false
--09-30
0001106838
0001106838
2025-07-11
2025-07-11
iso4217:USD
xbrli:shares
iso4217:USD
xbrli:shares
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): July 11, 2025
SONNET
BIOTHERAPEUTICS HOLDINGS, INC.
(Exact
name of registrant as specified in its charter)
| Delaware |
|
001-35570 |
|
20-2932652 |
(State
or other jurisdiction
of
incorporation) |
|
(Commission
File
Number) |
|
(IRS
Employer
Identification
No.) |
100 Overlook Center, Suite 102
Princeton,
New Jersey |
|
08540 |
| (Address
of principal executive offices) |
|
(Zip
Code) |
Registrant’s
telephone number, including area code: (609) 375-2227
N/A
(Former
name or former address, if changed since last report.)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under
any of the following provisions:
| ☒ |
Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| |
|
| ☐ |
Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| |
|
| ☐ |
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities
registered pursuant to Section 12(b) of the Act:
| Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered |
| Common
Stock, $0.0001 Par Value |
|
SONN |
|
The
Nasdaq Capital Market LLC |
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item
1.01. Entry into a Material Definitive Agreement.
Business
Combination Agreement
On
July 11, 2025, Sonnet BioTherapeutics Holdings, Inc. (the “Company”), Rorschach I LLC, a Delaware limited liability company
(“Rorschach”), Hyperliquid Strategies Inc, a Delaware corporation (“Pubco”), TBS Merger Sub Inc, a Delaware corporation
and wholly owned subsidiary of Pubco (“Company Merger Sub”) and Rorschach Merger Sub, LLC, a Delaware limited liability company
and wholly owned subsidiary of Pubco (“Rorschach Merger Sub”), entered into a Business Combination Agreement (the “BCA”)
pursuant to which, subject to the terms and conditions contained in the BCA, (i) Rorschach Merger Sub will merge with and into Rorschach
(the “Rorschach Merger”), with Rorschach surviving the Rorschach Merger as a direct wholly owned subsidiary of Pubco and
(ii) immediately following the Rorschach Merger, Company Merger Sub will merge with and into the Company (the “Company Merger”
and, together with the Rorschach Merger, the “Mergers”), with the Company surviving the Company Merger as a direct wholly
owned subsidiary of Pubco. The Mergers are expected to be completed in the second half of 2025.
Subject
to the terms and conditions of the BCA, at the effective time of the Company Merger (the “Effective Time”), (i) each share
of common stock of the Company, par value $0.0001 per share (“Company Common Stock”), issued and outstanding immediately
prior to the Effective Time other than Dissenting Shares (as defined in the BCA) shall be canceled and converted into the right to receive
(a) one share of common stock of Pubco, par value $0.01 per share (“Pubco Common Stock”), and (b) one contractual contingent
value right (a “CVR”) representing the right to receive Pubco Common Stock on the terms and subject to the conditions set
forth in the CVR Agreement (as defined below) (together, the “Per Share Merger Consideration”), (ii) each Company Unvested
RSA (as defined in the BCA) outstanding immediately prior to the Effective Time, together with the award agreement representing each
such Company Unvested RSA, shall be assumed by Pubco and be converted into the right to receive (a) one restricted share of Pubco Common
Stock, subject to the same terms and conditions (including applicable vesting, expiration and forfeiture provisions) that applied to
the corresponding Unvested RSA immediately prior to the Effective Time and (b) one CVR, (iii) each Company Vested RSU (as defined in
the BCA) outstanding immediately prior to the Effective Time shall be canceled and converted into the right to receive the Per Share
Merger Consideration, (iv) each Company Unvested RSU (as defined in the BCA) issued and outstanding immediately prior to the Effective
Time shall be assumed by Pubco and converted into a restricted share unit representing the right to receive (a) one share of Pubco Common
Stock, having the same terms and conditions as the Company Unvested RSUs, including the applicable vesting and issuance schedule as in
effect on the date of the BCA and (ii) one CVR, (v) each Company In-The-Money Warrant (as defined in the BCA) outstanding immediately
prior to the Effective Time shall be (a) canceled and converted into the right to receive, for each share of Company Common Stock the
holder of such Company In-the-Money Warrant would have received had such Company In-The-Money Warrant been exercised in full in accordance
with its terms immediately prior to the Effective Time, the Per Share Merger Consideration or (b) entitle the holder of such Company
In-The-Money Warrant to such other consideration that such holder is entitled to receive pursuant to the terms of such holder’s
Company In-The-Money Warrant, (vi) each Company Out-Of-The-Money Warrant (as defined in the BCA) outstanding and unexercised immediately
prior to the Effective Time shall (a) cease to represent a Company Out-Of-The-Money Warrant in respect of shares of Company Common Stock
and shall be assumed by Pubco and automatically converted into a warrant to acquire the same number of shares of Pubco Common Stock,
subject to the same terms and conditions as were applicable to the applicable Company Out-Of-The-Money Warrant immediately prior to the
Effective Time, with the right to receive, for each share of Company Common Stock the holder of such Company Out-Of-The-Money Warrant
would have received had such Company Out-Of-The-Money Warrant been exercised in full in accordance with its terms immediately prior to
the Effective Time, the Per Share Merger Consideration or (b) entitle the holder of such Company Out-Of-The-Money Warrant to such other
consideration that such holder is entitled to receive pursuant to the terms of such holder’s Out-Of-The-Money Warrant, and (vii)
all shares of Company Common Stock held in the treasury of the Company shall be canceled without any conversion thereof and no payment
or distribution shall be made with respect thereto.
Pursuant
to the BCA, at or prior to the closing of the Mergers (the “Closing” and the date on which the Closing occurs, the “Closing
Date”), certain investors shall enter into contribution agreements (the “Contribution Agreements”) with Rorschach to
contribute at least $200.0 million in HYPE Tokens Value (as defined in the BCA), and certain investors may contribute cash to Rorschach
(collectively, the “Contribution”). Subject to the terms and conditions of the BCA, at the effective time of the Rorschach
Merger, the equityholders of Rorschach immediately prior to the Closing will receive, in the aggregate, that number of shares of Pubco
Common Stock equal to the aggregate amount of the Contribution divided by $1.25. In addition, pursuant to the Subscription Agreements
(as defined below), certain investors have agreed to purchase, immediately prior to the Closing, shares of Company Common Stock at a
purchase price of $1.25 per share, which shares of Company Common Stock will convert into shares of Pubco Common Stock on a one-for-one
basis at the effective time of the Company Merger. Pursuant to the terms of the BCA, the amount of cash proceeds to the Company at the
Closing from the Subscription Agreements, the Contribution Agreements and the Initial PIPE Offering (as defined below) must equal at
least $50 million. At the Closing, based on Contribution Agreements and Subscription Agreements entered concurrently with the signing
of the BCA, it is expected that Pubco will hold approximately $583 million in HYPE tokens (based on an agreed spot price
of HYPE of $46.372, as used in the BCA) and have cash of at least $305 million on its balance sheet.
Also
pursuant to the terms of the BCA, at the Closing Pubco shall issue to the Advisor (as defined below) (i) that number of shares of Pubco
Common Stock equal to 5% of the shares of Pubco Common Stock issued and outstanding, on a fully-diluted, as converted basis, immediately
following the Effective Time and (ii) warrants (the “Advisor Warrants”) to purchase a number of shares of Pubco Common Stock
equal to, in the aggregate, 15% of the fully diluted number of outstanding shares of Pubco Common Stock immediately after Closing. The
Advisor Warrants will be exercisable for five years following the Closing, at an exercise price equal to (i) for one-third of the Advisor
Warrants, $1.875, (ii) for one-third of the Advisor Warrants, $2.50 and (iii) for one-third of the Advisor Warrants, $3.75.
On
a pro forma basis, it is anticipated that immediately following the Closing, current equityholders of the Company (including the investors
in the Initial PIPE Offering, as defined below) will own approximately 1.2% of outstanding shares of Pubco Common Stock and Rorschach
equityholders, collectively with the Subscribers (as defined below) will own approximately 98.8% of outstanding shares of Pubco
Common Stock.
In
connection with the Company Merger, the Company will seek the approval of its stockholders to, among other things, approve the BCA and
the transactions contemplated thereby (the “Company Required Stockholder Approval”). In addition, the Company will seek the
approval of its stockholders to, among other things, approve the issuance of the shares in the PIPE Offering pursuant to the rules of
the Nasdaq Stock Market (“Nasdaq”).
Each
of the parties have agreed to customary representations, warranties and covenants in the BCA, including, among others, covenants relating
to (i) obtaining the requisite approval of its respective stockholders and (ii) the conduct of its respective business during the period
between the signing of the BCA and the closing of the Mergers. In addition, the Company agreed to (a) file with the U.S. Securities and
Exchange Commission (the “SEC”) a proxy statement (the “Proxy Statement”) to (1) obtain the Company Required
Stockholder Approval, including the Company’s board of director’s recommendation that the stockholders vote “FOR”
the BCA and transactions contemplated thereby (the “Company Board Recommendation”) and (2) approve any other proposals the
parties deem necessary to effectuate the transactions contemplated by the BCA and (b) prior to the closing of the Rorschach Merger, non-solicitation
or facilitation of any Takeover Proposal or Superior Proposal (as each is defined in the BCA). Pubco also agreed to prepare and file
a registration statement on Form S-4 to register the shares of Pubco Common Stock to be issued in connection with the Mergers (the “Registration
Statement”).
