Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of the financial condition and results of operations of Infleqtion, Inc. (and its predecessor operations, ColdQuanta, Inc. (d/b/a Infleqtion) ("Legacy Infleqtion", collectively referred to as the "Company," "we,""us," or "our" should be read together with our unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited financial statements and notes thereto and Management' Discussion and Analysis of Financial Condition and Results of Operations for the fiscal year ended December 31, 2025, included in the Current Report on Form 8-K/A, which has been filed with the Securities and Exchange Commission ("SEC") on March 31, 2026.

Overview

Our vision is to harness the power of quantum to expand human potential.

We are developing and commercializing quantum technology products as part of a full-stack platform, which currently includes offerings such as quantum sensing, quantum computing and software. Our quantum-enabled solutions are focused on addressing the world's most pressing challenges, with technologies actively deployed across a number of sectors today, including defense and security, artificial intelligence ("AI"), energy optimization, space and frontier, materials discovery and cybersecurity. Our approach is grounded in an integrated quantum technology platform, from foundational technology to advanced hardware and propriety software, all built on neutral atoms, nature's ideal qubits, which enable an adaptable, scalable and high-fidelity path to quantum advantage across multiple applications.

Today, our high-performance quantum clocks and quantum radio frequency ("RF") sensors are already delivering quantum advantage, such as sensing the world with superior precision relative to classical state-of-the-art systems and unlocking new classes of national security and commercial applications. We are also pioneering the development of next-generation quantum inertial and gravimetric sensors for navigation in GPS-denied environments, including in space and underwater, subterranean exploration and mapping, and earth science and climate monitoring. Our sensing products are designed to function outside laboratory settings and are targeted for real-world deployment. These products are complemented by our flagship quantum computing system, Sqale, a room-temperature quantum computer with demonstrated high fidelity (99.73% controlled-Z ("CZ") gate), the industry's largest neutral atom array outside of a research institution. As of March 31, 2026, the Company has achieved 12 logical qubits. Our quantum sensors and computers are supported by our proprietary software. Our software applications enable customers to develop and execute optimization and quantum computing workloads using quantum and classical computing hardware. Superstaq, which serves as a control panel for future hybrid quantum-classical workflows, compiles and optimizes quantum circuits for multiple quantum computing modalities. Superstaq is currently deployed with a limited number of customers using third-party quantum computing hardware platforms, including platforms not based on neutral atom architectures such as our Sqale processor. In addition, we sell contextual machine learning ("CML") software, based on quantum physics principles, which provides AI software running on classical graphics processing units ("GPUs").

We work with a diverse set of customers and strategic partners globally, serving organizations in national security, critical national infrastructure, scientific discovery and advanced computing sectors. Our partners and customers include the U.S. Department of Defense, Defense Advanced Research Projects Agency ("DARPA"), NASA, Lockheed Martin, NVIDIA, Science Applications International Corp, Safran Electronics & Defense ("Safran") and the U.K. National Quantum Computing Centre. We generate revenue today through multiple channels and are scaling a global pipeline of strategic engagements.

We operate our business as a single operating and reportable segment. This determination is based on how the chief operating decision maker ("CODM"), our Chief Executive Officer, manages the business for the purpose of assessing performance and resource allocation.

Recent Developments

Business Combination

On February 13, 2026 (the "Closing), the business combination ("Business Combination") between Churchill Capital Corp X ("CCX") and Legacy Infleqtion was consummated pursuant to the definitive agreement and plan of merger and reorganization (the "Merger Agreement"), dated September 8, 2025. In connection with the closing of the Business Combination (the "Closing"), CCX changed its name to Infleqtion, Inc. Refer to Note 3 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for further discussion of the Business Combination.

At the Closing, each issued and outstanding share of Legacy Infleqtion common stock, preferred stock and restricted stock was automatically surrendered and exchanged for the right to receive shares of CCX common stock, par value $0.0001 per share, based on a defined exchange ratio (the "Exchange Ratio") of approximately 0.34740312, representing shares of the Company's Common Stock after the Closing.

