Yolanda Mgt. Corp. v. MicroAlgo, Inc.

2025 NY Slip Op 31208(U)
CourtNew York Supreme Court, New York County
DecidedApril 8, 2025
DocketIndex No. 650956/2024
StatusUnpublished

This text of 2025 NY Slip Op 31208(U) (Yolanda Mgt. Corp. v. MicroAlgo, Inc.) is published on Counsel Stack Legal Research, covering New York Supreme Court, New York County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Yolanda Mgt. Corp. v. MicroAlgo, Inc., 2025 NY Slip Op 31208(U) (N.Y. Super. Ct. 2025).

Opinion

Yolanda Mgt. Corp. v MicroAlgo, Inc. 2025 NY Slip Op 31208(U) April 8, 2025 Supreme Court, New York County Docket Number: Index No. 650956/2024 Judge: Margaret A. Chan Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 650956/2024 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 04/09/2025

SUPREME COURT OF THE STATE OF NEW YORK COUNTY OF NEW YORK: COMMERCIAL DIVISION PART 49M

----------------------------------X YOLANDA MANAGEMENT CORPORATION, INDEX NO. 650956/2024

Plaintiff, 05/13/2024, MOTION DATE 01/10/2025 - V-

MICROALGO, INC.,JIE "JACK" ZHAO, MIN SHU, LI MOTION SEQ. NO. 001 002 "LANCE" HE DECISION+ ORDER ON Defendants. MOTION - - - - -----------------------------------X

HON. MARGARET A. CHAN:

The following e-filed documents, listed by NYSCEF document number (Motion 001) 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19,20,21,22,23,24,25,26, 59 were read on this motion to/for DISMISS

The following e-filed documents, listed by NYSCEF document number (Motion 002) 27, 28, 29, 30, 31, 32, 33,34, 35, 36, 37, 38, 39, 40,41,42,43,44,45,46,47, 48,49, 50, 51, 53, 54, 55 were read on this motion to/for ALTERNATE SERVICE

This case arises from a SPAC transaction in which defendants allegedly failed to register plaintiff Yolanda Management Corp.'s shares in defendant MicroAlgo, Inc. (MicroAlgo) in breach of the parties' agreement. Only defendant MicroAlgo has fully appeared and now moves in MS 001 to dismiss the causes of action lodged against it pursuant to CPLR 3211(a)(l) and (7). Plaintiff opposes this motion. Defendant Jie "Jack" Zhao makes a limited appearance to oppose plaintiffs motion for alternative service under CPLR § 308(5) on Zhao pursuant to CPLR § 306-b and (MS002) in MS 002. The remaining individual defendants, Li "Lance" He and Min Shu have not appeared.

For the reasons below, both motions are granted in part and denied in part.

BACKGROUND 1 This case involves the SPAC transaction that created defendant MicroAlgo. A SPAC transaction is "a merger between a special ·purpose acquisition company

1 Unless otherwise stated, the following facts are drawn from the Second Amended Complaint and the parties' exhibits to the motions.

650956/2024 YOLANDA MANAGEMENT CORPORATION vs. MICROALGO, INC. ET AL Page 1 of 11 Motion No. 001 002

1 of 11 [* 1] INDEX NO. 650956/2024 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 04/09/2025

(SPAC) and a private company" ( Greenland Asset Mgt. Corp. v MicroCloud Hologram, Inc., 83 Misc 3d 1277(A), *1 [Sup Ct, NY County 2024] [Lebovits, J.D. 2 As relevant here:

"A private company's acquisition by a SPAC allows it to be publicly traded and to access the funds raised by the SPAC's initial public offering [IPO]. A SPAC's sponsor is usually compensated through discounted SPAC shares received before the SPAC's IPO. Those shares generally have value only if the SPAC transaction is finalized, meaning that the private company is acquired. Additionally, those shares cannot be sold unless and until the SPAC, or its successor in interest following the transaction, either registers the shares with the SEC by successfully filing a registration statement (Registration Route) or removes the restrictive legend on the shares pursuant to 17 CFR 230.44, otherwise known as SEC Rule 144 (Rule 144 Route)."

(id. [internal citations omitted]).

Here, plaintiff sponsored the formation of non-party Venus Acquisition Corporation (Venus), a Cayman Islands SPAC and predecessor to MicroAlgo (NYSCEF # 4, Second Amended Complaint, ,r,r 10, 11). Plaintiff purchased ordinary shares of Venus in 2019 (Founders Shares) (NYSCEF # 19, Founder Share Subscription Agreement), and later acquired additional "private placement units" in Venus during Venus's initial public offering in 2021 (Private Units, and together with the Founders Shares, the Shares) (NYSCEF # 20, Private Placement Unit Subscription Agreement; see also NYSCEF # 4 ,r,r 11, 12). Venus's "ultimate goal" was to complete a SPAC transaction with "an unspecified business or asset to be identified at a later time" (NYSCEF # 4 ,r 10).

In August 2021, Venus entered a merger agreement with non-parties Venus Merger Sub Corporation (Venus Merger Sub), VIYI Algorithm Inc. (VIYI), and WiMi Hologram Cloud Inc. (WiMi) (NYSCEF # 4 ,r,r 20-24). Pursuant to the agreement, Venus Merger Sub merged into VIYI, with VIYI emerging as the surviving company and as new Venus's wholly owned subsidiary (id ,r,r 20·22, 26). Venus (now New Venus) subsequently changed its name to become defendant MicroAlgo, and its ordinary shares outstanding upon the merger began trading on the NASDAQ under the symbol "MLGO" (id ,r,r 26-27). Following the merger, plaintiff owned a total 1,397,500 MicroAlgo shares, with Zhao, Min Shu and Lance holding directors' positions in MicroAlgo (id ,r,r 30-31).