From
the date of the BCA until the closing of the Rorschach Merger, the Company shall not, among other things, solicit, initiate, propose
or take any action to knowingly assist, facilitate or encourage the making, submission or announcement of, a Takeover Proposal or enter
into an Alternative Acquisition Agreement (as defined in the BCA) unless in response to an unsolicited bona fide written Takeover Proposal
from a third party that constitutes or would reasonably be expected to lead to a Superior Proposal (as defined in the BCA) and has determined
that the failure to take such actions would be inconsistent with the Company’s board of director’s fiduciary duties; provided
that the Company give at least 2 business days notice to the Rorschach Parties (as defined in the BCA) prior to furnishing any such non-public
information to, or entering into discussions with, any such third party.
Prior
to the closing of the Rorschach Merger, the Company’s board of directors shall not, among other things, withhold, withdraw, qualify
or modify, or publicly propose to withhold, amend, withdraw or modify, the Company Board Recommendation in a manner adverse to the Rorschach
Parties or fail to include the Company Board Recommendation in the Proxy Statement. However, the Company’s board of directors may
make a Company Adverse Recommendation Change (as defined in the BCA) in response to an Intervening Event (as defined in the BCA) or Takeover
Proposal from a third party that constitutes or would reasonably be expected to lead to a Superior Proposal if, in either case, the Company’s
board of directors determines that the failure to take such actions would be inconsistent with the Company’s board of director’s
fiduciary duties, if, among other things, the Company (i) first gives notice to the Rorschach Parties at least 5 business days prior
to making such Company Adverse Recommendation Change and (ii) negotiates in good faith to make revisions to the terms of the BCA.
The
Closing is subject to certain closing conditions, including, among other things, (i) the completion of the Contribution, (ii) obtaining
the Company Required Stockholder Approval, (ii) adoption and approval of the BCA and the transactions contemplated thereby by the requisite
equityholders of the Rorschach Parties, including the Pubco Requisite Approval (as defined in the BCA), (iii) the effectiveness of the
Registration Statement and (iv) the listing of the Pubco Common Stock issuable in connection with the Mergers on Nasdaq. Each party’s
obligation to consummate the Mergers is also subject to other specified customary conditions, including regarding the accuracy of the
representations and warranties of the other party, subject to the applicable materiality standard, and the performance in all material
respects by the other party of its obligations under the BCA required to be performed on or prior to the Closing Date.
The
BCA contains certain termination rights for both the Company and Rorschach, at any time prior to the Effective Time, notwithstanding
the receipt of the Company Requisite Stockholder Approval, including, among other things, (i) by mutual written consent of the Company
and Rorschach, (ii) by Rorschach, if the Company’s board of directors approves a Superior Proposal, a tender offer or there is
otherwise a Company Adverse Recommendation Change, (iii) by the Company, if the Company’s board of directors approves a Superior
Proposal, if and only if the Company shall have paid the Termination Fee (as defined below) to Rorschach, (iv) by the Company or Rorschach
if the Closing shall not have occurred prior to July 11, 2026 (the “Outside Date”), provided that the Outside Date may be
extended by either party for up to 60 days in the event that the SEC has not declared effective the Registration Statement by the date
which is 60 days prior to the Outside Date, or (v) by the Company or Rorschach if the Requisite Stockholder Approval shall fail to have
been obtained. Upon termination of the BCA under specified circumstances, the Company may be required to pay Rorschach a termination
fee of $2.5 million (the “Termination Fee”) or up to $1 million to reimburse Rorschach for any expenses incurred in connection
with the BCA and the transactions contemplated thereby (the (“Expense Reimbursement”). In no event will the Company be required
to pay both the Termination Fee and the Expense Reimbursement.
Following
the Closing, the board of directors of Pubco will initially be comprised of six members, which shall include Robert Diamond as Chairman,
Jeff Tuder, two additional members nominated by Rorschach, and Nailesh Bhatt and Albert Dyrness, two of the current board members of
the Company. Additionally, the officers of Pubco immediately following Closing will be David Schamis as Chief Executive Officer and such
other individuals as Rorschach may select. Following Closing and during the CVR Term, Raghu Rao will remain the Chief Executive Officer
of the Company, which will operate as a wholly owned subsidiary of Pubco.
Certain
Agreements Related to the Mergers
Initial
PIPE Purchase Agreements
Concurrently
with the execution of the BCA, the Company entered into separate securities purchase agreements (the “PIPE Purchase Agreements”)
with certain accredited investors pursuant to which the Company will issue (the “Initial PIPE Offering”), an aggregate of
(i) 5,500 shares of the Company’s newly designated Series 5 Convertible Preferred Stock (the “Series 5 Preferred Stock”),
stated value $1,000 per share (the “Stated Value”), initially convertible at a conversion price of $1.25 per share, or 4,400,000
shares of Company Common Stock, and (ii) warrants to purchase up to 8,800,000 shares of Company Common Stock (the “Initial PIPE
Warrants”), for an offering price of $1,000 per share of Series 5 Preferred Stock and accompanying Warrant, pursuant to a private
placement in accordance with Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Initial
PIPE Offering is expected to close on July 14, 2025. The gross proceeds are expected to be $5.5 million from the Initial PIPE Offering,
before deducting offering expenses.
In
addition, on the closing date of the Initial PIPE Offering, the holders of the Company’s convertible notes in the aggregate principal
amount of $2.0 million issued on June 30, 2025 (the “Bridge Financing”), will automatically convert into an aggregate of
2,000 shares of Series 5 Preferred Stock, initially convertible at a conversion price of $1.25 per share, or 1,600,000 shares of Company
Common Stock, and (ii) warrants to purchase up to 3,200,000 shares of Company Common Stock (together with the Initial PIPE Warrants,
the “PIPE Warrants”). The Company intends to use the net proceeds from the PIPE Offering and the Bridge Financing for working
capital and general corporate purposes, including the advancement of the Company’s current programs in connection with the planned
future sale of the Company Legacy Assets (as defined below).
The
PIPE Warrants are exercisable immediately upon issuance at an exercise price equal to $1.25 per share, and will expire on the five-year
anniversary of the date of issuance; provided, however, until Stockholder Approval (as defined in the PIPE Purchase Agreement) is obtained,
the PIPE Warrants will only be exercisable and the Series 5 Preferred Stock will only be convertible, in the aggregate, into up to an
aggregate of 666,212 shares of Company Common Stock, representing 19.99% of the number of shares of Company Common Stock outstanding
immediately prior to the date of the PIPE Purchase Agreement (the “Issuable Maximum”), subject to adjustment. The exercise
price of the PIPE Warrants may be adjusted for stock dividends and stock splits, subsequent rights offerings, pro rata distributions
of dividends or the occurrence of a Fundamental Transaction (as defined in the Form of PIPE Warrant). A holder of PIPE Warrants will
not have the right to exercise any portion of its PIPE Warrants if the holder, together with its affiliates, would beneficially own in
excess of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Company Common Stock outstanding immediately after
giving effect to such exercise. A holder may increase or decrease the beneficial ownership limitation up to 9.99%, provided, however,
that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of such change to the
Company.
Subscription
Agreements
Also
concurrently with the execution of the BCA, certain accredited investors (the “Subscribers”) entered into subscription agreements
with the Company and Pubco (the “Subscription Agreements”), pursuant to which the Company agreed to issue, and the Subscribers
agreed to purchase, immediately prior to the Closing, an aggregate of 243,787,992 shares of Company Common Stock at a purchase
price of $1.25 per share, pursuant to a private placement in accordance with Section 4(a)(2) of the Securities Act (the “Closing
PIPE”), The gross proceeds are expected to be $305 million from the Closing PIPE, before deducting offering expenses. Pursuant
to the terms of the Subscription Agreement, prior to the Closing, neither the Company nor Pubco shall enter into any agreement for the
investment or contribution of cash by any additional investors or contributors on terms more favorable to such persons than the terms
set forth in the Subscription Agreement or the BCA as in effect on the date hereof, unless, in any such case, the investors signatory
to the Subscription Agreement have also been provided the opportunity to amend the terms of the Subscription Agreement to reflect such
other terms. The Subscription Agreements provide that if the shares of Pubco Common Stock received by the Subscribers at Closing are
“restricted securities” pursuant to Rule 144(a)(3) under the Securities Act or are otherwise not freely tradeable under the
Securities Act immediately following the Closing, the Subscribers will be entitled to become a party to the Registration Rights Agreement
(as defined below).
The
consummation of the Closing PIPE is contingent upon, and will occur substantially concurrently with, the Closing and the satisfaction
or waiver of customary closing conditions.
Each
Subscription Agreement shall terminate and be void and of no further force and effect upon the earliest to occur of (i) such date and
time as the BCA is validly terminated in accordance with its terms; (ii) the mutual written agreement of the respective parties to terminate
such agreement; (iii) written notice by either party to the other party to terminate the Subscription Agreement if the transactions contemplated
by the Subscription Agreement are not consummated on or prior to the Outside Date (including any extension of the Outside Date expressly
provided for pursuant to the provisions of the Business Combination Agreement as described above); (iv) any amendment to, or waiver to
the terms of, the BCA that would reasonably be expected to materially and adversely affect the economic benefits the Subscribers would
reasonably expect to receive under the Subscription Agreements.
