UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 6-K

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 UNDER

THE SECURITIES EXCHANGE ACT OF 1934

 

For the month of August 2017

 

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Commission File Number: 001-35147

 

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Renren Inc.

 

5/F, North Wing

18 Jiuxianqiao Middle Road

Chaoyang District, Beijing 100016

People’s Republic of China

+86 (10) 8448-1818

 

(Address of principal executive offices)

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

 

Form 20-F x          Form 40-F ¨

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):________________

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):________________

 

 

 

 

 

 

 

SIGNATURE

 

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, thereunto duly authorized. 

 

  Renren Inc.
     
    /s/ Thomas Jintao Ren
  Name: Thomas Jintao Ren
  Title: Chief Financial Officer

  

Date: August 31, 2017

 

 

 

 

Exhibit Index

 

Exhibit 99.1—Press release

 

 

 

 

Exhibit 99.1

 

 

Renren Announces Unaudited Second Quarter 2017 Financial Results

 

BEIJING, China, August 30, 2017 — Renren Inc. (NYSE: RENN) ("Renren" or the "Company"), which operates a social networking service and internet finance business in China, today announced its unaudited financial results for the second quarter ended June 30, 2017.

  

Second Quarter 2017 Highlights

 

Total net revenues were US$22.3 million, a 55.4% increase from the corresponding period in 2016.

 

Advertising and Internet Value-Added Services (IVAS) net revenues were US$12.7 million, a 67.9% increase from the corresponding period in 2016.
Financing income was US$8.6 million, a 26.0% increase from the corresponding period in 2016.
Used car sales revenue was US$1.0 million.

 

Gross profit was US$5.0 million, compared to US$1.3 million in the corresponding period of 2016.

 

Operating loss was US$15.5 million, compared to an operating loss of US$18.8 million in the corresponding period in 2016.

 

Net loss attributable to the Company was US$17.2 million, compared to a net loss of US$46.1 million in the corresponding period in 2016.

 

Adjusted net loss (1) (non-GAAP) was US$12.0 million, compared to an adjusted net loss of US$40.6 million in the corresponding period in 2016.

 

(1)Adjusted net (loss) income is a non-GAAP measure, which is defined as net (loss) income excluding share-based compensation expenses and amortization of intangible assets. See “About Non-GAAP Financial Measures” below.

  

Second Quarter 2017 Results

 

Total net revenues for the second quarter of 2017 were US$22.3 million, representing a 55.4% increase from the corresponding period in 2016.

 

Advertising and IVAS net revenues were US$12.7 million, representing a 67.9% increase from the corresponding period of 2016. Advertising revenues were US$0.1 million for the second quarter of 2017. IVAS revenues were US$12.6 million, representing an 86.7% increase from the corresponding period in 2016. The increase was mainly due to the revenue from our Renren mobile live streaming service. Monthly unique log-in users of the Renren SNS platform decreased from approximately 35 million in June 2016 to approximately 34 million in June 2017. Login users’ monthly average time spent increased 23.9% year-over-year.

 

 

 

 

Financing income was US$8.6 million for the second quarter of 2017, compared to US$6.8 million in the corresponding period of 2016. The increase was in line with the increase of financing receivable from US$207.2 million as of June 30, 2016 to US$238.6 million as of June 30, 2017.

 

Used car sales revenue of US$1.0 million was generated through one of our subsidiaries conducting a used car trading business, which is a new business that we initiated in the second quarter of 2017.

 

Cost of revenues was US$17.4 million, a 32.5% increase from the corresponding period of 2016.

        

Operating expenses were US$20.4 million, a 1.7% increase from the corresponding period of 2016.

 

Selling and marketing expenses were US$6.0 million, a 15.2% increase from the corresponding period of 2016. The increase was primarily due to an increase in advertising and promotion expenses.  

 

Research and development expenses were US$4.6 million, compared to US$4.6 million in the corresponding period in 2016.

 

General and administrative expenses were US$9.8 million, a 4.4% decrease from the corresponding period in 2016.

 

Share-based compensation expenses, which were all included in operating expenses, were US$5.2 million, compared to US$5.5 million in the corresponding period in 2016.

 

Operating loss was US$15.5 million, compared to an operating loss of US$18.8 million in the corresponding period in 2016.

