Afternoon, and welcome to Express Broad Group's 2nd Quarter 2021 Financial Report. After today's presentation, there will be an opportunity to ask questions. Please note that this event is being recorded. Now I'd like to turn the call over to Mr. James Barry, CFO.
Please go ahead.
Good afternoon. Thank you for joining us today and for your interest in XpresSpa Group. Before our CEO, Doug Sasseman, provides an update on our business and I briefly review our Q2 2021 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 ks for the year ended December 31, 2020, as well as our earnings release and 10 Q 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.
Thank you, James. Hello, everyone. Thank you for taking the time to join us this afternoon. Before we begin, I'd like to express our deep appreciation for all of our shareholders, including both institutional And especially our retail investors for all of the support that you've given us over the past year. Our goals are aligned and we look to create significant Let me begin by expressing how pleased we are with the financial results During the Q2, we generated net revenue of $9,100,000 including $8,700,000 from ExpressCheck and narrowed our adjusted EBITDA loss to $2,300,000 down from $3,400,000 in the prior year 2nd quarter.
The improvement of $1,100,000 is indicative of the profitability of ExpressCheck compared to our legacy Express Baus segment. We also narrowed our net loss to $4,500,000 from $58,500,000 And retained our strong liquidity position with an unrestricted cash balance of $102,500,000 I want to be clear on a new view that we see as we look to the future. At one point, we believe the future of the airport business was highly uncertain considering the nature of a high personal touch business. We believe that ExpressCheck would be a short term bridge to the future. We also believe that Treat would be the sole destination As it combines the most relevant parts of Express BAW and Express Check and expands the health and wellness services for travelers while adding a significant digital engine.
So revenue is no longer limited to the airports where we operate units. Now we see a much bigger opportunity based on our experience during this pandemic, the data that we have collected and analyzed and customer views. We now see 3 sustainable business models for the future. We are transitioning from a company operating a singular concept to a family of relative relevant travel health and wellness brands with a lot of runway ahead of us. We see multiple brands that we believe have the potential to operate efficiently, simultaneously and profitably over the long run.
I would now like to share some thoughts on where we currently stand with respect to our airport based ExpressCheck and ExpressSpa businesses. Then I will take you on our new brand, Treat and how we intend to capitalize on what we believe is a large opportunity in the travel health and wellness space. Beginning with the ExpressCheck brand in April, we opened 2 ExpressCheck locations, The first in Seattle Tacoma International Airport and the second in San Francisco International Airport. Today, we operate 13 Express Check Wellness Centers 7 days a week across 11 airports. In fact, agreement extensions have been agreed to at the first two airports that we've opened express check-in last year, John F.
Kennedy International Airport and Liberty Newark Liberty International Airport. As you may recall, At the onset of the pandemic in March 2020, we moved extremely quickly on our vision for ExpressCheck Due to the vast opportunity we saw for COVID-nineteen testing at major U. S. Airports, we piloted, we learned and we launched. Since then, Express Check has surpassed all of the expectations we have for the brand and we are very pleased with the results.
Even as vaccination rates rise, for example, patient testing was at an all time high during the second quarter, Increasing 146 percent sequentially when compared to the Q1 this year. We believe Even with an increase in vaccination levels, on-site COVID-nineteen testing will still be an important and necessary service For airline employees and passengers alike for the foreseeable future due to several factors, including COVID-nineteen variant proliferation, ongoing international requirements and breakthrough vaccination infection rates. International travel represents a significant portion of our patient base as many countries outside the U. S. Continue to require a COVID-nineteen PCR test prior to arrival.
We do not see many countries changing this policy anytime in the near future and exposing their citizens to additional risk. There are simply not enough vaccines to meet The global demand in the wealthy countries are monopolizing most of the supply and further now considering adding booster vaccinations. According to a Wall Street Journal article this past Friday, at the current rate, much of the world would remain unvaccinated ExpressCheck also continues to benefit from the range of rapid COVID tests that we offer, which is substantially higher and more expensive in price point with $200 to $2.50 versus $75 for the standard PCR test with the blood antibody test that we initially launched with. Almost all tests are now rapid, which has helped significantly improve gross margins and minimize our cash burn. As a reminder, it was only March of this year When we transitioned to a fee for service model for all testing, which has helped significantly improve our cash flow.
