Novadaq@ Technologies Inc. (TSX:NDQ), a developer of real-time imaging

systems for use in the operating room, today announced financial

results for its fiscal year and fourth quarter ended December 31,

2011. Unless otherwise indicated, all dollar amounts in this press

release are expressed in United States (U.S.) dollars.

"Last year in collaboration with our partners, LifeCell and Intuitive

Surgical@, we advanced our goal of becoming a leader in providing

imaging technology for surgeons," said Dr. Arun Menawat, Novadaq's

President and CEO. "In the fourth quarter, we estimate that nearly 8%

of breast reconstruction surgeries performed in the U.S. involved the

use of SPY Imaging, effectively tripling penetration into our lead

application over the period of one year. Exiting 2011, more than 10%

of mid-to-large U.S. hospitals were users of Novadaq's imaging


"Looking ahead into 2012, we anticipate continued expansion of the SPY

Elite and FIREFLY installed bases, increased penetration in breast

reconstruction, and launches of new applications including colorectal

and vascular surgeries. Novadaq also continues to progress toward a

direct launch of our PINPOINT Endoscopic Fluorescence Imaging System

in the second half of 2012."

Fourth Quarter and YE2011 Corporate Highlights

-- The company's main performance metric in 2011 was "system shipments". In

the fourth quarter, Novadaq shipped 150 SPY and FIREFLY Systems. At

December 31, 2011, the number of U.S. hospitals with installed SPY and

FIREFLY Systems exceeded 300.

-- Approximately 175 SPY Systems are in use for breast reconstruction

surgery, our lead indication. During the fourth quarter, the average

annualized run rate for each of these systems was approximately 50


-- 2,700 SPY procedure kits for open surgical applications were shipped to

hospitals during the fourth quarter, representing a 128% increase over

the same period in 2010, and a 21% sequential increase compared with Q3-

2011. In total, 7,838 SPY procedure kits were shipped to hospitals

during 2011, representing a 110% increase compared with 2010.

-- In November 2011, Novadaq signed exclusive multi-year sales and

marketing agreements with Kinetic Concepts, Inc. for the development and

commercialization of SPY technology for wound care applications. Novadaq

also expanded its agreements with LifeCell for commercialization of SPY

Elite into additional applications including vascular surgery.

-- The fourth quarter marked the first publication of articles describing

the use of SPY during tibial bypass surgery and treatment of battlefield

extremity injuries. This increases the number of SPY publications to 52,

including two textbook chapters, which recommend use of SPY in breast

reconstruction surgery.

-- Subsequent to year-end, Novadaq named MAQUET Cardiovascular as the

exclusive U.S. distributor of Novadaq's CO2 Heart Laser products.

Financial Highlights

-- Revenues in the fourth quarter totaled $5.0 million, a 119% increase

compared with $2.3 million in the same period in 2010.

-- Revenues for the 2011 fiscal year totaled $15.3 million, a 10% increase

compared with $13.9 million in 2010. Excluding a one-time milestone

payment of $3.9 million recognized in 2010, the year-over-year revenue

increase would have been 53%. SPY product sales to hospitals grew at a

substantially faster rate. During 2011, revenues reported by the Company

represented only Novadaq's share of end user sales, which were paid to

the Company by its partners. During the first 9 months of 2010, Novadaq

sold SPY products directly and, as such, Novadaq recognized all of the

revenues from sales to hospitals during that period.

-- Fourth quarter recurring revenues from our SPY and TMR businesses

totaled $2.4 million, representing growth of 67% compared with the same

period in 2010.

-- Operating burn (cash used in operating activities before changes in

working capital) was close to break-even at $0.03 million in the fourth

quarter. This compares with operating burn of $2.39 million for the same

period in 2010, and $0.45 million in Q3-2011. Working capital consumed

$1.45 million during the fourth quarter before the impact of a licensing

payment, and $2.15 million was invested, including $1.81 million to

build the SPY Elite installed base.

-- Novadaq ended the fourth quarter with $9.6 million cash. The company

expects to receive up to $4 million in milestone payments from its

existing agreements during the next two years, and we have received an

asset-based loan offer from the Royal Bank of Canada, subject to various

approvals, to increase our debt facility limit to $5.5 million from $2.5


Conference Call

Novadaq is pleased to invite all interested parties to participate in

a conference call today, February 16, at 8:30 a.m. Eastern Time during

which the results will be discussed.