Chardan
Capital Markets, LLC (“Chardan”) acted as the Company’s and Rorschach’s exclusive advisor with respect to the
Closing PIPE and is entitled to receive a fee, payable in cash or Pubco Common Stock at Chardan’s option, equal to 7.0%
of the aggregate gross proceeds raised in connection with the Closing PIPE (other than from proceeds raised from certain specified investors
and affiliated persons). The Company also agreed to reimburse Chardan for certain of its expenses in an amount up to $50,000, or, in
the event the Closing occurs, $100,000.
Advisor
Agreements
Pursuant
to the BCA, in connection with the Closing, Pubco and Rorschach Advisors LLC, a Delaware limited liability company (the “Advisor”),
shall enter into an Advisor Rights Agreement (the “Advisor Rights Agreement”) and a Strategic Advisor Agreement (the “Advisory
Agreement”). The Advisor Rights Agreement will provide the Advisor certain rights with respect to Pubco, including, subject to
the conditions set forth in the Advisor Rights Agreement, director nomination rights and information rights. Pursuant to the Advisory
Agreement, the Advisor will provide technical advisory services to Pubco related to the digital asset ecosystem, including Hyperliquid
and related digital assets, developments in digital asset industries, the selection of third-party vendors with respect to asset management
and related digital asset services and other strategic advice regarding digital assets treasury operations for a term of five years.
Contingent
Value Rights Agreement
At
or prior to Closing, Pubco will enter into a Contingent Value Rights Agreement (the “CVR Agreement”) with a rights agent
(“Rights Agent”), pursuant to which holders of Company Common Stock (not including the shares of Company Common Stock issued
to the Subscribers pursuant to the Subscription Agreements) and Company In-The-Money Warrants, in each case, as of immediately prior
to the Effective Time, will receive one contingent value right (each, a “CVR”) for each then-outstanding share of Company
Common Stock held by such stockholder (or, in the case of the Company In-The-Money Warrants, each share of Company Common Stock for which
such Company In-The-Money Warrants is exercisable into as of such date). The CVR Payment (as defined in the CVR Agreement) will be payable
upon the closing of a sale, license, transfer, disposition, divestiture or other monetization transaction (i.e., a royalty transaction)
(or a series of transactions) and/or winding down of, or other disposition(s) of any the Company Legacy Assets (as defined in the CVR
Agreement) (a “Company Legacy Transaction”) during the period beginning on the Closing Date and ending on the 3rd
anniversary of the date of the CVR Agreement (the “CVR Term”). The shares of PubCo Common Stock issuable in connection with
the CVR Payment (the “CVR Shares”) are subject to certain deductions pursuant to the terms of the CVR Agreement.
The
payment date for the CVR Shares will be within 10 business days after the rights agent receives the CVR Shares from Pubco upon the closing
of a Company Legacy Transaction. In the event that a Company Legacy Transaction does not occur during the CVR Term or a Company Legacy
Transaction does occur during the CVR Term but the amount of deductions payable pursuant to the terms of the CVR Agreement, including
expenses related to the transaction, liabilities of the Company related to the Company’s outstanding warrants prior to the Closing
and other expenses payable pursuant to the CVR Agreement, exceed the proceeds received pursuant to the Company Legacy Transaction, the
holders of the CVRs will not receive any CVR Shares pursuant to the CVR Agreement. There can be no assurances that any holders of CVRs
will receive any CVR Shares with respect thereto.
The
CVRs are not transferable, except in certain limited circumstances as will be provided in the CVR Agreement, will not be certificated
or evidenced by any instrument and will not be listed for trading on any exchange.
Registration
Rights Agreement
Pursuant
to the BCA, on the Closing Date Pubco will enter into a Registration Rights Agreement (the “Registration Rights Agreement”)
with the Advisor and certain investors in Rorschach (and, if applicable, certain Subscribers pursuant to the terms of the Subscription
Agreements), pursuant to which, among other things, Pubco will agree to provide such holders with customary registration rights with
respect to the shares of Pubco Common Stock to be owned by such holders following the Closing.
* *
*
The
preceding summaries do not purport to be complete and are qualified in their entirety by reference to the BCA, Form of Subscription Agreement,
Form of Contribution Agreement, Form of PIPE Purchase Agreement, Form of PIPE Warrant, Advisor Rights Agreement, Advisory Agreement,
Advisor Warrants, Form of CVR Agreement and Form of Registration Rights Agreement, which are filed as Exhibits 2.1, 10.1, 10.2, 10.3,
4.1, Exhibit B to Exhibit 2.1, Exhibit C to Exhibit 2.1, Exhibit D to Exhibit 2.1, Exhibit E to Exhibit 2.1 and Exhibit A to Exhibit
2.1, respectively, which are incorporated herein by reference. The BCA has been attached as an exhibit to this Current Report on Form
8-K to provide investors and securityholders with information regarding its terms. It is not intended to provide any other factual information
about the parties thereto or to modify or supplement any factual disclosures about the Company in its public reports filed with the SEC.
The BCA includes representations, warranties and covenants of the parties signatory thereto made solely for the purpose of the BCA and
solely for the benefit of the parties thereto in connection with the negotiated terms of the BCA. Investors should not rely on the representations,
warranties and covenants in the BCA or any descriptions thereof as characterizations of the actual state of facts or conditions of the
parties or any of their respective affiliates. Moreover, certain of those representations and warranties may not be accurate or complete
as of any specified date, may be subject to a contractual standard of materiality different from those generally applicable to SEC filings
or may have been used for purposes of allocating risk among the parties to the BCA, rather than establishing matters of fact.
Item
3.02. Unregistered Sales of Equity Securities.
The
information set forth in “Item 1.01 Entry into a Material Definitive Agreement” relating to the issuance of (i) the Series
5 Preferred Stock (and the Company Common Stock issuable upon conversion of such Series 5 Preferred Stock) and the PIPE Warrants (and
the Company Common Stock issuable upon exercise of the PIPE Warrants) and (ii) the shares of Company Common Stock to be issued pursuant
to the Subscription Agreements is incorporated by reference herein in its entirety.
The
securities in the Initial PIPE Offering and the Closing PIPE were sold in reliance upon an exemption from the registration requirement
of the Securities Act of 1933, as amended, pursuant to Section 4(a)(2) thereof and/or Rule 506(b) of Regulation D promulgated thereunder.
This
Current Report on Form 8-K shall not constitute an offer to sell or the solicitation of any offer to buy the Company Common Stock, nor
shall there be an offer, solicitation or sale of the Company Common Stock in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of such state.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of
Certain Officers.
On
July 11, 2025, the Company’s board of directors approved the grant of 120,000 restricted stock units (“RSUs”) pursuant
to the Company’s 2020 Omnibus Equity Incentive Plan which included the following: 10,000 RSUs to Donald Griffith, the Company’s
Chief Financial Officer; 12,000 RSUs to John Cini, the Company’s Chief Scientific Officer; and 20,000 RSUs to Raghu
Rao, the Company’s Interim Chief Executive Officer. Each RSU grant vests in full on the earlier of (i) the Closing or (ii) January
8, 2026. Vested RSUs will be paid in shares of the Company’s common stock on a one-to-one basis.
Item
5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.
Pursuant
to the PIPE Purchase Agreement, the Company filed a certificate of designations (the “Certificate of Designations”) on July
11, 2025, with the Delaware Secretary of State designating the rights, preferences and limitations of the shares of the Series 5 Preferred
Stock.
Each
share of Series 5 Preferred Stock will be convertible, at the option of the holder, into that number of shares of Company Common Stock
determined by dividing the Stated Value by $1.25 (the “Conversion Price”); provided, however, until Stockholder Approval
(as defined in the PIPE Purchase Agreement) is obtained, the Series 5 Preferred Stock will only be convertible together with the exercise
of the PIPE Warrants into the Issuable Maximum, subject to adjustment. The Conversion Price may be adjusted pursuant to the Certificate
of Designations for stock dividends and stock splits, subsequent rights offerings, pro rata distributions of dividends or the occurrence
of a Fundamental Transaction (as defined in the Certificate of Designations). A holder of Series 5 Preferred Stock will not have the
right to convert any portion of its Series 5 Preferred Stock if the holder, together with its affiliates, would beneficially own in excess
of 4.99% (or, at the election of the holder, 9.99%) of the number of shares of Company Common Stock outstanding immediately after giving
effect to such conversion. A holder may increase or decrease the beneficial ownership limitation up to 19.99% (the “Exchange Cap”),
provided, however, that any increase in the beneficial ownership limitation shall not be effective until 61 days following notice of
such change to the Company. No holders of Series 5 Preferred Stock will, as holders of Series 5 Preferred Stock, have any preemptive
rights to purchase or subscribe for Company Common Stock or any of the Company’s other securities. The shares of Series 5 Preferred
Stock are not redeemable by the Company.
