XWELL Inc (XWEL) 2020 Q4 法說會逐字稿

Greetings, and welcome to XpresSpa Group's Fourth Quarter 2020 Earnings Conference Call. (Operator Instructions) As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. James Berry, Chief Financial Officer. Thank you, sir. You may begin.

Good afternoon. Thank you for joining us today and for your interest in XpresSpa Group. Before our CEO, Doug Satzman, provides an update on our business and I briefly review our fourth quarter 2020 financial results, I first need to advise you of the following.

Comments made on today's call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current assumptions and opinions that involve a variety of known and unknown risks and uncertainties. Actual results may differ materially from those contained in or suggested by such forward-looking statements.

Important factors that might cause such differences include those set forth from time to time in our SEC filings, including our report on Form 10-K for the year ended December 31, 2020, which was filed this afternoon, as well as our earnings release also issued this afternoon, along with other current and periodic reports that we file with the SEC.

I would now like to turn the call over to Doug.

Good afternoon. First, I would like to welcome Mr. James Berry, our new CFO, to his first XpresSpa earnings call. Welcome, James.

This afternoon, I'd like to provide a brief update on our legacy spa business before moving on to where we currently stand with XpresCheck. Afterwards, I will share some preliminary thoughts, including some near-term steps that we are taking in evolving our business model to capitalize on what we view as a substantial opportunity in the Travel Health and Wellness space in a post-COVID world.

So starting with our legacy XpresSpa business. While airport traffic begins to recover, COVID-19 cases continue to decline. And as more and more people get vaccinated, the consensus across the travel industry is that it will likely take until late 2022 to early 2023 before we can return to pre-pandemic travel volumes. We are certainly encouraged that traffic has picked up recently, perhaps due to, in part, to spring break excursions and that the airport and airline employees are returning to work. Still, we have a long way to go. And based on historical seasonal patterns, traffic is likely to taper off again in the near term before the summer.

Beginning last July, we reopened 2 international XpresSpa locations to test the waters. Specifically, we opened our spas in Dubai International Airport where we have been providing limited spa services and selling various spa products such as neck pillows and travel blankets. Then in late September, our sole domestic XpresSpa franchisee reopened in Austin-Bergstrom International Airport. However, all 3 of these locations continue to underperform despite increasing airport traffic and are not close to breakeven profitability.

Given these circumstances and what we believe will be continued customer uneasiness, having one-to-one close personal interactions with massage therapists and cosmetologists in an airport setting, we currently do not have plans to reopen our spas for traditional services in the near term. We have run analysis on several low to mid-volume scenarios, and none of them project an acceptable financial outcome at this point in time. This could change as the pandemic wanes and we will, therefore, reevaluate possible reopenings of select spas in the future.

Now turning to our XpresCheck business. As of today, we are operating 11 XpresCheck Wellness Centers across 9 airport locations, with 2 additional top-up locations in the pipeline. First one -- the first will be opened at Tacoma -- Seattle-Tacoma International Airport and the second at San Francisco International Airport. We expect both locations to open in the coming weeks.

Our patient volumes at XpresCheck continue to increase with rising traffic at the airport, and we are further aided by the rollout of the rapid molecular COVID test that we launched in early October. This has been, by far, the most preferred option compared to the Polymerase Chain Reaction or PCR test or the blood antibody test and is at a substantially higher price point, $200 versus $75. Over 73% of all tests that we are conducting are now rapid, which has also helped improve gross profit margin and helped to reduce our monthly cash burn.

As detailed in our last quarterly earnings call, 10-K and in today's -- in the last 10-Q and in today's 10-K filing based on state-by-state regulations, we do not report revenue on a per patient basis or services. But instead, we receive our revenues as a management service fee from the physicians.

And this is because XpresCheck operates as a management service organization, or MSO, which is a health care specific administrative and management services engine that provides a range of administrative and management functions with a company management services agreement with a physician as governed by state-by-state regulations.

As a result, we are not able to recognize revenue in the fourth quarter of 2020 related to XpresCheck. However, we have reassessed our agreements and updated projections for new locations that are better reflective of the actual patient volumes that we're seeing in our locations. Therefore, we anticipate being able to report revenue in the first half of this year.

