K2 Pure Solutions, a producer of chlorine and caustic soda, was evaluated by CMA on behalf of its lenders to assess financial performance, liquidity, and debt capacity. The company faced uncertainty around pricing, demand, and energy costs, requiring validation of historical results, current liquidity, covenant compliance, and the reasonableness of management’s forecast assumptions.

CMA analyzed K2’s business plan and conducted a detailed operational review of its Pittsburg, California facility, including production processes, capacity utilization, supplier relationships, maintenance and capital spending plans, and key operational risks. The work incorporated management interviews, process walkthroughs, and a virtual plant tour to assess the facility’s ability to support projected volumes and margins.

CMA stress-tested projections through sensitivity analyses on pricing and volume across key product lines, benchmarked forecasts against industry data, and identified risks to performance and liquidity. CMA provided recommendations to support lender monitoring, including focus on covenant compliance, contract finalization, and pricing discipline to ensure the business could meet its obligations and maintain stability.