Now all patients pay upfront at the time of service and then they are able to submit their testing fees for insurance reimbursement on their own. The testing business has ramped up much faster than we expected. Our medical practices saw revenues Over $17,000,000 in Q2, almost triple what was seen in the Q1. We are confident that this will continue over this Not only has testing ramped faster than any other part of our PassSpa business, But the 4 wall pro form a margins continue to grow faster than any initiatives that we have implemented in our spas and they yield a return on our investment under in under 3 months. At the end of 2020, we promoted Scott Milford, The Chief Operating Officer.
Scott has quickly increased labor productivity and worked diligently to expand our operational hours To meet those the needs of those requiring COVID testing, while still only operating when the terminals are the busiest to ensure profitability. Scott and our new CFO, James Barry, have brought a sharp focus on financial discipline, cash generation and the execution of our operational strategies while still creating an employer of choice people culture. In late July, we announced a partnership with the Go And is dedicated to funding COVID-nineteen vaccines worldwide in the fight to reduce the growing vaccine equity gap. As a kickoff to the campaign, XpresSpa is matching Public donations up to an aggregate of $100,000 We are honored To support this incredible campaign in the fight against COVID-nineteen For those in lower income countries lacking access to critical vaccinations, Our investment in the health and wellness of our customers has opened up the door for this incredible partnership, which we hope to continue to grow in the future. Additionally, last week, we received approval for a $2,000,000 contract with the Centers For Disease Control and Prevention, CDC for biosurveillance tracking at 3 airports JFK International Airport, Newark Liberty International Airport San Francisco International Airport.
Many of you will remember that I have spoken about our government affairs efforts with the federal government over the past year. This is one of the outputs from those many conversations. This is an 8 week program With a 6 month contract with the CDC that is aimed at identifying existing and new COVID-nineteen variants, including the highly contagious delta variant and other new variants surfacing that could start surfacing in the U. S. Let me be clear.
This 6 month contract with a 6 month extension in place allows the CDC, at their discretion, To direct ExpressCheck to set up a national biosurveillance program with installments of incremental funding In any or all airports, regardless of whether there's an express check full fully operating in place. The CDC has the ability to dictate how real estate is used in airports for national safety concerns, Whereas the current express check model requires the airport to grant access to their real estate on an airport by airport basis. The first $2,000,000 commitment is only for this 8 week pilot across 3 airports targeting 7 daily flights. While we're starting with the incoming flights from India, we are testing and developing protocol The future interventions that can be directed to many flights arriving from various countries of concern. The program is being developed could easily be implemented for any incoming port beyond airports upon the CDC's direction.
And because this at the gate program primarily includes the collection of self administered Passenger swabs that ExpressCheck sends out to select external labs for the testing similar to what is used by children in some elementary There is not a limit to capacity that we might typically have in an Express Check Facility with a specific number of testing rooms. As this program expands, we see this as a potentially significant business line Extension for ExpressCheck and with the foundation of the government contract in place. Again, we will pilot, we will look to learn, we plan to launch. Our collaborations with government agencies As the CDC demonstrates the confidence these agencies have in the ExpressCheck brand, ExpressCheck aims to further the relationship with the CDC and extend the program into all major U. S.
International airports in the near future. Based on what we have learned and are seeing today, And COVID-nineteen testing, let alone future infectious disease testing, is here to stay ExpressCheck also continues to work with several airlines providing COVID-nineteen testing for passengers to select location. In April, we signed an agreement with Delta Airlines to administer the new rapid antigen test to customers traveling from John F. Kennedy International Airport, Milan Malpensa and Rome, La Macchino International Airports. In early August, we launched a pilot program with El Al Israeli Airlines, the National Airline of Israel.