Also notable, effective March 8, 2021, XpresCheck transitioned to a fee-for-service model for all tests, similar to what we've been doing all along with the rapid test. Under this model, patients pay XpresCheck directly at the time of service, and then they are able to submit their testing fees for insurance reimbursement on their own. However, lab fees are still submitted for insurance reimbursement from the outside lab companies.

We will also be adding a rapid PCR test and another rapid antigen test to our suite of COVID-19 testing services this week, which will provide passengers additional methods of testing that many require for travel and additional lines of revenue for us.

In the past several months, the XpresCheck brand has also secured a few notable partnerships. As announced on November 13, 2020, we become -- we became a designated State of Hawaii Trusted Testing Partner. All travelers, aged 5 and over, are required to take a Nucleic Acid Amplification Test, or NAAT, from a certified Clinical Laboratory Improvement Amendment, CLIA, lab in order to bypass the State of Hawaii's 14-day mandatory quarantine. The State of Hawaii accepts test results only from Trusted Testing and Travel Partners. Tests must be taken no more than 72 hours before flight departure time. We are proud to be a trusted partner of the State of Hawaii as people take a long-awaited Hawaiian vacation.

As of January 28, we've been working with United Airlines, Delta Air Lines, KLM Royal Dutch Airlines out of our JFK Terminal 4 location, our Newark Liberty International Airport locations and our Boston Logan International Airport locations for flights to the Netherlands. The Netherlands COVID-19 testing policy for incoming passengers -- international passengers requires a negative COVID-19 PCR test within 72 hours before departure as well as a negative COVID-19 rapid test 4 hours before departure. This is the strictest travel requirement globally at the time. We are collaborating with these major airlines to meet the rapid 4-hour test requirement at these select airports.

We have also piloted at JFK Terminal 4 the implementation of a rapid antigen test administering BD Veritor's rapid SARS COVID-2 test for the BD Veritor Plus System.

Next, we've partnered with The CommonTrust Network's CommonPass platform, which links COVID-19 test results from partnered labs such as XpresCheck directly into the CommonPass app. Passengers are then able to show their test results through this app to airlines and destinations, so as to ensure a hassle-free entry and avoid quarantines where applicable.

The CommonPass digital health pass is currently accepted upon arrival at Aruba's Queen Beatrix International Airport to enter. And JetBlue U.S. customers traveling from Boston are able to utilize the 2 XpresCheck Wellness Centers at Boston's Logan International Airport for COVID-19 testing, with the test results then uploaded to the CommonPass app.

We are hopeful that acceptance of CommonPass will continue to expand over time. We are engaged in discussions with other emerging health passport apps that could similarly be deployed to XpresCheck Wellness Centers as soon as reasonably possible.

We are also awaiting approval on a state-by-state basis to administer COVID-19 vaccine approved for use by the FDA at select XpresCheck locations. Upon state-by-state approval and receipt of the necessary COVID-19 vaccines, we may launch a vaccination program primarily focused on airline employees and the airport staff initially, although passengers could be eligible for vaccines over time, subject to supply availability and other state eligibility requirements.

Finally, on XpresCheck, we -- while we believe that COVID-19 testing will remain an important necessary service for airline employees, airline staff and passengers for the foreseeable future, we are reassessing future development of any additional XpresCheck Wellness Centers, popup or other, beyond the 2 pending locations in the pipeline. This is based on our evaluation of the economic viability of the remaining major hub, airports and developing international travel requirements.

This decision was made so that we can dedicate our efforts and resources to bringing to market a new, more comprehensive Travel Health and Wellness brand focused on emerging new category of health-focused travel and personal wellness services that would still include COVID-19 testing and other related services.

So I'll turn to the new Travel Health and Wellness brand that we're working on. We'd now like to start sharing our plans with our investors as to how we plan to evolve as an organization. As you are already aware, once the pandemic struck last March, we quickly pivoted to XpresCheck as a bridge between our legacy spa business and to what we believe Health and Wellness brand customers will be looking for in a post-COVID world. We are at the point where a need state and a want state are colliding, and we can provide the answer for both.