Immediately following the Business Combination, there were 216,471,927 shares of the Company's Common Stock and 10,424,967 warrants outstanding, which amounts remained unchanged as of March 31, 2026. The warrants represent CCX warrants that became warrants of the Company, exercisable for shares of the Company's Common Stock, upon the Closing of the Business Combination.

Our Common Stock and warrants commenced trading on the New York Stock Exchange under the symbols "INFQ" and "INFQ WS", respectively, on February 17, 2026.

In connection with the Closing, CCX delivered approximately $528.2 million of gross transaction proceeds to Infleqtion, consisting of $401.6 million of proceeds from the trust account and operating cash accounts and $126.5 million of proceeds from a previously announced private investment in public equity (the "PIPE Investment"). The PIPE Investment was completed pursuant to subscription agreements entered into on September 8, 2025, under which the Company issued an aggregate of 12,654,760 shares of common stock at a value of $10.0 per share. Total direct and incremental transaction costs incurred by Legacy Infleqtion and recognized as a reduction of additional paid in capital were approximately $9.3 million of which $1.8 million were paid at the Closing and the remaining $7.5 million were previously incurred and capitalized as deferred offering costs. Certain other costs in the amount of $11.5 million, associated with the Business Combination, did not qualify for capitalization and were expensed as selling, general and administrative expenses in the condensed consolidated statements of operations and comprehensive loss during the three months ended March 31, 2026. Of this amount, $10.7 million was paid at the Closing.

In addition, in connection with the Business Combination, holders of 37,821 CCX Class A ordinary shares exercised their redemption rights, representing approximately 0.09% of the outstanding CCX Class A ordinary shares, resulting in approximately $0.4 million being removed from the trust account.

Although CCX is the legal acquirer in the Business Combination, for financial reporting purposes under U.S. generally accepted accounting principles ("GAAP"), Legacy Infleqtion was the accounting acquirer and CCX was treated as the acquired company. Accordingly, the Business Combination was accounted for as a reverse recapitalization.

At the Closing, Legacy Infleqtion became the accounting acquirer and the successor registrant with the SEC. Accordingly, Legacy Infleqtion's historical financial statements are presented for all periods in periodic reports filed with the SEC.

Public Company Costs

As a result of the Business Combination, we became a publicly traded company and are subject to ongoing public company reporting, governance and compliance requirements. Accordingly, we expect to incur increased ongoing costs related to public company regulatory requirements and customary practices, including additional personnel, stock-based compensation due to additional equity awards, directors' and officers' liability insurance, director compensation, and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees. These costs are expected to continue in future periods.

Contract Awards

In February 2026, DARPA awarded us a $2.0 million contract through the Heterogeneous Architectures for Quantum ("HARQ") program. The award supports the Company's development of Multistaq, a next-generation platform designed for heterogeneous quantum systems composed of multiple qubit modalities. These heterogeneous quantum systems have the potential to accelerate scientific discovery, enhance national security decision-making, and support the development of more efficient energy, materials, and infrastructure solutions. We were selected to contribute to Technical Area 1, which focuses on breakthrough quantum circuit compilers that maximize the capabilities of heterogeneous qubit platforms. Multistaq builds on the principles behind our industry-leading Superstaq multimodal compiler, implementing cross-modality and cross-layer optimization techniques to support next-generation quantum architectures.

In February 2026, the U.S. Navy awarded us a $1.0 million contract to advance our Quantum-Inspired Rapid Context ("QuIRC") machine learning software platform for RF signal processing. This AI application is powered by our patent-pending GPU-hosted CML technology, which applies quantum principles across machine learning models to capture contextual correlations across large datasets while significantly reducing computational and storage requirements. The Phase II award builds on a successful Phase I feasibility demonstration and will expand the effort to develop an integrated prototype for testing and evaluation in operationally relevant Navy environments.

