Sonnet BioTherapeutics to transform business with Hyperliquid blockchain reserve.

Sonnet BioTherapeutics has entered into a definitive agreement for a business combination with Rorschach I LLC, transforming its business by building a reserve of HYPE tokens on the Hyperliquid Layer-1 blockchain. The newly-created entity, Hyperliquid Strategies Inc, will hold approximately 12.6 million HYPE tokens, valued at $583 million, and gross cash invested of at least $100 million.

Sonnet BioTherapeutics, Inc. (NASDAQ: SONN), an oncology-focused biotechnology company, has entered into a definitive agreement for a business combination with Rorschach I LLC. The agreement aims to transform Sonnet's business by building a reserve of HYPE tokens on the Hyperliquid Layer-1 blockchain. The newly-created entity, Hyperliquid Strategies Inc (HSI), will hold approximately 12.6 million HYPE tokens, valued at $583 million, and gross cash invested of at least $305 million, for a total assumed closing value of $888 million [1].

The transaction includes participation by prominent strategic investors, such as Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital. Upon closing, HSI is expected to be listed on the Nasdaq Capital Market under a new ticker symbol and become a public cryptocurrency treasury company. The $305 million in gross cash proceeds will enable HSI to acquire significantly more HYPE tokens, creating one of the top strategic reserves of the HYPE token.

Bob Diamond, Co-founder and CEO of Atlas Merchant Capital LLC, will be named Chairman of the Board, while David Schamis, CIO and Co-founder of Atlas, will be named Chief Executive Officer of HSI. The parties expect to appoint a new Chief Financial Officer and add new members to the Board, including Eric Rosengren, former President of the Boston Fed, and two of Sonnet’s current independent directors. Additionally, Sonnet will raise an aggregate $5.5 million in a private placement to accredited investors through the issuance and sale of shares of non-voting convertible preferred stock and warrants to purchase shares of common stock of Sonnet [1].

The private placement is expected to close on July 14, 2025. The net proceeds from the raises will be used by Sonnet for general corporate purposes and working capital requirements, including the continued development of its biotech assets and funding transaction expenses related to the Business Combination. In parallel with its new cryptocurrency treasury strategy, following the completion of the potential Business Combination, Sonnet will operate as a wholly owned subsidiary of HSI and will continue focusing on existing assets and business lines, including the development of SON-1010, while disposing of other assets [1].

The Business Combination Agreement has been approved by the governing boards of both companies and is subject to approval by Sonnet stockholders and other customary closing conditions. The closing of the Business Combination is expected to occur in the second half of this year. Chardan is acting as sole placement agent to the transaction and exclusive financial advisor to Rorschach in connection with the transaction. Greenberg Traurig, LLP is serving as legal counsel to Rorschach in connection with the transactions and Lowenstein Sandler LLP is serving as legal counsel to Sonnet. Lucid Capital Markets, LLC is providing a fairness opinion to Sonnet’s board of directors [1].

References:

[1] https://www.globenewswire.com/news-release/2025/07/14/3114584/0/en/Sonnet-BioTherapeutics-Inc-Announces-888-Million-Business-Combination-to-Launch-a-HYPE-Cryptocurrency-Treasury-Reserve-Strategy.html