 

Non-operating loss was US$62.8 million, compared to a loss of US$28.3 million in the corresponding period in 2016. Non-operating loss for the second quarter of 2017 was mainly due to a US$61.0 million impairment on long-term investments.

 

Earnings in equity method investments were US$61.7 million, compared to earnings of US$1.4 million in the corresponding period in 2016. Earnings in equity method investment for the second quarter of 2017 mainly included a US$58.3 million gain on disposal of certain shares of Social Finance Inc.

 

Net loss attributable to the Company was US$17.2 million, compared to a net loss of US$46.1 million in the corresponding period in 2016.

 

Adjusted net loss (non-GAAP) was US$12.0 million, compared to an adjusted net loss of US$40.6 million in the corresponding period in 2016. Adjusted net loss is defined as loss excluding share-based compensation expenses and amortization of intangible assets.

  

Business Outlook

 

The Company expects to generate revenues in an amount ranging from US$60 million to US$65 million in the third quarter of 2017, representing a 235.5% to 263.4% year-over-year increase. The increase is expected to be primarily due to revenue from used car sales through one of our subsidiaries that is now conducting a used car trading business. This forecast reflects Renren's current and preliminary view, which is subject to change.

 

 

 

 

Updates on Proposed Transactions

 

As described in the Company’s most recent annual report on Form 20-F, filed on May 15, 2017, the Company is continuing to pursue its plan to dispose of a newly formed subsidiary (the “Subsidiary”) that would hold its advertising agency business and most of its investments in minority stakes in its investee companies. The plan is intended primarily to address the risk that the Company could be deemed to be an investment company as defined under the Investment Company Act of 1940.

 

When the plan was initially announced last year, the Company expected to dispose of the Subsidiary by means of a distribution of rights by the Company to all of its shareholders on a pro rata basis in proportion to their shareholding in the Company. These rights would have allowed shareholders that were both (i) “qualified purchasers” under the Investment Company Act and (ii) “accredited investors” under the Securities Exchange Act of 1934 to elect to receive either shares of the newly formed Subsidiary (“Subsidiary Shares”) or a cash dividend based on the value of the Subsidiary Shares. Non-qualified shareholders or qualified shareholders not electing to receive Subsidiary Shares would receive the cash dividend. To help fund payment of the cash dividend, the Company’s board of directors considered a preliminary non-binding proposal from Mr. Joseph Chen, Mr. James Jian Liu and SoftBank Group Capital Limited, each a Company affiliate, to purchase for cash those Subsidiary Shares that would not be distributed to shareholders. To consider the plan and the related offer from the affiliates, the Company’s board of directors formed a special committee which, in turn, retained its own financial advisor and counsel to advise it.

 

In its most recent Form 20-F, the Company announced that the special committee was considering a revised plan. Since then, although many of the previous elements remain unchanged, the Company has further revised the plan. Subject to potential change and refinement, this further revised plan (the “Plan”) includes the following elements:

 

•     The transfer of most of the Company’s investments in minority stakes in its investee companies, including all of its shares of Social Finance Inc., to the Subsidiary;

•     The transfer of the Company’s advertising agency business (conducted by Beijing Zhenzhong Interactive Information Technology Co., Ltd.) to the Subsidiary;

•     The declaration of a special cash dividend to all Company shareholders (the “Dividend”), with the amount to be determined as described below;

•     An offer of Subsidiary Shares in a private placement to qualified Company shareholders (i.e., those Company shareholders that are both (i) “qualified purchasers” under the Investment Company Act and (ii) “accredited investors” under the Securities Exchange Act) on a pro rata basis in proportion to their shareholding in the Company, in exchange for a waiver by those shareholders of their pro rata share of the Dividend as payment for the Subsidiary Shares (the “Private Placement”);

•     At the closing of the Private Placement, the transfer of 100% of the Subsidiary Shares to those qualified Company shareholders opting to acquire Subsidiary Shares in exchange for waiving their pro rata right to the Dividend; and

•     At the earliest practicable time after the closing of the Private Placement, the payment of the Dividend to those shareholders of the Company that have not waived it.