In January 2026, we awarded the Company a $5.3 million cost-sharing agreement with the U.S. Department of Energy's Advanced Research Projects Agency-Energy ("ARPA-E"). Enhancing Neutral-atom Computers for Optimizing Delivery of Energy ("ENCODE") program intends to optimize energy distribution and utilization across the nation's electricity grid by developing and validating next-generation computational techniques that employ neutral atom quantum hardware. Via ENCODE, we will advance and upgrade its neutral atom quantum computer hardware and software stack to focus squarely on an end-to-end quantum solution.

In September 2025, NASA awarded us a $17.0 million contract modification, bringing the total contract value to $20.0 million, for the development of a Quantum Gravity Gradiometer ("QGG") for space deployment in the initial phase of NASA's QGG Pathfinder program, for which we are the prime sensor developer and integrator for this groundbreaking space-based gravity sensor.

Strategic Partnerships

In April 2026, we announced an integration of our Sqale neutral atom quantum computer and NVIDIA Ising models for calibration and decoding. This milestone marks continued progress on our mission to achieve high counts of logical qubits for commercial applications through tight integration with classical computing, as well as improving quantity and quality of our neutral-atom qubits and gates.

In December 2025, we announced our strategic partnership with Safran to advance quantum-enabled precision timing solutions for critical global infrastructure. Integrating our Tiqker quantum optical clock technology with Safran's trusted synchronization systems enables a GPS-independent timing architecture designed to withstand the most challenging environments. Through this partnership, we are advancing quantum innovation to transform mission-critical operations across defense, aerospace and telecommunications, establishing a new benchmark for secure, resilient, and ultra-precise timing capabilities.

In November 2025, we announced our strategic partnership with Voyager Technologies, Inc. to advance dual-use quantum technology in low-Earth orbit and beyond. The collaboration marks a major milestone in the growing convergence of the quantum and aerospace industries. Through this partnership, we are unlocking a completely new class of dual-use capabilities with quantum timing, sensing and computing in space, strengthening the backbone of next-generation space infrastructure and ensuring mission continuity in increasingly contested domains.

In October 2025, we announced a groundbreaking partnership with NVIDIA to deploy a NVQLink-enabled quantum supercomputing system at the Illinois Quantum & Microelectronics Park. Through this partnership, we are integrating our Sqale quantum computers with NVIDIA's GPU-accelerated systems via NVQLink, creating a unified architecture that enables real-time hybrid quantum-classical computing. This collaboration unlocks new possibilities in materials science, clean energy, secure communications and artificial intelligence, while addressing critical scalability challenges for quantum computing.

In June 2025, we announced a new go-to-market partnership with SAIC, a leading mission integrator that provides advanced technology solutions to solve and support mission-critical needs across military, intelligence and government agencies. Through this partnership, we are expanding the deployment of quantum sensing technologies, including atomic clocks, quantum RF communication and inertial sensing, into defense and aerospace applications.

The Company expects that these strategic partnerships will support future growth by expanding market access, enabling joint development opportunities, and accelerating elements of its product and technology roadmaps. While certain partnerships may create opportunities to generate revenue or enhance commercialization pathways, the timing and ultimate financial impact on the Company's results of operations, including revenue and gross profit, remain subject to a variety of factors, including customer adoption, program execution and market conditions.

Trends and Key Factors Affecting Performance

Our business has demonstrated continued top-line growth, with revenue increasing to $9.5 million for the three months ended March 31, 2026, compared to $8.3 million for the three months ended March 31, 2025. In February 2026, as discussed above under 'Business Combination', the Company completed the Business Combination, which materially strengthened its liquidity position and enhanced its ability to scale operations and support its long-term growth strategy as a public company. Prior private capital raises, including the Company's Series C convertible redeemable preferred stock

financing, supported investment in scaling its quantum computing, sensing, and precision timing platforms and accelerating deployment of field-ready solutions. Management believes the Company's current capital base enhances our ability to advance product innovation and pursue additional market opportunities, supporting our long-term growth strategy. The following discussion highlights key trends and factors affecting our performance.