Each
outstanding share of Series 5 Preferred Stock is entitled to receive, in preference to shares of Junior Securities (as defined in the
Certificate of Designations), cumulative dividends (“Preferential Dividends”), payable quarterly in arrears, at an annual
rate of 6.0% of the Stated Value (the “Preferential Dividend Rate”). Preferential Dividends shall be payable, at the option
of the Company, either in-kind in shares of Company Common Stock, through an accrual on the Stated Value of the Series 5 Preferred Stock
or in cash. In addition, each holder of Series 5 Preferred Stock will be entitled to receive dividends equal to, on an as-converted to
shares of the Company Common Stock basis, and in the same form as, dividends actually paid on shares of the Company Common Stock when,
as, and if such dividends are paid on shares of the Company Common Stock. In the event that the BCA is terminated for any reason, the
Preferential Dividend Rate shall increase 600 basis points in the event that the Exchange Cap remains in place on the dates representing
the sixth (6th) month and twelfth (12th) month anniversary of such termination date; provided, however, that (i)
in no event shall the Preferential Dividend Rate exceed eighteen percent (18%) and (ii) the Preferential Dividend Rate shall be reset
to 6.0% upon Stockholder Approval.
The
Series 5 Preferred Stock has no voting rights, except as required by law and for certain customary protective provisions set forth in
the Certificate of Designations.
Upon
any liquidation, dissolution or winding-up of the Company, whether voluntary or involuntary, the then holders of the Series 5 Preferred
Stock are entitled to receive out of the assets available for distribution to stockholders of the Company, for all shares of Series 5
Preferred Stock held by them, (i) after and subject to the payment in full of all amounts required to be distributed to the holders of
another class or series of stock of the Company ranking on liquidation prior and in preference to the Series 5 Preferred Stock, (ii)
ratably with any class or series of stock designated as ranking on liquidation on parity with the Series 5 Preferred Stock and (iii)
in preference and priority to the holders of the shares of Junior Securities, an amount equal to 100% of the Stated Value, plus all unpaid
accrued and accumulated Preferential Dividends on all such shares (whether or not declared), and no more, in proportion to the full and
preferential amount that all shares of the Series 5 Preferred Stock are entitled to receive.
Immediately
prior to the Closing and subject to the conditions of the Certificate of Designations, each outstanding share of the Series 5 Preferred
Stock shall, without any further action by the Company or the holders thereof, automatically convert into the number of shares of Company
Common Stock determined by dividing the Stated Value of such share of Series 5 Preferred Stock plus all unpaid accrued and accumulated
Preferential Dividends on such share (whether or not declared) by the Conversion Price.
The
foregoing description of the Series 5 Preferred Stock is not complete and is qualified in its entirety by reference to the full text
of the Certificate of Designations, a copy of which is attached hereto as Exhibit 3.1 and is incorporated in its entirety herein by reference.
Item
7.01. Regulation FD Disclosure.
On
July 14, 2025, the Company and Rorschach issued a joint press release announcing the execution of the BCA. A copy of the press release
is attached hereto as Exhibit 99.1. The press release and the information set forth therein shall not be deemed to be filed for purposes
of Section 18 of the Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise be subject to the liabilities of
that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act, or the Exchange Act.
Item
8.01. Other Events.
In
connection with the BCA, the Company is supplementing the business description and risk factors previously disclosed in its Annual Report
on Form 10-K for the year ended September 30, 2024, and as supplemented by the Company’s subsequent periodic filings, with the
following:
Business
Overview
In
parallel with its new cryptocurrency treasury strategy, following the Closing, the Company will operate as a wholly owned subsidiary
of Pubco and will continue focusing on existing assets and business lines, including the development of SON-1010 as described in the
Company’s Form 10-K for the fiscal year ended September 30, 2024 and other filings with the SEC, while disposing of other assets.
The Company continues to engage in commercial partnering discussions focused on its biotech assets.
Hyperliquid
Strategies Inc.
Pubco
will be focused on building a reserve of HYPE, the native token of the Hyperliquid Layer-1 blockchain. At the closing of the Mergers,
it is expected that Pubco is to be named Hyperliquid Strategies Inc. (“HSI”), which will hold approximately $583 in
HYPE tokens (based on an agreed spot price of $46.372, as used in the BCA) and cash of at least $305 million on its balance
sheet based upon the Subscription Agreements and Contribution Agreements entered into in connection with the BCA. Both HYPE and cash
have been committed by certain accredited investors to contribute to Rorschach or the Company prior to the closing of the Mergers. 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 Mergers. The gross cash proceeds of $305 million at the closing of the Mergers are expected to enable
HSI to acquire significantly more additional HYPE.
HYPE
Treasury
Hyperliquid
is a layer one (L1) blockchain engineered for transparent high-frequency decentralized transactions. The blockchain hosts fully onchain
perpetual futures and spot order books. The Hyperliquid blockchain also hosts the HyperEVM, a general-purpose smart contract platform
that, like Ethereum, provides permissionless building blocks for decentralized financial applications.
Hyperliquid
supports non-custodial trading via its HyperCore order books, with perpetual futures trading for a range of digital assets including
Bitcoin (BTC), Ether (ETH), and Solana (SOL). Perpetual futures are a type of cryptocurrency derivative contract that allows traders
to speculate on the price of an asset without owning the underlying asset itself. Unlike traditional futures contracts, perpetual futures
have no expiration date, allowing traders to hold positions indefinitely as long as they meet margin requirements. The Hyperliquid blockchain
is available to any potential users with a compatible cryptocurrency wallet such as MetaMask, Phantom, and Coinbase Wallet. However,
Hyperliquid interface operators can choose to block persons in certain jurisdictions or sanctioned wallets as required via solutions
such as geoblocking and address screening.
HYPE
is the native token of Hyperliquid. HYPE serves multiple purposes: users can stake HYPE to validate transactions and reduce their fees
on Hyperliquid, conduct transactions on the HyperEVM, or use it as collateral on various decentralized DeFi applications. As of July
2025, the token has become the 11th-largest cryptocurrency by market capitalization.
Additionally,
HYPE has certain governance rights with respect to the Hyperliquid blockchain. The Hyperliquid L1 is a proof-of-stake blockchain, wherein
validators that have staked the threshold number of HYPE are selected to produce blocks and receive rewards if they successfully validate
blocks. Holders of HYPE can vote or delegate to validators who then are able to vote on certain decisions regarding the platform. Any
holder of HYPE can delegate HYPE to a validator to earn staking rewards, should the validator successfully participate in network consensus.
Staked HYPE is locked until un-staked, subject to a seven day un-staking queue before HYPE is released back to the user.
HYPE
can also be deployed into the HyperEVM for various strategies such as lending and liquidity provisioning. This is expected to enable
the Company to support various applications built on Hyperliquid and in return, potentially earn yield that can be compounded into its
overall HYPE acquisition strategy.
Risk
Factors
Completion
of the Mergers is subject to a number of conditions, including certain conditions that may not be satisfied or completed on a timely
basis or at all.
The
completion of the Mergers is contingent upon the satisfaction or waiver of a number of conditions, some of which are beyond our control.
These conditions include, but are not limited to, securing necessary stockholder approval and the absence of any legal restraints or
prohibitions. There can be no assurance that all of these conditions will be satisfied or, if permissible, waived, or that they will
be satisfied or waived in a timely manner. Failure to satisfy any of these conditions could result in the Mergers being delayed or not
being completed at all. Any delay or failure to complete the Mergers could result in significant costs, the loss of potential benefits,
and could have a material adverse effect on our business, financial condition, and results of operations. Additionally, the uncertainty
associated with the pending Mergers may disrupt our business or negatively impact our relationships with customers, employees, and other
business partners.
HYPE
is a highly volatile asset, and fluctuations in the price of HYPE may influence our financial results and the market price of our listed
securities.
