🚀 Sonnet BioTherapeutics Strikes $888M Mega-Merger with Rorschach I LLC

Biotech just got a new power couple—and Wall Street's already placing bets.

The deal that'll shake up immunotherapy

Sonnet BioTherapeutics is merging with Rorschach I LLC in a blockbuster $888 million transaction. Neither company bothered explaining how they arrived at that suspiciously round number—but hey, it's SPAC season somewhere.

Why this matters beyond the headline

This isn't just another biotech marriage. Sonnet's targeted cancer therapies could get rocket fuel from Rorschach's deep pockets. Or crash spectacularly when Phase III trials meet reality. Either way, hedge funds win.

The cynical take

Another day, another 'transformative' merger where the real innovation is in creative accounting. At least the PR teams earned their retainers.

Hyperliquid treasury and focus on HYPE

Upon closing, the combined company will operate under the new name Hyperliquid Strategies Inc. and continue to trade on the Nasdaq Capital Market under a new ticker. 

HSI will hold approximately 12.6 million HYPE tokens, valued at around $583 million based on recent prices, alongside a minimum of $305 million in invested cash. The reserves will bring the company to a combined valuation of  $888 million.

The transaction conjoins a consortium of investors including Paradigm, Galaxy Digital, Pantera Capital, Republic Digital, D1 Capital, and 683 Capital. The cash component of the deal will be used to acquire additional HYPE tokens.

According to the terms of the deal, Sonnet will become a wholly owned subsidiary of HSI and will retain some of its biotech operations while divesting other assets. Its biotech development program, SON-1010, will continue, supported by capital raised from the merger process.

Sonnet executive shakeup post merger

The startup leadership team will feature Bob Diamond, co-founder and CEO of Atlas Merchant Capital, as chairman of the board. David Schamis, Atlas’s Chief Investment Officer and Co-founder, will become Chief Executive Officer of HSI. 

“We are delighted by this opportunity to partner with Sonnet in establishing a leading crypto treasury management strategy to ultimately deliver strong value to shareholders. We believe HYPE and the Hyperliquid protocol represent a truly differentiated offering within the digital asset space,” incoming board executive Diamond said in a press conference on Monday. 

A new Chief Financial Officer is expected to be named soon, while the board will expand to include Eric Rosengren, former President of the Boston Federal Reserve, and two of Sonnet’s existing independent directors.

At the time of closing, HSI will also enter into a Sponsor Advisory Agreement (SAA) with Rorschach to expand the business by adding HYPE into the treasury.

Capital raised and private placement details

Concurrent with the signing of the BCA, Sonnet is raising $5.5 million in a private placement to accredited investors. The technology company is issuing non-voting convertible preferred stock and warrants to purchase common stock. The placement is expected to close later on today.

An additional $2 million in convertible notes issued by Sonnet in June 2025 will convert into preferred stock and warrants as part of the same transaction. Net proceeds from these offerings will be used for general corporate purposes, including the development of existing biotech assets and expenses related to the Business Combination.

Ownership of HSI will be weighted toward Rorschach and new investors, who are projected to hold about 98.8% of the company. Existing Sonnet shareholders, including PIPE and bridge investors, will hold approximately 1.2%.

Chardan is the sole placement agent for the transaction and exclusive financial advisor to Rorschach. Greenberg Traurig, LLP is providing legal counsel to Rorschach, while Lowenstein Sandler LLP is representing Sonnet. Additionally, Lucid Capital Markets, LLC, is delivering a fairness opinion to Sonnet’s board.

The securities offered in the private placement are exempt from registration under the Securities Act of 1933 and may not be publicly traded unless registered or covered by another exemption.

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