Technology Milestones

Many of our contracts with customers are dependent on our ability to demonstrate the technological feasibility of our products and services, as well as research and development of technology for quantum hardware and software, and materials science applications. These milestones include demonstrating materials science applications for high-fidelity quantum simulations, released CML capabilities to optimize hybrid quantum-classical workflows and expanding our portfolio of deployable Tiqker optical clocks for military and enterprise customers. We risk the potential that our technology may become obsolete, as advancements in quantum technologies occur rapidly, necessitating additional investments. Additionally, integrating new technologies into our existing capabilities creates additional risks, such as compatibility with existing systems. Our business is dependent on our ability to achieve technological milestones while navigating these risks effectively.

Across our technology organization, generative AI ("GenAI") adoption has significantly enhanced productivity, particularly for software engineering as many of the mechanical aspects of software development have been replaced or accelerated by GenAI tooling, dramatically reducing the time required to complete repetitive, manual processes. In other less mechanical software development areas of our business which are deeply grounded in scientific research, GenAI serves as an accelerant.

Government Funding

A significant portion of our business is conducted with various governments, including agencies of the U.S., U.K., Australian and Japanese governments. Changes in government spending levels and the timely funding thereof could impact our financial performance. The long-term outlook for our business is influenced by government funding priorities, the diversity of our programs and customers, and our ability to evolve our products and services and successfully execute on our contracts. Strong international demand for our products and services presents opportunities for our business, particularly in the U.K.

During the three months ended March 31, 2026, approximately 61%, 14%, and 6% of total revenue was derived from customers associated with the U.S., U.K. and Australian governments, respectively, compared to approximately 51%, 29%, and 3%, respectively, for the three months ended March 31, 2025. Government contracts are subject to periodic expiration and renewal in the ordinary course of business. The expiration of certain U.K. government contracts resulted in a decrease in revenue, which was more than offset by increased revenue from U.S. and Australian government contracts, resulting in a $1.2 million net increase in total revenue during the three months ended March 31, 2026.

Our government contracts typically involve defined phases or fixed terms, and it is common for individual contracts to expire as programs conclude or transition to new phases or follow-on arrangements. Accordingly, our ability to grow revenue in future periods will depend, in part, on our success in securing new government contracts and follow-on awards to replace or expand upon expiring programs.

Partnership Opportunities

Our future growth depends in part on our ability to successfully identify and enter into strategic partnership opportunities. We have historically entered into partnerships with major technology companies and academic organizations to enhance our capabilities through access to intellectual property, improve operational efficiencies, increase supply chain resilience and expand our addressable market. We expect we will continue to explore and enter new academic and commercial partnership opportunities that we believe are complementary to our business.

Impact of the Macroeconomic Climate on Our Business Inflationary factors, interest rates and overhead costs may adversely affect our operating results.

High interest and inflation rates also present a challenge impacting the U.S. economy and could make it more difficult for us to obtain traditional financing on acceptable terms, if at all, in the future. These inflationary effects may be exacerbated by new tariffs and evolving trade policy. Although we do not believe that inflation has had a material impact on our financial position or results of operations to date, we may experience increases in the future on our operating costs, including due to supply chain constraints, consequences associated with bank failures, trade wars and the effect of recently heightened, scheduled, and threatened tariffs by the U.S. or its trading partners, geopolitical tensions in and around Ukraine, Israel, Iran and other areas of the world, and employee availability and wage increases, which may result in additional stress on our working capital resources.

Components of Results of Operations

Revenue

Our revenue is primarily derived from governmental contracts with the U.S. and allied government agencies and commercial contracts with research institutes and private companies primarily in the U.S. and Europe.