Those wishing to access the live conference call by telephone should

dial 1-877-407-8031 (within Canada and the United States) or

1-201-689-8031 (international callers) several minutes prior to the

beginning of the call. A telephonic replay of the conference call will

be made available until midnight on March 16, 2012 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 388170 when prompted.

The call will be archived for 90 days on the Company's website at 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 primarily develops, manufactures and markets real-time

fluorescence imaging products that are designed for use by surgeons in

the operating room and other clinical settings where open, minimally

invasive or interventional surgical procedures are performed. The

Company's SPY@ Imaging core technology enables surgeons to visualize

blood flow in vessels, co-joined vessels and micro-vessels, and to

assess the quality of blood perfusion in tissue, without exposing the

patient to radiation. More than 50 peer-reviewed publications

demonstrate that the use of SPY Imaging during complex surgery leads

to fewer post-operative complications and lower hospital costs. The

SPY Imaging System is United States Food and Drug Administration

("FDA") 510(k) cleared for use during a variety of open surgical

applications. The endoscopic version of SPY, which will be marketed

under the brand name PINPOINT, combines the capabilities of SPY

Imaging with high definition ("HD") visible light visualization

offered by conventional endoscopes. The majority of Novadaq's current

revenues come from alliances formed with leading companies in relevant

markets where SPY technology has been demonstrated to improve clinical

outcomes in open, minimally invasive and robotic surgery applications.

Novadaq's first alliance that integrates SPY Imaging into the 3-D HD

imaging capabilities of the da Vinci@ Surgical Robotic System offered

by Intuitive Surgical@, Inc., received FDA 510(k) clearance in

February 2011. In September 2010, Novadaq entered into an exclusive

North American sales and marketing alliance with LifeCell

Corporation, for SPY in open plastic and reconstructive,

gastrointestinal and head and neck surgeries. In November 30, 2011,

Novadaq signed exclusive, multi-year sales and marketing agreements

with Kinetic Concepts, Inc., for wound care applications and extended

its agreement with LifeCell for the commercialization of the SPY

System into vascular surgery. The SPY Imaging System for cardiac

applications is marketed directly, whereas the CO2 Heart Laser for

TMR is distributed by MAQUET Cardiovascular. For more information,

please visit the Company's website at

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, the Company's strategy,

strategic goals, research and development activities, research and

clinical testing outcomes, taxes, capital expenditures, future

operations, future financial position, future revenues/results,

projected costs, prospects and plans and objectives of management.

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.

Note: LifeCell Corporation is a business unit and trademark of

Kinetic Concepts, Inc. Intuitive Surgical and da Vinci are registered

trademarks of Intuitive Surgical.

Novadaq Technologies Inc.


(expressed in U.S. dollars)

December December

31, 2011 31, 2010



Current assets

Cash and cash equivalents 9,633,608 5,597,407

Accounts receivable 2,018,782 1,434,964

Prepaid expenses and other 829,625 1,193,423

Inventories 1,755,729 778,984

Non-current assets

Available-for-sale financial instruments - -

Property and equipment 6,034,674 1,202,468

Prepaid expenses and other - 144,456

Deferred taxes 248,640 -

Other intangible assets 2,272,434 1,968,483


Total Assets 22,793,492 12,320,185




Current liabilities

Accounts payable 2,474,021 2,913,979

Provisions 41,300 19,520

Income taxes payable 11,973 24,066

Deferred revenue 396,859 549,865

Deferred license revenue 1,300,000 800,000

Deferred license and development revenue - -

Repayable government assistance 197,760 507,675

Non-current liabilities

Deferred tax liabilities 248,640 -

Convertible debentures 4,223,454 3,891,753

Deferred revenue 188,883 190,609

Deferred license revenue 4,591,666 2,933,333

Repayable government assistance 214,402 -

Shareholder warrants 8,278,105 1,276,464


Total Liabilities 22,167,063 13,107,264


Shareholders' Equity

Share capital 98,695,023 87,897,555

Contributed surplus 6,772,298 5,985,190

Equity component of convertible debentures 1,454,353 1,968,395

Deficit (106,295,245) (96,638,219)


Total Shareholders' Equity 626,429 (787,079)


Total Liabilities and Shareholders' Equity 22,793,492 12,320,185



Novadaq Technologies Inc.