People need to be safe and healthy, but they want to return to travel. So we can help them travel well. For clear reasons, consumers are more health and wellness focused in general than ever before, and this is especially true as it relates to travel. With this new brand, whose name we will announce at a later date, we plan to provide health and wellness services for the entire travel journey from planning to post-arrival care.

We're developing a health and wellness brand that is positioned for a post-pandemic world that leverages our historic travel, wellness experience and our newly acquired health care expertise. We are preparing a launch of a Travel Health and Wellness company delivering on-demand access to integrated health care through technology and personalized services.

The strategic brand pillars are travel, health and wellness, which places our experience and assets directly in the intersection of these 3 categories, Travel Wellness was a skyrocketing trend category prior to COVID-19 and adding health to that combination will enable it to rise again.

In the health pillar, the new brand will be differentiated, because it is a travel focused and in airports, while in wellness, it is differentiated because it is a travel industry retailer and expert. In travel, the new brand is differentiated, because it has health and wellness experience and will provide access to integrated care and health documents all in one app.

We see this concept evolution as a significant opportunity to be a category innovator in a new niche industry where it can leverage technology in addition to its existing real estate and airport operational experience and providing travelers with peace of mind and access to integrated health care. The brand name, again, will be announced at a later date.

While COVID-19 testing will be available under this new brand, broader suite of services may include pre-travel planning; on-site medical services such as metabolic panel testing, anxiety care and convenience travel care; virtual chat care and video care through a partnership with an established telemedicine company; and access to virtual wellness care such as guided meditations and yoga.

The first 2 integrated Travel Health and Wellness locations are expected to open in late summer or early fall 2021. Over time, the company intends to evolve some of its legacy XpresSpa footprint into this new Travel Health and Wellness brand, where feasible, as well as open additional locations in other suitable terminals and airport venues.

However, over the long term, we envision that our digital channels will provide more significant growth opportunities for revenue and profit than our airport real estate. The success of this revenue stream will be achieved through both subscription-based services that provide care and tools supporting travel, health and wellness.

Further, we'll be offering upstream content that can be monetized through affiliate revenue as well as curated retail through e-commerce. We are currently laying the groundwork to have our initial digital assets launch in the summer time frame ahead of the first 2 brick-and-mortar location openings, as travel begins its recovery this fall and into 2022.

Given its strong liquidity position and poise for growth, we also -- we would also consider accretive acquisitions and other investments to further broaden our service and retail offerings and would invest in new opportunities beyond this new evolving concept. We are excited about this new brand and the future of XpresSpa.

With that, I'll turn it to James.

Thank you, Doug. As I referenced earlier, we had negligible revenue during the fourth quarter, given very limited operations and our aforementioned inability to recognize revenue under our management services agreement.

As a result of the uncertainties around the cash flow of the XpresCheck business, we concluded that the collectability criteria to qualify as a contract under ASC 606 was not met during the fourth quarter 2020, and therefore, no revenue associated with the monthly management fees was recognized from the management services agreement.

Instead, for the fourth quarter 2020, we have recognized management fees paid of $900,000 as a deposit contract liability. As of December 31, 2020, management fees not recognized as revenues was $3.4 million. However, we do expect to be able to recognize revenue in the first half of 2021 after reassessment of the management service agreements relative to ASC 606.

As a result, reported revenues during the 3 months ended December 31, 2020, was $323,000 compared to $10.9 million in the corresponding period of 2019. The decrease in revenue was primarily due to the adverse impact of COVID-19 and temporarily closing substantially all global spa locations due to the categorization of the spa locations by local jurisdictions as nonessential services. The decrease was offset by revenue generated by services and products of $246,000 and $68,000, respectively, due to the sales and marketing agreements with strategic spa partners in the recently reopened spots in Dubai and $9,000 for others.

Cost of sales decreased to $2.4 million from $9.2 million in the prior year fourth quarter. The decrease was due to the reduction in variable costs associated with the decline in the XpresSpa revenues and decreases in occupancy costs as a result of rent concessions received from the airport. They were offset by the cost of sales provided pursuant to the XpresCheck management services agreement of $1.2 million.