Product revenue

Product revenue from governmental contracts is primarily derived from development projects resulting in product prototypes or projects to custom engineer a completed product to the customer's specifications. Product revenue from commercial contracts is derived from the sale of products to commercial customers, primarily from selling Tikqer for position navigation and timing ("PNT") use cases. Revenues under governmental contracts are generally recognized over time as we satisfy our performance obligations based on the extent of progress towards contract completion and product revenue under commercial contracts is generally recognized at a point in time when we satisfy our performance obligations and control of the product transfers to the customer.

Service revenue

Service revenue is derived primarily from governmental contract revenue for research-related projects and commercial service revenue.

Other revenue

Other revenue is comprised primarily of other award revenue.

Cost of revenue

Cost of products

Cost of products primarily consists of labor, including direct labor, third-party specialist subcontractors and stock-based compensation, materials and equipment costs related to delivering our products, warranty expenses and an allocation of information technology costs, occupancy costs, and depreciation and amortization expense. Cost of products is recorded when the control of products is transferred to the customer.

Cost of services

Cost of services primarily consists of labor, including direct labor, third-party specialist subcontractors and stock-based compensation, materials and equipment costs related to delivering our services, and an allocation of information technology costs, occupancy costs, and depreciation and amortization expense. Cost of services is recorded as services are performed.

Research and development

Research and development expenses primarily consist of personnel-related costs, including salaries, benefits and stock-based compensation, costs of materials, costs of consultants and allocated facility costs associated with the research, engineering, design and development of our quantum computing technologies.

Selling, general and administrative

Selling, general and administrative expenses primarily consist of personnel-related costs, including salaries, benefits and stock-based compensation, for employees performing bid, proposal, marketing and sales functions, for executive leadership and employees in legal, finance, accounting, and human resources, changes in contingent obligation, information technology and other administrative functions as well as allocated facility and consulting costs.

Grant income

Grant income includes income recognized from government grants, that are not accounted for as revenue from contracts with customers under ASC 606.

Interest income

Interest income consists primarily of interest earned on interest-bearing cash deposits and money market funds. We also earn interest on available-for-sale securities, including investments in short- and long-term corporate debt securities and U.S. Treasury securities.

Other, net

Other, net consists primarily of income from refundable research and development tax credits, interest expense related to borrowings and gains or losses resulting from fluctuations in exchange rates during the reporting period on unsettled transactions and outstanding balances with foreign subsidiaries, vendors or customers. Our exposure to foreign currency risk reflects our international operations and contracts, which are subject to changes in currency values.

Income tax expense (benefit)

Income tax expense (benefit) consists of income taxes related to federal, state and foreign jurisdictions in which we conduct business.

Results of Operations

Comparison of the three months ended March 31, 2026 and 2025

The following table sets forth our condensed consolidated statements of operations for the periods indicated (unaudited; in thousands):

Total revenue

Total revenue increased by $1.2 million, or 14%, to $9.5 million for the three months ended March 31, 2026, compared to $8.3 million for the three months ended March 31, 2025. The increase was primarily driven by an increase of $4.0 million for services performed under the QGG contract with NASA due to increased project activity during the current period. The increase was partially offset by the decreases of $1.9 million for the Rack Mount Optical Clocks ("RMOC") project with the U.S. Army due to lower levels of activity compared to the three months ended March 31, 2025 and $0.8 million for the Moonshot project with the Japanese government which concluded in 2025.

Total cost of revenue

Total cost of revenue increased by $2.5 million, or 52%, to $7.5 million for the three months ended March 31, 2026, compared to $4.9 million for the three months ended March 31, 2025. The increase was primarily driven by a $0.9 million increase in stock-based compensation expense due to additional grants upon the Closing of the Business Combination and $1.6 million increase in subcontractor expense primarily related to the QGG contract.