Our
financial results and the market price of our listed securities would be adversely affected, and our business and financial condition
would be negatively impacted, if the price of HYPE decreased substantially, including as a result of:
| ● |
decreased
user and purchaser confidence in HYPE, including due to the various factors described herein; |
| |
|
| ● |
transactional
activities such as (i) activities of highly active retail and institutional users, speculators and holders or (ii) actual or expected
significant dispositions of HYPE by large holders, including the expected liquidation of digital assets seized by governments or
associated with entities that have filed for bankruptcy protection, or associated with tokens vested by the Hyperliquid core team; |
| |
|
| ● |
negative
publicity, media or social media coverage, or sentiment due to events in or relating to, or perception of, HYPE, Hyperliquid or the
broader digital assets industry; |
| |
|
| ● |
changes
in consumer preferences and the perceived value or prospects of HYPE or the utility of Hyperliquid; |
| |
|
| ● |
competition
from other blockchains, centralized exchanges or decentralized exchanges that exhibit comparable or better speed, security, scalability
or energy efficiency, or that feature other more favored characteristics; |
| ● |
competition
from other digital assets that feature other more favored characteristics, are backed by governments, including the U.S. government,
or reserves of fiat currencies, or that represent ownership or security interests in physical assets; |
| |
|
| ● |
a
decrease in the price of other digital assets, to the extent the decrease in the price of such other digital assets may cause a decrease
in the price of HYPE or adversely affect investor confidence in digital assets generally; |
| |
|
| ● |
developments
relating to the Hyperliquid blockchain, including (i) changes to the Hyperliquid blockchain that impact its security, speed, scalability,
usability or value, such as changes to the cryptographic security protocol underpinning the Hyperliquid blockchain, changes to the
maximum number of HYPE outstanding, changes to the mutability of transactions, changes relating to the size of blockchain blocks,
changes to its number of validators, and similar changes; (ii) failures to make upgrades to the Hyperliquid blockchain and the Hyperliquid
interface to adapt to security, technological, legal or other challenges; and (iii) changes to the Hyperliquid blockchain that introduce
software bugs, security risks or other elements that adversely affect HYPE; |
| ● |
disruptions,
failures, unavailability, or interruptions in services of venues for acquiring HYPE; |
| |
|
| ● |
the
filing for bankruptcy protection by, liquidation of, or market concerns about the financial viability of digital asset custodians,
trading venues, lending platforms, investment funds, or other digital asset industry participants; |
| |
|
| ● |
regulatory,
legislative, enforcement and judicial actions that adversely affect access to, functionality of or performance of Hyperliquid or
associated products such as cryptocurrency perpetual futures, the price, ownership, transferability, trading volumes, legality or
public perception of, HYPE, Hyperliquid or other L1 blockchains, or that adversely affect the operations of or otherwise prevent
digital asset custodians, trading venues, lending platforms or other digital assets industry participants from (i) accessing HYPE
or Hyperliquid or associated products or (ii) operating in a manner that allows them to continue to deliver services to the digital
assets industry; |
| |
|
| ● |
transaction
congestion and fees associated with processing transactions on the Hyperliquid network; |
| |
|
| ● |
macroeconomic
changes, such as changes in the level of interest rates and inflation, fiscal and monetary policies of governments, trade restrictions
and fiat currency devaluations; |
| |
|
| ● |
developments
in mathematics or technology, including in digital computing, algebraic geometry and quantum computing, that could result in the
cryptography used by the Hyperliquid blockchain becoming insecure or ineffective; and |
| |
|
| ● |
changes
in national and international economic and political conditions, including, without limitation, federal government policies, trade
tariffs and trade disputes, and the adverse impacts attributable to global conflicts, including those between Russia and Ukraine
and in the Middle East. |
Moreover,
the price of our listed securities has been and is likely to continue to be volatile, and with the adoption of our new cryptocurrency
treasury strategy, we expect to see additional volatility in our stock price. In addition, if investors view the value of our listed
securities as dependent upon or linked to the value or change in the value of our HYPE holdings or the availability of HYPE to be readily
purchased in the United States or elsewhere, the price and/or availability of HYPE may significantly influence the market price of our
listed securities. The price of HYPE has historically been, and is likely to continue to be, volatile.
HYPE
and other digital assets are novel assets and are subject to significant legal and regulatory uncertainty.
HYPE
and other digital assets are relatively novel and are subject to significant legal and regulatory uncertainty, which could adversely
impact their price. The application of state and federal securities laws and other laws and regulations to digital assets is evolving
and unclear in certain respects, and it is possible that regulators in the United States or foreign countries may interpret or apply
existing laws and regulations in a manner that adversely affects the operations or functionality of Hyperliquid, the price of HYPE or
the ability of individuals or institutions such as us to own or transfer HYPE.
The
U.S. federal government, states, regulatory agencies, and foreign countries may also enact new laws and regulations, or pursue regulatory,
legislative, enforcement or judicial actions, that could materially impact the price of HYPE or the ability of individuals or institutions
such as us to own or transfer HYPE. For example, within the past several years:
| ● |
President
Trump signed an Executive Order instructing a working group comprised of representatives from key federal agencies to evaluate measures
that can be taken to provide regulatory clarity and certainty built on technology-neutral regulations for individuals and firms involved
in digital assets, including through well-defined jurisdictional regulatory boundaries, and this working group is required to submit
a report with regulatory and legislative proposals on or before July 22, 2025; |
| |
|
| ● |
in
January 2025, the SEC announced the formation of a “Crypto Task Force,” which was created to provide clarity on the application
of the federal securities laws to the crypto asset market and to recommend policy measures with respect to digital asset security
status, registration and listing of digital asset-based investment vehicles, and digital asset custody, lending and staking; |
| |
|
| ● |
in
May 2025, the SEC issued a statement providing its view that certain staking activities on blockchain networks that use protocol
staking activities do not involve the offer or sale of securities under the Securities Act or the Exchange Act; |
| |
|
| ● |
in
April and August 2024, Uniswap Labs and OpenSea, respectively, publicized that they had each received a Wells Notice from the
SEC, notifying them that the SEC was planning to recommend legal action against them based on allegations that they operate as
unregistered securities exchanges; |
| |
|
| ● |
in
November 2023, Binance Holdings Ltd. (“Binance”) and its then chief executive officer reached a settlement with the U.S.
Department of Justice, the Commodity Futures Trading Commission, the U.S. Department of Treasury’s Office of Foreign Asset
Control, and the Financial Crimes Enforcement Network to resolve a multi-year investigation by the agencies and a civil suit brought
by the Commodity Futures Trading Commission, pursuant to which Binance agreed to, among other things, pay $4.3 billion in penalties
across the four agencies and to discontinue its operations in the United States; |
| |
|
| ● |
in
November 2023, the SEC filed a complaint against Payward Inc. and Payward Ventures Inc., together known as Kraken, alleging, among
other claims, that Kraken’s crypto trading platform was operating as an unregistered securities exchange, broker, dealer and
clearing agency; |
| |
|
| ● |
in
June 2023, the SEC filed complaints against Binance and Coinbase, Inc. (“Coinbase”), and their respective affiliated
entities, relating to, among other claims, assertions that each party was operating as an unregistered securities exchange, broker,
dealer and clearing agency; |
| |
|
| ● |
the
European Union adopted Markets in Crypto Assets Regulation, a comprehensive digital asset regulatory framework for the issuance and
use of digital assets, like bitcoin; |
| |
|
| ● |
in
June 2023, the United Kingdom adopted and implemented the Financial Services and Markets Act 2023, which regulates market activities
in “cryptoassets;” and |
| |
|
| ● |
in
China, the People’s Bank of China and the National Development and Reform Commission have outlawed cryptocurrency mining and
declared all cryptocurrency transactions illegal within the country. |
While
the complaint against Coinbase was dismissed in February 2025, the complaint against Payward Inc. and Payward Ventures Inc. was dismissed
with prejudice in March 2025, and the complaint against Binance was dismissed on May 29, 2025, the SEC or other state, federal or foreign
regulatory agencies may initiate similar actions in the future, which could materially impact the operations or functionality of Hyperliquid,
the price of HYPE and our ability to own or transfer HYPE. For example, in April 2025, the State of Oregon brought a civil enforcement
action against Coinbase for allegedly selling unregistered securities.
It
is not possible to predict whether or when new laws will be enacted that change the legal framework governing digital assets or provide
additional authorities to the SEC or other regulators, or whether or when any other federal, state or foreign legislative bodies will
take any similar actions. It is also not possible to predict the nature of any such additional laws or authorities, how additional legislation
or regulatory oversight might impact the ability of digital asset markets to function, the willingness of financial and other institutions
to continue to provide services to the digital assets industry, or how any new laws or regulations, or changes to existing laws or regulations,
might impact the value of digital assets generally and HYPE specifically. The consequences of any new law or regulation relating to digital
assets and digital asset activities could adversely affect the market price of HYPE, as well as our ability to hold or transact in HYPE,
and in turn adversely affect the market price of our listed securities.
Our
HYPE treasury strategy subjects us to enhanced regulatory oversight.
There
has been increasing focus on the extent to which digital assets can be used to launder the proceeds of illegal activities, fund criminal
or terrorist activities, or circumvent sanctions regimes, including those sanctions imposed in response to the ongoing conflict between
Russia and Ukraine. While we have implemented and maintain policies and procedures reasonably designed to promote compliance with applicable
anti-money laundering and sanctions laws and regulations and take care to only acquire our HYPE through entities subject to anti-money
laundering regulation and related compliance rules in the United States, and are in the process of onboarding a chief compliance officer,
if we are found to have purchased any of our HYPE from bad actors that have used HYPE to launder money or persons subject to sanctions,
we may be subject to regulatory proceedings and any further transactions or dealings in HYPE by us may be restricted or prohibited.
A
portion of our HYPE holdings may serve as collateral securing our outstanding indebtedness, and we may incur additional indebtedness
or enter into other financial instruments in the future that may be collateralized by our HYPE holdings. We may also consider pursuing
strategies to create income streams or otherwise generate funds using our HYPE holdings. These types of HYPE-related transactions are
the subject of enhanced regulatory oversight. These and any other HYPE-related transactions we may enter into, beyond simply acquiring
and holding HYPE, may subject us to additional regulatory compliance requirements and scrutiny, including under federal and state money
services regulations, money transmitter licensing requirements and various commodity and securities laws and regulations.
Increased
enforcement activity and changes in the regulatory environment, including evolving or changing interpretations and the implementation
of new or varying regulatory requirements by the government or any new legislation affecting HYPE, as well as enforcement actions involving
or impacting our trading venues, counterparties and custodians, may impose significant costs or significantly limit our ability to hold
and transact in HYPE.
In
addition, private actors that are wary of HYPE or the regulatory concerns associated with HYPE have in the past taken and may in the
future take further actions that may have an adverse effect on our business or the market price of our listed securities. For example,
it is possible that a financial institution could restrict customers from buying our securities if it were to determine that the value
of our securities is closely tied to the performance of HYPE, signaling a reluctance to facilitate exposure to virtual currencies.
