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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OF 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
September 17,1998 (Date of earliest event reported)
CYGNET FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 000-24747 86-0917503
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
2525 East Camelback Road, Suite 1150, Phoenix, AZ 85016
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (602)852-6600
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
On September 17, 1998, Ugly Duckling Corporation announced an exchange
offer (the "Exchange Offer") to its holders of Common Stock, offering to
exchange up to $32.5 million principal amount of its 12% Subordinated Debentures
due 2003 (the "Debentures") for up to 5,000,000 shares of its Common Stock, at a
price of $6.50 principal amount of Debentures per share tendered. Among other
conditions, the Exchange Offer is conditioned upon at least 1,000,000 shares
being tendered. The Exchange Offer will expire at 5:00 p.m. New York City time,
on October 19, 1998, unless extended by the Company.
In light of this development, Cygnet has prepared and is distributing
a Prospectus Supplement dated September 17, 1998 to its Prospectus dated August
26, 1998 describing the key terms of the Exchange Offer. The Prospectus covers
the offer and sale of shares of Cygnet's Common Stock pursuant to a Rights
Offering made to the stockholders of Ugly Duckling Corporation. The Rights
Offering is scheduled to expire September 21, 1998, subject to extension,
abandonment, or postponement in the sole discretion of Ugly Duckling's Board of
Directors. As a result of this information, Cygnet has agreed that any person
who has properly exercised his or her Rights may rescind the exercise until
September 29, 1998.
On September 17, 1998, the Company issued a press release relating to
the Exchange Offer by Ugly Duckling and the Company's distribution of the
Prospectus Supplement describing the Exchange Offer and the Right to Rescind. A
copy of the press release is filed herewith as Exhibit 99.1 and is hereby
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
4.1 Right to Rescind described in Item 5 above
99.1 Press Release dated September 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CYGNET FINANCIAL CORPORATION
(Registrant)
Date September 17, 1998 By ___________________________
(Signature)
Steven P. Johnson
Senior Vice President
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Right to Rescind described in Item 5
99.1 Press Release dated September 17, 1998
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RIGHT TO RESCIND
ACCEPTANCE OF CYGNET FINANCIAL CORPORATION
RIGHTS OFFERING
Ugly Duckling Corporation is offering to exchange up to $32,500,000
aggregate principal of its 12% Subordinated Debentures due 2003 for up to
5,000,000 shares of its Common Stock on the basis of $6.50 principal amount of
Debentures for each share of Common Stock (the "Exchange Offer"), as described
in the Supplement dated September 17, 1998 to Cygnet Financial Corporation's
Prospectus dated August 26, 1998. As a result of this development, Cygnet
Financial Corporation has agreed that any person who has properly exercised his
or her Rights prior to 5:00 p.m. Minnesota time on September 21, 1998 may
rescind the exercise on or before 5:00 p.m. Minnesota time on September 29, 1998
and receive a refund of any funds previously paid to exercise the Rights. In
order to accept this Right to Rescind, complete and return this form to the
Distribution Agent. This Right to Rescind must be received by the Distribution
Agent prior to 5:00 p.m., Minnesota time, on September 29, 1998.
THE DISTRIBUTION AGENT IS:
NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION
<TABLE>
<S> <C>
BY FIRST CLASS MAIL BY EXPRESS MAIL, OR OVERNIGHT COURIER OR HAND
Norwest Bank Minnesota, N.A. Norwest Bank Minnesota, N.A.
Shareholder Services Shareholder Services
Reorganization Department Reorganization Department
P.O. Box 64858 161 North Concord Exchange Street
St. Paul, MN 55164-0858 South St. Paul, MN 55075-1139
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BY FACSIMILE
(612) 450-4163
CONFIRMED BY TELEPHONE TO:
(612) 552-6995
Sincerely,
CYGNET FINANCIAL CORPORATION
[ ] THE UNDERSIGNED WISHES TO RESCIND THE PREVIOUS EXERCISE OF RIGHTS LISTED
BELOW AND RECEIVE A REFUND OF FUNDS PREVIOUSLY PAID WITH RESPECT TO SUCH
RIGHTS:
[ ] All rights tendered
[ ] ___ Rights out of
___ Rights tendered
THE RIGHTS OFFERING ITSELF IS NOT BEING EXTENDED AND WILL TERMINATE AT 5:00 P.M.
