Sonnet BioTherapeutics Holdings, Inc. (NASDAQ: SONN) shares were surging 152.22% as of the last check in early trading today, reaching $13.04, following the announcement of a transformative business combination agreement.
SONN revealed it has entered into a definitive Business Combination Agreement (BCA) with Rorschach I LLC and associated sponsors, setting the stage for a strategic shift in its corporate focus.
Formation of Hyperliquid Strategies Inc. and Strategic Holdings
Rorschach I LLC is a newly established entity affiliated with Atlas Merchant Capital LLC and Paradigm Operations LP. Through this agreement, Sonnet BioTherapeutics aims to reposition its business by creating a substantial reserve of HYPE—the token native to the Hyperliquid Layer-1 blockchain.
The combined company will be known as Hyperliquid Strategies Inc. (HSI) after the deal closes. It is anticipated that it will have roughly 12.6 million HYPE tokens, which are worth about $583 million, along with $305 million in gross cash investments, for a total assumed closing value of $888 million.
Notable Participation of Investors and Appointments to Leadership
The deal is being backed by a number of renowned investors, including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital. As a publicly traded cryptocurrency treasury company, HSI is expected to stay listed on the Nasdaq Capital Market with a new ticker symbol.
Alongside the purchase, there will be changes in leadership: David Schamis, co-founder and CIO of Atlas, will be named CEO, and Bob Diamond, co-founder and CEO of Atlas, will be appointed Chairman. In addition, two of Sonnet BioTherapeutics’ current independent directors and former Boston Federal Reserve President Eric Rosengren will join the board.
Private Placement and Biotech Development Continuation
Sonnet BioTherapeutics will raise $5.5 million as part of the deal by issuing warrants and non-voting convertible preferred shares through a private placement. At the end of the placement, convertible notes worth $2.0 million that were issued in June 2025 will also convert. Along with expenses related to the company combination, the proceeds will be used to fund working capital, ongoing biotech development, and general corporate operations.
With this deal, Sonnet BioTherapeutics is able to retain investing in its core biotech portfolio while taking advantage of prospects in the digital asset sector, marking a significant strategic shift for the firm.