We
plan to use a portion of our capital raised that is not required to provide working capital for our ongoing operations to acquire HYPE,
which may adversely affect our financial results and the market price of our securities.
We
plan to use a portion of our capital raised that is not required to provide working capital for our ongoing operations to acquire HYPE.
The price of HYPE has been subject to dramatic price fluctuations and is highly volatile. Moreover, digital assets are relatively novel,
and the application of securities laws and other regulations to such assets is unclear in many respects. It is possible that regulators
may interpret laws in a manner that adversely affects the liquidity or value of our HYPE holdings. Further, the acquisition of large
amounts of HYPE may become difficult or more costly, which would make it more difficult for us to implement our strategy.
Any
decrease in the fair value of HYPE below our carrying value for such assets could require us to incur an impairment charge, and such
a charge could be material to our financial results for the applicable reporting period, which may create significant volatility in our
reported earnings. Any decrease in reported earnings or increased volatility of such earnings could have a material adverse effect on
the market price of our securities. In addition, the application of generally accepted accounting principles in the United States with
respect to digital assets remains uncertain in some respects, and any future changes in the manner in which we account for our HYPE holdings
could have a material adverse effect on our financial results and the market price of our securities.
In
addition, if investors view the value of our securities as dependent upon or linked to the value or change in the value of our HYPE holdings,
the price of such digital assets may significantly influence the market price of our securities.
Absent
federal regulations, there is a possibility that HYPE may be classified as a “security.” Any classification of HYPE as a
“security” would subject us to additional regulation and could materially impact the operation of our business.
Neither
the SEC nor any other U.S. federal or state regulator has publicly stated whether they believe that HYPE is a “security,”
nor has any court addressed the status of HYPE under the U.S. federal securities laws or similar laws. Therefore, while (for the reasons
discussed below) we believe that HYPE is not a “security” within the meaning of the U.S. federal securities laws, and registration
of the Company under the Investment Company Act of 1940, as amended (the “Investment Company Act”) is therefore not required
under the applicable securities laws, a regulator or federal court may determine otherwise. Our belief, even if reasonable under the
circumstances, would not preclude legal or regulatory action based on such a finding that HYPE is a “security” which could
require us to register as an investment company under the Investment Company Act.
We
have implemented a process for analyzing the U.S. federal securities law status of HYPE and other cryptocurrencies as guidance and case
law evolve. As part of our U.S. federal securities law analytical process, we take into account a number of factors, including the various
definitions of “security” under U.S. federal securities laws and federal court decisions interpreting the elements of these
definitions, such as the U.S. Supreme Court’s decisions in the Howey and Reves cases, as well as court rulings, reports,
orders, press releases, public statements, and speeches by the SEC Commissioners and SEC Staff providing guidance on when a digital asset
or a transaction to which a digital asset may relate may be a security for purposes of U.S. federal securities laws. Our position that
HYPE is not a “security” is premised, among other reasons, on our conclusion that HYPE does not meet the elements of the
Howey test and thus is not a security nor bought and sold in securities transactions. Rather, we believe that HYPE is a commodity
not subject to the U.S. securities laws.
We
acknowledge, however, that the SEC, a court or another relevant entity could take a different view. Application of securities laws to
the specific facts and circumstances of digital assets is complex, evolving and subject to change. Our conclusion, even if reasonable
under the circumstances, would not preclude legal or regulatory action based on a finding that HYPE, or any other digital asset we might
hold is a “security.” As such, we are at risk of enforcement proceedings and lawsuits against us or others, which could result
in potential injunctions, cease-and-desist orders, fines and penalties if HYPE is determined by a regulatory body or a court to be a
security or to be bought and sold in securities transactions. Such developments would adversely affect our business, results of operations,
financial condition, and prospects.
Due
to the complexity and uncertainty of applying the federal securities and similar laws to digital assets, as well as the fact that different
companies doing business in the digital asset industry take varying approaches to analyzing the security status of digital assets, other
companies may from time to time reach different conclusions from us on the security status of a particular digital asset. Although we
anticipate that these differences will narrow over time, if competitors conclude that they can hold digital assets in ways that we do
not permit, then they may have business and revenue opportunities that are not available to us.
If
we were deemed to be an investment company under the Investment Company Act, applicable restrictions likely would make it impractical
for us to continue segments of our business as currently contemplated.
The
Investment Company Act is intended to protect investors (for example, by preventing insiders from managing investment companies to their
benefit and to the detriment of public investors), and it requires an issuer primarily engaged in the business of investing, reinvesting
or trading in securities to register as an investment company, unless a valid exemption applies. Under Sections 3(a)(1)(A) and (C) of
the Investment Company Act, a company generally will be deemed to be an “investment company” if (i) it is or holds itself
out as being engaged primarily, or proposes to engage primarily, in the business of investing, reinvesting, or trading in securities
or (ii) it engages or proposes to engage in the business of investing, reinvesting, owning, holding, or trading in securities, and it
owns or proposes to acquire investment securities having a value exceeding 40% of the value of its total assets (exclusive of U.S. government
securities and cash items) on an unconsolidated basis.
We
do not believe that we are an “investment company” as such term is defined in either Section 3(a)(1)(A) or Section 3(a)(1)(C)
of the Investment Company Act since we believe HYPE is not an investment security. With respect to Section 3(a)(1)(A), we do not hold
ourselves out as being engaged primarily or propose to engage primarily in the business of investing, reinvesting, or trading in securities
within the meaning of such section. With respect to Section 3(a)(1)(C), we do not own or propose to acquire investment securities having
a value exceeding 40% of the value of our total assets (exclusive of U.S. government securities and cash items) on an unconsolidated
basis. Our stockholders will not have the regulatory protections provided to investors in investment companies.
HYPE
and other digital assets, as well as new business models and transactions enabled by blockchain technologies, present novel interpretive
questions under the Investment Company Act. There is a risk that assets or arrangements that we have concluded are not securities could
be deemed to be securities by the SEC or another authority for purposes of the Investment Company Act, which would increase the percentage
of securities held by us for Investment Company Act purposes. The SEC has requested information from a number of participants in the
digital assets’ ecosystem, regarding the potential application of the Investment Company Act to their businesses. For example,
in an action unrelated to the Company, in February 2022, the SEC issued a cease-and-desist order under the Investment Company Act to
BlockFi Lending LLC (“BlockFi”), in which the SEC alleged that BlockFi was operating as an unregistered investment company
because it issued securities and also held more than 40% of its total assets, excluding cash, in investment securities, including the
loans of digital assets made by BlockFi to institutional borrowers.
If
we were deemed to be an investment company, Rule 3a-2 under the Investment Company Act is a safe harbor that provides a one-year grace
period for transient investment companies that have a bona fide intent to be engaged primarily, as soon as is reasonably possible (in
any event by the termination of such one-year period), in a business other than that of investing, reinvesting, owning, holding or trading
in securities, with such intent evidenced by the company’s business activities and an appropriate resolution of its board of directors.
The grace period is available not more than once every three years and runs from the earlier of (i) the date on which the issuer owns
securities and/or cash having a value exceeding 50% of the issuer’s total assets on either a consolidated or unconsolidated basis
or (ii) the date on which the issuer owns or proposes to acquire investment securities having a value exceeding 40% of the value of such
issuer’s total assets (exclusive of U.S. government securities and cash items) on an unconsolidated basis. Accordingly, the grace
period may not be available at the time that we seek to rely on Rule 3a-2; however, Rule 3a-2 is a safe harbor and we may rely on any
exemption or exclusion from investment company status available to us under the Investment Company Act at any given time. Furthermore,
maintaining our status as a non-investment company or reliance on Rule 3a-2 could require us to take actions to dispose of securities
and/or acquire other assets, which dispositions or acquisitions could be required to take place under unfavorable market conditions and
could result in the incurrence of losses, and could limit our ability to make certain investments or enter into joint ventures, or otherwise
limit or change our service offerings and operations.
If
we were to be deemed an investment company in the future, restrictions imposed by the Investment Company Act - including limitations
on our ability to issue different classes of stock and equity compensation to directors, officers, and employees and restrictions on
management, operations, and transactions with affiliated persons - likely would make it impractical for us to continue our business as
contemplated, and would have a material adverse effect on our business, results of operations, financial condition, and prospects. In
addition, if we were to become subject to the Investment Company Act, any violation of the Investment Company Act could subject us to
material adverse consequences, including potentially significant regulatory penalties and the possibility that certain of our contracts
would be deemed unenforceable. In such event, there would be no guarantee that we would be able to take actions to modify our operations
to cease to be an investment company or to bring our operations into compliance with the Investment Company Act. Furthermore, any steps
we are able to take to ensure future compliance with the Investment Company Act would not insulate us from liability for past violations.
Any of these events could adversely affect our business, results of operations, financial condition, and prospects.
HYPE
is created and transmitted through the operations of the peer-to-peer Hyperliquid network, a decentralized network of computers running
software following the HYPE protocol. If the Hyperliquid network is disrupted or encounters any unanticipated difficulties, the value
of HYPE could be negatively impacted.
