# Respira Financial Model

Respira Technologies develops WAVE, the world's first carcinogen-free vape device using ultrasonic oscillation (heat-free), targeting Cannabis, Nicotine, and BioPharma inhalation markets.

- Canonical: https://finamodel.com/startups/respira
- Excel download: https://finamodel.com/startup-models/respira.xlsx
- Category: Biotech/Pharma
- Model type: Unit-economics / DTC
- Funding round: Seed
- Funding: $2.1M
- Founded: 2020
- Geography: Los Angeles, CA; US-first, with international expansion noted as a macro tailwind.
- Customer: B2C

## About the company

Respira develops WAVE, a heat-free ultrasonic aerosol device for cannabis, nicotine, and biopharma applications. The technology is designed to avoid formaldehyde, acrolein, acetaldehyde, and other harmful constituents created by heat-based vapes, with a patent portfolio spanning devices, cartridges, electronics, and formulations.

WAVE G targets cannabis and CBD through direct hardware and consumable sales plus technology licences. Nicotine economics depend on a modified-risk pathway and potential Big Tobacco engineering, licensing, or acquisition deals. Biopharma could use technology licences or combination-device joint ventures with OTC and prescription manufacturers.

The deck gives no unit price, cartridge ASP, royalty rate, regulatory outcome, or revenue. The model should separate hardware, consumables, licence upfronts, royalties, regulatory milestones, manufacturing cost, channel partners, and R&D. Forecasts must distinguish the cannabis commercial path from longer-dated nicotine and biopharma outcomes.

## What's included

- 5-year monthly revenue build with stage-appropriate growth assumptions
- Full P&L, headcount plan, and operating-expense schedule
- Cash-flow statement, runway, and burn-rate tracking
- Valuation via exit multiple with a DCF cross-check
- Returns analysis with MOIC and IRR
- Unit economics including CAC, LTV, payback, and cohort retention

## Product & value proposition

- **WAVE device**: heat-free respirable aerosol device using proprietary ultrasonic oscillation and energy transfer. Patent-pending.
- Three SKUs: WAVE G (Cannabis/THC+CBD), WAVE (Nicotine), WAVE RX (OTC & Rx medicines).
- Core claim: zero HPHC (Harmful & Potentially Harmful Constituents) - eliminates formaldehyde, acrolein, acetaldehyde, and 20+ other carcinogens present in all heat-based vapes.
- FDA alignment: positioned as the only device exempt from the FDA Final Deeming Rule HPHC labeling mandates (effective November 2019). MRTP (Modified Risk Tobacco Product) pathway actively pursued.
- IP portfolio spans: aerosolizing systems, devices, cartridges, electronics, process & systems, compositions (nano encapsulation, production methods).

## Market

- Total addressable market described as "potential $1 Trillion" across all inhalation-reliant consumer industries. - no methodology shown.
- **Cannabis vertical:**
  - US Cannabis Market Today (2019): $50B
  - US Cannabis Market to reach $80B by 2030
  - CAGR: 17.4%
  - US Cannabis users to increase to 15.2% by 2030
  - Vapor accounts for 22% of all cannabis sales
  - Source: Ackrell Capital Estimates
- **Nicotine vertical:**
  - US E-Vapor Market Today (2019): $8.7B
  - US E-Vapor Market to reach $27B by 2025
  - CAGR: 22%
  - Source: Wells Fargo Securities LLC
- **BioPharma**: described as an expansion market; no size figure given.
- Total US addressable market chart (2018–2023) shows stacked columns for Cannabinoid Based Pharma, Rec+Medical, and Vaporization segments growing from ~$10B to ~$50B range.

## Revenue model

Three revenue streams identified; no ASP, unit volumes, or deal-size figures provided:

**Cannabis and CBD:**
1. D2C brand for e-commerce and retail distribution (hardware + consumable cartridges).
2. Technology license & partnership agreements with leading manufacturers, growers, and fillers.

**Nicotine (ENDS) - two-scenario path:**
- Scenario A (MRTP-Ready): Innovation bonus or NRE (Non-Recurring Engineering) license agreement with a Big Tobacco partner.
- Scenario B (MRTP Order Granted): Exclusive license agreement or sector-based acquisition by Big Tobacco partner.

**BioPharma:**
1. Future technology license(s).
2. Combination Medical Device JV with OTC & Rx drug manufacturers.

No device pricing, cartridge ASP, royalty rates, upfront license fees, or revenue per deal disclosed.