On impairment and disposals of assets, expense increased to $9 million from $5.2 million in the prior year fourth quarter. The expense was related to the impairment of our XpresSpa tradename due to the changing business climate and due to the COVID-19 pandemic and impairment of leasehold improvements made to certain XpresSpa locations, operating lease right-of-use assets, where management determined that the location's discounted future cash flows were not sufficient to support the carrying value of these assets over the remaining lease term and trademark.

General and administrative expenses were flat at approximately $5 million for both of the comparable periods. Operating losses from operations increased to $17.5 million compared to $10.1 million in the prior year fourth quarter. Net loss attributable to common shareholders was $15.7 million compared to net loss attributable to common shareholders of $7.1 million in the prior year fourth quarter.

Finally, with respect to our GAAP financials, our liquidity remains strong with cash and cash equivalents totaling approximately $89.8 million as of December 31, 2020. For further details, please refer to our annual report on Form 10-K filed today.

Let me now conclude with the non-GAAP financial metrics with respect to XpresCheck that we believe will be helpful in providing greater transparency in terms of its performance. Although we do not generate revenue directly from patient testing volumes as detailed above, in the interest of providing investors with greater transparency regarding XpresCheck's performance, we have opted to disclose recent and current average daily patient testing volumes along with other relevant non-GAAP financial metrics.

During the fourth quarter 2020, average daily patient testing volumes for XpresCheck Wellness Center was approximately 70 to 100 people, with higher volumes during the November and December holiday travel period. This reflects a significant increase from the average daily patients testing volumes generated in the third quarter of 2020 of 30 to 50 people and was due largely to the rollout of the COVID-19 rapid testing along with an increase in the airline industry traffic over the 3-month period.

Notably, the number of higher revenue, higher-margin COVID-19 rapid test as a percentage of total tests averaged 55% during the fourth quarter of 2020 and 67% in December of 2020. COVID-19 rapid tests did not become readily available at XpresCheck Wellness Center until early October 2020. During the first 12 weeks of the first quarter of 2021, the average revenue per patient was $150, while higher-revenue, higher-margin COVID-19 rapid test as a percent of total tests averaged 73%.

Total XpresCheck pro forma patient service revenues for the 3 months ended January 31, 2021, was $3.3 million, while pro forma XpresCheck gross profit was $1.2 million, representing a 36.5% margin. Total patient volume was 22,344, including 14,998 rapid test volumes during that period.

The improvement in the 4-wall performance of XpresCheck has slowed the company's monthly cash burn and exceeds the pre-pandemic gross profit margin of the legacy XpresSpa location.

So with that, we appreciate your time this afternoon and are now ready to take your questions.

(Operator Instructions) [Michelle], you may proceed with questions.

The first question we have coming in, perhaps reopening spas at the moment is not a good idea, but once the vaccine is rolled out and available to everyone by the summer, why not try and open a few locations? Don't you think people will begin to resume normal activities at some point? And don't you think the spas will be more relevant then?

Thank you for the questions. It's a tough one. We opened a couple of spas to see how they would do. They're underperforming. I'm not convinced that people will be rushing even when they have vaccinations to have such close intimate interactions. Even if 10% to 20% of our traffic that used to come to us decide they're going to wait until next time, that can be a material difference in our economic model.

One of our major competitors in other airports, they opened a handful of spas during the holiday of November and December, and then they reclosed them again in January. But the short answer is the world has changed, and we will be reopening, but in a new format, in a new world with more relevant services and more relevant retail. We're extremely excited about the new path that we're going down and where we'll be able to leverage a lot of our existing real estate as well as get access to a lot of new real estate, just like we do with XpresCheck.

Great. And the next question. Did you receive any stimulus as it relates to COVID testing in the airports? Did you apply and were you expecting to?

We haven't received any new stimulus from the recent bills that came. We had been speaking with the Trump administration and the Biden administration and various government departments. We have ongoing discussions with the CDC and HHS. We want to avoid further pandemics, and we think that we are well positioned, and they're very interested to support their agency efforts with the number of people that we have access to. So more to come.

