Thanks for joining us.
Hello, everyone. My apologies, it looked like we had some audio difficulties there at the start of the webinar. On the basis that we're now good for audio, and I'll have that confirmed in a second, I would like to, for the second time this afternoon, welcome you to the Q3 quarterly webinar for Atomo Diagnostics . I'm John Kelly, the Managing Director, and welcome to the proceedings. I'm just going to share our quarterly report. In terms of highlights, we announced the first large order for the vending machine program, Supply Chain Scale-Up, that's funded through the federal government, and we also announced launch into New Zealand market through a partnership with Chemist Warehouse New Zealand. We also were able to deliver to the market a partnering agreement with the Institute for the Licensing to Commercialize the Non Syphilis Test, and the program.
In terms of revenues, we have just over AUD 1 million of revenue for the quarter, bringing the revenue total for the three quarters of the year to just over AUD 3 million, and we were looking at total cash receipts for the quarter of approximately AUD 1.3 million. In terms of HIV business growth, we're excited to see the market growing, particularly here in Australia, where we generate the best margins for supply of HIV to market, reflecting the fact that we go direct to market here rather than through distributors overseas. We're seeing most of the growth come through our channels that are publicly funded, although we do still continue to see growth in the pharmacy channel privately, and we'll talk a little bit about that in more detail. In terms of federal government funding, there's two main channels.
One is the NAPWHA-administered program for at-home mail-out of tests, and that was one that was announced to market previously in 2024. We talked also about the funding of the scale-up of a Vending Machine Channel Program, and we're now starting to see the first of the large orders come through on that program, and that reflects the fact that there was a lead time to get the Vending Machine Program installed, machines built, and in site, and that's now been completed, and we're going to start supplying to that. We do recognize that both of those channels are funded by the federal government for a period of time, and that includes through into 2026, so we will be expecting to see continued orders through both of those channels as those programs scale up.
That is going to continue to grow the public health business that we can expect for HIV Self-Testing, and that sits nicely alongside the program into pharmacy retail, and we continue to see new pharmacies coming on to the sale of product, and we also were pleased to announce that we have secured access through Symbion, which are one of the two large channels of wholesalers supplying the market, and that now means that we can supply essentially all pharmacies in the Australian network rather than just ones that were covered under our original agreement with API, and that access into new pharmacies we expect to see translating into new pharmacies stocking and selling product.
Across both the private sector as well as the emerging public sector, we're starting to see significant and continued momentum for HIV Self-Testing in Australia, and we think that talks to a market that's only going to grow globally as self-testing becomes more mainstream in the lexicon of consumers as well as in policy for public health. Here we have a picture of the test newly launched in Chemist Warehouse New Zealand. They're the largest retail pharmacy chain in New Zealand, and we're very pleased to be into that market with an established credible player, and we look forward to seeing sales out of New Zealand grow over the months and years ahead.
In terms of our active syphilis test, we announced in 2024 the securing of an AUD 2.44 million grant from the Commonwealth Government to take the initial work that had been done by ourselves and the Burnet Institute to put their novel syphilis assay onto our Pascal device and show that it was able to not only detect syphilis, but to be able to detect active syphilis and distinguish it from prior treated syphilis, which is a limitation of current rapid syphilis tests on the market. The data we were able to present to the government allowed us to secure that grant and move forward with the further development and testing of the product.
We're currently doing further analytical testing, which we expect to finish next month, and that will really allow us to establish the performance claims for the test, and that supports us moving forward with clinical and regulatory efforts as well as being able to talk to potential partners globally around not only when we can expect to get that product to market, but also what that product will do, we believe, in terms of performance claims in both professional and self-test markets, and we do feel that the product on the Atomo platform, with the ability to be more specific for active syphilis, really adds a lot of unique value into the market. We're very excited about that. The feedback we've had from clinicians in a number of key markets, including in the U.S., for that assay on Pascal has been extremely encouraging.
The agreement that we've now secured with Burnet allows us to be able to go out and have those commercial discussions with the ability for us to make representation that we can now not only develop this test, but bring it to market as the exclusive commercialization channel. We also announced in this quarterly an amendment to our partnering agreement with Lumos Diagnostics for supply of our Pascal cassette to their test for FebriDx. We have an agreement that was in place from prior to our listing in 2020. That agreement's now being restructured to reflect the commercial position of the product in the market. We have announced that there's now an introduced IP licensing exclusivity payment in that contract, and we'll be expecting to see the first of those payments come through very shortly. We're very excited about that ongoing partnership.