Research and development

Research and development expense increased by $4.8 million, or 93%, to $10.0 million for the three months ended March 31, 2026, compared to $5.2 million for the three months ended March 31, 2025. The increase was primarily driven by a $2.3 million increase in stock-based compensation expense due to additional grants upon the Closing of the Business Combination, $1.6 million increase in payroll and other compensation costs in the U.S. and U.K primarily attributable to increased personnel supporting the Tiqkers and quantum computer platforms maintenance activities and general research and development support functions and a $0.5 million increase in material costs.

Selling, general and administrative

Selling, general and administrative expense increased by $20.5 million, or 355%, to $26.3 million for the three months ended March 31, 2026, compared to $5.8 million for the three months ended March 31, 2025, primarily driven by $11.5 million of non-recurring expenses associated with the Business Combination, an increase of $3.9 million of stock-based compensation expense due to additional grants upon the Closing of the Business Combination, $2.1 million of audit and accounting expenses, a $1.3 million increase in payroll and other compensation costs, a $0.3 million increase in marketing related expenses, as well as a $0.6 million mark-to-market adjustment for the Morton acquisition contingent obligation.

Other income (expense)

Interest income, net

Interest income increased by $2.8 million, or 799%, to $3.2 million for the three months ended March 31, 2026, compared to $0.4 million for the three months ended March 31, 2025. The increase was primarily driven by an increase in our invested balances in government money market funds and available-for-sale securities from the prior period, funded with the proceeds received from the Closing of the Business Combination in February 2026.

Liquidity and Capital Resources

We have incurred net losses and used cash in operating activities since inception. Prior to the Business Combination, we have funded our operations primarily through the issuance of convertible redeemable preferred stock, resulting in aggregate gross proceeds of approximately $285.4 million. At the Closing of the Business Combination, our cash position increased significantly primarily due to proceeds of approximately $401.6 million received from funds held in CCX's trust account and proceeds of approximately $126.5 million received from the PIPE Investment, partially offset by approximately $1.8 million of transaction-related costs which were accounted for as equity issuance related costs and recorded in additional paid in capital, and $10.7 million of transaction-related costs that were expensed as selling, general and administrative expenses in the condensed consolidated statement of operations and comprehensive loss during the three months ended March 31, 2026. Following Closing of the Business Combination, our primary sources of liquidity have shifted to cash on hand and available-for-sale securities.

For the three months ended March 31, 2026, we incurred a net loss of $30.3 million, and as of March 31, 2026, we had an accumulated deficit of $261.3 million. We expect to continue to incur operating losses and higher operating expenses for the foreseeable future as we invest in the development and commercialization of our technologies.

Our cash and cash equivalents consist primarily of cash held in banks, checking deposits, money market funds and highly liquid investments, including short-dated U.S. Treasury securities. As of March 31, 2026, we had cash and cash equivalents, including restricted cash, of $84.9 million. Our available-for-sale securities are primarily invested in short- and long-term corporate debt securities and U.S. Treasury securities, generally with longer maturities than those classified as cash equivalents. As of March 31, 2026, we had $484.0 million of available-for-sale securities.

Based on our current operating plan, management believes that our cash, cash equivalents and available-for-sale securities as of March 31, 2026 will be sufficient to meet our anticipated working capital and capital expenditure requirements for at least 12 months from the date of this Quarterly Report on Form 10-Q. We believe we will meet longer-term expected future cash requirements and obligations through a combination of cash flows from operating activities and available funds from our cash, cash equivalents and available-for-sale securities balances. However, this determination is based upon internal projections and assumptions and is subject to changes in market conditions, business execution and other factors.

Our primary short-term cash requirements include funding working capital needs and operating lease obligations. Working capital requirements may fluctuate significantly from period to period, particularly due to the timing of receipts and payments associated with long-term customer contracts. Our medium- to long-term cash requirements are expected to consist primarily of investments in facilities, equipment, personnel, research and development activities, and potential strategic acquisitions.

