Toronto, Ontario – March 19, 2007 – Novadaq® Technologies Inc. (TSX: NDQ), a developer of real-time medical imaging systems for the operating room, today announced its financial results for the fourth quarter and year ended December 31, 2006. In this press release, unless otherwise indicated, all dollar amounts are expressed in US dollars.

"Our vision of becoming the imaging company of the operating room began to take shape in 2006" said Dr. Arun Menawat, President and Chief Executive Officer of Novadaq Technologies Inc. "SPY, our first marketed product in the United States, is now supported by a direct sales team and we have a solid pipeline of intellectual property protected products including the recently FDA cleared HELIOS System for plastic reconstructive surgery and Health Canada approved LUNA for various urological procedures."

2006 Operating Highlights

• SPY(R): Presented to Centers for Medicare & Medicaid Services (CMS), the federal agency responsible for administering the United States' health-related programs, resulting in a recommendation for a unique ICD-9-CM reimbursement code; Signed an exclusive European and Emerging Markets distribution agreement with Eastman Kodak Company for the SPY System; Was the subject of a scientific presentation made at the Society of Thoracic Surgeons Meeting reporting a statistically significant 43% reduction (from 20.8% to 11.8%) in post-operative myocardial injury in patients treated with SPY compared to those who were not; Hired 12 highly experienced sales representatives to represent the SPY Intra-operative Imaging System (SPY System) throughout the United States in December 2006.
• LUNA(TM): Licensed Intellectual Property from the University of Rochester that enables visualization of nerves and lymphatics during urological procedures including prostate surgery; Completed animal testing as highlighted at the annual meeting of the American Urological Association held in Atlanta, Georgia, in May; Initiated first human clinical trial in Rochester on partial nephrectomy; Received Health Canada issuance of a medical device license for the use of Luna for the assessment of organs, tissues and vessels in urological procedures, such as open radical prostatectomy, tumor resections, evaluating perfusion in suspected testicular torsion cases, and aiding in the assessment of vessel reconstruction procedures.
• OPTTX(R): Presented results from a clinical trial of 40 patients, demonstrating that, among other positive results, at the end of the treatment, on average the visual acuity was stable, and 29% of all patients seen at this visit had an improvement in vision. These results were a major factor in the receipt of the necessary CE Mark Certificate to market the OPTTX System in Europe. First 2 devices installed in Europe by year end.

Subsequent 2007 Events

• Ended distribution partnership with CarboMedics effective December 31, 2006
• HELIOS(TM): Received 510(k) clearance from the United States Food and Drug Administration (FDA) for its imaging system for use during plastic reconstruction and micro surgery.
• OPTTX: Initiated European Clinical Registry; Placed two systems in Europe. One in Italy and the other in England, with a third site planned for Switzerland in the first quarter of 2007.

Total revenue increased by approximately $1,552,000 from approximately $623,000 in 2005 to approximately $2,175,000 in 2006. This included a more than five-fold increase in procedure based revenue relating primarily to the increasing installed base of SPY Systems in the US. At December 31, 2005 the installed base in the US was 14 systems, which increased to 55 systems by December 31, 2006. The Company also had 12 purchase orders on hand at December 31, 2006 under which SPY Systems were installed in January 2007. 2006 procedure based revenue included minimum payments of $171,000 that CarboMedics was required to make under the distribution agreement with the Company. Capital sale revenue increased by approximately $32,000 or 10% from 2005 to 2006.

Gross profit as a percentage of sales decreased from 64.0% in 2005 to 53.2% in 2006. The primary reason for the decrease was that gross margins earned on capital sales were significantly lower in 2006 as a decision was made to reduce the capital sale price of systems sold internationally, and to increase the price of consumable supplies.

Sales and marketing expenses increased by approximately $3,287,000 to approximately $4,586,000 in 2006 from $1,299,000 in 2005. The increase relates primarily to an increase in employee and recruiting costs of approximately $2,016,000 to hire a team of 12 clinical educators which began in late 2005 and to hire a direct sales team in late 2006; an increase of approximately $661,000 of related travel and entertainment costs; and an increase of approximately $514,000 in commissions paid to CarboMedics. Sales and Marketing expenses are expected to be higher in 2007 because the direct sales team was hired in late 2006 and early 2007.

Research and development expenses increased by approximately $1,489,000 to $5,103,000 in 2006 from $3,614,000 in 2005. The overall increase reflects increases of approximately $717,000 in employee costs to support the completion of a redesigned OPTTX device, LUNA device development and clinical trials, and SPY product development; an increase of approximately $185,000 in clinical trial expenses related primarily to trials being done with LUNA at the University of Rochester, an increase in patent costs of $328,000 which resulted in issuance of SPY patents in Japan as well as additional patent coverage for LUNA and OPTTX; and an increase of approximately $170,000 in SPY registry costs.

