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Novadaq Corp. Reports Second Quarter 2010 Financial Results



8/12/2010 9:17:10 AM

TORONTO, ONTARIO--(Marketwire - August 12, 2010) - Novadaq® Technologies Inc. (TSX: NDQ), a developer of real-time imaging systems for use in the operating room, today announced 2010 second quarter revenues of $2,647,000 compared to revenues of $1,699,000 in second quarter 2009. Sales of SPY products were $1,627,000 (excluding engineering services on a development contract) representing an increase of 125% compared to Q2-2009 and 62% compared to Q1-2010.

Financial Results

As at June 30, 2010, the Company had cash and cash equivalents of $5,427,000. The Company's cash used in operating activities in Q2-2010 was $2,367,000 compared to $376,000 in Q2-2009. Novadaq's Q2-2010 net loss of $3,524,000 or $0.13 per share, compared to net loss of $3,358,000 or $0.14 per share in Q2-2009. The Q2-2010 loss among other items included a one-time non-cash inventory write-down of $427,000. Unless otherwise indicated, all dollar amounts expressed in this press release are United States (U.S.) dollars.

Comment

"Our continued focused on driving the adoption of SPY in key opinion leading plastic surgery centers throughout the United States resulted in our best sales quarter overall for SPY" said Dr. Arun Menawat, Novadaq CEO and President. "In addition, CMS recently announced that on October 1, 2010, a new ICD-9-CM procedure code describing the use of SPY in non-coronary surgical applications such as plastic reconstruction surgery will go into effect. As the momentum continues to build, we expect to announce our broader commercialization strategy by the end of the third quarter."

