Infleqtion, Inc.

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 ofnon-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 andavailable-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 andavailable-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. Ouravailable-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 ofavailable-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 ofat-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 potentialend-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 innon-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 inavailable-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 utilizenon-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 materialoff-balance sheet arrangements during the periods presented, and do not currently have any materialoff-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 facilitatingoff-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.