Thank you for standing by, and welcome to our quarterly Investor call. All participants are in a listen-only mode, so rest assured that nobody else on the call will be able to see or hear you. There will be a presentation followed by a question-and-answer session that I will announce at the end of the presentation. To ask a question, please use the Q&A box in the Zoom control panel, or feel free to raise your hand to ask a question in person. Unfortunately, those joining by telephone will not be able to raise a question. An audio recording of this call will be made available on the company's website later today. I would now like to hand the conference over to Brent Barnes, CEO and Managing Director.
Great. Thank you, Debbie, and welcome, everyone. Thanks for attending today's investor call. Our execution focus in the pharmaceutical microbiology market remains our priority, which is aligned with our updated business strategy, and pleasingly, this is progressing very well. Over this past quarter, we've started to see evidence of the opportunity in this market and have delivered on key milestones, including first sales that position us well commercially. We expect to execute on our developing and promising sales pipeline over the next six months that will establish a solid platform for commercial growth. In today's call, I'll provide an overview of the key company updates during the quarter. Ray Ridge, our CFO, will provide a summary of our financial performance before I conclude with a summary of the business outlook. Our Chair, Rebecca Wilson, also joins us today and is available for Q&A at the end of this call.
I'll now hand it over to Ray to start with some formalities.
Thank you, Brent. The usual formality before we commence, I would like to remind those on the call that today's update may contain forward-looking statements which involve inherent risks and uncertainties. Those risks and uncertainties include those disclosed in our ASX lodgements, which we recommend that you review. There are reasonable grounds for any forward-looking statements made today. However, due to their inherent uncertainties, we recommend that you do not place undue reliance on those statements. Actual results, of course, may differ materially from those forward-looking statements. We're now ready to go. Back to you, Brent.
Thank you, Ray. So look, this quarter we completed a significant body of work to finalize the validation of our APAS Pharma QC analysis module for automated reading of 90-millimeter culture plates used in pharmaceutical environmental monitoring. These plates are called settle plates, allowing the clean room atmosphere to settle under the plate during the manufacturing of pharmaceutical products. During aseptic manufacturing, these plates are used routinely for environmental monitoring in pharmaceutical manufacturing facilities globally, representing a significant opportunity for our APAS technology, which automates the reading and reporting of these plates. The development of our machine learning algorithm for these settle plates has been finalized during the quarter. As important is the extensive testing we've completed to demonstrate the performance of our technology.
This is what we call our primary validation, and the extensive documentation we've generated will be used by our customers to incorporate APAS into their routine environmental monitoring practices. As the manufacturing of pharmaceutical products is highly regulated, it's expected our validation documentation will be used by our customers to demonstrate performance of APAS to regulators during any routine inspections. As previously communicated, there are no additional regulatory approvals required. Our technology is now validated and demonstrated performance, ready for customers to start trialing and adopting. I want to take a moment to go through some of the key data points from this primary validation and explain why it's important. I'm going to share some slides, but if you can't see the screen, don't worry. We'll have a recording made available on our website later today. So just putting this in presentation mode here. Fantastic.
So look, the primary validation study was designed to meet the requirements of the compendial methods, demonstrating the performance of APAS Pharma QC as an alternate microbiological method to manual plate reading. There are a number of US and European pharmacopeia validation requirements that need to be met, and this has informed our robust testing program. For example, a range of tests were completed where the results generated from APAS were compared to a panel of three microbiologists. The testing included a broad range of microbiological organisms representing the diversity of organisms likely to be encountered in pharmaceutical manufacturing environments. In total, the study included over 35,000 manual plate counts and an estimated three million colonies that were counted and analyzed. It was a huge body of work that was completed.
The key takeaway is that this was an extensive study designed to challenge the performance of APAS Pharma QC thoroughly, ultimately giving our customers confidence in the benefits they can expect to gain when adopting the technology for routine use. Completing this work is a critical milestone to support our commercialization efforts because all customers want to see evidence that the technology works and meets the compendial methods. This next slide talks through some really important key performance results, and I'm just going to share a couple of them with you because they're really the most important ones for our customers. First, our primary validation demonstrated a false negative rate of 0%. This is the most critical criteria our customers look at when considering our technology. The highest risk for our technology is that we will miss plates where microbial growth is present.