The state of Israel requires a negative COVID-nineteen PCR test within 72 hours of the traveler travel When passengers and flight crew departing the U. S. And then another COVID-nineteen PCR test once arriving And then Gurion International Airport in Tel Aviv. If this pilot is successful, an express check may provide free travel COVID Our rapid COVID-nineteen PCR testing on-site at JFK and other U. S.
Airports for all LL passengers and crew on multiple daily flights in place of a second PCR administered in Israel. The protocol will get U. S. Originating LL passengers out of the airport significantly faster after a 10 plus hour flight And sitting in line with all the other arriving passengers from other from every country and other airlines in queue for an on-site COVID-nineteen test before being released from the airport. Again, we piloted, we learned and we're looking to launch.
Now turning to the airport business. On July 1, we reopened 4 historically top performing XpresSpa locations. These locations include Hartsfield Jackson Atlanta International and Concourse A Dallas Fort Worth International Airport In Concourse A, Charlotte Douglas International Airport, Concourse D and Las Vegas McCarran International Airport, In order to maximize profitability across these spas, we negotiated the right to operate these 4 spas during the busiest hours And only start with our highest performing services, which are massages, manicures and pedicures. As a reminder, we had already opened our 2 XpresSpa locations in Dubai International Airport in the UAE In a single franchised XpresSpa location in Austin Bergstrom International Airport. We also opened a new XpresSpa expanded concept on June 17 in Dubai International Airport.
This is an international wellness prototype focused on testing new wellness treatments and technology, expanding our core XpresSpa offerings, Hopefully export, the winners into existing domestic and international U. S. And international XpresSpa Businesses. To date, this brings us up to 8 XpresSpa locations currently reopened and operating. As we analyze the 1st 30 days of performance of the 4 high volume U.
S. Locations that we opened on July 1, Their sales are lower than previous 2019 run rates despite the increase in airport traffic and rising vaccination levels. The good news is that even with the lower revenue baseline, we believe we can generate the same or better gross profit margins While the legacy spa business on its own may not have been highly profitable In the past, today it has the benefit of cost cutting measures we implemented in 2019 as well as sharing the corporate overhead across 2 other operating brands leveraging the same corporate support structure. Our operations team is currently reviewing our pricing, Service model and labor model to find further upside beyond the efficiencies of operating reduced hours during the airport's busiest times. As vaccination rates increase and airport traffic continues to return, Especially with anxious flyers and business travelers, we've been a significant service segment in the past.
We see enthusiasm for travel spa services and at airports returning. We now have plans to open The next wave of 8 to 10 high performing XpresSpas by early fall to continue the profitable restoration Of the pre COVID business model of $40,000,000 to $50,000,000 in annual revenue as the economy reopens. We piloted, re openings, we are learning, we are relaunching. We will continue to reevaluate each airport on a month by month basis as well as review continued learnings as our portfolio continues to be reactivated. Now let's discuss our new brand Treat, A comprehensive travel, health and wellness concept that is positioned for the post pandemic growth.
While this multi channel business is coming to market In record time in 2021, take advantage of this singular moment in history, the return to travel. It has a runway to be a larger business than XpresSpa or XpresCheck with better revenue and gross margins over time. Trade started as the vision of our collective new executive team after many planning sessions in late 2019 early 2020. The brand and concept has been refined by one of our new executives, Kelsey Hansen, SVP of Marketing and Communications, who has wrapped these services with a beautiful lifestyle brand with timely digital content in a modern retail store design that connects with today's reemerging traveler. Through this leadership team's strategic thinking, We found a way to leverage XpresSpa's historic travel wellness experience and XpresCheck's healthcare expertise To provide travelers access to integrated health care through technology and on-site personalized services.
We have a classic need and want converging. People want to get back to traveling, but need to do it safely and responsibly. We are not building an average brand for average people at above average prices. We are passionately working towards creating a concept worth creating with a story worth telling and a contribution worth talking about. Treat is positioned to be a leader in what we view as an emerging new category of health focused travel and personal wellness services.