 

 

 

 

The amount of the Dividend will be based on or influenced by, among other things, the Subsidiary’s valuation at the time of the Private Placement, the percentage of Company shareholders opting to waive their share of the Dividend in exchange for Subsidiary Shares, and the cash available to the Company to fund the Dividend. At this time, based on the holdings of its largest affiliated shareholders, the Company expects shareholders holding at least 75% of its outstanding shares will elect to purchase Subsidiary Shares in the Private Placement.

 

Although the Company plans to carry out the Plan as soon as practicable, timing depends on a number of factors, many of which are at least partially outside of the Company’s control.

 

The Company must secure adequate financing to carry out the Plan. Since the filing of the Company’s most recent Form 20-F, the principle change to the Plan relates to the manner of funding the Dividend and the working capital needs of the Subsidiary. The Company has been negotiating with SoftBank Group Corp., the parent company of SB Pan Pacific Corporation, one of the Company’s largest shareholders, for a loan to the Subsidiary. It is anticipated that the Subsidiary will transfer an agreed amount of cash to the Company in connection with the transfer of assets to the Subsidiary. This cash, together with cash that the Company has on hand (including proceeds from the previously announced sale of shares of Social Finance Inc. in April 2017), will help finance payment of the Dividend. The key commercial terms for this loan have been substantially agreed between the parties, subject to the approval of the special committee.

 

The Company must properly transfer its advertising agency business and most of its investments in minority stakes in its investee companies to the Subsidiary as part of the Plan. In 2015, the Company received a loan from a financial institution to finance its purchase of additional shares of Social Finance Inc., which shares were and still are pledged as collateral to the lender. The pledged shares, together with the corresponding loan obligations, are intended to transfer to the Subsidiary as part of the Plan. The Company has been negotiating an agreement with the lender to permit this share transfer and debt assumption. The key commercial terms for this agreement also have been substantially agreed between the parties, subject to the approval of the special committee.

 

In addition, the Plan remains subject to the approval of the special committee of the Company’s board of directors, which will make the final determination as to whether the Company will carry out the Plan in the proposed form or in any other form, or carry out a different transaction or no transaction at all. The special committee, with the assistance of its financial advisor, will assess the fairness of the Dividend to be paid to shareholders of the Company who are not acquiring Subsidiary Shares in the Private Placement. The terms of the Plan also remain subject to the approval of SoftBank Group Corp.in accordance with the Company’s articles of association.

 

If the valuation of the assets for purposes of the transaction is lower than the book value at closing, then the Company will have a loss on disposal of those assets. However, the existence or amount of any such loss can not be determined until the special committee concludes the valuation of those assets with the assistance of its financial advisor. The Company will provide further guidance on any such loss at a later date.

 

 

 

 

Conference Call Information

 

The Company will not host a conference call. Please contact our Investor Relations Department if you have any questions.

 

About Renren Inc.

 

Renren Inc. (NYSE: RENN) operates a social networking service (SNS) and an internet finance business in China. Our SNS enables users to connect and communicate with each other, share photos and access mobile live streaming. Our internet finance business includes primarily auto financing. Renren.com and our Renren mobile application had approximately 251 million activated users as of June 30, 2017. Renren's American depositary shares, each of which represents fifteen Class A ordinary shares, trade on the NYSE under the symbol "RENN".

 

Safe Harbor Statement

 

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the business outlook for the third quarter of 2017 and quotations from management in this announcement, as well as Renren's strategic and operational plans, contain forward-looking statements. Renren may also make written or oral forward-looking statements in its filings with the U.S. Securities and Exchange Commission ("SEC"), in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about Renren's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our goals and strategies; our future business development, financial condition and results of operations; the expected growth of the social networking site market in China; our expectations regarding demand for and market acceptance of our services; our expectations regarding the retention and strengthening of our relationships with key advertisers and customers; our plans to enhance user experience, infrastructure and service offerings; competition in our industry in China; and relevant government policies and regulations relating to our industry. Further information regarding these and other risks is included in our annual report on Form 20-F and other documents filed with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and Renren does not undertake any obligation to update any forward-looking statement, except as required under applicable law.

