SmileDirectClub Inc (NASDAQ:SDC) shares are trading lower Monday after the company filed for Chapter 11 bankruptcy.

What Happened: Late Friday, SmileDirectClub voluntarily filed for protection under Chapter 11 of the U.S. Bankruptcy Code as part of a process to implement a comprehensive recapitalization transaction.

SmileDirectClub intends to continue its operations throughout the bankruptcy process. The dental aligner company said in a statement that its founders have committed to invest at least $20 million. Up to $60 million of additional capital is available upon satisfaction of certain conditions.

"This transaction is designed to ensure our future financial structure reflects the talent of our team members and the quality of our business, and I am excited about the future ahead," said David Katzman, CEO of SmileDirectClub.

The news comes just four years after the company raised $1.35 billion in an initial public offering.

SDC Price Action: SmileDirectClub shares were down 54.4% at 19 cents at the time of the publication.

Photo: courtesy of SmileDirectClub.