Until such time as we can generate significant revenue from commercializing our products and services, if ever, we expect to finance our liquidity needs through our cash, cash equivalents, and available-for-sale securities. We may elect, or be required, to seek additional capital through public or private equity financings, debt financings or other sources. However, additional financing may not be available on acceptable terms, or at all. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders could be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Debt financing and equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. If we are unable to raise additional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our quantum computing and sensing efforts. Our future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section titled "Risk Factors" in our Annual Report on Form 10-K and other our other filings with the SEC.

Our product roadmap benefits significantly from external funding sources to advance the technological roadmap across quantum sensing and quantum computing as technological advances in these areas are funded as cost of sales of the respective programs rather than through internal research and development. In addition, we invest aggressively in research and development across quantum sensing and quantum computing, including

capital expenditures, business development and engineering. In addition to the quantum computers in our technological roadmap, we also develop full-stack quantum computers and quantum computing test-beds to push the technological frontier of these programs, enabling advances in quantum computing architecture, integrated photonics and vacuum cell technologies, as well as improvements in gate fidelity and quantum error correction. We expect to continue to invest in research and development as a public company to fund these technological priorities and realize our goal of at-scale, fault-tolerant quantum computing.

In addition to our research and development efforts, we have historically invested in demonstration units that can be deployed in the field and showcased to customers in a variety of real-world, in-situ environments, such as Tiqker clocks for long-term testing and quantum radio frequency systems that can be used to demonstrate an array of use cases to a variety of potential end-customers. We have also historically pursued acquisitions to expand our capabilities, de-risk our technological roadmaps and readily scale resources. We expect that we will continue to make investments in strategic acquisition opportunities going forward.

Convertible Redeemable Preferred Stock

At the Closing, Legacy Infleqtion had Series Seed, Series Seed II, Series A, Series B, Series B-1, Series C and Series C1 convertible redeemable preferred stock outstanding. Upon the Closing, all outstanding shares of Legacy Infleqtion's convertible redeemable preferred stock were automatically surrendered and exchanged for the right to receive shares of CCX common stock based on the Exchange Ratio, representing the Company's Common Stock after the Closing.

The following table summarizes the exchange of the Legacy Infleqtion convertible redeemable preferred stock at the Closing:

Refer to Note 10 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information about our convertible redeemable preferred stock.

Cash Flows

The following table summarizes our condensed consolidated cash flows and cash and cash equivalents, for the three months ended March 31, 2026 and 2025 (unaudited; in thousands):

Cash used in operating activities

Net cash used in operating activities was $19.2 million for the three months ended March 31, 2026, compared to $7.0 million for the three months ended March 31, 2025, representing a $12.2 million increase in cash used. This change was primarily attributable to a $24.3 million increase in net loss partially offset by an $7.6 million increase in non-cash operating adjustments and $4.3 million increase in cash provided by working capital changes.

Non-cash adjustments increased by $7.6 million for the three months ended March 31, 2026 compared to three months ended March 31, 2025, primarily due to an $7.2 million increase in stock-based compensation expense and a $0.6 million increase in the fair value of the contingent obligation related to the Morton acquisition.

Net cash impact from changes in working capital increased by $4.3 million for the three months ended March 31, 2026 compared to three months ended March 31, 2025. The change was primarily driven by increases in contract liabilities of $3.1 million and decreases in unbilled receivables of $2.4 million, both of which are due to the timing of revenue recognition, customer billings, and advance payments associated with the increased revenue activity during the period, and decreases accrued liabilities of $2.3 million. This was offset by a decrease in accounts payable of $4.4 million primarily driven by the timing of vendor payments at quarter-end.

Cash used in investing activities

Net cash used in investing activities was $433.1 million for the three months ended March 31, 2026, compared to net cash used in investing activities of $0.4 million for the three months ended March 31, 2025. The $432.7 million change was primarily driven by a $444.2 million increase in available-for-sale securities purchases during the three months ended March 31, 2026, partially offset by an $11.4 million increase in available-for-sale securities maturities.