 

About Non-GAAP Financial Measures

 

To supplement Renren's consolidated financial results presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"), Renren uses "adjusted net income (loss)" which is defined as "a non-GAAP financial measure" by the SEC, in evaluating its business. We define adjusted net income (loss) as net income (loss) excluding share-based compensation expenses and amortization of intangible assets. We present adjusted net income (loss) because it is used by our management to evaluate our operating performance. We also believe that this non-GAAP financial measure provide useful information to investors and others in understanding and evaluating our consolidated results of operations in the same manner as our management and in comparing financial results across accounting periods and to those of our peer companies.

 

The presentation of this non-GAAP financial measure is not intended to be considered in isolation from, or as a substitute for, the financial information prepared and presented in accordance with GAAP. For more information on these non-GAAP financial measures, please see the table captioned "Reconciliation of non-GAAP results of operations measures to the comparable GAAP financial measures" at the end of this release.

 

For more information, please contact:

 

Cynthia Liu

Investor Relations Department

Renren Inc.

Tel: (86 10) 8448 1818 ext. 1300

Email: ir@renren-inc.com

 

 

 

 

 

RENREN INC.

CONSOLIDATED BALANCE SHEETS (UNAUDITED)    

 

(Amounts in US dollars, in thousands, except shares,  December 31,   June 30, 
per share, ADS, and per ADS data)  2016   2017 
         
ASSETS          
           
Current assets:          
Cash and cash equivalents  $79,370   $136,750 
Restricted Cash   30,390    76,408 
Short-term investments   410    - 
Accounts and notes receivable, net   4,702    8,186 
Financing receivable, net   301,773    238,607 
Prepaid expenses and other current assets   20,749    33,930 
Amounts due from related parties   13,419    15,008 
Inventory   -    14,429 
Total current assets   450,813    523,318 
           
Non-current assets:          
Long-term financing receivable, net   330    37 
Property and equipment, net   28,666    28,708 
Long-term investments   695,348    614,626 
Other non-current assets   1,687    1,345 
Total non-current assets   726,031    644,716 
           
TOTAL ASSETS  $1,176,844   $1,168,034 
           
LIABILITIES AND EQUITY          
           
Current liabilities:          
Accounts payable  $5,561   $7,730 
Short-term debt   37,202    89,003 
Accrued expenses and other current liabilities   19,781    21,831 
Payable to investors   182,951    214,662 
Amounts due to related parties   10,914    10,899 
Deferred revenue and advance from customers   5,954    5,072 
Income tax payable   7,860    9,497 
Total current liabilities   270,223    358,694 
           
Non-current liabilities:          
Long-term debt   95,390    80,631 
Long-term payable to investors   59,916    - 
Other non-current liabilities   12,849    15,320 
Total non-current liabilities   168,155    95,951 
           
TOTAL LIABILITES   438,378    454,645 
           
Shareholders' Equity:          
Class A ordinary shares   720    724 
Class B ordinary shares   305    305 
Additional paid-in capital   1,266,592    1,276,965 
Statutory reserves   6,712    6,712 
Accumulated deficit   (542,746)   (576,119)
Accumulated other comprehensive income   6,883    4,802 
           
TOTAL EQUITY   738,466    713,389 
           
TOTAL LIABILITIES AND EQUITY  $1,176,844   $1,168,034 

 

 

 

 

 

RENREN INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

 

   For the Three Months Ended   For the Six Months Ended 
(Amounts in US dollars, in thousands, except shares,  June 30,   March 31,   June 30,   June 30,   June 30, 
per shares, ADS, and per ADS data)  2016   2017   2017   2016   2017 
                     
Net revenues                         
 Advertising and IVAS  $7,583   $11,599   $12,731   $13,681   $24,330 
 Financing income   6,792    9,347    8,559    11,473    17,906 
 Used car sales   -    -    1,042    -    1,042 
Total net revenues   14,375    20,946    22,332    25,154    43,278 
                          
Cost of revenues   (13,118)   (14,499)   (17,376)   (21,532)   (31,875)
                          
Gross profit   1,257    6,447    4,956    3,622    11,403 
                          
Operating expenses:                         
 Selling and marketing   (5,222)   (6,148)   (6,017)   (9,841)   (12,165)
 Research and development   (4,610)   (5,784)   (4,611)   (9,949)   (10,395)
 General and administrative   (10,238)   (12,112)   (9,784)   (21,822)   (21,896)
                          
