------
Long-term investments                                      -        150,000
Property, plant and equipment, net                 1,509,996      1,762,554
Prepaid expenses and other receivables               189,427        189,148
Deferred development costs                           405,195        405,195
Intangible assets, net                             7,074,978      7,273,564
------------------------------
21,660,448     16,724,961
------------------------------
------------------------------

LIABILITIES AND SHAREHOLDERS' EQUITY
Current
Accounts payable and accrued liabilities           3,031,171      3,254,575
Current portion of deferred revenue                  640,699        710,365
Current portion of deferred license and
development revenue                               4,000,000      3,000,000
------------------------------
Total current liabilities                          7,671,870      6,964,940
Long-term debt                                     3,615,377      3,527,700
Long-term income tax payable                          45,965         48,979
Deferred revenue                                     267,629        238,158
------------------------------
Total liabilities                                 11,600,841     10,779,777
------------------------------
------------------------------

Shareholders' equity
Share capital                                     86,881,921     81,188,324
Warrants                                             916,560              -
Contributed surplus                                7,076,814      6,882,280
Deficit                                          (84,815,688)   (82,125,420)
------------------------------
Total shareholders' equity                        10,059,607      5,945,184
------------------------------
21,660,448     16,724,961
------------------------------
------------------------------

INTERIM CONSOLIDATED STATEMENT OF LOSS AND
COMPREHENSIVE LOSS AND DEFICIT
(Unaudited)
(expressed in U.S. dollars)

Three-month period ended
March 31,      March 31,
2010           2009
$              $
------------------------------

REVENUE
Product sales                                      2,057,439      2,648,780
Service                                              361,969        364,886
------------------------------
Total revenue                                      2,419,408      3,013,666
Cost of sales                                      1,317,953      1,360,283
------------------------------
Gross profit                                       1,101,455      1,653,383
------------------------------

OPERATING EXPENSES
Sales and marketing                                1,782,248      1,817,842
Research and development                             851,166        966,584
General and administration                           622,580        842,207
Depreciation                                          77,089         95,664
Amortization                                         198,587        308,246
(Gain) loss on foreign exchange                      (18,999)        30,373
------------------------------
Total operating expenses                           3,512,671      4,060,916
------------------------------
Loss before the following:                        (2,411,216)    (2,407,533)
Impairment of long-term investment                 (125,000)             -
Interest expense and imputed interest expense      (155,986)       (66,815)
Interest income                                       1,934          2,988
------------------------------
Net loss and comprehensive loss for the period    (2,690,268)    (2,471,360)
------------------------------

Deficit, beginning of period                     (82,125,420)   (67,136,089)
------------------------------
Deficit, end of period                           (84,815,688)   (69,607,449)
------------------------------
------------------------------

Basic and fully diluted loss per share                 (0.10)         (0.10)
------------------------------
------------------------------

INTERIM CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
(expressed in U.S. dollars)

Three-month period ended
March 31,      March 31,
2010           2009
$              $
------------------------------

OPERATING ACTIVITIES
Net loss for the period                           (2,690,268)    (2,471,360)
Add items not involving cash
Depreciation and amortization                       458,642        577,934
Imputed interest expense                             87,677         35,496
Impairment of long-term investment                  125,000              -
Stock based compensation                            194,534         86,565
------------------------------
(1,824,415)    (1,771,365)
Net change in non-cash working capital
balances related to operations                      575,748      1,416,254
------------------------------
Cash used in operating activities                 (1,248,667)      (355,111)
------------------------------

FINANCING ACTIVITIES
Issuance of convertible debentures, net of
transaction costs                                         -      5,062,409
Issuance of common shares and warrants, net of
transaction costs                                 6,610,157              -
------------------------------
Cash provided by financing activities              6,610,157      5,062,409
------------------------------

INVESTING ACTIVITIES
Purchase of plant, property and equipment             (7,498)       (93,157)
Redemption of long-term investment                    25,000         50,000
------------------------------
Cash provided by (used in) investing
activities                                           17,502        (43,157)
------------------------------
Foreign exchange gain (loss) on cash held in
foreign currency                                     63,820        (19,881)
------------------------------

Net increase in cash and cash equivalents
during the period                                 5,442,812      4,644,260
Cash and cash equivalents, beginning of period     2,524,958      3,991,833
------------------------------
Cash and cash equivalents, end of period           7,967,770      8,636,093
------------------------------
------------------------------


Contacts:
Investor:
Novadaq Technologies Inc.
Suzie Robinson, APR
972-488-6508
srobinson@novadaq.com
www.novadaq.com



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