Counsels for plaintiff and MicroAlgo also represented the parties in Greenland Asset Management 2

and submitted the opinion as supplemental authority (see NYSCEF # 26, Notice of Supplemental Authority). Counsel for MicroAlgo repeatedly refer to Yolanda as "Greenland" in their reply in support of the motion to dismiss, indicating counsel likely copied and pasted arguments from one case to another (see NYSCEF # 25, MTD Reply, a:t 8, 10·11). 650956/2024 YOLANDA MANAGEMENT CORPORATION vs. MICROALGO, INC. ET AL Page 2 of 11 Motion No. 001 002

2 of 11 [* 2] INDEX NO. 650956/2024 NYSCEF DOC. NO. 76 RECEIVED NYSCEF: 04/09/2025

Registration Rights Agreement

Prior to the SPAC transaction, plaintiff and Venus also entered into a Registration Rights Agreement (RRA), which MicroAlgo inherited as Venus's successor in interest (id ,r 15; NYSCEF # 5, RRA). The RRA provided plaintiff with three routes to make its Shares tradable after the SPAC transaction: (1) a "Demand Registration Right" and "best efforts clause" under§§ 2.1.1 and 3.1.1; (2) a "Piggy· Back Registration Right" under§ 2.2.1 (which together with Demand Registration falls into the Registration Route described in Greenland above); and (3) the ability to demand removal of the restrictive legends on the shares via the "Rule 144 Route" (described in Greenland) (see NYSCEF # 5 §§ 2.1.1, 2.2.1, and 3.1.1).

Specifically, § 2.1.l's Demand Registration Right allowed plaintiff to "make a written demand for registration" either at the time of or following the SPAC transaction, or "three months prior to the Release Date with respect to all other Registrable Securities" (id§ 2.1.1). Plaintiff was limited to making only three requests under this right (id). Per§ 3.1.1, MicroAlgo was required to "use its best efforts to" register plaintiffs shares "as expeditiously as possible after receipt of a request for Demand Registration" (Best Efforts Clause) (id§ 3.1.1). While MicroAlgo had "the right. to defer any Demand Registration for up to thirty days," that right could not be used "more than once in any 365-day period" and required MicroAlgo to follow specific steps to invoke it (id.).

Section 2.2.l's Piggy-Back Registration Right obligated MicroAlgo to provide plaintiff with written notice at least ten days prior to filing registration for certain other shares with the SEC (id, quoting § 2.2.1 ["in no event less than ten (10) days before the anticipated filing date"]). MicroAlgo must also offer plaintiff the opportunity to "piggy-back," i.e., request registration of plaintiffs own shares within five days of receiving MicroAlgo's notice (id).

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Colavito v. New York Organ Donor Network, Inc.
860 N.E.2d 713 (New York Court of Appeals, 2006)
Savasta v. 470 Newport Associates
623 N.E.2d 1171 (New York Court of Appeals, 1993)
511 West 232nd Owners Corp. v. Jennifer Realty Co.
773 N.E.2d 496 (New York Court of Appeals, 2002)
Stormhale, Inc. v. Baidu. Com, Inc.
675 F. Supp. 2d 373 (S.D. New York, 2009)
Mill Financial, LLC v. Gillett
122 A.D.3d 98 (Appellate Division of the Supreme Court of New York, 2014)
Born To Build, LLC v. Saleh
139 A.D.3d 654 (Appellate Division of the Supreme Court of New York, 2016)
Phipps Houses Services, Inc. v. New York-Presbyterian Hospital
139 A.D.3d 480 (Appellate Division of the Supreme Court of New York, 2016)
Joseph II. v. Luisa JJ.
2021 NY Slip Op 06586 (Appellate Division of the Supreme Court of New York, 2021)
Guggenheimer v. Ginzburg
372 N.E.2d 17 (New York Court of Appeals, 1977)
State Street Bank & Trust Co. v. Coakley
16 A.D.3d 403 (Appellate Division of the Supreme Court of New York, 2005)
Tsimerman v. Janoff
40 A.D.3d 242 (Appellate Division of the Supreme Court of New York, 2007)
Philips South Beach, LLC v. ZC Specialty Insurance
55 A.D.3d 493 (Appellate Division of the Supreme Court of New York, 2008)
Amcan Holdings, Inc. v. Canadian Imperial Bank of Commerce
70 A.D.3d 423 (Appellate Division of the Supreme Court of New York, 2010)
Osberg v. Raj Rajaratnam
95 A.D.3d 649 (Appellate Division of the Supreme Court of New York, 2012)
Peters Griffin Woodward, Inc. v. WCSC, Inc.
88 A.D.2d 883 (Appellate Division of the Supreme Court of New York, 1982)
Yeterian v. Heather Mills N. V. Inc.
183 A.D.2d 493 (Appellate Division of the Supreme Court of New York, 1992)
Cooper-Fry v. Kolket
245 A.D.2d 846 (Appellate Division of the Supreme Court of New York, 1997)
Home Federal Savings Bank v. Versace
252 A.D.2d 480 (Appellate Division of the Supreme Court of New York, 1998)
Timberline Development L. L. C. v. Kronman
263 A.D.2d 175 (Appellate Division of the Supreme Court of New York, 2000)
Acquista v. New York Life Insurance
285 A.D.2d 73 (Appellate Division of the Supreme Court of New York, 2001)

Cite This Page — Counsel Stack

Bluebook (online)
2025 NY Slip Op 31208(U), Counsel Stack Legal Research, https://law.counselstack.com/opinion/yolanda-mgt-corp-v-microalgo-inc-nysupctnewyork-2025.