Sonnet enters into $888MM business combination to become the largest U.S.-based publicly-listed company to adopt HYPE as part of its cryptocurrency treasury reserve

Overview

Sonnet and Rorschach I LLC to form a HYPE treasury under the name Hyperliquid Strategies Inc. (HSI).

Asset contribution: The deal consolidated $305 million in cash and 12.6 million HYPE tokens (valued between $491 million and $596 million at prevailing prices).

The Company’s pivot is sponsored by Atlas Merchant Capital, a prominent financial services private equity firm with > $1BN in AUM, and an initial backer of stable coin issuer Circle (NYSE: CRCL), and leading crypto investors such as Paradigm (the “Sponsors”)

Other prominent investors include Galaxy, D1 Capital, Pantera, Republic, and 683 Capital, and aims to provide public market exposure to HYPE, a high-utility token native to the Hyperliquid blockchain exchange, which is not accessible for U.S investors.

HSI to become the largest U.S.-listed holder of HYPE tokens; legacy biotech assets remain a subsidiary with contingent value rights for existing shareholders.

Chardan’s Role & Successful Execution

Rorschach engaged Chardan to find a Nasdaq-listed “shell” that would allow them to bring the HYPE token to the U.S. capital markets and to affect this innovative transaction and strategy.

As Sonnet’s former financial advisor, Chardan introduced the Sponsors to the Company and proposed a strategic business combination to implement a digital asset strategy, further unlocking value for SONN’s shareholders.

Chardan helped deliver and execute an LOI between Rorschach and Sonnet in under 15 days, with the BCA executed less than a month later and Chardan raising the $888 million in under two weeks; rapidly positioning Sonnet at the convergence of traditional financial services and crypto.

It is expected that Rorschach and other new investors will own ~98.8% of HIS, legacy stockholders, including the PIPE and bridge investors, owning the remaining ~1.2%.

Upon announcement, Sonnet closed at $9.64/share, representing an ~86% increase from its closing price of $5.17/share the prior trading day.

The transaction is expected to close in the second half of 2025, with the executive leadership of the combined entity led by former Barclay’s CEO, Bob Diamond, as Chairman.