Sonnet BioTherapeutics (SONN) Proxy Filing summary

Executive summary

• The proxy filing details a proposed business combination between Sonnet BioTherapeutics Holdings, Inc., Rorschach I LLC, and Hyperliquid Strategies Inc. (Pubco), resulting in Sonnet and Rorschach becoming wholly owned subsidiaries of Pubco, which will focus on a HYPE token treasury strategy and continue Sonnet's biotech operations as a subsidiary.

• The transaction involves a complex exchange of equity, with Sonnet stockholders receiving one-fifth of a Pubco share and a contingent value right (CVR) per Sonnet share, and Rorschach investors contributing HYPE tokens and cash to Pubco in exchange for Pubco shares.

• The deal is expected to result in Pubco issuing approximately 155 million shares and 20 million warrants, with Rorschach and its investors owning about 97.3% of Pubco and Sonnet securityholders about 2.7%.

• Pubco will apply for listing on Nasdaq under the symbol "PURR" and will implement a new 2025 Equity Incentive Plan.

Voting matters and shareholder proposals

• Shareholders are asked to vote on: (1) approval of the business combination, (2) adoption of Pubco's new charter and bylaws, (3) approval of Nasdaq share issuance, (4) approval of the 2025 Equity Incentive Plan, (5) amendment to increase Sonnet's authorized shares, and (6) adjournment if needed.

• Approval of the business combination, Nasdaq share issuance, and charter amendment are interdependent and required for the transaction to close.

• The board unanimously recommends voting in favor of all proposals.

Board of directors and corporate governance

• Pubco's board post-closing will have seven members, including Bob Diamond as Chairman, with two current Sonnet directors joining.

• Pubco's charter includes provisions for a classified board, removal of directors for cause only, and limits on shareholder action by written consent.

• The Advisor (Rorschach Advisors LLC) will have director nomination rights as long as it holds at least 10% of Pubco shares.