Total operating expenses   (20,070)   (24,044)   (20,412)   (41,612)   (44,456)
                          
Loss from operations   (18,813)   (17,597)   (15,456)   (37,990)   (33,053)
                          
Other income (expenses)   8,401    (6)   477    11,333    471 
Interest income   252    315    371    490    686 
Interest expenses   (2,681)   (2,305)   (2,379)   (5,960)   (4,684)
Realized gain (loss) on short-term investments   698    100    (201)   581    (101)
Impairment of long term investments   (35,000)   -    (61,021)   (35,000)   (61,021)
Total non-operating loss   (28,330)   (1,896)   (62,753)   (28,556)   (64,649)
                          
Loss before provision of income tax and loss in equity method investments, net of tax   (47,143)   (19,493)   (78,209)   (66,546)   (97,702)
Income tax expenses   (364)   (780)   (688)   (946)   (1,468)
                          
Loss before income (loss) in equity method investments, net of tax   (47,507)   (20,273)   (78,897)   (67,492)   (99,170)
Income (loss) in equity method investments, net of tax   1,409    4,095    61,702    (10,457)   65,797 
Loss from continuing operations   (46,098)   (16,178)   (17,195)   (77,949)   (33,373)
                          
Discontinued operation                         
Income from operations of discontinued operations, net of income tax   -    -    -    391    - 
Gain on deconsolidation of the subsidiaries, net of income tax   -    -    -    8,310    - 
Income from discontinued operations, net of tax   -    -    -    8,701    - 
                          
Net loss attributable to Renren Inc.  $(46,098)  $(16,178)  $(17,195)  $(69,248)  $(33,373)
                          
Net loss per share from continuing operations attributable to Renren Inc. shareholders:                         
 Basic  $(0.05)  $(0.02)  $(0.02)  $(0.08)  $(0.03)
 Diluted  $(0.05)  $(0.02)  $(0.02)  $(0.08)  $(0.03)
Net income per share from discontinued operations attributable to Renren Inc. shareholders:                         
 Basic  $-   $-   $-   $0.01   $- 
 Diluted  $-   $-   $-   $0.01   $- 
Net loss per share attributable to Renren Inc. shareholders:                         
 Basic  $(0.05)  $(0.02)  $(0.02)  $(0.07)  $(0.03)
 Diluted  $(0.05)  $(0.02)  $(0.02)  $(0.07)  $(0.03)
Net loss per share attributable to Renren Inc. shareholders:                         
 Basic  $(0.68)  $(0.24)  $(0.25)  $(1.02)  $(0.49)
 Diluted  $(0.68)  $(0.24)  $(0.25)  $(1.02)  $(0.49)
                          
Weighted average number of shares used in calculating net loss per ordinary share from continuing operations attributable to Renren Inc. shareholders:                         
 Basic   1,022,385,038    1,026,375,051    1,027,812,327    1,021,387,919    1,027,097,660 
 Diluted   1,022,385,038    1,026,375,051    1,027,812,327    1,021,387,919    1,027,097,660 
Weighted average number of shares used in calculating net income  per ordinary share from discontinued operations attributable to Renren Inc. shareholders:                         
 Basic   1,022,385,038    1,026,375,051    1,027,812,327    1,021,387,919    1,027,097,660 
 Diluted   1,022,385,038    1,026,375,051    1,027,812,327    1,021,387,919    1,027,097,660 

 

* Each ADS represents 15 Class A ordinary shares. 

 

 

 

 

 

Reconciliation of Non-GAAP results of operations measures to the comparable GAAP financial measures

 

Adjusted net loss                     

  

   For the Three Months Ended   For the Six Months Ended 
   June 30,   March 31,   June 30,   June 30,   June 30, 
(Amounts in US dollars, in thousands)  2016   2017   2017   2016   2017 
                     
Net loss  $(46,098)  $(16,178)  $(17,195)  $(69,248)  $(33,373)
 Add back: Shared-based compensation expenses   5,457    5,143    5,169    12,661    10,312 
     Add back: Amortization of intangible assets   -    -    -    21    - 
Adjusted net loss  $(40,641)  $(11,035)  $(12,026)  $(56,566)  $(23,061)