FEATURED PORTFOLIO COMPANY HDM Systems Corporation

Context

An engineering company, HDM Systems has substantial committed contracts for the design, manufacture, and distribution of its innovative battery power module, which has environmental applications in the transportation industry. Two of HDM’s principal owners, a husband and wife team, previously helped build another impressive power company that was sold for $32M. Their newest effort is reaping the benefit of their foresight that new environmental regulations would create unprecedented demand for their technology. After three years of research and development on this flagship product, HDM is poised for expansion.

Advisory Need

HDM Systems engaged Next Street to collaborate on development of a strategic plan and a “road map” for reaching the plan’s goals. Next Street also conducted an analysis of comparable companies and transactions to develop a valuation of the business and potential returns to investors. In addition, Next Street provided critical advisory services to bolster HDM’s organizational structure.

Financing Need

HDM has retained Next Street to advise the company on its initiative to raise approximately $1M capital for bridge financing that will secure the contracted orders. In addition, Next Street will assist in brokering the permanent financing with HDM’s bank for the best terms and the flexible capital needed.

Impact to Date

Next Street provided HDM management with critical advice in dealing with its Board of Directors, shareholders, and capital fundraising. Moreover, Next Street has held preliminary discussions with possible stakeholders who may provide support for the business.

Looking Ahead

Next Street anticipates that HDM Systems will need additional long-term financing to respond to the demand for its technology. These needs include entering the aftermarket to retrofit its strategic partner’s fleet and to build out its locally based engineering and manufacturing facility. HDM’s revenue growth and profitability trajectory are expected to be exponential, based on its management’s previous success and coupled with Next Street’s role as trusted advisor.