According to the statements included in its 2015 second quarter financial results released earlier this week, LA-based brand American Apparel may be filing for bankruptcy within the next 12 months due to a lack of liquidity: “Based upon the trends occurring in our operations since June 30, 2015 and through the date of this release, together with our current expectations and projections for the next four fiscal quarters, we believe that we may not have sufficient liquidity necessary to sustain operations for the next twelve months. These factors, among others, raise substantial doubt that we may be able to continue as a going concern.”

During the first six months of the year, American Apparel has incurred losses from operations and negative cash flows from operating activities. The brand has already been working with its advisers and has begun discussions with certain key financial stakeholders to analyze potential strategic and financial alternatives for the future. The possibilities may include operations such as refinancing or new capital raising transactions; amendments to or restructuring of the existing indebtedness and other obligations, and consideration of other restructuring and recapitalization transactions. However, the company also makes pretty clear in the report that the result of these discussions is still unknown and warns out that existing and any new investors could lose substantial or total losses of their investment in their common stock:

“As of the date of this release, substantial uncertainty exists as to the ultimate outcome of those discussions, and there are no assurances that such efforts will result in any transaction or agreement, or that any such transaction or agreement, if proposed and/or implemented, will be successful. In addition, whether or not any such transactions or agreements were implemented or successful, our existing and any new investors could suffer substantial or total losses of their investment in our common stock.”