Insider Brief
- Churchill Capital Corp X shareholders largely declined to redeem their shares, preserving nearly all of the SPAC’s trust account ahead of its merger with Infleqtion.
- Infleqtion is expected to receive more than $550 million in gross proceeds, including nearly 100% of trust cash and over $125 million from a PIPE financing.
- The limited redemptions stand out in a SPAC market where most recent mergers have experienced significantly higher investor cash-outs.
- Photo by Aditya Vyas on Unsplash
Churchill Capital Corp X shareholders largely declined to redeem their shares ahead of the blank-check company’s merger with quantum technology firm Infleqtion Inc., preserving nearly all of the Special Purpose Acquisition Company’s (SPAC) trust account in a market where most similar deals have seen investors pull cash at the last minute.
Infleqtion is expected to receive more than $550 million in gross proceeds at closing, including “nearly 100%” of the cash held in Churchill X’s trust account prior to the redemption deadline and more than $125 million raised through a common stock private investment in public equity, or PIPE, according to a Churchill Capital Corp X news release.
Financial experts report that redemption rates for SPAC mergers in recent years have frequently exceeded 70% to 90%, sharply reducing the cash delivered to operating companies and forcing many to restructure transactions or seek alternative financing.
Churchill X shareholders approved the previously announced business combination at a special meeting, with more than 90% of votes cast in favor of the transaction. The preserved trust balance suggests that redemptions were limited. Shareholders in a SPAC have the right to redeem their shares for cash before a merger closes, regardless of how they vote. When large numbers elect to redeem, trust accounts shrink, often undermining the financial rationale of the deal.
If securities filings confirm that redemptions were minimal, Infleqtion will enter the public markets with one of the stronger cash positions among recent de-SPAC transactions. The company said the proceeds, combined with existing cash on hand, are expected to support continued execution of its technology roadmap and product commercialization strategy, including deployments across artificial intelligence, national security and space-related applications.
Infleqtion develops quantum computing and quantum sensing systems based on neutral-atom technology. In that approach to tapping quantum mechanics for real world solutions, individual atoms are trapped and manipulated with lasers to function as qubits, the basic units of quantum information. Neutral-atom platforms are considered one of several leading architectures in the race to build scalable quantum computers, alongside superconducting circuits, trapped ions and photonics. Infleqtion also markets precision sensing systems that use quantum effects to measure time, gravity and other physical properties with high sensitivity.
Upon closing, Infleqtion is expected to become the first publicly listed neutral-atom quantum technology company and the only public company with commercial operations spanning both quantum computing and precision sensing. The dual focus gives the company exposure to nearer-term revenue opportunities in sensing while continuing to invest in longer-term computing development.
The transaction includes a domestication of Churchill X from the Cayman Islands to Delaware, according to the news release. Following the closing, the combined company will be renamed Infleqtion Inc., and existing Churchill shareholders will hold shares in the Delaware-incorporated entity rather than in a Cayman Islands company.
Churchill X’s shares, warrants and units are currently listed on Nasdaq. Upon completion of the merger, the combined company’s common stock and warrants are expected to begin trading on the New York Stock Exchange under the ticker symbols “INFQ” and “INFQ WS,” respectively, subject to satisfaction of listing requirements.
The closing of the transaction is expected to occur today (Feb. 13), the company said.