General and administration expenses increased by $64,000 to $2,958,000 in 2006 from $2,894,000 in 2005. The overall increase included an increase in officers & directors and liability insurance of $172,000, an increase in investor relations expenses of $143,000, an increase in professional fees of $379,000, an increase in office expenses of $102,000, other general increases totaling $89,000, offset by a reduction in stock-based compensation of $820,000 resulting from the contractual vesting of options in 2005 upon the completion of the Company's initial public offering, which did not recur in 2006.

Depreciation expense increased by $143,000 to $171,000 in 2006 from $28,000 in 2005. The increase related primarily to the purchase of computer hardware and software and other infrastructure to support the Company's
growth.

Interest and other income increased by $526,000 to $1,043,000 in 2006 from $517,000 in 2005 as a result of the increase in cash and short term investment balances following completion of the Company's initial public offering in June 2005 and following the exercise of warrants in March 2006.

Net loss increased by approximately $4,161,000 as a result of an increase in sales and marketing costs of approximately $3,287,000, an increase in research and development expenses of approximately $1,489,000, an increase in general and administrative expenses of approximately $64,000, an increase in depreciation of $143,000, a reduction in foreign exchange gain of $454,000, offset partially by an increase in gross profit of approximately $758,000 and an increase in interest and other income of $526,000.

As of December 31, 2006 the Company had cash, cash equivalents and short-term investments of approximately $16,829,000, a decrease of approximately $5,945,000 from December 31, 2005. The decrease in these balances was primarily the result of cash used in operating activities of $9,083,000, cash invested in PPE, licenses and deferred development costs and of approximately $2,328,000, offset partly by $5,466,000 of capital raised from the exercise of warrants, special options and options.

As at March 15, 2007, there were a total of 19,711,892 common shares (21,416,817 on a fully diluted basis) and no preferred shares outstanding. A total of 1,704,925 stock options were outstanding under the Company's employeestock option plan.

Quarter Ended December 31, 2006 Compared to Quarter Ended September 30, 2006
Revenue in the fourth quarter of 2006 was approximately $205,000 higher than in the third quarter of 2006. Most of the increase related to minimum payments of approximately $171,000 which CarboMedics was required to make under the distribution agreement with Novadaq. Capital sale revenue was down from the third quarter of 2006 as there were no SPY Systems shipped in the fourth quarter.

Gross profit as a percentage of sales was positively impacted by the minimum margin payment and increased from 51% in the third quarter of 2006 to 58% in the fourth quarter of 2006.

Sales and marketing expenses increased by approximately $364,000 primarily as a result of expenses associated with building a direct sales team in the fourth quarter, which were not offset by reduced CarboMedics commissions as the CarboMedics distribution contract was not terminated until January 2007. Sorin commissions of up to approximately $171,000 may be paid in 2007 to CarboMedics based on 2007 revenue generated from devices placed before termination of the distribution agreement. The post-termination commission arrangement was designed to minimize any disruption in revenue during a transition phase.

Research and development costs increased by approximately $150,000 primarily due to focused efforts to complete OPTTX Systems for CE Mark testing and device installation in two European clinical trial sites.

General and Administrative expenses increased from the third to the fourth quarter of 2006 by approximately $12,000.

Conference call

Novadaq will host a conference call on Monday, March 19, 2007 at 4:30 p.m. E.T. to discuss the financial results for the fourth quarter and full year ended December 31, 2006. To access the conference call by telephone, dial 416-644-3415 or 1-800-732-9303. Please connect approximately ten minutes prior to the beginning of the call to ensure participation. The conference call will be archived for replay until March 26, 2007 at midnight. To access the archived conference call, dial 416-640-1917 or 1-877-289-8525 and enter the reservation number 21222176 followed by the number sign.

A live audio webcast of the conference call will be available at www.novadaq.com. Please connect at least ten minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above website for 365 days.

About Novadaq Technologies

Novadaq Technologies Inc. (TSX: NDQ) develops and commercializes medical imaging devices 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 Intra-operative 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 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 System. The HELIOS™ 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™ 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. For more information, please visit the company's website at www.novadaq.com.

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 System placement targets and utilization rates, the implementation of a reimbursement code for the SPY System, future revenues and research and development activities, 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 System, as well as the Company’s plans for each of the SPY System, HELIOS System, the OPTTX System and LUNA 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 System, the adoption by customers of a rental mode of arrangement for the SPY System, the effect of a recommended reimbursement code for the SPY System, the clinical results of the use of the SPY System, market acceptance and the rate of market penetration of the HELIOS System, the clinical results of the use of the HELIOS System, the results from clinical tests of the OPTTX System and LUNA, 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 System and of the OPTTX System, the risk that a recommended reimbursement code will not be fully implemented or that it will not affect acceptance of the SPY System, risks related to third party contractual performance, dependence on key suppliers for components of the SPY 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.

For further information visit our website at www.novadaq.com, or contact:

Arun Menawat, PhD, MBA
President & CEO
Novadaq Technologies Inc.
Phone: 905-629-3822 x 202
amenawat@novadaq.com

Investor Relations:
Michael Moore
The Equicom Group
Phone: 416-815-0700 x 241
mmoore@equicomgroup.com