Sonnet Biotherapeutics to Merge with Rorschach I LLC in a Blockbuster $888 Million Deal Shifting Focus to Crypto Treasury Management

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In a groundbreaking move, NASDAQ-listed biotech firm Sonnet Biotherapeutics has announced an $888 million merger with crypto-backed entity Rorschach I LLC, pivoting from biotechnology to crypto treasury management under Hyperliquid Strategies Inc. (HSI). The deal, expected to close in late 2025, will see HSI manage $583 million in Layer 1 blockchain tokens and $305 million in cash, backed by heavyweights like Paradigm and Galaxy Digital. Sonnet’s biotech program SON-1010 will continue, funded by merger proceeds. Leadership shakeups include Atlas Merchant Capital’s Bob Diamond as Board Chair. --- ### Why Is Sonnet Biotherapeutics Merging with Rorschach? The merger, structured as a Business Combination Agreement (BCA), marks Sonnet’s strategic shift from biotech to crypto asset management. Rorschach, a consortium of crypto investors, brings Hyperliquid’s Layer 1 blockchain hype and treasury expertise to the table. The deal, approved by both boards, hinges on shareholder and regulatory approvals, targeting a late-2025 closure. *Key Drivers*: - Valuation : Combined entity valued at $888 million (12.6M tokens at $583M + $305M cash). - Investor Muscle : Backing from Paradigm, Galaxy Digital, and Pantera Capital signals strong market confidence. - Hybrid Model : Sonnet retains partial biotech operations while HSI takes the crypto reins. --- ### Hyperliquid’s Treasury Strategy: What’s the Game Plan? Post-merger, HSI will operate under Hyperliquid Strategies Inc. on NASDAQ (new ticker pending). The treasury will blend Hyperliquid’s native tokens with cash reserves, aiming to capitalize on crypto market volatility. *By the Numbers*: - Token Reserves : 12.6M Hyperliquid tokens (worth ~$583M as of recent prices). - Cash Injection : Minimum $305M for token acquisitions and operations. *Industry Take*: “Hyperliquid’s protocol offers a differentiated edge in digital assets,” said Bob Diamond, incoming Board Chair. --- ### Leadership Shakeup: Who’s Steering the Ship? Post-merger leadership includes: - Bob Diamond (Atlas Merchant Capital): Board Chair. - David Schamis (Atlas): CEO of HSI. - New CFO : To be announced soon. The board expands to include Eric Rosengren, ex-Boston Fed President, and two Sonnet holdovers. --- ### Funding Breakdown: Where’s the Money Going? - Private Placement : $5.5M raised via convertible preferred shares/warrants (Chardan as sole agent). - June 2025 Notes : Additional $2M in convertible notes rolled into the deal. - Use of Proceeds : Biotech development (SON-1010) and merger-related expenses. *Ownership Split*: Rorschach/new investors (98.8%) vs. Sonnet shareholders (1.2%). --- ### Legal and Advisory Teams - Legal : Greenberg Traurig (Rorschach); Lowenstein Sandler (Sonnet). - Fairness Opinion : Lucid Capital Markets. --- ### FAQs: Quickfire Round

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What’s the merger’s valuation?

$888 million ($583M tokens + $305M cash).

When will the deal close?

Late 2025, pending approvals.

Will Sonnet abandon biotech entirely?

No—SON-1010 continues with merger funding.