Treat will act as a wellness concierge, providing original content to help you plan travel as well as medical care and wellness services to consumers as they return to travel. Through Treat's mobile app, travelers will be able to access 20 fourseven On demand virtual healthcare, a travel health wallet with your medical records and real time global COVID 'nineteen travel requirements all in one place as well as book appointments in our on-site wellness centers as they open. Our goal is to be your travel champion, making it easier for you to be well as you return to traveling the world. To ensure a seamless launch of this new brand, we are rolling TREAT OUT in 3 distinct phases. If you recall on our Q1 earnings call in May, We announced Phase 1 of the new brand, our website www.treatcare.com and brand campaign was launched in June.
Thanks to the hard work of our new Chief Technology Officer, David Cole, We met this target and officially launched our website on June 1. The Treat website features original content, Access to resources about COVID-nineteen requirements for travelers and curated e commerce with emerging products targeting the savvy traveler living a wellness lifestyle. The initial website launch is gaining traction daily. We have over a 1000 100,000 unique visitors. The website also allows consumers to opt in to biweekly newsletter.
The treatment, which has started with over 1,000 readers and an average 30% to 35% Saturday morning open rate. If you've not signed up for the treatment on treatcare.com, I think you'll enjoy it. As seen in the press release issued this morning, Phase 2 of TREAT's mobile app launched today. Our internal goal was to have this mobile app up and running by the end of summer as communicated on our last earnings call. I'm happy to report that through the team's smart work led by David, we stayed on track and launched ahead of schedule.
The mobile app is available today at no charge for Apple and Android devices and provides access to on demand virtual care, Including check care, video care and a travel wallet with access to a person's medical records and test results. Memberships are available, which include a mobile app subscription with access to unlimited 20 fourseven on demand medical care virtually. Also included in the membership is one free PCR COVID-nineteen test, one free flu vaccine shot per year and discounts on prescriptions, which will be added in a few weeks. Over time, there will be additional capabilities added to the app, Such as in person scheduling, once our airport, wellness centers, locations begin to open, Plus other exclusive offers and discounts. Memberships start at $200 for 3 months or can be $7.20 for 12 months.
Now moving on to Phase 3, which includes the launch of treat in airport wellness centers, which will both leverage some of our existing in airport real estate as well as take shape in new spaces. We're starting construction this week and plan to open the 1st pilot location at JFK Terminal 4 In mid Q4, in a converted XpresSpa location and a second pilot treat location In Phoenix Sky Harbor International Airport before the holidays in a converted express check location. Again, we pilot, we learn, we launch. Treat and airport wellness centers We'll offer services such as COVID-nineteen testing, travel vaccines, anxiety care, emergency prescriptions, Vitamin IV therapies as well as private technology led wellness sessions, including fitness, yoga, Meditation and mindfulness sessions in a premium hospitality environment. Upon entering, customers will see a beautifully curated retail and check-in area and will be greeted by treat wellness concierges.
Well appointed treatment rooms will allow a break from the hectic airport environment and offer a list of health and wellness services designed specifically for travelers. We intend to roll out treat wellness centers across many additional airports In 20222023, leveraging our existing XpresSpa Real Estate. Most importantly, We are building the one travel brand that provides access to integrated holistic care and can seamlessly fit into a health and wellness lifestyle. Over the long term, we envision that treats digital channels will provide more significant growth opportunities for revenue and profit than our airport real estate. This is because we believe this customer is everywhere and not just captive in the airports.
The success of this revenue stream will be achieved through both subscription based services that provide care and digital tools supporting travel, Furthermore, we anticipate offering upstream content that can be monetized through affiliate revenue as well as curated retail through e commerce channels. In 2021, we are building the long term infrastructure and habits The transition from an airport wellness operator to a technology led company with unparalleled customer data coming in through multiple channels. And that also operates a profitable and convenient health and wellness operations for travelers and While we are excited about this new brand and see treat as the central pillar to the future of XpresSpa Group, We also now believe that there is significant opportunity for 3 sustainable growth brands, while healthy unit level economics In experience operating in global airports, we have an extremely clear vision for the company With a focus on elevating our brands, being nimble, further expanding our services and products inside and outside the airports to increase value for all XpresSpa shareholders. As I have expressed here today, we have also assembled an extremely strong management team over the last 6 to 9 months, which is already contributing today As seen by our Q1 and Q2 results and recent announcements, while laying the foundation for a long term Success of this developing global multichannel company.
