"Substantial doubt exists related to the company's ability to continue", Sears Holdings said in a filing with the Securities and Exchange Commission.
Sears's forewarning comes after more optimistic signs from the company, which has been working on a turnaround under Chief Executive Officer Eddie Lampert.
Last month, the company said it was planning a "strategic transformation" by trimming $1 billion in annual costs.
In the wake of that statement, the price of Sears stock dipped 13.69% to $7.85 a share. The dip was largely due to the reduced number of both Sears and Kmart full-line stores, which led to a revenue loss of $596 million. The company's retail store sales decline was the worst among the top 250 retailers tracked by eMarketer as of November.
Is your local Sears or Kmart among 150 stores to be axed?
The company has been considering selling other businesses such as the Kenmore appliances and DieHard vehicle battery brands.
"They're past the tipping point", Perkins said. During that period, Sears cuts its store count in the U.S.by close to a third, lowered its holding in Canada and spun off clothing chain Lands' End. "As we move towards the last quarter, I think we'll find there are more and more suppliers that are not necessarily willing to engage with Sears" and will demand cash up-front. He said he noticed a warning sign a year ago when Sears pushed to increase its purchases, which occurred "because a lot of their current suppliers were either cutting them off or limited them on credit".
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06/09/2015 - Sears Holdings Corporation was upgraded to "hold" by analysts at S&P Capital IQ. "Sometimes multiple retailers to take those large spaces", Bell said.
Mr. Lampert owned almost 10 per cent of the real-estate investment trust that paid Sears $2.6-billion for stores that it purchased, many of which were then leased back to the retailer.
A Sears spokesman said Tuesday's report doesn't suggest it won't get a clean audit on its annual financial results, as a going-concern warning sometimes does, indicating repercussions for companies' compliance with credit agreements.
Additional asset sales could prove problematic, according to Sears' filing.
Sears, which had current liabilities of $4.68-billion as of January 28, said it would continue to explore ways to unlock value from its assets.
Sears said it expects "to generate additional liquidity through the monetization of our real estate and additional debt financing actions".
The money troubles at Sears are no secret - it's lost more than $10 billion since 2011, including $2 billion past year.