1. My read on the call was that they were not sure that there would be a drop but are being conservative. There may or may not be a sequential drop. They did guide for $4.25 - $4.92M in revenue for Q4 vs. $5.1M in revenue for Q3. Note that this will still be a significant increase on a year over year basis.
2. I think growth will be from all of the sources that you mention. In the next year, EPS growth will be driven by international sales, further organic growth, new products, and cost reductions. I don't like to bank on acquisitions for earnings growth but I think that additional acquisitions are a strong possibility. Their existing intellectual property portfolio has more legs for growth so IMO organic growth should continue to be strong for some time.
3. Med-Design was acquired on June 2, 2006. Med-Design's revenue was roughly half that of SHPI prior to the merger. Med-Design revenue was $1,057,000 for Q1'06. Med-Design was purchased for 21.5M shares which was roughly 32.5% of the outstanding shares immediately after the acquisition. You can read more in the 8-K/A located here:
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