We believe that our portfolio of health and wellness brands will enable us to build
Thank you, Doug. As we mentioned last quarter, we were very pleased to have been able to recognize revenue for ExpressCheck during the Q1 based on a reassessment of the Management service agreements relative to ASC 606. Turning to the 2nd quarter, we were able to recognize a total $9,100,000 compared to $143,000 in the Q2 last year. Only one center did not meet the ASC 606 for revenue recognition in Q2. The increase in revenue was primarily due to the recognition of the revenue from the 12 to 13 expressed check wellness centers that were wholly or partially opened during the quarter.
Please note during the quarter, A majority of the Express File locations remained closed. In the Q3, we will be able to recognize the revenue associated with the 4 Express Spas opened on July 1. Managed service fees totaled $8,700,000 compared to 0 in the Q2 of the prior year. We also generated revenues from services and products of $338,000 $79,000 respectively, From sales and marketing agreements with strategic partners related to our 2 locations in Dubai. Cost of sales increased to $7,700,000 from $978,000 in the prior year Q2.
The increase in cost of sales was primarily due to the cost of sales incurred in the Express Check, most notably for the rapid test kit, Offset by the decrease in the variable costs associated with the decline in Express Spa preferences and decrease in occupancy costs as a result of rent concessions received from airport. Gross profit was $1,400,000 compared to a negative gross profit of $835,000 in the prior year Q2, primarily due to the higher revenue. General and administrative expenses were $4,600,000 compared to approximately $3,400,000 for the year ago comparable period. The increase was related primarily due to startup costs associated with Express Check, development of proceeds and additional legal fees related to the resolution of certain Express File litigation matters offset by reduced variable costs related The closed Express File locations and the realized benefits of cost cutting and control initiatives instituted throughout 2019, primarily in salaries, occupancy and professional fees. Operating losses from operations decreased to $4,700,000 $58,500,000 in the prior year Q2 due to higher revenues and the recognized loss on revaluation of warrants conversion options in 2020.
Net loss attributable to common shareholders was $4,550,000 compared to net loss attributable to common shareholders of $58,100,000 in the prior year Q2. Finally, with respect to GAAP Financials, our liquidity remains strong With cash and cash equivalents totaling $102,500,000 as of June 30, 2021. On a non GAAP basis, adjusted EBITDA loss of $2,300,000 compared to adjusted EBITDA loss of $3,400,000 in the prior year Q2. This represents an improvement of $1,100,000 and is indicative of the profitability of ExpressCheck Wellness Center. We define adjusted EBITDA as earnings before interest, taxes, depreciation, amortization expense and adjusted for stock based compensation and impairment disposal of the asset.
We consider adjusted EBITDA to be an important indicator for the performance of our operating business, ExpressCheck. In particular, we believe that it is useful for analysts and investors to understand that adjusted EBITDA excludes certain transactions not related to our core cash Operating activities, which are primarily related to our Express Check Wellness Centers. We believe that excluding these transactions allows investors to meaningfully analyze the performance of our core cash operations. For further details, please refer to our annual report on Form 10 Q filed today. Let me now conclude with the non GAAP financial With respect to ExpressCheck that we believe will be helpful in providing greater transparency in terms of 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 ExpressCheck's performance, we've opted to disclose recent and current average daily patient testing volumes along with other relevant non GAAP financial metrics. During the Q2 of 2021, average daily patient testing volumes for all ExpressCheck wellness centers was more than 1,000 visits per day. With the additional centers open, total patient volumes grew nearly 146% in the Q2 of 2021 versus the Q1. Notably, the number of higher revenue, higher margin COVID-nineteen rapid tests increased from just over 300 per day in Q1 More than $800 per day in Q2, a 176% increase. During July, Higher revenue, higher margin COVID rapid tests, molecular and TCR as a percentage of total tests averaged 97%.
