CO2Rail's 24-Month Use of Funds model deploys approximately $9.9 million in starting capital across a precisely sequenced runway beginning August 2026, with the full-scale working prototype completed and on-site testing commencing May 2027 — just nine months after funding close. The program runs through July 2028 with meaningful cash reserves remaining, demonstrating that the capital ask is sized to the milestone, not padded for comfort. Total program costs are approximately $3 million in payroll, $1 million in non-labor G&A, and roughly $425,000 in upfront capital expenditure, with concentrated CAPEX at key prototype build milestones. A $1 million grant receipt in late 2027 extends runway through the final validation phase. Revenue generation begins modestly in the first half of 2027, with VCM revenue emerging shortly after — totaling over $100,000 across the 24-month period as the system transitions from build to early operation. The model is lean, milestone-sequenced, and ends exactly where it should: capital nearly fully deployed, prototype complete, Series A ready.
The 24-month cash flow model is one of the most investor-credible documents in CO2Rail's portal — not because it shows large revenues or comfortable cash cushions, but because it shows exactly what the capital will do, month by month, with no waste and no ambiguity. The starting balance of approximately $9.9 million represents the full fundraise deployed into a precisely engineered 24-month program. The ending balance — a meaningful but intentionally lean cash reserve — is not an accident. It is the natural consequence of a model built to spend what it needs to spend and nothing more, arriving at the Series A threshold with the prototype complete and the capital nearly fully deployed. This is what disciplined capital deployment looks like.
The most important milestone in the model arrives at Month 10 — May 2027 — when on-site testing begins. The build is complete. This is the moment the program transitions from engineering and fabrication into real-world validation, and it arrives less than a year after funding close. The capital deployed in the months leading to this milestone is concentrated, deliberate, and directly traceable to prototype completion. Everything that follows — pilot deployment, commercial validation, Series A raise — flows from this single date. The 24-month model exists to get the company to May 2027 and keep it running through the validation period that follows.
The first two months carry the heaviest single expenditures in the entire program. The opening month absorbs the initial ~$425,000 capital expenditure — facility, equipment, and program setup — alongside first-month operating expenses, producing the largest single burn in the early phase. Month 2 reflects concentrated CAPEX for prototype build commencement and is the highest individual burn month in the model. This front-loading is intentional and appropriate: the highest capital intensity occurs when the engineering risk is highest and the spend is most directly tied to value creation. After the opening phase, the burn rate normalizes to a steady ~$250,000 per month through the end of Year 1 — a lean, controlled operating cadence that reflects a team focused entirely on engineering execution.
The operating expense structure is deliberately lean throughout. The first 12 months carry approximately $125,000 per month in payroll and roughly $42,000 in non-labor G&A — a total monthly operating expense of approximately $250,000 reflecting a small, highly focused technical team without the administrative bloat that destroys most early-stage hardware companies. In Year 2, expenses step up modestly to approximately $140,000 in monthly payroll and $47,000 in non-labor G&A — a run rate of roughly $290,000 per month reflecting the team additions required to support the transition from prototype build to pilot validation and early commercial activities. At no point in the 24-month model does headcount grow ahead of the program milestone that justifies it.
Two concentrated CAPEX deployments around the prototype build completion — in the months approaching May 2027 — represent the most capital-intensive period in the program. An investor reviewing this model in the context of the Risk Burn Down Timeline will recognize these as the planned, anticipated cost of the program's most important milestone. These are not unexpected overruns. They are the price of the prototype, paid at exactly the moment the engineering program requires it, producing exactly the deliverable the program promises.
Revenue begins to emerge in the first half of 2027 with initial offset income — a small but symbolically important figure that marks the first dollar of verified carbon removal value generated by the program. VCM revenue follows shortly after, growing through Year 2 as the pilot operation begins generating verifiable removal data. The total 24-month revenue of approximately $100,000 is not material to the cash flow in this period — nor is it intended to be. This is a prototype and validation phase, not a commercial deployment phase. The revenue that appears here is the leading edge of what the financial projections show growing to hundreds of millions annually — its presence in the burn model at this early stage is confirmation that the commercial architecture works, not a claim that it has already scaled.
The ~$1 million grant receipt in late 2027 arrives at precisely the right moment — after the major prototype CAPEX has been deployed and as the program transitions into final validation and pilot preparation. This grant is not embedded in the opening capital raise; it is incremental funding that extends the runway through the final months of the program and contributes to the ending cash balance that positions the company cleanly for a Series A raise with a completed prototype, verified performance data, and zero existential capital risk. The 24-month runway does not run out. It lands exactly where it was designed to land.