## Competition / moat

**Competitive framing (slide 13):**
- Heat-based vapes (JUUL, iQOS, BLU): FDA will never grant Medical Device status; destined to remain consumer/retail-healthcare only.
- Propellant/impingement devices: eliminate toxic emissions but poor consumer UX; not defensible IP; low adoption potential.
- Medical nebulizers: eliminate toxic byproducts but impractical consumer form factor; expired/non-defensible IP.
- WAVE: only HPHC-free vape with consumer form factor; defensible patent portfolio; MRTP-eligible; viable for future insurance-reimbursable therapeutics.

**Moat claims:**
- Patent-pending IP across 6+ categories (slide 8).
- Only device exempt from FDA HPHC labeling mandate.
- Regulatory alignment as structural barrier: MRTP pathway inaccessible to heat-based competitors.

## Team & funding ask / use of funds

- Founder & CEO: Mario Danek (mario@respirarx.com).
- No other team members listed.

## Recommended financial model

- **Archetype + why:** Dual-track hardware DTC + IP licensing model with scenario toggle. The business has two fundamentally different revenue engines: (1) a D2C consumer hardware business (device + recurring cartridge consumable) that resembles a razor/blade model, and (2) B2B technology licensing to Big Tobacco / Pharma that is event-driven and lumpy. These should be modeled in separate modules with a consolidated P&L. A 3-statement model is appropriate given the capital requirements of hardware manufacturing. The Nicotine MRTP path (Scenario A vs. B) should be a scenario toggle.

- **Forecast horizon & granularity:** 5 years (2024–2028), monthly for Year 1 (cash burn tracking), quarterly thereafter. Hardware launch assumed Year 1; licensing deals Year 2+.

- **Key drivers & assumptions:**

  *Cannabis D2C (hardware + cartridges):*
  - Device ASP: $60–$80 retail (premium vape comps); 50–60% gross margin on device
  - Cartridge ASP: $15–$25; refill attach rate: 4–6 cartridges/user/month
  - Units sold Year 1: 5,000–20,000 devices (pre-revenue; seeding market)
  - Retail channel split: 60% D2C, 40% retail (25–35% wholesale margin haircut)
  - Cannabis vape market share target: <0.5% of US vapor segment in Year 1

  *Technology licensing:*
  - NRE / Innovation Bonus from Big Tobacco: $2M–$10M one-time; deal probability contingent on MRTP filing status
  - Royalty rate on licensee revenue: 2–5% of net sales; not disclosed in deck
  - License deal timeline: Year 2 earliest (post-MRTP submission); Year 3–4 for MRTP Order Granted scenario

  *Market data (seed values from deck):*
  - US Cannabis Market 2019: $50B; CAGR 17.4%
  - Cannabis vapor share of total cannabis sales: 22%
  - US E-Vapor Market 2019: $8.7B; CAGR 22%

  *Cost structure:*
  - COGS / hardware manufacturing: 40–50% of device revenue; cartridge COGS: 30–40%
  - R&D / regulatory (MRTP filing): significant; FDA MRTP process is multi-year and costly
  - Sales & marketing: 20–30% of revenue in launch years; declines as D2C scales
  - G&A: $1.5M–$3M/year (lean hardware startup)
  - Capex: tooling and mold costs for ultrasonic device; $500K–$2M pre-production

- **Scenarios (Base / Bull / Bear - which variables flex):**
  - **Base:** Cannabis D2C launched Year 1 at modest volumes; NRE deal with Big Tobacco in Year 2 (Scenario A); MRTP Order in Year 4; BioPharma licensing Year 5+
  - **Bull:** Faster regulatory approval; exclusive Big Tobacco acquisition in Year 3 (Scenario B); cannabis retail partnership accelerates volume; BioPharma JV signed Year 3
  - **Bear:** MRTP filing delayed or rejected; FDA scrutiny increases compliance costs; no Big Tobacco deal; cannabis market slower than projected; company funds solely from D2C with high cash burn

- **Required sheets / outputs:**
  1. Assumptions - all drivers with / tags, scenario toggles (Base/Bull/Bear + MRTP Scenario A/B)
  2. Revenue Build - Cannabis D2C (units x ASP + cartridge recurring), Cannabis licensing, Nicotine licensing (scenario-gated), BioPharma licensing
  3. COGS & Gross Margin - by segment
  4. P&L (Income Statement) - monthly Year 1, quarterly Year 2–5
  5. Balance Sheet
  6. Cash Flow Statement - working capital, capex, licensing cash receipts
  7. Runway / Cash Burn - key output; months of runway at current burn
  8. KPI Dashboard - units shipped, attach rate, licensing deals signed, gross margin %, cash runway

## Frequently asked questions

### Is the Respira financial model free?

Yes. The Respira model is a free Excel download with live formulas.

### Can I change the assumptions?

Yes. The workbook is editable and its live formulas recalculate when assumptions change.