The Wall Street Journal reports that Colt Defense LLC has filed papers with the Securities and Exchange Commission indicating it does not have the funds to pay back loans and may default on its payments to bondholders.

According to the report, Colt is expected to declare a loss of as much as 60 percent for the quarter over last year, based largely on declining sales and delays in payment for government contracts. Colt told the SEC it may not be able to make a nearly $11 million payment next month on a $248.8 million loan.

The SEC filing said Colt was “working through accounting considerations and liquidity concerns,” according to The Journal. Colt’s stock is considered “junk” by traders and analysts expect to recover no more than 10 percent of the debt if the company goes into default.

Colt is not the only major firearms manufacturer seeing poor sales this year. Both Sturm, Ruger & Co. and Smith & Wesson have posted losses for the quarter, with Smith’s revenues dropping 22.9 percent and Ruger’s plunging 42.5 percent — largely as a result of a drop in demand for modern sporting rifles compared to the 2013 buying surge.