We've been supporting Lumos through their launch efforts in the U.S. and also through their ongoing program to secure CLIA waiver, and we note that that CLIA waiver program that they're running is funded through BARDA in the U.S. and is ongoing, and obviously that CLIA waiver status approval, if and when secured, would not only support scale-up of FebriDx in the U.S. market as a reimbursed test, but would give us the ability to look to bring our own tests and offer new partners a CLIA-waived, capable platform that is really important for looking to secure U.S. partnering over the longer term. In terms of new product initiatives beyond the current products, HIV and syphilis, we continue to work on the CLIP-IN concept to improve blood test usability. We call that platform FLORI. We've got some pictures here in the quarterly around that concept.
Development work is proceeding at pace, and we're very happy with the concept performance that we've got. Pascal is ideal for companies that are looking to build a product dossier for a new assay, and we've shown with our partnerships with NG and with Lumos that that can be done successfully and that those partners can secure regulatory approval and market traction. However, for tests that are already in market in a standard cassette, we wanted to be able to deliver to them something that offered Atomo usability, but was more of an accessory, and the reason for that approach was that by not having the test in the device, in the Atomo device, the Atomo device is not the finished IVD, so it doesn't need to have the regulatory approval that a diagnostic test requires.
It can be introduced much more streamlined and cost-effectively to partners that want to avail themselves of Atomo technology but not go through the effort and cost to revalidate their clinical and regulatory approvals.
We think that that reduced pathway to market makes the barriers to adoption much less, and the engagement we've had with a small number of partners to date to show and demonstrate the concept really would tend to support our rationale that by reducing the clinical and regulatory burden of adopting our device, we have a much easier path to market, and we'll be looking to move forward later this year with finished, fully functional prototypes that we can then use to secure, we believe, some supply agreements into partners who want to improve their usability, possibly look to move to CLIA waiver or self-test approval, but not have the cost and effort to have to completely revalidate the regulatory approvals. We'll certainly keep the market up to date on that, but we do think it provides an Atomo solution in a very large, established, addressable market.
If we look to the financials in a little bit more detail, we have just over AUD 1 million of revenue for the quarter. That's just under AUD 500,000 from HIV test sales, another AUD 250,000 from supply of Pascal to partners, and a further payment from the grants brings total grant revenue to market of AUD 3.1 million for the first three quarters of the period, representing a growth on the comparable period. In contrast, our operating costs continue to moderate. We have been very focused over the last two years in bringing down the inherent costs in the business, with more than AUD 2 million now pulled out of OpEx over that period, and we announced last week further plans to reduce operating costs, and we'll talk a little bit about that plan moving forward. Cash receipts for the quarter were around AUD 1.3 million.
Just under AUD 8.50 of that was customer receipts and then a further CRCP payment from the federal government for the syphilis program. We finished the quarter with just under AUD 2 million cash on hand, but most of you will be no doubt aware that we've subsequently announced to market a further capital placement, and we'll talk a little bit about that capital and how we plan to move forward from here with that funding in place. In terms of our key business priorities, certainly over the rest of this calendar year, they remain the same as they were disclosed in the half-yearly. A continued expansion of HIV sales channels both here and internationally, as well as paving the way for longer-term growth in HIV Self-Testing through the entry of self-testing at home into the management of PrEP.
We believe that's a very big untapped market, and the amount of rapid testing that could be brought to bear in PrEP screening is very significant. There's more than, I believe, 65,000 patients on PrEP in Australia alone. They test four times a year for HIV negative status, and there are a number of pilots globally where self-testing at home has been used to ease the burden on facilities to keep those patients compliant for PrEP treatment, and we're looking to see if we can get some Australian pilots up and running to demonstrate that. We also remain interested in Gen 4 for professional use, and we believe that Pascal is an ideal platform to deliver that type of test into professional use screening markets. With regard to syphilis, we're very excited about the opportunity.
We think the test is unique in terms of its ability to support self-testing as well as its ability to be specific for active syphilis, and we're very keen to move forward with commercial discussions now that we've got that licensing in place with Burnet. We have data coming out in the next month that allows us to firm up our performance claims for the product, and we'll be looking to push forward with design freeze and transition into clinical trials later this calendar year. OEM growth sales, obviously the CLIA waiver of Pascal would be a very significant milestone, not just for Lumos but for Atomo, and we would be looking to not only support a scale-up of Lumos's business with CLIA waiver in place, but also look to expand the OEM business network for Pascal off the back of that CLIA waiver in the U.S.