Great. And how long are these various XpresCheck contracts? Are they all 12 months from the commencement of operations? If COVID testing is here to stay, why not open a few more popups to capitalize on the opportunity in the near term?

So let me repeat the question back. How long are the contracts? And are they all 12 months? And then why not open a few more pop-ups? Did I get that?

That is correct.

Okay. So our contracts range in time. In some instances, we're simply amending an existing lease we have. Some are 12-month emergency use provisions. Some have rights to extend. Some are 2- and 3-year deals. We have a right to terminate if all of a sudden the business dries up. So there really isn't one answer. Point is we negotiated flexibility as much as we can with airport leases, which often have very defined constructs.

Why not open a few more popups? We are watching this carefully. And we have hit a lot of the major airports that we've been targeting. Some have gained some testing facilities, but more importantly, based on our evaluation of the economic viability of the remaining major hub airports, in this constantly developing international travel requirements, that will tell us at what rate or development for XpresCheck picks back up. Maybe it stops here. Maybe it goes further.

So it's -- every month or so, even more frequently, we're constantly evaluating the run that we have, when we sign these contracts, make these investments and certainly look for a return on that investment for our shareholders.

Okay. Great, Doug. And the next one, do you have any current authorization to raise additional capital? Or will you seek a new authorization?

So -- well, we do currently have a shelf, I think everyone is aware. And I've been asked this question before. It's the exact same answer. We do not have immediate plans to raise capital, but we always reserve the right if the opportunity presents itself. I, as the CEO, and our Board has a fiduciary responsibility to take advantage of market conditions when they arise time to time. And I think the company is in a much stronger position now because of the decisions that we've made. So again, we don't have immediate plans, but we're always watching.

Great. And how will you be able to recognize revenue beginning in the first half of 2021?

I'll ask my colleague, James, to answer this one.

The revenue recognition that governs a contract is called ASC 606 and it requires that the customer has an ability to pay the full amount or substantially the full amount. In 2020, we were not able to meet that criteria. Under 606, you reassess as time goes on, and you reassess the contract against the ability to the collectibility. And it is based on that, that we now believe and strongly contend we will have -- be able to recognize that revenue under 606 with the contracts that we have outstanding at this time.

Great. And for the next question, is there a meaningful patient volume difference between each location? Is the percentage that is rapid test stable across the footprint?

Okay. So 2 questions. One is, is there a meaningful difference between patient volume location by location, and then the percent of rapid test, is that consistent. So it does vary. Larger airports like JFK are -- have more humans coming through. They're higher volume. And then Salt Lake City is a less traffic airport than JFK that will similarly have different volumes. But interestingly, depending on which hubs the airports lean on, one of the reasons we did Salt Lake City is because it's a Delta hub and they funnel a lot of flights through there.

Therefore being a medium-sized airport, they're getting a lot of business. And so we've tried to be thoughtful where we place these investments to meet the most travelers and the most needs. So they do vary. We also have locations some that are pre-security, some that are post security. And when we went into it, we wondered would we see a material difference if we were post security, would we miss out on a lot of the traffic. And the revenue or the traffic is similar.

I wouldn't say materially different. So we are pleased about that and continue to operate. Again, these things can change as airlines shift traffic patterns from terminals, terminal and hub airport to hub airport. But generally speaking, many airports are in a similar range, although there are differences based on the overall size of the airport.

And then the second question about rapid testing, we have steadily seen this march. And we talked about or I think James spoke about, at one point, the rapid tests were at 55% for Q4, but in December, it was actually 67%. And then for the first several weeks of Q1, it was up to 73%. Right now, it's over 80%. So it continues to move up. This is good, because it's a higher-cost and a higher-margin product.

And we feel even better with a rapid PCR test that we just launched on Monday and announced this week. We're piloting in JFK and then we're going to launch it in Houston next week, and then we'll likely spread it to the rest of our centers to have another premium rapid test that would sit alongside the Abbott ID NOW and would fall right in line with the trends that we're seeing consistently across our whole portfolio.

