Arbitrator Requires SDC Financial, LLC to Pay Align an Additional $45.5 Million for a Total Award of $99.7 Million

Continued Strong Growth and Increasing Momentum for Invisalign Clear Aligners and iTero Systems and Services Across Products and Customer Channels Worldwide, Reflects the Strength of Align’s Doctor-Directed Model and the Align Digital Platform

• $99.7 million award includes the $54.2 million paid to Align to date for the capital account
  
• SDC required to pay $45.5 million and additional interest of $3,000 per day beginning on March 13, 2021 until payment is made in full or a different rate applies by operation of law
• Align will recognize a gain on its reported financials upon receipt of payment
  

TEMPE, Ariz., March 15, 2021 (GLOBE NEWSWIRE) -- Align Technology, Inc. (Nasdaq: ALGN) (“Align”) today announced the favorable outcome of a binding arbitration for the claims it asserted against SDC Financial, LLC, SmileDirectClub, LLC, David Katzman, David Katzman Revocable Trust, and David Katzman 2009 Family Trust (“SDC Entities”) relating to the valuation of Align’s membership interest in SDC Financial LLC (“SDC”).

“We are pleased with the arbitrator’s March 12, 2021 final award in favor of Align, and against SDC, directing SDC to pay Align an additional $45.5 million for a total of $99.7 million,” said John Morici, Align Technology CFO. “The first quarter continues to be very strong with increasing momentum for Invisalign Clear Aligners and iTero Systems and Services across products and customer channels worldwide, reflecting the strength of our doctor-directed model and the Align Digital Platform - which provides technology, innovation, digital tools and services to over 200,000 orthodontists, dentists and labs around the world.”

As previously disclosed, on March 4, 2019 an arbitrator ordered Align to tender its SDC Financial, LLC membership interest for a purchase price equal to the capital account balance as of October 31, 2017 to be determined in accordance with Align’s operating agreements with the SDC entities. On July 3, 2019, Align filed a confidential demand for arbitration challenging the propriety of the SDC entities’ determination of the capital account balance as of October 31, 2017.

In the final award, the arbitrator found in favor of Align and against SDC and determined the value of the capital account balance to be $97.6 million, offset by the $54.2 million paid over the last two years to Align for the capital account. The arbitrator directed SDC to pay the difference of $43.4 million plus interest of $2.1 million, and additional interest of approximately $3,000 per day beginning on March 13, 2021 until payment is made in full or a different rate applies by operation of law. Align has requested the American Arbitration Association to identify March 31, 2021 as the deadline for SDC’s payment of the $45.5 million, consistent with the schedule prescribed by the operating agreements, which requires SDC’s payment for redemption of Align’s membership interests to be made in full on or before March 31, 2021. While Align believes that based on the operating agreements SDC should make the $45.5 million payment on or before March 31, 2021, it is unclear whether SDC will do so in the absence of a stated deadline in the final award.