Sonnet BioTherapeutics to Merge with Rorschach for $888 Million Cryptocurrency Pivot

Sonnet BioTherapeutics Inc. has entered into a definitive agreement for an $888 million business combination with Rorschach I LLC. This deal aims to transform Sonnet's business by building a reserve of HYPE cryptocurrency tokens. The combined entity will be renamed Hyperliquid Strategies Inc. and is expected to hold approximately 12.6 million HYPE tokens, valued at $583 million based on the spot price at the time of the agreement signing. The transaction includes $305 million in gross cash proceeds and participation from strategic investors including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital.

Upon closing, the company expects to remain listed on the Nasdaq Capital Market under a new ticker symbol as a public cryptocurrency treasury company. Bob Diamond, Co-founder and CEO of Atlas Merchant Capital, will serve as Chairman of the Board, while David Schamis, CIO and Co-founder of Atlas, will become Chief Executive Officer. HYPE is the native token of the Hyperliquid Layer-1 blockchain and ranks as the 13th-largest cryptocurrency by market capitalization as of July 6, 2025.

Current owners of Rorschach and other new investors are expected to own approximately 98.8% of the combined entity, while legacy Sonnet stockholders will own the remaining 1.2%. Sonnet stockholders will receive contingent value rights related to the company’s biotech assets at closing. The company also announced a $5.5 million private placement expected to close July 14, 2025, through the issuance of non-voting convertible preferred stock and warrants. An additional $2.0 million in convertible notes from June 2025 will convert into the preferred stock and warrants at closing.

The transaction requires approval from Sonnet stockholders and other customary closing conditions. The closing is expected to occur in the second half of 2025. Sonnet will continue operating as a wholly owned subsidiary of the combined entity, focusing on existing biotech assets including the development of SON-1010 while disposing of other assets.

This deal represents a significant pivot for Sonnet, transitioning from its core biotech business to a cryptocurrency treasury strategy. The involvement of high-profile investors and leadership, including Bob Diamond and David Schamis, adds credibility to the transaction. The new entity will effectively become a publicly-traded proxy for HYPE token ownership, providing public market exposure to HYPE tokens, which are difficult to access in the United States. The transaction is designed to create a publicly-traded cryptocurrency treasury company, leveraging Sonnet's public listing as a vehicle for this transformation.