On-site rapid testing is the desired state. And I think we're going to see rapid antigen testing starting to emerge as more destinations accept that. A rapid antigen test or antigen test in general is not as sensitive as a molecular or a PCR test, but it's still pretty good. And so there are some countries that are starting to accept that. It's a little less expensive of a test.

So -- and some of them, you can operate even faster. So we're putting our feelers out and learning with the test protocols that are developed only the ones that have the EAU authorization by the FDA, and we are shifting our business to adapt to the dynamic environment. That's it.

Great. Great. Have you expanded your operating hours as airport passenger volume has increased? Are you staffed differently at different dayparts? What is the new monthly management fee per location?

Okay. So we have expanded our operating hours. And there were some questions in the fall. We were running 5 days a week and started to move to 7 days a week in some airports in the fall. And now we're operating all of them 7 days a week. The reason we weren't running them all 7 days a week before, because there just wasn't that much business.

But as we'd like to think people are traveling, they're getting back, we've been very careful to operate when it is the busiest. The labor that we have is an expensive staff, getting medical assistance and nurse practitioners and others there. So we're very careful where we invest our labor that we're going to get a return for it. But as travel is coming back, our operational hours have expanded to meet these needs.

I think you also asked about do we staff differently, different times of day. No, not necessarily. People come in for 6- and 8-hour shifts, and our staffing model is pretty consistent throughout the day. Even though the airport does have peaks and valleys, it could be really slow for 2.5 hours, because there's no flights, and then it's super busy for 2.5 hours.

Unfortunately, you can't send people on and off the clock 2 hours at a time when they drive all the way out to the airport. So we have to be thoughtful on how we manage our labor. We're continuing to look at our labor as well to ensure our initial assumptions with the number of staff that we need is actually necessary with the demand that's coming in.

I think the last part of the question was around the new monthly management fee per location. So now that we have a good amount of data, some of our XpresCheck have been open like 9 months. Some have been open 4 and 5 months. We have a credible trajectory of -- or volume of traffic other than maybe the peaks we had during Thanksgiving and Christmas that now we can even better anticipate and adjust our management fees with our MSA contracts, but also staff our labor efficiently. So again, we're rightsizing the labor spend with the traffic that's there while keeping an eye to expanding passenger traffic that's slowly coming back. I think I got all the questions there.

Okay. Great. And for the next one, why do you think passengers would want to interact with their travel health enrollment brands outside of the airport environment? Aren't airport services really only relevant to customers if they address their needs as a captive audience?

I think it's a fair question, but I want you to take a step back and think about, as the world returns to travel and begins planning, they will inevitably be looking for tools to help them do that safely and responsibly. We believe the new concept we're developing includes services and access to travel care and documentation that will be invaluable to that traveler and providing them all -- everything they need in one place will be another unique. Right now, people are using multiple sources, possibly multiple apps.

These services paired with on-site health and wellness services in airports will help customers return to travel with peace of mind. We believe this customer is everywhere and not just a captive audience sitting in airports.

Okay. Great. And when would you expect the company to be at breakeven?

James, this one is for you. I'm glad to have James now. Before I had to answer all the questions.

Well, we are introducing the new brand vision today. We are not providing guidance at this time. So we wouldn't answer that question. I'm sorry, [Michelle].

Not yet.

Okay. And then another one, why is now the right time to be hiring senior level people that will likely be very expensive?

Well, we are making investments surgically, strategically and bringing in expert executives that had done these things in the past that will help us with our new concepts and evolve and adapt our XpresSpa and our XpresCheck model into a new, more relevant concept. So we haven't hired like lots of people, but we're being really smart on the leaders that we're bringing in. And they have each made an immediate impact since they've come in, for sure.

Okay. And then so you don't have a tech industry background. What gives you confidence that you are the right fit to lead a tech company going forward?

Well, I don't have a medical background either, and I didn't have a spa background either when I joined. As the CEO, it's important to surround yourself with talent that has this experience and has the ability to execute. And one of the -- speaking of executives that we hired a gentleman named David Kohel we brought in as our Chief Technology Officer, he is fantastic.