If
the Hyperliquid network is disrupted or encounters any unanticipated difficulties, then the processing of transactions on the Hyperliquid
network may be disrupted, which in turn may prevent us from depositing or withdrawing HYPE from our accounts with our custodian or otherwise
effecting HYPE transactions. Such disruptions could include, for example: the price volatility of HYPE; the insolvency, business failure,
interruption, default, failure to perform, security breach, or other problems of participants, custodians or others; the closing of HYPE
trading platforms due to fraud, failures, security breaches or otherwise; or network outages or congestion, power outages, or other problems
or disruptions affecting the Hyperliquid network.
In
addition, digital asset validating operations can consume significant amounts of electricity, which may have a negative environmental
impact and give rise to public opinion against allowing, or government regulations restricting, the use of electricity for validating
operations. Additionally, validators may be forced to cease operations during an electricity shortage or power outage.
We
face risks relating to the custody of our HYPE, including the loss or destruction of private keys required to access our HYPE and cyberattacks
or other data loss relating to our HYPE, including smart contract related losses and vulnerabilities.
We
plan to hold our HYPE with regulated custodians that have duties to safeguard our private keys. Our custodial services contracts will
not restrict our ability to reallocate our HYPE among custodians, and our HYPE holdings may be concentrated with a single custodian.
In light of the significant amount of HYPE we anticipate that we will hold, we expect to continually seek to engage additional custodians
to achieve a greater degree of diversification in the custody of our HYPE as the extent of potential risk of loss is dependent, in part,
on the degree of diversification. However, multiple custodians may not be available or may utilize similar wallet infrastructure, cloud
service providers or software systems, which could increase systemic technology risk.
If
there is a decrease in the availability of digital asset custodians that we believe can safely custody our HYPE, for example, due to
regulatory developments or enforcement actions that cause custodians to discontinue or limit their services, we may need to enter into
agreements that are less favorable or take other measures to custody our HYPE, and our ability to seek a greater degree of diversification
in the use of custodial services would be materially adversely affected. While we will conduct due diligence on our custodians and any
smart contract platforms we may use, there can be no assurance that such diligence will uncover all risks, including operational deficiencies,
hidden vulnerabilities or legal noncompliance.
Any
insurance that may cover losses of our HYPE holdings may cover none or only a small fraction of the value of the entirety of our HYPE
holdings, and there can be no guarantee that such insurance will be maintained as part of the custodial services we have or that such
coverage will cover losses with respect to our HYPE. Moreover, our use of custodians exposes us to the risk that the HYPE our custodians
hold on our behalf could be subject to insolvency proceedings and we could be treated as a general unsecured creditor of the custodian,
inhibiting our ability to exercise ownership rights with respect to such HYPE. Any loss associated with such insolvency proceedings is
unlikely to be covered by any insurance coverage we may maintain related to our HYPE. The legal framework governing digital asset ownership
and rights in custodial or insolvency contexts remains uncertain and continues to evolve, which could result in unexpected losses, protracted
recovery processes or adverse treatment in insolvency proceedings.
HYPE
is controllable only by the possessor of both the unique public key and private key(s) relating to the local or online digital wallet
in which the HYPE is held. While the L1 blockchain ledger requires a public key relating to a digital wallet to be published when used
in a transaction, private keys must be safeguarded and kept private in order to prevent a third party from accessing the HYPE held in
such wallet. To the extent the private key(s) for a digital wallet are lost, destroyed, or otherwise compromised and no backup of the
private key(s) is accessible, neither we nor our custodians will be able to access the HYPE held in the related digital wallet. Furthermore,
we cannot provide assurance that our digital wallets, nor the digital wallets of our custodians held on our behalf, will not be compromised
as a result of a cyberattack. The HYPE and blockchain ledger, as well as other digital assets and blockchain technologies, have been,
and may in the future be, subject to security breaches, cyberattacks or other malicious activities.
As
part of our treasury management strategy, we may engage in staking, restaking, or other permitted activities that involve the use of
“smart contracts” or decentralized applications. The use of smart contracts or decentralized applications entails certain
risks including risks stemming from the existence of an “admin key” or coding flaws that could be exploited, potentially
allowing a bad actor to issue or otherwise compromise the smart contract or decentralized application, potentially leading to a loss
of our HYPE. Like all software code, smart contracts are exposed to risk that the code contains a bug or other security vulnerability,
which can lead to loss of assets that are held on or transacted through the contract or decentralized application. Smart contracts and
decentralized applications may contain bugs, security vulnerabilities or poorly designed permission structures that could result in the
irreversible loss of HYPE or other digital assets. Exploits, including those stemming from admin key misuse, admin key compromise, or
protocol flaws, have occurred in the past and may occur in the future. Certain employees or vendors may also be vulnerable to physical
or psychological coercion, commonly referred to as “wrench attacks,” as well as scams and social engineering tactics intended
to obtain access to passwords or private cryptographic keys, in order to then effectuate the unauthorized transfer or theft of digital
assets.
Our
historical financial statements do not reflect the potential variability in earnings that we may experience in the future relating to
our HYPE holdings.
Because
we only recently initiated our HYPE treasury strategy, our historical financial statements do not reflect the potential variability in
earnings that we may experience in the future from holding or selling significant amounts of HYPE. The price of digital assets have historically
been subject to dramatic price fluctuations and is highly volatile. In December 2023, the Financial Accounting Standards Board issued
Accounting Standards Update 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of
Crypto Assets (“ASU 2023-08”), which we plan to adopt.
ASU
2023-08 requires us to measure our HYPE holdings at fair value in our statement of financial position, and to recognize gains and losses
from changes in the fair value of our HYPE in net income each reporting period. ASU 2023-08 also requires us to provide certain interim
and annual disclosures with respect to our HYPE holdings. As a result, volatility in our earnings may be significantly more than what
we experienced in prior periods.
Unrealized
fair value gains on our HYPE holdings could cause us to become subject to the corporate alternative minimum tax under the Inflation Reduction
Act of 2022.
The
United States enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022. Unless an exemption applies, the IRA imposes
a 15% corporate alternative minimum tax (“CAMT”) on a corporation with respect to an initial tax year and subsequent tax
years, if the average annual adjusted financial statement income for any consecutive three-tax-year period preceding the initial tax
year exceeds $1 billion. On September 12, 2024, the Department of Treasury and the Internal Revenue Service issued proposed regulations
with respect to the application of the CAMT.
In
connection with the implementation of our HYPE treasury strategy, we expect to adopt ASU 2023-08. ASU 2023-08 requires us to measure
our HYPE holdings at fair value in our statement of financial position, with gains and losses from changes in the fair value of our HYPE
recognized in net income each reporting period. When determining whether we are subject to CAMT and when calculating any related tax
liability for an applicable tax year, the proposed regulations provide that, among other adjustments, our adjusted financial statement
income must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year.
Accordingly,
as a result of the enactment of the IRA and our anticipated adoption of ASU 2023-08, unless the IRA is amended or the proposed regulations
with respect to CAMT, when finalized, are revised to provide relief (or other interim relief is granted), we could become subject to
the CAMT in future tax years. If we become subject to the CAMT, it could result in a material tax obligation that we would need to satisfy
in cash, which could materially affect our financial results, including our earnings and cash flow, and our financial condition.
Due
to the unregulated nature and lack of transparency surrounding the operations of many HYPE trading venues, HYPE trading venues may experience
greater fraud, security failures or regulatory or operational problems than trading venues for more established asset classes, which
may result in a loss of confidence in HYPE trading venues and adversely affect the value of our HYPE.
HYPE
trading venues are relatively new and, in many cases, unregulated. Furthermore, there are many HYPE trading venues which do not provide
the public with significant information regarding their ownership structure, management teams, corporate practices and regulatory compliance.
As a result, the marketplace may lose confidence in HYPE trading venues, including prominent exchanges that handle a significant volume
of HYPE trading and/or are subject to regulatory oversight, in the event one or more HYPE trading venues cease or pause for a prolonged
period the trading of HYPE or other digital assets, or experience fraud, significant volumes of withdrawal, security failures or operational
problems.
The
SEC alleged as part of its June 5, 2023, complaint against Binance that Binance committed strategic and targeted “wash trading”
through its affiliates to artificially inflate the volume of certain digital assets traded on its exchange. The SEC has also brought
actions against individuals and digital asset market participants alleging that such persons artificially increased trading volumes in
certain digital assets through wash trades, or repeated buying and selling of the same assets in fictitious transactions to manipulate
their underlying trading price. Such reports and allegations may indicate that the HYPE market is significantly smaller than expected
and that the United States makes up a significantly larger percentage of the HYPE market than is commonly understood. Any actual or perceived
wash trading in the HYPE market, and any other fraudulent or manipulative acts and practices, could adversely affect the value of our
HYPE.
Negative
perception, a lack of stability in the broader digital currency markets and the closure, temporary shutdown or operational disruption
of HYPE trading venues, lending institutions, institutional investors, institutional miners, custodians, or other major participants
in the HYPE ecosystem, due to fraud, business failure, cybersecurity events, government-mandated regulation, bankruptcy, or for any other
reason, may result in a decline in confidence in HYPE and the broader digital currency ecosystem and greater volatility in the price
of HYPE. For example, in 2022, each of Celsius Network, Voyager Digital, Three Arrows Capital, FTX, and BlockFi filed for bankruptcy,
following which digital assets significantly declined. In addition, in June 2023, the SEC announced enforcement actions against Coinbase
and Binance, two providers of large trading venues for digital assets, which similarly was followed by a decrease in the market price
of digital assets. These were followed in November 2023, by an SEC enforcement action against Payward Inc. and Payward Ventures Inc.,
together known as Kraken, another large trading venue for digital assets. While the complaint against Coinbase was dismissed in February
2025, the complaint against Payward Inc. and Payward Ventures Inc. was dismissed with prejudice in March 2025, and the complaint against
Binance was dismissed on May 29, 2025, the SEC or other regulatory agencies may initiate similar actions in the future. For example,
in April 2025, the State of Oregon brought a civil enforcement action against Coinbase for allegedly selling unregistered securities.
