Cortical Dynamics Limited (ASX:CDY) is an Australian medical device neurotechnology company developing BARM, an EEG-based brain function monitor intended to help anaesthetists keep patients optimally anaesthetised during surgery. The company released its financial report for the year ended 30 June 2026, with the directors' report dated 23 September 2026. The report shows an operating loss after tax of $3,914,184, compared with $2,610,705 in 2025.

BARM 2.0 development

The company says technical completion of BARM 2.0, its next-generation AI-enhanced brain and pain monitor, is expected over the next few months. The minimum viable product suitable for trials is nearing completion and will then undergo electrical safety (EMC) testing. The proprietary BarSensors that will be used with the system will be tested for biocompatibility and shelf life ahead of Clinical Trials and regulatory approvals.

Cortical describes BARM 2.0 as combining hypnotic depth and pain response monitoring in one EEG- and AI-based system. After technical completion, clinical trials are scheduled in the United States and the Netherlands, followed by regulatory submissions worldwide. When commercialised, the system is intended to be offered stand-alone or integrated into operating room monitors. A companion deep learning application, CORDYAN, is also in development with matched grants from MTPConnect and ARM-hub.

Market positioning and engagement

The report cites a global market of over 300 million operations a year under general anaesthesia and states that the technology has potential uses in neuro-diagnostics, pain response and drug discovery. It notes that current monitors do not capture all aspects of an anaesthetic's effect on the brain, which can lead to too much or too little anaesthesia being delivered.

Activities during the year included showcasing BARM 2.0 at the Australia Regulatory Device Summit and at MedTech on the Hill at Parliament House, presenting to US investors in Detroit, exhibiting at the Emergence Conference, and presenting AI work to representatives of the Mayo Clinic. As part of a future focus on the US market, the company appointed two senior former US generals, including Lieutenant General Roger Cloutier (Ret), as founding members of a US advisory team.

Financial position

At 30 June 2026 the company had cash of $29,214, compared with $22,562, and total Assets of $197,321. Current borrowings were $2,463,825 and non-current borrowings $636,323, with total liabilities of $4,289,159. The Working Capital Deficit was $3,497,843 (2025: $2,622,504), and net liabilities were $4,091,838 (2025: $2,600,083). Net cash used in Operating Activities was $1,005,164, compared with $1,103,677, and net cash from financing activities was $1,015,632. The directors recommend no dividend.

Included in payables are balances of $899,333 owed to current directors, who have voluntarily suspended cash payments of directors' fees to conserve cash and will not seek payment until the company has sufficient cash. BPH Energy Limited has confirmed that a $3,100,148 Loan will not be called for at least 12 months or until Cortical is financially independent, and that up to $600,000 of further short-term funding would be available if required.

Risks and sector context

The financial statements carry a material uncertainty related to going concern. The company states that if it does not raise additional funds through new Equity or borrowings, there may be significant doubt about its ability to continue. The independent auditor, HLB Mann Judd, drew attention to this note without modifying its opinion. Cortical anticipates that it may need funding through equity raisings, R&D tax incentives and grants.

The company has no commercial product on the market. BARM 2.0 clinical trials and regulatory submissions are still ahead, and the report does not give dates for trial starts or approvals. The loan from BPH Energy is a significant part of the balance sheet, and directors' fee balances are unpaid.

For sector context, the report points to anaesthesia monitoring as a large recurring clinical market spanning surgical, ICU and emergency settings.

What to watch next

Items to watch include technical completion of BARM 2.0, EMC and BarSensor testing, the start of clinical trials in the United States and the Netherlands, regulatory submissions, progress on CORDYAN, any capital raising, and the ongoing support of BPH Energy.