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UGLY DUCKLING CORPORATION
SUPPLEMENT DATED SEPTEMBER 28, 1998
TO
OFFERING CIRCULAR DATED SEPTEMBER 17, 1998
The Rights Offering described in Cygnet's Prospectus dated August 26, 1998,
a copy of which accompanied Ugly Duckling's Offering Circular dated September
17, 1998, and referred to in the Sections "Summary of Exchange Offer -- The
Company" and "Business", has been terminated. The Rights Offering was terminated
primarily due to lack of market acceptance resulting in an inadequate level of
subscriptions necessary to meet certain minimum requirements for Nasdaq listing.
The termination of the Rights Offering does not affect the Exchange Offer, which
was announced on September 17, 1998 and is scheduled to expire on October 19,
1998.
Despite termination of the Rights Offering and the corresponding decision
not to proceed with the Split-up as contemplated, Ugly Duckling continues to
evaluate its options regarding the separation of its dealership and
non-dealership operations. Even though the Split-up will not be consummated as
contemplated, if at all, Ugly Duckling does not anticipate that terminating the
Rights Offering will have any significant current impact on Ugly Duckling's
consolidated financial statements, other than the write-off of expenses incurred
related to the Rights Offering expected to approximate $1.0 million after income
taxes. Individuals contemplating whether to participate in the Exchange Offer
should consider the possibility that Ugly Duckling could later decide to retain
rather than separate its non-dealership operations, in which case Ugly
Duckling's consolidated financial statements would require restatement to
reflect the integration of certain financial results currently attributed to
discontinued operations.
