14. Leases

The Company has operating leases for office and warehouse space and equipment under various arrangements which provide the right to use the underlying asset and require lease payments for the lease term. The Company’s lease portfolio consists of operating leases which expire at various dates through 2033.

Certain of the Company’s lease arrangements contain renewal provisions, exercisable at the Company's option. The probability of renewal is not reasonably certain and therefore not included in ROU assets and lease liabilities. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating lease cost was $1.8 million and $1.7 million for the years ended December 31, 2025 and 2024, respectively. For the years ended December 31, 2025 and 2024, $0.8 million and $0.7 million, respectively, was included in cost of goods sold and $1.0 million, respectively, was included in selling, general and administrative expenses in the accompanying consolidated statements of operations.