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Filed pursuant to Rule 424(b)(3)
Registration No. 333-22237
PROSPECTUS SUPPLEMENT NO. 3 TO PROSPECTUS DATED APRIL 21, 1997
5,413,144 SHARES
[UGLY DUCKLING LOGO]
COMMON STOCK
This Prospectus Supplement No. 3 to the Prospectus dated April 21, 1997
of Ugly Duckling Corporation (the "Company") relates to the offering of
5,413,144 shares of the Company's Common Stock by persons who have acquired
such shares in certain private placement transactions by the Company not
involving a public offering and modifies or supplements the Prospectus
enclosed herewith.
The Common Stock is quoted on Nasdaq National Market under the symbol
"UGLY." On July 17, 1997, the last reported price of the Common Stock was
$14.75 per share.
SEE "RISK FACTORS" AT PAGE 8 OF THE PROSPECTUS FOR A DISCUSSION OF
CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE
COMPANY IS A CRIMINAL OFFENSE.
_________________________
The date of this Prospectus Supplement No. 3 is July 18, 1997.
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THE COMPANY
The following discussion is added to the Prospectus for the purpose of
supplementing the information contained therein under the heading "The
Company" beginning on page 14 of the Prospectus:
Recent Developments
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On July 17, 1997, Ugly Duckling Corporation (the "Company") entered into
an agreement in principle with the senior bank group of First Merchants
Acceptance Corporation ("First Merchants") to purchase the secured debt held
by such group. The debt totals approximately $103 million. First Merchants
filed for reorganization under Chapter 11 of the Federal Bankruptcy Code on
July 11, 1997. In connection with the bankruptcy proceedings, the Company,
which owns approximately 2-1/2% of First Merchants' common stock with a cost
basis of $1.5 million, agreed last week to provide up to $10 million of
"debtor in possession" financing to First Merchants. The more significant
terms of the proposed purchase of senior debt provide, among other things, for
(1) purchase of the debt at a 10% discount of the outstanding principal,
interest and certain fees and expenses; (2) six-month financing by the bank
group to the Company for the purchase, with interest accruing at LIBOR plus
2%, and an up-front payment by the Company to the bank group equal to 20% of
the purchase price; and (3) issuance of stock warrants to the bank group to
purchase up to 500,000 shares of the Company's common stock at an exercise
price of $20.00 per share over a 30-month term and subject to a call feature
by the Company at $27.00. The purchase is subject to certain conditions,
including, but not limited to, Bankruptcy Court approval, unless waived by the
bank group, and execution of definitive documents.
SS-1
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[PROSPECTUS BACK COVER PAGE FOLLOWS.]
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No dealer, salesperson, or other person has been authorized to give any
information or t make any representation not contained in this Prospectus and,
if given or made, such information or representation must not be relied upon
as having been authorized by the Company, any Underwriter, or any other
person. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct as of any date subsequent to the date
hereof. This Prospectus does not constitute an offer of any securities other
than those to which it relates or an offer to sell, or a solicitation of an
offer to buy, to any person in any jurisdiction where such an offer or
solicitation would be unlawful.
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TABLE OF CONTENTS
Page
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Prospectus Supplement No. 3
The Company SS-1
Prospectus Supplement
Quarterly Financial Information S-2
Management's Discussion and Analysis of Financial Condition and Results of Operations S-6
E-Z Plan Financial Statements S-19
Selling Securityholders S-37
Description of Capital Stock S-40
Prospectus
Prospectus Summary 3
Risk Factors 8
The Company 14
Use of Proceeds 14
Price Range of Common Stock 14
Dividend Policy 15
Capitalization 15
Selected Consolidated Financial Data 16
Management's Discussion and Analysis of Financial Condition and 18
Results of Operations
Business 31
Management 42
Principal Stockholders 49
Selling Securityholders 50
Certain Relationships and Related Transactions 53
Description of Capital Stock 54
Plan of Distribution 57
Legal Matters 58
Experts 58
Available Information 59
Index to Financial Statements F-1
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5,413,144 SHARES
COMPANY LOGO
Common Stock
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PROSPECTUS
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July 18, 1997