He has been working with consumer brands in the digital space for his whole career, was a senior executive at Nike, amazing consumer brand, and then was the CTO at ZOOM+Care, which was a regional urgent care powerhouse in the Pacific Northwest and developed a lot of technology and were one of the early leaders in telemedicine years ago.

So David is coming in and has the -- is the architect of the plan, where we'll be building some assets, we'll be buying some assets and partnering with some outside companies to bring this future model to reality very soon. And that's why we brought James here. He has a great background that again is helping us model and have, hopefully, a strong P&L in the future.

Okay. Great. And then why haven't you gotten the COVID vaccine yet at the XpresCheck location? Are you still getting it? And if so, when?

So in order to get the vaccines, your doctors need to be registered and approved state by state. Each state has a slightly different application process and procedure. And all of our doctors are in this process now. But for example, in New York State, our doctors have been approved to do it, but they haven't admitted the next batch of clinics or doctors to support the distribution of vaccines.

So up till now, many of the states have been struggling with the demand and the supply chain getting vaccine. So I understand they're not letting a lot of others in to start distributing the vaccine. But as the supply chain rights itself, which we're starting to see, I'm hopeful that these will get the release and the approvals to start doing vaccinations on-site at the XpresCheck locations, maybe not all of them we'll go to, but we'd like to get in as many as possible.

Our focus in the beginning will be airport employees and airline employees. And then we may or may not expand into the public after that. We just need to see where demand is. But it starts with having all the licensing that we need, which we started many, many months ago, anticipating this coming.

Great. Thank you, Doug. And then one more. Do you have any other airline partnerships rolling out similar to United, JetBlue and Hawaiian Airlines?

There are other international carriers that we're speaking to, also with some of the domestic major carriers we have a relationship with. We're talking to them about extending these relationships. It depends. Often, it's driven by needs they have where destinations, often international destinations, have changing requirements.

So the Netherlands example, when the Netherlands said, okay, a clean PCR test isn't good enough, we also need a rapid test 4 hours before boarding, that's when we got called by 3 big airlines to help them in Newark and JFK and in Boston. So it often comes through these kind of COVID-free safe passages that are drawn up.

We talk to -- we work with these guys on crew testing time to time, but these aren't necessarily material announcements on press releases. So we offer a range of services, and we are a tool that the airports and the airlines use to sell tickets and get people confident in traveling again. So yes, there's more, but nothing I can announce before extensions or new deals are signed.

Great, Doug. And then for the last question, what happened with CommonPass or air bridges to places like London that you've spoken about in the past?

Yes. So this is a good example. I have to be really careful when I speak, because these things change so often. So we were lined up to support a transatlantic flight actually with 2 airlines to London. And this was -- felt like it was a sure thing. But this then coincided with the timing of infection rates increasing in the U.K. So the British government said -- they pulled the plug on the program. They were going to loosen restrictions on and have some testing protocol that would allow people to maybe reduce the quarantine when they arrived in the U.K., and then they just stopped it.

Understandably because infection rates were going up. So this is constantly the start stop, start stop that a lot of these destinations, governments, agencies live with. This is why it's hard for travelers sometimes. And it often directly correlates to infection rates rising or falling, vaccination rates increasing, neighboring countries or cities.

And it's, as we all watch in the news, quite complicated at times. So air bridges are still a thing. That concept that countries and airlines are able to put together to help travelers feel there is a lower risk path to go into these places. And again, we're uniquely positioned at so many airports to support it on-site.

That's all the questions we had today, Doug. So if you'd like to just give some closing remarks.

Okay. Well, with that, I'd like to thank everyone for their support in the past. We have a lot of exciting things coming and trust that the management team is working very hard to make sure that XpresSpa Group, the company, and our shareholders will have a relevant business in this changing world in a post-COVID environment.

Everyone is trying to figure out what it will look like. And we clearly see this emerging trend of Travel Health and Wellness, and we are uniquely positioned to be an early leader in this space. And we're assembling a team to join me to deliver on this. So very excited about the future, even though it's -- there's uncertainty. But we're doing all the homework we can and putting together a great program.

So thank you for your time listening to the call, and have a great week.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation, and enjoy the rest of your evening.