Cash provided by (used in) financing activities

Net cash provided by financing activities was $525.2 million for the three months ended March 31, 2026, compared to net cash used in financing activities was $0.3 million for the three months ended March 31, 2025, representing a $525.5 million increase. The change was primarily driven by (i) $528.2 million of net proceeds from the Business Combination, net of redemptions and issuance costs, (ii) $0.4 million of higher proceeds from stock option exercises. These increases were partially offset by an outflow of $3.3 million from payments made during the period of offering costs that were capitalized prior to the Closing.

Contractual Obligations and Commitments

The commitment amounts presented below are associated with material contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts.

Operating lease obligations

We utilize non-cancellable operating leases for various real estate in Colorado, Wisconsin, Illinois, the U.K. and Australia primarily used as office space, which expire at various dates through 2030 and some of which contain multi-year renewal options. As of March 31, 2026, our remaining contractual obligations for our operating lease obligations were approximately $4.9 million.

In April 2026, the Company executed an amendment to its operating lease for its Louisville, Colorado facility. The amendment increases the leased premises by approximately 68,000 square feet and extends the lease expiration date from March 31, 2030 to August 31, 2037.

Incremental lease payments associated with the amendment total approximately $25 million over the extended term.

Contingent obligations

In May 2025, the Company amended the equity purchase agreement related to the Morton acquisition. The amendment added new milestones that, if achieved, requires the Company to make the remaining contingent cash payments of approximately $0.2 million and results in the vesting of the remaining 569,444 outstanding shares of restricted common stock. Additional information regarding the original purchase agreement and related contingent consideration is provided in Note 9 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.

The contingent obligation is classified as a liability, initially measured at fair value upon assessment of the likelihood that the related milestones would be achieved and subsequently remeasured at fair value each reporting period, with changes recognized in earnings. Refer to Note 1 to our condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for information regarding the valuation methodology and inputs used in measuring the contingent obligation. In the fourth quarter of 2025, certain milestones were achieved, and the Company settled $2.3 million of the contingent obligation, consisting of $0.1 million in cash payments and the vesting of 329,678 shares of restricted common stock with an estimated fair value of $2.2 million. During the three months ended March 31, 2026, a total of $0.6 million of expense was recorded within selling, general and administrative expenses related to the remeasurement of the contingent obligation. The remaining balance of the contingent obligation included in accrued liabilities on the condensed consolidated balance sheet was $2.4 million as of March 31, 2026.

In January 2024, the Company completed the SiNoptiq asset acquisition. The asset acquisition provides for contingent payments to the sellers of up to $1.5 million in cash and 512,092 restricted shares of Series B convertible redeemable preferred stock for achieving certain sales-and development-based milestones. The rights to these contingent payments expire on January 26, 2028. At the acquisition date, we assessed the likelihood of the contingencies to be met as not probable and do not expect this assessment to change. Additional information regarding the SiNoptiq asset acquisition and related contingent consideration is provided in Note 6 to our consolidated financial statements for the year ended December 31, 2025 included in the Current Report on Form 8-K/A that the Company filed with the U.S. Securities and Exchange Commission on March 31, 2026.

Off-Balance Sheet Arrangements

We did not have any material off-balance sheet arrangements during the periods presented, and do not currently have any material off-balance sheet financing arrangements or any relationships with unconsolidated entities or financial partnerships, including entities sometimes referred to as structured finance or special purpose entities, that were established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.

Critical Accounting Policies and Estimates

There have been no material changes to the Company's critical accounting policies and estimates from those disclosed in the Company's audited financial statements for the year ended December 31, 2025 included in the Current Report on Form 8-K/A.

Recently Issued or Adopted Accounting Standards

A description of recently issued and adopted accounting pronouncements are described in Note 1 to our unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.