Direct Gross Margin

Direct Gross Margin. Means a fraction (expressed as a percentage), (a) the numerator of which is the direct costs used to manufacture one unit of Components, including direct labor (and for avoidance of doubt, excluding any indirect costs, such as indirect research and development, research and development for human, indirect labor, marketing, accounting, insurance, overhead and other non-direct expenses), and (b) the denominator of which is the Price of one unit of Components to Heska.