Leases, Commitments, and Contingencies

12 Months Ended

Dec. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Leases

Metromile has non-cancellable and cancellable operating lease agreements for two real estate locations in Tempe, Arizona and its corporate headquarters in San Francisco, California with various expiration dates through 2030. The Company had an additional operating lease agreement for real estate in Boston, Massachusetts, which expired on December 31, 2021, that was present throughout both 2020 and 2021. The right-of-use asset as of December 31, 2021 was $14.2 million and is included in Prepaid expenses and other assets on the Consolidated Balance Sheets. The lease liability as of December 31, 2021 was $18.4 million and is included in Other liabilities in the Consolidated Balance Sheets. Metromile does not recognize a right-of-use asset and lease liability arising from leases with a term of 12 months or less. The Company’s lease payments consisted primarily of fixed rental payments for the right to use the underlying leased assets over the lease terms. The Company is responsible for operating expenses over base operating expenses as defined in each lease agreement. The weighted average remaining lease term and the weighted average discount rate of the Company’s operating leases is 7.6 years and 5.1% at December 31, 2021. The weighted average remaining lease term does not include any renewal options at the election of the Company.

Components of the Company’s operating lease expense are as follows (in thousands):


	Year Ended December 31, 2021
Operating lease cost	$	2,785
Short-term lease cost	—
Variable lease cost	187
Total lease costs included in other operating expenses	$	2,972

The weighted average remaining operating lease term and weighted average discount rate used in the calculation of the Company’s lease assets and lease liabilities were as follows (in thousands):


			Year Ended December 31, 2021
Weighted average remaining operating lease term (in years)			7.6
Weighted average discount rate			5.1%

Cash paid for amounts included in the measurement of lease liabilities were as follows (in thousands):


	Year Ended December 31, 2021
Operating cash flows from operating leases	$	3,257
Right-of-use assets obtained in exchange for new lease liabilities	$	—

Maturities of operating lease liabilities as of December 31, 2021 is as follows (in thousands):


As of December 31,	Leases
2022	$	2,181
2023	2,373
2024	2,500
2025	1,849
2026	2,027
Thereafter	7,969
Total lease payments	$	18,899
Less: imputed interest	495
Total lease liability	$	18,404

The following table summarized the future minimum lease payments due under operating leases as of December 31, 2020 and reflect the application of the prior year lease standard (ASC 840, Leases). These amounts were disclosed in the Company’s prior year audited financial statements for the year ended December 31, 2020 (in thousands):


Year Ended December 31,	Purchase Obligations		Leases		Total
2021	$	3,949	$	3,276	$	7,225
2022	—		3,093		3,093
2023	—		3,181		3,181
2024	—		3,190		3,190
2025	—		2,433		2,433
Thereafter	—		11,186		11,186
Total minimum lease payments	$	3,949	$	26,359	$	30,308

The total rental expense recognized in accordance with ASC 840 was $2.9 million in 2020.

Litigation

Shareholder Matters

The Company and/or its current and/or former directors and/or executive officers are named as defendants in a number of lawsuits initiated by putative holders of Metromile, Inc. common stock.

On November 8, 2021, the Company entered into an Agreement with Lemonade. Following the announcement of the Lemonade transaction, multiple complaints were filed against the Company and certain current and former officers and directors alleging that the Company’s disclosures concerning the Lemonade transaction were incomplete. The Company believes that these claims lack merit and intends to defend against them vigorously. At this time an estimate of the probable loss or range of loss cannot be made.

Since the Agreement announcement, the Company also received demands to inspect its books and records under Delaware General Corporation Law Section 220. The demands seek various documents related to the sale process leading up to the Company’s transaction with Lemonade.