As previously mentioned in this webinar, we've got strong levels of confidence that Florey, as a low regulatory burden CLIP-IN device, adds significant value to that testing process and provides a lot of the usability and reliability that Atomo has proven with Pascal in an easy-to-accommodate format. We're excited about that test as well. Outside of those short-term programs, obviously we're mindful that we have secured further capital to fund the scale-up of growth in the business. We're looking to raise up to AUD 3.1 million. We have AUD 2.1 million committed by way of a placement. I'm very pleased to report that the vast majority of that AUD 2.1 million of commitment has come from existing Atomo shareholders who continue to support the business as we move forward.
A small portion, but quite a small portion, was new shareholder incoming capital, and I think that's a real tick of confidence from the key shareholders in the business to put that additional capital into the business, and we're also pleased that that was done at a less than 10% discount to the 15-day VWAP for the stock, so we were able to do that without a significant market discount, which is, I think, a good result in this market. We are going out with an SPP, a share purchase plan, for all shareholders to participate, and also pleased to announce that that's on the same terms as the placement, and we'd be encouraging everyone to give that SPP some consideration, and we'll be certainly coming out with more information in advance of that process.
We also announced, as part of that capital raise, that there will be some Board renewal. I'd like to take this opportunity to thank Deb Neff and Paul Kasian for their several years of service on the Atomo Board, helping the business move forward as a listed entity, and thank them for their efforts over the last couple of years in supporting me and supporting the business as we move forward. I'd also like to take an opportunity to really thank John Keith, our outgoing Chairman, who has been a tireless champion of Atomo and its products and its mission, and has been involved with the business from the early days and helped us move from a startup through to a company in market and go to market with an IPO and move forward now into the scale-up phase of the business.
With that Board renewal, we see two new directors joining the Atomo Board. I'd like to welcome them to the Board. I note that Patrick and Tony bring significant IVD Diagnostic and Industry experience to the Board, and that'll be very valuable as we seek to expand our product portfolio and also expand our commercial networks globally. They have very strong network channels into Asia and into other international markets, and we'll be certainly looking to avail ourselves of not only their networks but their experience and their input as we seek to move forward now that we have been able to improve the balance sheet and support the business growth as we move forward.
I'd like to thank everyone for their continued support of the business, and we look forward to bringing you further announcements later in this quarter as we move towards the end of year and start to move forward into FY 26 with these exciting product developments. We have had a couple of questions that I just wanted to follow up with. One of the questions: what is the situation with relation to Atomo's business and the U.S.-Chinese trade war? Like virtually every business on the planet, we're waiting to see how things develop. We do note that the category code that the medical device products were brought into the U.S. were previously exempt.
We're waiting to see what the longer-term opportunities might be from a realignment of the supply chain into the U.S., but at the moment, we're really just waiting to see what comes out of these developments that tend to be moving at a very rapid pace. We also had another question in relation to Atomo has a number of agreements that have significant licensing and revenue commitments. How does Atomo keep track of that? We have a long-term forecast, and into that forecast, we have monthly expectations of revenue based on contract commitments and payments. We monitor those monthly. We report to the Board any variations to those, and on occasion, we are able to go back and restructure agreements when necessary.
I would point to the restructure of the Lumos agreement to show that when we need to amend agreements to keep them relevant and applicable and in Atomo's interests, then we're more than happy to do that, and that will, from time to time, see a change to terms and also the introduction of licensing fees that we feel help validate the value of our technology to our partners as they move forward in the business, but it is something we keep close eye on. I'd like to thank everyone for their time. I just wanted to finish by saying that we continue to see not only growth in the business but improvement in the gross margins in the business, and I think that's really important to call out. Our gross margins were blended over the business at about 40% historically.
That reflects a large portion of our revenue coming in from global health, where we typically saw volume but not necessarily good margins. As the business moves away from global health and starts to focus and continues to grow in developed channels, we do see now an improving of gross margin, and our gross margin blended at the moment is in the mid-40%. I'd make the point that we are still at pilot scale phase in business scale-up, and we do see significant opportunities to move to higher margins, and we're targeting margins in the high 50% to early 60% at scale, and we're on track to deliver that.
The margins that we have are reasonable for the pilot phase that we're at, and certainly the technology we have and the uniqueness of that technology does allow us to generate margins at scale in the high 50s and low 60s, and that's very competitive for medical device diagnostic products. We'll continue to report on that as those metrics firm up. I'd like to thank everyone in the meantime for your support today and for joining us, and we'll welcome you to the next quarterly at the end of this calendar year. Thank you very much.