The false negative rate of 0% demonstrates that the APAS Pharma QC growth detection works extremely reliably. This has been further demonstrated in the studies with AstraZeneca, where APAS has correctly identified plates with growth that were missed by their own internal reading processes by two microbiologists. Secondly is a test called linearity, where the graph on the right shows the performance of APAS for counting colonies accurately. The graph compares the results of APAS counting colonies on the plate with the manual counting of colonies by the microbiologist. The performance data represented in the graph demonstrates extremely positive agreement between the microbiologist result and APAS. This gives our customers confidence in the counting performance of APAS and shows it can add more value than simply segregating plates with growth from those without growth. That's the end of the slides for now, so just kind of continuing on here.
The completion of our primary validation study represents a key milestone for the company and finalizes the development of our APAS Pharma QC product for automated reading and reporting of settle plates. As mentioned previously, there are no further regulatory clearances required, and we are now incorporating this new data into our sales and marketing initiatives to support our commercialization efforts. For our partnership with AstraZeneca, the completion of our primary validation study represents a key inflection point where the product is formally released to AstraZeneca, and they are now able to commence and progress with their secondary validation that assesses the performance of APAS Pharma QC within their own manufacturing processes. This work will be completed by their team in the U.K. and is expected to be completed in the September quarter.
From a commercialization perspective, we've made a really strong start in the pharmaceutical market, completing our first two sales. In February, we finalized the sale of the Thermo Fisher contract drug manufacturing business unit, and just last week, we completed a further sale to Perth-based CDMO NovaCina. These sales have come six months ahead of our original expectations and provide a clear indication of the market opportunity that lies ahead. At the start of this year, we identified a number of important events to attend and present at throughout the year, focusing on key pharmaceutical microbiology events that provide the best opportunities to showcase our product. Key highlights for this quarter included a joint presentation to the BioPhorum Working Group for Alternative and Rapid Microbiology Methods and demonstration of the system at AstraZeneca's U.K. site as part of the Pharmig Modern Micro Methods event in February.
More recently, I just returned from the annual European Congress for Clinical Microbiology and Infectious Diseases Conference, which was in Barcelona this year. This conference has historically been a high-investment event for us and remains an important annual event to engage with customers and partners in the clinical microbiology market. Given the clear shift in our strategic focus towards the pharmaceutical market, this year we took a lean approach, where it was just me attending. During the conference, our key opinion leader, Labor Dr. Wisplinghoff, presented a poster publication demonstrating the performance of the APAS Independence for reading disc diffusion plates using antimicrobial susceptibility testing. It was well received by customers.
As outlined in our quarterly, given the slower-than-expected sales performance in the clinical microbiology market, we have commenced discussions with Thermo Fisher to explore alternate distribution and sales models, and I spent some time with Thermo Fisher to progress these discussions during the conference last week. Our goal is to maximize near-term opportunities, however, and make it very clear that we are prioritizing resources towards execution of our commercialization strategy in the pharmaceutical market. As part of this strategic review and taking into account our expected increase in APAS placements and sales into the pharmaceutical market, we are also in discussions with Thermo Fisher to consolidate the service and support for the APAS Independence in both markets and to return the service of all instruments to be managed by LBT directly.
We do expect this to deliver a positive revenue stream with positive associated margins for the company that will support the growth in both markets on a go-forward basis. I'll now hand it over to Ray to talk through the financial results for the quarter.
Thanks, Brent. Good morning, all. I will now provide a brief overview of the financial results we recorded in our Appendix 4C lodged with the ASX in April. All figures are in Australian dollars and in accordance with ASX listing rules. They are not audited so for the quarter ended 31st of March, LBT reported net cash outflows of AUD 0.7 million, which comprised net cash outflow from operating and investing activities of AUD 1.1 million, including receipts of AUD 0.3 million from customers for analysis module renewals and development funding from AstraZeneca. Net cash inflows from financing activities were AUD 0.4 million, largely the proceeds from the early exercise of options. These cash flow movements in the quarter resulted in reported cash balance of AUD 2.5 million at 31st of March.