Conference Call

Novadaq is pleased to invite all interested parties to participate in a conference call on August 12, 2010 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=160767 Select "2nd 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) 407-8033 Live Participant Dial-In (International): (201) 689-8033 A telephonic replay of the conference call will be made available until midnight on 9/12/10 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 354599 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. 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. Novadaq Technologies Inc. CONSOLIDATED BALANCE SHEET (Unaudited) (expressed in U.S. dollars) As at As at June 30, December 31, 2010 2009 $ $ ---------------------------- ASSETS Current Cash and cash equivalents 5,427,390 2,524,958 Accounts receivable 1,980,649 1,398,593 Current portion of prepaid expenses and other receivables 2,266,739 2,003,681 Inventory 497,844 1,017,268 ---------------------------- Total current assets 10,172,622 6,944,500 ---------------------------- Long-term investments - 150,000 Property, plant and equipment, net 1,373,312 1,762,554 Prepaid expenses and other receivables 209,398 189,148 Deferred development costs 405,195 405,195 Intangible assets, net 6,876,390 7,273,564 ---------------------------- 19,036,917 16,724,961 ---------------------------- ---------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Accounts payable and accrued liabilities 3,038,243 3,254,575 Current portion of deferred revenue 714,844 710,365 Current portion of deferred license and development revenue 4,500,000 3,000,000 ---------------------------- Total current liabilities 8,253,087 6,964,940 ---------------------------- Long-term debt 3,705,242 3,527,700 Long-term income tax payable 43,090 48,979 Deferred revenue 259,995 238,158 ---------------------------- Total liabilities 12,261,414 10,779,777 ---------------------------- Shareholders' equity Share capital 86,883,879 81,188,324 Warrants 916,560 - Contributed surplus 7,314,899 6,882,280 Deficit (88,339,835) (82,125,420) ---------------------------- Total shareholders' equity 6,775,503 5,945,184 ---------------------------- 19,036,917 16,724,961 ---------------------------- ---------------------------- Novadaq Technologies Inc. CONSOLIDATED STATEMENT OF LOSS AND COMPREHENSIVE LOSS AND DEFICIT (Unaudited) (expressed in U.S. dollars) Three-month period ended Six-month period ended June 30 June 30 2010 2009 2010 2009 $ $ $ $ ---------------------------------------------------- REVENUE Product sales 2,338,591 1,352,471 4,396,030 4,001,251 Service revenue 307,831 347,081 669,800 711,967 ---------------------------------------------------- Total revenue 2,646,422 1,699,552 5,065,830 4,713,218 Cost of sales 1,318,591 1,117,187 2,636,544 2,477,470 ---------------------------------------------------- Gross profit 1,327,831 582,365 2,429,286 2,235,748 ---------------------------------------------------- OPERATING EXPENSES Sales and marketing 1,953,818 1,837,583 3,736,065 3,655,424 Research and development 1,174,475 839,696 2,025,641 1,806,279 General and administration 817,406 721,405 1,439,986 1,563,612 Depreciation 67,152 102,646 144,241 198,310 Amortization 198,587 308,247 397,174 616,493 Impairment of inventory 426,600 - 426,600 - (Gain) loss on foreign exchange 58,999 (9,139) 40,000 21,235 ---------------------------------------------------- Total operating expenses 4,697,037 3,800,438 8,209,707 7,861,353 ---------------------------------------------------- Loss before the following: (3,369,206) (3,218,073) (5,780,421) (5,625,605) Impairment of long-term investment - - (125,000) - Interest expense and imputed interest expense (160,183) (143,654) (316,170) (210,470) Interest income 5,242 3,343 7,176 6,331 ---------------------------------------------------- Net loss and comprehensive loss for the period (3,524,147) (3,358,384) (6,214,415) (5,829,744) ---------------------------------------------------- Deficit, beginning of period (84,815,688) (69,607,449) (82,125,420) (67,136,089) ---------------------------------------------------- Deficit, end of period (88,339,835) (72,965,833) (88,339,835) (72,965,833) ---------------------------------------------------- ---------------------------------------------------- Basic and fully diluted loss per share (0.13) (0.14) (0.23) (0.24) ---------------------------------------------------- ---------------------------------------------------- Novadaq Technologies Inc. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (expressed in U.S. dollars) Three-month period ended Six-month period ended June 30 June 30 2010 2009 2010 2009 $ $ $ $ ------------------------------------------------ OPERATING ACTIVITIES Net loss for the period (3,524,147) (3,358,384) (6,214,415) (5,829,744) Add (deduct) items not involving cash Depreciation and amortization 419,130 599,896 877,772 1,177,830 Imputed interest expense 89,865 79,505 177,542 115,001 Impairment of inventory 426,600 - 426,600 - Loss on long-term investment - - 125,000 - Stock-based compensation 238,085 165,481 432,619 252,046 ------------------------------------------------ (2,350,467) (2,513,502) (4,172,882) (4,284,867) Net change in non-cash working capital balances related to operations (16,215) 2,137,555 559,533 3,553,809 ------------------------------------------------ Cash used in operating activities (2,366,682) (375,947) (3,615,349) (731,058) ------------------------------------------------ FINANCING ACTIVITIES Issuance of convertible debentures, net of transaction costs - - - 5,062,409 Exercise of options 1,958 - 1,958 - ------------------------------------------------ Issuance of common shares and warrants, net of transaction costs - - 6,610,157 - ------------------------------------------------ Cash (used) provided by financing activities 1,958 - 6,612,115 5,062,409 ------------------------------------------------ INVESTING ACTIVITIES Purchase of property, plant, and equipment (83,859) (36,797) (91,357) (129,954) Redemption of long-term investment - - 25,000 50,000 Purchase of short-term investments, net - (699,304) - (699,304) ------------------------------------------------ Cash (used in) provided by investing activities (83,859) (736,101) 66,357 (779,258) ------------------------------------------------ Foreign exchange (loss) income on cash held in foreign currency (91,797) 5,658 (27,977) (14,223) ------------------------------------------------ Net (decrease) increase in cash and cash equivalents during the period (2,540,380) (1,106,390) 2,902,432 3,537,870 Cash and cash equivalents, beginning of period 7,967,770 8,636,093 2,524,958 3,991,833 ------------------------------------------------ Cash and cash equivalents, end of period 5,427,390 7,529,703 5,427,390 7,529,703 ------------------------------------------------ ------------------------------------------------


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


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