Total patient volume was over 33,700 including those rapid tests. And with that, I would be happy to take your questions.
Thank you. At this time, we'll be conducting a question and answer session. Michelle, you may now proceed with the questions.
Good afternoon, Doug, and thank you. The first question we have, you mentioned that the medical practices did $14,000,000 in revenues in the second quarter. How does that reconcile with ExpressCheck's $9,100,000 revenues reported?
I'm going to turn this question over to James.
Well, the patient service fees collected by the practices, In addition to paying for the medical providers services there, they're used to pay past, current and future MSA charges. The information that we provide about those practices is to give a better understanding to the current levels of activities at that very top level?
I'm going to jump into on the end of it. And the number was 17 1,000,000 not 14. And this is unbelievable, guys. As you look at the traffic that's coming through, vaccination rates are going up, infection rates are lower than the height of the pandemic, Testing is still more relevant not still is more relevant today than it ever has been. And we don't see it changing anywhere in the near future.
As travel picks up, more countries are going to continue requiring these tests. So it's important to understand the revenues and the fees that come through these practices because that's the indicator of the demand that's coming through in the wrong way We have. It blew us away when we saw what Q2 looked like compared to Q1. And we're very excited for the rest of the year from a business perspective.
Great. Thank you, Doug. The next question, the company has over $100,000,000 of cash on the balance sheet, great position to be in. However, how are you going to make efficient use of this cash?
James? Well,
I would report that our stewardship of cash is always top of mind. In addition to funding new segments such as street that are so exciting and dynamic, We've stated that we continue to evaluate opportunities, including acquisitions, strategic business transactions and potentially stock repurchases. So, you're right, it is great to have that on that amount of money. It's a flexibility that it gives us, but we take it very seriously in making sure that there is an efficient return on that capital.
Yes. I'm going to tag on too. So we're getting Visibility to a lot of emerging concepts. As the world's changed in this post COVID world, there's other Companies, other good ideas, that are well suited to be strategic partners with us to amplify what we're doing with treat and accelerate some of the other services that we're offering. And so like James said, In a good steward of cash and making sure it is invested wisely, where there is a Much bigger benefit for us than just a return on the investment, but a strategic value to further accelerate Our offerings and some of our new contracts and purchases.
Great. Thank you, Doug. There is a lot of talk from employers, especially municipal employers saying that Any employee who has not been vaccinated will need a weekly COVID test in order for them to be able to go to work. Is this an opportunity you see for Express Check?
Absolutely. So now as we've settled into this new norm of testing, We've been talking a lot about for travelers to go somewhere, but we're seeing more municipalities just like The investor asked, that's going to require regular testing. So there is a clear opportunity for the ExpressCheck business line To grow outside of airports, to provide testing services, we've already built the protocol and can handle large peaks. And we continue to evaluate a broad number of opportunities that Don't just have to limit us to being in an airport.
Great. Thanks, Doug. What will you do with the rest of your real estate? How many leases expire in the near term, that you will have to decide shortly on the go forward path for those locations?
So the real estate we have continues to be a very valuable asset. Literally it took us 15, 16 years to get the 50 locations that we had pre pandemic, a lot of RFPs and but once you're in the airport and you've demonstrated that you are a good operator, It's much easier to stay in an airport and get extensions. One of the things we're seeing quite often now and you may be reading about Is rent concessions are being offered by airports because of the lack of business often the rent concessions are Funded by EPP funds or other government COVID dollars That come federally down to the state that work their way to the airports. But one of the things they can offer that doesn't cost them anything is extending your term. And we're getting more term and other airport operators are as well.
So it gives us more runway to Make an evaluation whether a piece of XpresSpa Real Estate is best suited for a treat, which we think is the highest sales and profit opportunity or an Express check or reopen it as an Express spa with some of the features that I spoke before. But there could be a couple that we cut. These were maybe a small kiosk at the end of a terminal That wasn't very busy before. It's not magically going to be very busy now. But the real estate that we have under contract And frankly, ExpressCheck brought us even more real estate under contract in at least 3 more airports we'd never operated in.
