Sonnet BioTherapeutics Announces $888M Business Combination with Rorschach I LLC to Launch HYPE Cryptocurrency Treasury Reserve Strategy

Sonnet BioTherapeutics announces an $888 million business combination with Rorschach I LLC, forming Hyperliquid Strategies Inc (HSI) with 12.6 million HYPE tokens. The deal includes $583 million in HYPE tokens and $305 million in cash. SONN shareholders will retain 1.2% ownership of HSI, while Rorschach and new investors will control 98.8%. The merger marks a pivot from SONN's biotech focus to a cryptocurrency treasury strategy, expected to close in H2 2025.

Sonnet BioTherapeutics, Inc. (NASDAQ: SONN) has announced a significant business combination with Rorschach I LLC, forming a new entity called Hyperliquid Strategies Inc. (HSI). The deal, valued at $888 million, includes 12.6 million HYPE tokens, a cryptocurrency native to the Hyperliquid Layer-1 blockchain, and $305 million in cash. This strategic move marks a pivot for Sonnet, shifting its focus from biotechnology to a cryptocurrency treasury strategy.

Upon closing, HSI will hold approximately 12.6 million HYPE tokens, representing $583 million in value based on the spot price of HYPE shortly before the signing of the Business Combination Agreement. Additionally, the gross cash proceeds of $305 million will enable HSI to acquire more HYPE tokens, creating one of the top strategic reserves of the HYPE token. The transaction also includes participation by prominent strategic investors such as Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital.

Bob Diamond, Co-founder and CEO of Atlas Merchant Capital LLC, will be named Chairman of the Board of HSI, while David Schamis, CIO and Co-founder of Atlas, will serve as the Chief Executive Officer. The new entity is expected to be listed on the Nasdaq Capital Market under a new ticker symbol and become a public cryptocurrency treasury company upon closing.

The deal is expected to close in the second half of 2025 and is subject to approval by Sonnet stockholders and other customary closing conditions. In connection with the signing of the Business Combination Agreement, Sonnet will raise an aggregate $5.5 million in a private placement to accredited investors through the issuance and sale of non-voting convertible preferred stock and warrants. The private placement is expected to close on July 14, 2025.

The merger represents a significant shift for Sonnet, which will operate as a wholly owned subsidiary of HSI and continue focusing on its existing biotech assets while disposing of other assets. The new cryptocurrency treasury strategy is expected to enhance Sonnet's treasury management and potentially unlock value for its shareholders.

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