Novadaq Corp. Announces Restatement of Q1 2007 Financial Statements

TORONTO, Aug. 15 /PRNewswire-FirstCall/ - Novadaq(R) Technologies Inc. , a developer of real-time medical imaging systems and image guided therapies for the operating room, announced today that it has filed restated unaudited interim financial statements for the three months ended March 31, 2007 with the Canadian securities regulatory authorities. The restatement has no impact on previously reported net income, earnings per share, revenue, cash, total assets, or shareholder’s equity and only relates to the accounting treatment, in the Company’s Consolidated Statement of Cash Flows of the assets acquired from Edwards Lifesciences LLC relating to the exclusive distribution rights to PLC Medical System, Inc.'s Heart Laser System for transmyocardial revascularization (the “Edwards TMR Business”) in the United States.

Novadaq has restated the Consolidated Statement of Cash Flows for the three months ended March 31, 2007 to reclassify the acquisition of inventory and assumption of accounts payable related to the Edwards TMR Business as investing activities, rather than non-cash working capital changes relating to operations. In addition, certain non cash financing and investing activities also related to the acquisition of the Edwards TMR Business have been removed from the Consolidated Statement of Cash Flows for such period and disclosed as non-cash financing and investing activities in Note 7 to the unaudited interim financial statements for the period.

Immediately upon recognition of this historical accounting error, Novadaq’s audit committee and its board of directors, on the recommendation of management, concluded that it was appropriate to restate the Company’s unaudited interim financial statements for the three months ended March 31, 2007. Accordingly, Novadaq’s financial statements as previously published and filed in respect of such period should no longer be relied upon. The press release issued on August 7, 2007 relating to the financial results of the Company for Q2 did not reflect the Q1 restatement and accordingly, should not be relied upon. The Company’s Q2 financial statements have been filed on SEDAR concurrently with this press release and reflect the restatement. The restatement of Q1 has no impact on previously reported net income, earnings per share, revenue, cash, total assets, or shareholder’s equity.

About Novadaq Technologies

Novadaq Technologies Inc. develops and commercializes medical imaging systems and real-time image guided therapies for use in the operating room. Novadaq’s proprietary imaging platform can be used to visualize blood vessels, nerves and the lymphatic system during surgical procedures. Novadaq’s SPY(R) Imaging System, commercially available worldwide, enables cardiac surgeons to visually assess coronary vasculature and bypass graft functionality during the course of open-heart surgery. Novadaq’s OPTTX(R) System which received CE Mark approval in November 2006, is aimed at the diagnosis, evaluation and treatment of wet Age-related Macular Degeneration (AMD) by using the same core imaging technology that is used in the SPY Imaging System. The HELIOS(TM) Imaging System, which received FDA clearance in January 2007, is the first fluorescent imaging system available for use during plastic reconstructive surgery allowing surgeons to evaluate pre- and intra-operative blood flow, as well as post-surgery perfusion. Novadaq’s LUNA(TM) Imaging System is designed to enable surgeons to visualize nerve bundles during the course of urological and neurological procedures. LUNA has been granted a license for use by Health Canada. Novadaq is also the exclusive United States distributor of PLC Medical’s CO(2) HEART LASER(TM) System for TMR (Trans-Myocardial Revascularization). Novadaq recently acquired a comprehensive portfolio of minimally invasive native tissue fluorescence imaging technology with the vision to expand the applications for this technology in Novadaq’s surgical markets. For more information, please visit the company’s website at www.novadaq.com.

Forward-Looking Information

This press release contains certain information that may constitute forward-looking information within the meaning of securities laws. In some cases, forward-looking information can be identified by the use of terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Forward-looking information may relate to management’s future outlook and anticipated events or results, and may include statements or information regarding the future financial position, business strategy and strategic goals, research and development activities, projected costs and capital expenditures, financial results, research and clinical testing outcomes, taxes and plans and objectives of or involving Novadaq. Without limitation, information regarding future sales and marketing activities, SPY Imaging System placement targets and utilization rates, the implementation of a reimbursement code for the SPY Imaging System, future revenues arising from the sales of the Company’s products or the distribution arrangements with PLC Medical Systems, Inc., and research and development activities, FDA approval of sources of indocyanine green (“ICG”), the fluorescent agent used with the Company’s products, and or the manufacturing of an alternate form of the florescent agent by the Company, the Company’s plans to seek additional regulatory clearances for additional indications, the expected benefits of the combination of TMR with the SPY Imaging System, as well as the Company’s plans for each of the SPY Imaging System, HELIOS Imaging System, the OPTTX System and the LUNA Imaging System, and the current development by the Company of a family of prototype endoscopes is forward-looking information.

Forward-looking information is based on certain factors and assumptions regarding, among other things, market acceptance and the rate of market penetration of Novadaq’s SPY Imaging System, the adoption by customers of a rental mode of arrangement for the SPY Imaging System, the effect of a recently announced reimbursement code for the SPY Imaging System, the clinical results of the use of the SPY Imaging System, market acceptance and the rate of market penetration of the HELIOS Imaging System, the clinical results of the use of the HELIOS Imaging System, the results from clinical tests of the OPTTX System and the LUNA Imaging System, and potential opportunities in the AMD treatment market and in image guided conventional and minimally invasive urological applications including nerve-sparing radical prostatectomy. While the Company considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect.

Forward looking-information is subject to certain factors, including risks and uncertainties, that could cause actual results to differ materially from what we currently expect. These factors include risks relating to the transition from research and development activities to commercial activities, market acceptance and adoption of the SPY Imaging System, the HELIOS Imaging System and of the OPTTX System, the risk that a recently announced reimbursement code will not affect acceptance or usage of the SPY Imaging System, risks related to third party contractual performance, dependence on key suppliers for components of the SPY Imaging System, the HELIOS Imaging System and the OPTTX System, regulatory and clinical risks, risks relating to the protection of intellectual property, risks inherent in the conduct of research and development activities, including the risk of unfavorable or inconclusive clinical trial outcomes, potential product liability, competition and the risks posed by potential technological advances, and risks relating to fluctuations in the exchange rate between the US dollar and the Canadian dollar.

You should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While Novadaq may elect to, Novadaq is under no obligation and does not undertake to update this information at any particular time.

Novadaq Technologies Inc.

CONTACT: visit our website at www.novadaq.com, or contact: Arun Menawat,PhD, MBA, President & CEO, Novadaq Technologies Inc., (905) 629-3822 x 202,amenawat@novadaq.com; Michael Moore, Investor Relations, The Equicom Group,(416) 815-0700 x 241, mmoore@equicomgroup.com