(expressed in U.S. dollars)

For the three months For the twelve months

ended ended

December December December December

31, 2011 31, 2010 31, 2011 31, 2010


Product sales 4,404,981 1,809,988 12,925,953 8,355,273

Royalty revenue 116,797 - 395,398 -

Milestone revenue 241,667 - - 3,958,737

Deferred partnership fee

revenue - 200,000 841,667 266,667

Service revenue 231,632 266,029 1,129,423 1,290,644


Total revenues 4,995,077 2,276,017 15,292,441 13,871,321

Cost of sales 2,072,642 1,249,878 6,634,206 5,534,087


Gross margin 2,922,435 1,026,139 8,658,235 8,337,234


Selling and distribution

costs 1,348,328 1,380,978 5,375,612 7,067,288

Research and development

expenses 1,185,349 1,563,379 4,610,694 4,915,669

Administrative expenses 1,194,632 1,119,148 4,550,971 4,070,693

Write-down of intangible

assets - - - 4,828,605

Write-down of equipment - - 314,213 -

Write-down of inventory (95) - 15,287 426,600


Total operating expenses 3,728,214 4,063,505 14,866,777 21,308,855


Loss from operations (805,779) (3,037,366) (6,208,542) (12,971,621)

Finance costs (169,895) (165,489) (679,069) (643,100)

Finance income 1,841 4,650 15,421 16,099

Warrants revaluation

adjustment (1,029,310) 51,763 (3,306,128) (463,697)

Gain (loss) on investment - - 25,000 (125,000)


Loss and comprehensive

loss for the period (2,003,143) (3,146,442) (10,153,328) (14,187,319)



Basic and diluted loss

and comprehensive loss

per share for the period (0.05) (0.11) (0.32) (0.52)



Novadaq Technologies Inc.


(expressed in U.S. dollars)

For the three months For the twelve months

ended ended

December December December December

31, 2011 31, 2010 31, 2011 31, 2010



Loss for the period (2,003,153) (3,146,442) (10,153,328) (14,187,319)

Items not affecting cash

Depreciation and

impairment of property

and equipment 331,761 199,307 1,050,929 884,869

Amortization and

impairment of

intangible assets 294,752 330,055 1,119,691 881,672

Impairment of investment - - - 125,000

Redemption of investment - - (25,000) -

Stock option

compensation 212,315 183,482 876,767 786,578

Finance costs, including

imputed interest on

convertible debentures 100,875 94,404 398,448 364,053

Write-down of intangible

assets - - - 4,828,605

Write-down of equipment - - 314,213 -

Write-down of inventory (95) - 15,287 426,600

Warrants revaluation

adjustment 1,029,310 (51,763) 3,306,128 463,697


(34,235) (2,390,957) (3,096,865) (5,426,245)


Changes in working capital

Increase in deferred

revenue 2,679,368 834,092 2,003,601 340,993

Increase in accounts

receivable (85,114) 221,259 (583,818) (36,371)

Increase in inventories (80,005) (216,284) (992,032) (188,315)

Decrease in accounts

payable (1,222,116) (165,354) (588,099) (113,761)

Decrease (increase) in

prepaid expenses and

other 261,516 (1,230,548) 259,614 1,038,973


Net change in non-cash

working capital balances

related to operations 1,553,649 (556,835) 99,266 1,041,519


Cash used in operating

activities 1,519,414 (2,947,792) (2,997,599) (4,384,726)



Purchase of property and

equipment (2,145,876) (194,848) (6,197,348) (324,784)

Purchase of TMR business - - (1,000,000) -

Redemptions of long-term

investment - - 25,000 25,000


Cash used in investing

activities (2,145,876) (194,848) (7,172,348) (299,784)



Issuance of common

shares and warrants - - 15,273,401 8,121,337

Transaction costs of

common shares and

warrants - - (998,207) (511,180)

Options exercised 2,500 4,880 42,664 39,964

National Research

Council loan repayments (73,765) - (95,513) -


Cash provided by financing

activities (71,265) 4,880 14,222,345 7,650,121


Net increase in cash and

cash equivalents (697,727) (3,137,760) 4,052,398 2,965,611

Net foreign exchange

difference 27,587 64,580 (16,197) 106,838

Cash and cash equivalents

at January 1 10,303,748 8,670,587 5,597,407 2,524,958


Cash and cash equivalents

at December 31 9,633,608 5,597,407 9,633,608 5,597,407