As the price of our listed securities may be affected by the value of our HYPE holdings, the failure of a major participant in the digital
currency ecosystem could have a material adverse effect on the market price of our listed securities.
The
concentration of our HYPE holdings could enhance the risks inherent in our HYPE treasury strategy.
The
concentration of our HYPE holdings limits the risk mitigation that we could achieve if we were to purchase a more diversified portfolio
of treasury assets, and the absence of diversification enhances the risks inherent in our HYPE treasury strategy. Any future significant
declines in the price of HYPE would have a more pronounced impact on our financial condition than if we used our cash to purchase a more
diverse portfolio of assets.
The
emergence or growth of other blockchains and associated digital assets, including those with significant private or public sector backing,
could have a negative impact on the price of HYPE and adversely affect our business.
As
a result of our HYPE treasury strategy, our assets are concentrated in our HYPE holdings. Accordingly, the emergence or growth of digital
assets other than HYPE may have a material adverse effect on our financial condition. There are numerous alternative digital assets and
many entities, including consortiums and financial institutions, are researching and investing resources into private or permissioned
blockchains that do not use proof-of-stake consensus mechanism like the Hyperliquid network, or use different technical innovations that
build upon or improve the proof-of-stake consensus mechanism. For example, in late 2022, the Ethereum network transitioned to a “proof-of-stake”
mechanism for validating transactions that requires significantly less computing power than proof-of-work mining. The Ethereum network
has completed another major upgrade since then and may undertake additional upgrades in the future. If improved mechanisms for validating
transactions on blockchains are perceived as superior to proof-of-stake, those digital assets could gain market share relative to HYPE.
Our
HYPE holdings will be less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for us to
the same extent as cash and cash equivalents.
Historically,
the cryptocurrency market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to
sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation,
compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and
decentralized network. During times of market instability, we may not be able to sell our HYPE at favorable prices or at all. As a result,
our HYPE holdings may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
Further,
the HYPE we hold with our custodians and transact with our trade execution partners does not enjoy the same protections as are available
to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation
or the Securities Investor Protection Corporation.
Additionally,
we may be unable to enter into term loans or other capital raising transactions collateralized by our unencumbered HYPE or otherwise
generate funds using our HYPE holdings, including in particular during times of market instability or when the price of HYPE has declined
significantly. If we are unable to sell our HYPE, enter into additional capital raising transactions, including capital raising transactions
using HYPE as collateral, or otherwise generate funds using our HYPE holdings, or if we are forced to sell our HYPE at a significant
loss, in order to meet our working capital requirements, our business and financial condition could be negatively impacted.
Forward-Looking
Statements
This
communication contains certain forward-looking statements within the meaning of the U.S. federal securities laws with respect to the
Mergers involving the Company and Rorschach, including expectations, hopes, beliefs, intentions, plans, prospects, financial results
or strategies regarding the Company, Rorschach, HSI and the Mergers and statements regarding the anticipated benefits and timing of the
completion of the Mergers, the assets held by Rorschach, the price and volatility of HYPE tokens, HSI’s listing on any securities
exchange, the macro and political conditions surrounding HYPE tokens and cryptocurrency generally, HSI’s planned business strategy,
use of proceeds of the Mergers, objectives of management for future operations of HSI, the upside potential and opportunity for investors,
HSI’s plan for value creation and strategic advantages, market size and growth opportunities, regulatory conditions, technological
and market trends, future financial condition and performance and expected financial impacts of the Mergers, the satisfaction of closing
conditions to the Mergers, the CVR, and other expectations, intentions, strategies, assumptions or beliefs of the parties to the Mergers
about future events, results of operations or performance or that do not solely relate to historical or current facts. These forward-looking
statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,”
“estimate,” “intend,” “strategy,” “future,” “opportunity,” “potential,”
“plan,” “may,” “should,” “will,” “would,” “will be,” “will
continue,” “will likely result,” and similar expressions. Forward-looking statements are predictions, projections and
other statements about future events or conditions that are based on current expectations and assumptions and, as a result, are subject
to risks and uncertainties. Many factors could cause actual future events to differ materially from the forward-looking statements in
this press release, including, but not limited to: the risk that the Mergers may not be completed in a timely manner or at all; the failure
by the parties to satisfy the conditions to the consummation of the Mergers, including the approval of The Company’s shareholders;
failure to realize the anticipated benefits of the Mergers; the failure of HSI to obtain or maintain the listing of its securities on
any securities exchange after closing of the Mergers; costs related to the Mergers and as a result of becoming a public company; changes
in business, market, financial, political and regulatory conditions; risks relating to HSI’s anticipated operations and business,
including the highly volatile nature of the price of HYPE tokens; the risk that HSI’s stock price will be highly correlated to
the price of HYPE tokens and the price of HYPE tokens may decrease between the signing of the BCA and the closing of the Mergers or at
any time after the closing of the Mergers; risks related to increased competition in the industries in which HSI will operate; risks
relating to significant legal, commercial, regulatory and technical uncertainty regarding HYPE tokens; risks relating to the treatment
of crypto assets for U.S. and foreign tax purposes; risks that after consummation of the Mergers, HSI experiences difficulties managing
its growth and expanding operations; challenges in implementing HSI’s business plan including HYPE token-related financial and
advisory services, due to operational challenges, significant competition and regulation; the outcome of any potential legal proceedings
that may be instituted against The Company, Rorschach, HSI or others following announcement of the Mergers, and those risk factors discussed
in documents that the Company has filed, or that will be filed by the Company and/or HSI, with the SEC.
Additional
Information about the Proposed Mergers and Where to Find It
This
Current Report on Form 8-K does not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities
or a solicitation of any vote or approval. This Current Report on Form 8-K relates to the proposed Merger of the Company. In connection
with the proposed Mergers, the Company, Rorschach and HSI expect that a registration statement on Form S-4 will be filed with the SEC,
containing a preliminary proxy statement for the Company’s stockholders that will also constitute a preliminary prospectus of HSI,
the securities of which are expected to be listed on Nasdaq upon consummation of the Mergers. After the registration statement is declared
effective, the Company will mail a definitive proxy statement/prospectus to the Company’s stockholders. The Company and Rorschach
urge investors, stockholders and other interested persons to read, when available, the proxy statement/prospectus, as well as other documents
filed with the SEC, because these documents will contain important information about the proposed business combination transaction. The
Company’s stockholders will be able to obtain a free copy of the proxy statement/prospectus (when available) and other documents
filed with the SEC by the Company or HSI, without charge, by directing a request to: dongriffith@sonnetbio.com. These documents,
once available, can also be obtained, without charge, at the SEC’s web site (http://www.sec.gov).
Participants
in the Solicitation
The
Company, Rorschach, HSI and their respective directors, executive officers and other members of their management and employees, under
SEC rules, may be deemed to be participants in the solicitation of proxies of the Company stockholders in connection with the Mergers.
Investors and security holders may obtain more detailed information regarding the names, affiliations and interests of the Company’s
directors in its Annual Report on Form 10-K for the fiscal year ended September 30, 2024, which was filed with the SEC on December 17,
2024. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of proxies to the Company’s
stockholders in connection with the proposed business combination will be set forth in the proxy statement/prospectus for the Mergers
when available. Information concerning the interests of the Company’s and Rorschach’s participants in the solicitation, which
may, in some cases, be different than those of the Company’s and Rorschach’s equity holders generally, will be set forth
in the proxy statement/prospectus and other relevant materials to be filed with the SEC relating to the Mergers when they become available.
These documents can be obtained free of charge from the sources indicated above.
No
Offer or Solicitation
This
Current Report on Form 8-K is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the
solicitation of an offer to buy any securities or the solicitation of any vote of approval, nor shall there be any sale of securities
in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities
laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended, or pursuant to an exemption from, or in a transaction not subject to, such registration
requirements.
Item
9.01. Financial Statements and Exhibits.
(d)
Exhibits:
| Exhibit
No. |
|
Description |
| 2.1* |
|
Business Combination Agreement. |
| 3.1 |
|
Certificate of Designations. |
| 4.1 |
|
Form of PIPE Warrant. |
| 10.1 |
|
Form of Contribution Agreement. |
| 10.2 |
|
Form of Subscription Agreement. |
| 10.3 |
|
Form of PIPE Purchase Agreement. |
| 99.1 |
|
Press Release, dated July 14, 2025. |
| 104 |
|
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
*Schedules
have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish copies of any of the omitted
schedules upon request by the SEC.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
| |
Sonnet
BioTherapeutics Holdings, Inc. |
| |
|
| Date: |
July
14, 2025 |
By: |
/s/
Donald Griffith |
| |
Name: |
Donald
Griffith |
| |
Title: |
Chief
Financial Officer |
