Novadaq Technologies Inc.

Novadaq Technologies Inc.

February 17, 2009 08:00 ET

Novadaq Announces Private Placement Offering of Convertible Debentures

TORONTO, ONTARIO--(Marketwire - Feb. 17, 2009) - Novadaq® Technologies Inc. ("Novadaq" or the "Corporation") (TSX:NDQ), a developer of real-time imaging and image guidance systems for use in the operating room, announced today that it has entered into an agreement with Fairfax Financial Holdings Limited and certain of its insurance company subsidiaries ("Fairfax") pursuant to which the Corporation will issue to Fairfax, on a private placement non-brokered basis, US$5.0 million aggregate principal amount of 5% senior unsecured convertible debentures maturing five years from the date of closing. Certain officers and directors of the Corporation will also subscribe for debentures bringing aggregate gross proceeds of US$5,150,000 to the Corporation. The transaction is expected to close on or about February 18, 2009, and is subject to a number of closing conditions.

The debentures are convertible at the option of the holder at any time prior to maturity into common shares of the Corporation at a conversion price equal to the US$ equivalent of Cdn$2.33 (US$1.87) per common share, subject to customary anti-dilution adjustments. The debentures will bear interest at the rate of 5% per annum, payable in arrears in equal semi-annual installments, in cash or, at the option of Novadaq, in additional debentures. On maturity of the debentures, the Corporation has the option of repaying the principal in cash or in common shares at a conversion rate equal to 95% of the weighted average trading price of the common shares on the Toronto Stock Exchange for the 20 trading days ended five trading days preceding the maturity date.

"We are very pleased to announce this transaction, as it will further strengthen our balance sheet and allow us to pursue growth opportunities, both in marketing our existing products and in further research and development," said Dr. Arun Menawat, Novadaq's President and Chief Executive Officer.

Assuming full conversion of the principal amount of the debentures issued to them, Fairfax would acquire 2,673,797 common shares, representing 9.82% of the outstanding common shares. Based on information provided by Fairfax, full conversion of the debentures would bring Fairfax's total holdings in the Corporation to 4,673,797 common shares or 17.17% of the total common shares outstanding. Novadaq understands that Fairfax has subscribed for the debentures for investment purposes and may purchase additional common shares of the Corporation from time to time in accordance with applicable laws. A copy of the early warning report filed by Fairfax pursuant to applicable Canadian securities laws may be obtained on SEDAR or by contacting Paul Rivett, Vice President and Chief Legal Officer of Fairfax, at 416-367-4941.

Proceeds from this offering will be used to fund ongoing sales and marketing expenses, product research and development efforts, and in particular further development of the Corporation's minimally invasive surgical endoscopy products, and for general corporate purposes.

This press 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 Inc.

Novadaq develops and commercializes real-time imaging and image guidance systems for use in the operating room. Novadaq's technology uniquely enables surgeons to visualize blood vessels, tumors, tumor margins, blood flow and the lymphatic system in real-time during surgery. This core technology is now being applied to and across multiple surgical markets such as cardiac, plastic and reconstructive, urological, general, micro and transplant. The PINPOINT™ System for endoscopic autofluorescence imaging is Novadaq's first minimally invasive product. PINPOINT allows surgeons to differentiate between healthy and cancerous tissue in the lung and other hollow organs. Expanding its portfolio of minimally invasive products, Novadaq's SPY scope combines the typical features of a standard endoscope with the capabilities of SPY imaging. The SPY scope may unlock the full potential of certain minimally invasive surgeries by effectively addressing the limited field of vision that has until now constrained surgeons. Novadaq also leverages its core technology to offer the OPTTX® System, which is designed for use in the diagnosis, evaluation and treatment of wet Age-related Macular Degeneration (AMD). Novadaq is the exclusive United States distributor of PLC Medical's CO2 HEART LASER™ System, which is used by the same cardiac surgeons that perform SPY imaging procedures. 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, including but not limited to the anticipated closing date of the private placement, participation by directors and officers of the Corporation in the private placement, and the intended use of proceeds. Forward-looking statements in this press release are commonly characterized by words such as "plan", "expect", project", "intend", believe", and "anticipate". Forward-looking 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. 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. Unless otherwise required by law, 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.

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