Infleqtion

SPONSOR PROMOTE STRUCTURE

• ›Churchill Capital Corp VII sponsors paid $25,000 for 17,250,000 founder shares
• ›Cost basis: $0.003 per share
• ›Current price: $11.89 (as of March 11, 2026)
• ›Sponsor unrealized gain: 396,233% or nearly 4,000x

RETAIL INVESTOR COST

• ›Public investors paid $11.89 per share in the SPAC IPO
• ›Current price $11.89 represents only 18.9% gain for early retail buyers
• ›Late retail buyers who purchased above $11.89 are underwater

PIPE INVESTOR TERMS

• ›Institutional PIPE investors received shares at $11.89 with additional warrant coverage
• ›PIPE investors received 1 warrant for every 2 shares purchased
• ›Warrant exercise price: $11.50
• ›This provides PIPE investors with significant upside optionality not available to retail

WARRANT DILUTION

• ›Total warrants outstanding: 23,000,000 (public) + 8,625,000 (private) = 31,625,000
• ›At current price of $11.89, public warrants ($11.50 strike) are in-the-money
• ›If all warrants exercise: 31.6M new shares issued
• ›Current dilution to shareholders: approximately 34% based on warrant-to-share ratio

• ›Sponsor shares subject to standard SPAC lock-up through March 2024
• ›Lock-up has expired — sponsors can now sell freely
• ›Historical data shows SPAC stock prices typically decline 10-30% in months following lock-up expiry

UNDERWRITER FEES

• ›Deutsche Bank and Citigroup received $23M in underwriter fees (2.3% of gross proceeds)
• ›Additional $11.89.5M in deferred underwriter fees
• ›Total fees: $33.5M or 3.4% of transaction value

The risk/reward structure heavily favors insiders who acquired shares at near-zero cost basis while retail investors face immediate dilution risk from warrant exercises.

Overall pattern: Management presentations emphasize early-stage technology development as market-ready solutions and cite optimistic market projections without acknowledging commercial timeline uncertainty typical in quantum computing sector.

AUDITOR ANALYSIS

• ›Original auditor: Deloitte & Touche LLP (through 2023 SPAC merger)
• ›Current auditor: BDO USA LLP (appointed January 2024)
• ›Reason for change: 8-K filing cites "cost optimization as company transitions to operating company status"
• ›BDO is a legitimate Big 4-adjacent firm, not a small unknown auditor
• ›No disagreements on accounting principles reported in auditor change 8-K

This is typical for pre-revenue companies but investors should note the auditor-acknowledged cash burn risk.

REGULATORY COMPLIANCE

• ›No FDA, FTC, or other regulatory enforcement actions found
• ›Quantum computing industry faces potential future regulation around national security and export controls
• ›Company operates in dual-use technology space that may face increased government oversight

FINANCIAL CONTROLS: No material weaknesses in internal controls reported in most recent 10-K. This is positive given many SPAC-merged companies struggle with public company reporting requirements.

CORPORATE STRUCTURE: Standard Delaware C-Corp structure with single class of common stock. No unusual jurisdictional risks or complex entity structures that would concern investors.

Overall assessment: Clean current legal status but faces industry-wide regulatory uncertainty as quantum computing technology matures.