In addition to that cash on hand, other expected sources of funding in the near term include an estimated AUD 0.8 million from customer receipts and grants in the next quarter, AUD 0.6-AUD 0.8 million for the research and development tax incentive, which we would expect to receive in the September quarter. In addition to these, there are 410 million listed options with an expiry date of the 15th of September 2024. These, if fully exercised, would raise proceeds of AUD 2.1 million, with AUD 1.3 million funding operations and AUD 0.8 million reducing the balance of the loan with the South Australian Government. Importantly, we also have the clear prospect of cash inflows from multiple instrument sales to AstraZeneca, expected to commence in or before the December 2024 quarter, depending, of course, on the outcome and the timing of their secondary validation, which is currently underway. Back to you, Brent.
Great. Thanks. Thanks, Ray. Look, turning to the outlook, our primary focus is to execute on our sales and marketing initiatives centered around the APAS Pharma QC product in the pharmaceutical market. We have three areas of focus being customers, pipeline, and awareness. Starting with customers, our cornerstone customer is AstraZeneca, and we'll be supporting them as they commence their secondary validation process of the APAS technology. This is the first customer validation for APAS Pharma QC, which is an activity required to incorporate APAS into a routine manufacturing setting. AstraZeneca has already completed initial real-world performance studies of the technology. However, now that the product is validated, they can commence their formal process for validation of the technology.
Once completed, we expect this will be a precursor to AstraZeneca commencing a multi-site rollout of the technology and will establish an influential key opinion leader who are using the technology across multiple sites. This will be hugely important as we continue to engage with more customers in the market. NovaCina is the Perth-based drug manufacturing organization who signed a contract last week to procure APAS. The planning for shipment, installation, and commissioning has commenced, and we look forward to supporting NovaCina with their secondary validation processes following delivery of the instrument. From a sales pipeline perspective, we have established an early adopter initiative to accelerate the placement of APAS Pharma QC with new customers.
This initiative is focused on groups who can move quickly to evaluate the technology and with parties who are willing to publish data that further demonstrates the performance of the system and broadens the credibility with other customers. NovaCina is an example of a customer that is part of this early adopter program. An important component of our pipeline development is sharing our newly completed validation data, establishing confidence in the technology, where we expect customers will sign up to a placement of the APAS instrument at their facility. We expect the sign-up program is structured as a placement to procure, whereby a placement is a leading indicator of a customer sale. We expect new customer placements over the coming quarters. Finally, our awareness activities will accelerate with increased marketing presence at industry conferences and publishing of white papers.
In fact, this week, we have sales representatives attending regional pharmaceutical microbiology events in Singapore and also the United States. Next week, I'll travel back to Europe for conferences in Germany and Ireland, in addition to meeting at customer sites in the region with our European sales executive. In Germany, we have an exhibition booth at the Aseptic Manufacturing Conference, where AstraZeneca will be presenting updated performance data on the technology at the conference. We expect to finalize and publish a significantly updated Clever Culture Systems website that better communicates our technology for the pharmaceutical market, and this will be delivered in the near term. In closing, I want to emphasize our optimism and focus on the pharmaceutical microbiology market.
We've now delivered on a number of important milestones, which provide evidence and positive signals our APAS technology is building commercial momentum in the market, and we expect this positive momentum to continue. I'll now hand it back to Debbie to open it up for any questions.
Thank you, Brent. We will now commence the question and answer session. Please remember, if you'd like to ask a question, either use the Q&A function on the Zoom control panel at the bottom of your screen or raise your hand and wait for your name to be announced. If you wish to cancel your request at any time, simply remove the raised hand.
Doesn't look like we've got any raised hands this morning.
Obviously covered it well, Brent.
Okay, if that's the case, Debbie, you want to wrap it up, perhaps?
Yep. Well, yes. Thank you for listening, and this recording will be put on our website as announced.
Thank you all.