MINNESOTA TIME ON SEPTEMBER 21, 1998, UNLESS SEPARATELY EXTENDED.
Dated: ________________
By ___________________________________
[NAME OF REGISTERED HOLDER]
Its __________________________________
[AUTHORIZED SIGNATORY]
_________________________________________________________
NAME OF BENEFICIAL OWNER
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CONTACTS: Judith A. Boyle
Associate General Counsel
(602) 852-6600
Lori Parks/Eugene Heller
Silverman Heller Associates
(310) 208-2550
FOR IMMEDIATE RELEASE
CYGNET FINANCIAL CORPORATION FILES
SUPPLEMENT TO RIGHTS OFFERING
PHOENIX, Arizona (September 17, 1998) - Cygnet Financial Corporation (Nasdaq NM:
CGNTR) today announced that it has filed a supplement to its prospectus dated
August 26, 1998, which covers the sale of its common stock in a rights offering
made to stockholders of Ugly Duckling Corporation (Nasdaq NM: UGLY). The rights
offering is being made in connection with the proposed split-up of Ugly
Duckling, whereby Ugly Duckling's non-dealership operations would be
transferred to Cygnet, subject to satisfaction of certain conditions.
In light of Ugly Duckling's announcement today of its offer to exchange up
to $32.5 million principal amount of its 12% Subordinated Debentures due 2003
for up to 5,000,000 shares of its common stock, Cygnet has distributed a
prospectus supplement describing the basic terms of Ugly Duckling's exchange
offer. Cygnet is also offering each holder who exercised rights in the rights
offering the right to rescind that election until 5 p.m. Minnesota time on
September 29, 1998. The rights offering is scheduled to expire at 5 p.m.
Minnesota time on September 21, 1998, subject to extension, abandonment,
postponement or modification at the sole discretion of Ugly Duckling's Board of
Directors.
For additional information regarding procedures for exercising rights, see
"The Rights Offering - Method for Exercising Rights" in Cygnet's prospectus
dated August 26, 1998, or contact Corporate Investor Communications, Inc., toll
free at 1-888-673-4478.
-more-
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Cygnet Financial Corporation Files Supplement to Rights Offering
September 17, 1998
Page 2.
Headquartered in Phoenix, Arizona, upon the effective date of the
split-up, Cygnet will engage in the business of providing various financial
services primarily to the sub-prime segment of the automobile financing
industry.
***
This press release may include statements that constitute forward-looking
statements, usually containing the words "believe," "estimate," "project,"
"expects" or similar expressions. These statements are made pursuant to the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements inherently involve risks and uncertainties that could
cause actual results to differ materially from the forward-looking statements.
By making these forward-looking statements, Cygnet undertakes no obligation to
update these statements for revisions or changes after the date of this press
release. Factors that could cause or contribute to such differences include, but
are not limited to, factors detailed in this press release and in the sections
entitled "Management Discussion and Analysis of Financial Condition and Results
of Operations," and "Risk Factors," and elsewhere in Cygnet's Registration
Statement on Form S-1 (File No. 333-57323).
As noted above, a registration statement relating to the Cygnet securities
(rights and Cygnet common stock) has been filed with and declared effective by
the Securities and Exchange Commission. This discussion of the split-up
transaction and the related rights offering shall not constitute an offer to
sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any state in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such state. The securities sold in the rights offering will be offered only
by means of a Cygnet prospectus. Copies of Cygnet's prospectus dated August 26,
1998, and related prospectus supplement dated September 17, 1998, for the
rights offering may be obtained by contacting: Steven P. Johnson, General
Counsel of Cygnet, 2525 E. Camelback Road, Suite 1150, Phoenix, AZ 85016,
telephone (602) 852-6600. For more complete information about the split-up
transaction, the related rights offering and their impact on Cygnet, obtain a
Cygnet prospectus and related prospectus supplement as indicated above.
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