Sonnet BioTherapeutics enters $888M business combination with Rorschach I

Sonnet BioTherapeutics (SONN) announced that it has entered into a definitive agreement for a business combination with Rorschach I LLC, a newly-formed entity formed by an entity affiliated with Atlas Merchant Capital LLC, an affiliate of Paradigm Operations LP, and additional sponsors, to transform its business by building a reserve of HYPE, the token of the Hyperliquid Layer-1 blockchain. At the closing of the Business Combination, the newly-created entity is to be named Hyperliquid Strategies, which is expected to hold approximately 12.6M HYPE tokens, representing $583M in value and gross cash invested of at least $305M, for a total assumed closing value of $888M. The transaction includes participation by prominent strategic investors, including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital. HSI is expected to remain listed on the Nasdaq Capital Market under a new ticker symbol and become a public cryptocurrency treasury company upon the closing of the Business Combination. In addition to the $583M of HYPE value contributed, the gross cash proceeds of $305M at the closing of the Business Combination will enable HSI to acquire significantly more HYPE, creating one of the top strategic reserves of the HYPE token. Additionally, upon closing of the Business Combination, Bob Diamond, Co-founder and CEO of Atlas, will be named Chairman of the Board and David Schamis, CIO and Co-founder of Atlas, will be named Chief Executive Officer of HSI. The parties also expect to appoint a new Chief Financial Officer and that new members will be added to the Board, including Eric Rosengren, former President of the Boston Fed, in addition to two of Sonnet’s current independent directors. At the closing of the Business Combination, HSI will enter into a Sponsor Advisory Agreement with Rorschach to help expand the company’s business operations through the integration of HYPE into its treasury management strategy.