The direct-to-consumer teeth-straightening service SmileDirectClub has filed with the Securities and Exchange Commission for an initial public offering.

The Nashville, Tenn.-based company is seeking to raise up to $1.29 billion and list on the Nasdaq Global Select Market under the symbol “SDC.”

The company said it was offering 58,537,000 shares of Class A common stock at an IPO price expected to be between $19 and $22 per share, before underwriting discounts and commissions. JPMorgan and Citigroup are lead managers.

In the prospectus, SmileDirectClub said its “vertically integrated” business model allows it to provide service at a 60% lower cost than traditional orthodontic solutions. “We achieve this cost savings while maintaining high quality by removing the overhead cost of in-person doctor visits and managing the entire member experience, all the way from marketing to aligner manufacturing, fulfillment, treatment by a member’s doctor, and monitoring through completion of their treatment, which is supported by our proprietary teledentistry platform [called SmileCheck],” said the prospectus.

SmileDirectClub had $423.2 million in revenue in 2018, up from $146 million a year ago. Revenue hit $373.5 million in the first six months of this year. The company posted a net loss of $74.7 million in 2018 and $52.9 million in the first six months of 2019.

The company has faced some headwinds from health organizations who say its practices violate regulations around the practice of dentistry. The American Association of Orthodontists has filed complaints against SmileDirectClub in 36 states and has alleged that the company’s model, which allows customers to skip in-person visits and X-rays, is “illegal and creates medical risks.”

In its filing, SmileDirectClub said some dental professionals think the system is appropriate only for a “limited percentage” of patients and that legal or regulatory action could greatly impact its core business.

“There is a risk that state authorities may find that our contractual relationships with our doctors violate laws and regulations prohibiting the corporate practice of dentistry, which generally bar the practice of dentistry by entities,” it said.

Last October, the company raised $380 million in a round of funding led by Clayton, Dubilier & Rice and including Kleiner Perkins and Spark Capital. That round valued the company at $3.2 billion

In April, CVS Health announced it was adding SmileDirectClub to hundreds of locations through a partnership that would offer in-store dental care.

Photo by Gary Gershoff/Getty Images

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