Toronto, Ontario – May 23, 2007 – Novadaq® Technologies Inc. (TSX: NDQ), a developer of real-time medical imaging systems and image guided therapies for the operating room, is pleased to announce that it has closed its previously announced private placement financing of 4,000,000 common shares at a price of $7.50 per share for aggregate gross proceeds of $30.0 million. The syndicate of agents was led by RBC Dominion Securities Inc. and included Blackmont Capital Inc. and Versant Partners Inc.

The net proceeds from this offering will be used to fund ongoing product research and development efforts, sales and marketing expenses and recent acquisitions including the exclusive distribution rights to PLC Medical System Inc.'s Heart Laser System™ for transmyocardial revascularization (TMR) in the United States, the acquisition of certain business assets of Xillix Technologies Corp., and for general corporate purposes.

This news release does not constitute an offer to sell or a solicitation of an offer to buy any securities. The securities referred to above have not been and will not be registered under the United States’ Securities Act of 1933, as amended (the "US Securities Act") or any state securities laws and may not be offered or sold within the United States or to US persons unless registered under the US Securities Act and applicable state securities laws or an exemption from such registration is available.

About Novadaq Technologies

Novadaq Technologies Inc. (TSX: NDQ) 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® 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 Imaging System. The HELIOS™ 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™ 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 CO² HEART LASER™ 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.

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