Sears revealed "substantial doubt" about its ability to stay in business in an annual report filed late Tuesday.
"Our historical operating results indicate substantial doubt exists related to the company's ability to continue as a going concern," the company said in the report.
"Going concern" refers to a company's ability to stay in business.
Sears said its efforts to generate cash by selling or licensing brands like Kenmore and Diehard, as well as selling valuable real estate, should mitigate that doubt and satisfy its estimated cash needs for the next 12 months.
But the company said it can't make any guarantees.
"However, we cannot predict, with certainty, the outcome of our actions to generate liquidity, including the availability of additional debt financing, or whether such actions would generate the expected liquidity as currently planned," the report said.
To be sure, the going concern statement appeared in the "Risk Factors" section of Sear's annual report — a place where companies often lay out worst case scenarios — but Sears and Kmart have been bleeding cash for years.
The company's annual revenues have dropped nearly 40% since 2013 to $22 billion last year. Its losses grew nearly 5% to $607 million in the most recent quarter, and same-store sales, or sales at stores open at least a year, fell 10.3%.
To raise money and stay in business, Sears has been selling off real estate and brands like Craftsmen.
But the company warned that it may be at the end of its rope in terms of acquiring additional liquidity.
"If we continue to experience operating losses and we are not able to generate additional liquidity through the mechanisms described above or through some combination of other actions, we may not be able to access additional funds under our domestic credit facility and we might need to secure additional sources of funds, which may or may not be available to us, the company said. "Additionally, a failure to generate additional liquidity could negatively impact our access to inventory or services that are important to the operation of our business."