It's become a very important part of our strategy.
Great. Thank you, Doug. For the next question, what made you choose John F. Kennedy Airport and Sky Harbor as the first to locate treat locations.
I'm glad you asked. I don't think I've talked about this much. They are really ideal for what we want to pilot with our treat wellness centers. So JFK Terminal 4 is one of the preeminent terminals, I think, in the world. The ownership JFK, IAT have been outstanding partners.
With us, the Port Authority of New York and New Jersey has also been Very supportive of what we've done with Express Check and now Treat. And what is Great about JFK. Well, let me tell you a touch about Phoenix and then compare and contrast. Phoenix also great management in place has been a very important Port for us with our Express spot portfolio. But it is another one where we have access to a really good piece Real Estate just like in JFK Terminal 4.
So New York, one is East Coast, 1 is West Coast. One location is pre security, the other is post security. One is maybe 1200 square feet, the other is close to 2,000 square feet. So we really get good data to see and inform and to learn from to inform the next 20, 30, 40 that we build. That's where, again, we take a very disciplined approach To piloting, learning and then launching and we find we have a much higher success rate as we've used this methodology again and again, since I've been here at the company.
So, that's why we've chosen And we also have just 2 very good pieces of real estate that we could easily convert and get them open this fall.
Great. Thanks, Doug. Are you finding it hard to staff your Express Check and Express BOS? Is there a labor shortage you're seeing?
Well, there absolutely is a labor shortage. We are starting to see relief as federal and state funding expires for the unemployed. And it's whether you're a food service worker Or you're a delivery driver, or you work in an airport, it's a challenge to find people. But Our people team, our HR team has done an excellent job. Scott Milford, who was promoted to COO, Most of his career background is HR.
So he has a very strong team with recruiters that have kept us Generally staffed. The medical side, the medical techs that we get, Those can be competitive too, but it's loosened up during the height of the pandemic. Lots of urgent cares and hospitals And testing centers were all vying for a fixed population, but that's eased up and labor Has not been a big challenge for us so far. But I really attribute it to Having good benefits, good pay, good middle management that takes care of our people and that's Part of what I brought Scott in to do and it's working.
Great. Thank you, Doug. And my final question, Should we expect to see an increase in personnel related to treat? Will your current G and A be able to support this new business?
Yes, it's a good question. So we are being very careful as we add new talent. First, we look at some of the talent we have internally. We have some very strong folks who have been promoted. And then we go to the upside to bring in talent that we may not have.
As we balance the cost of it, With this new business, we have the good fortune of Express Check, which has dramatically changed our cash burn situation. And with the reemergence of XpresSpa, we're going to have more registers ringing, More income sources to distribute and really leverage this corporate team that we have. So our senior leadership team Supports all of the companies. Most of the people as you go through the organization support all three brands. If you're a recruiter or you're an You're able to support them.
And frankly, that's a benefit XpresSpa never had. All the corporate overhead was purely paid for by these spas, but now it is being redistributed with these different Growing businesses. I'm also being careful not to starve the growth. So one of the mistakes one can make is you staff so slowly that you never reach the potential. These three businesses and this company is picking up speed.
So we are bringing on As we need to, while keeping an eye on the overall expense rate, while we have more centers of revenue Contributing and distributing these costs. So I feel good with the practices that we have in place. And I got to tell you, the leadership team bringing the first people in when the sky was falling in the pandemic, it really took some true believers. Now it's much easier to hire. We have a lot of people who would love to get working at XpresSpa Group, under These men and women that we're bringing in, and we're very pleased to be in this position.
So it's been an awesome Q2 and we're deep into Q3, doing what we do And I look forward to sharing more news at our next quarterly earnings call. Is there are there any more questions? I think you said last question.
That would be it for today, Doug. Thank you.
Okay. Well, I just want to reiterate a big Thank you to all of our investors, be it our retail investors or institutional investors or any of the men and women in between. We work very hard to produce and create mid and long term value. The day traders that are in and out, That's not necessarily our customer. We are building a company that is growing outside of airports