<PAGE> 1
Filed Pursuant to Rule 424B3
Registration File No. 333-5732
SUPPLEMENT, DATED SEPTEMBER 17, 1998,
TO PROSPECTUS DATED AUGUST 26, 1998
This Supplement, dated September 17, 1998, to the Prospectus dated August 26,
1998, relating to the offering of 5,678,572 shares of Common Stock and 4,750,000
Common Stock Purchase Rights of Cygnet Financial Corporation, modifies or
supplements the Prospectus, as more fully described below.
CYGNET FINANCIAL CORPORATION
5,678,572 Shares of Common Stock and
4,750,000 Common Stock Purchase Rights
The attached Prospectus relates to a Rights Offering by Cygnet Financial
Corporation ("Cygnet"), which is being separated from its parent company, Ugly
Duckling Corporation ("Ugly Duckling") in a transaction scheduled to close on or
about September 30, 1998 (the "Split-up"). Pursuant to the Rights Offering,
stockholders of Ugly Duckling as of August 17, 1998 received Rights to acquire
shares of Cygnet's Common Stock at $7.00 per share, which will approximate the
book value per share of the Common Stock upon acquisition.
On the date hereof, Ugly Duckling has announced an exchange offer (the
"Exchange Offer") to its holders of Common Stock, pursuant to which Ugly
Duckling is offering to exchange up to $32.5 million aggregate principal amount
of its 12% Subordinated Debentures due 2003 ("Debentures") for up to 5,000,000
shares of its Common Stock, at a price of $6.50 principal amount of Debentures
for each share tendered. Among other conditions, the Exchange Offer is
conditioned upon at least 1,000,000 shares being tendered. The $6.50 principal
amount represents a premium of approximately 39% over the closing market price
of Ugly Duckling's Common Stock as of September 15, 1998. This recent market
price is at the lower end of the Company's historical closing trading prices,
which have ranged from a high of $25.75 to a low of $4.63 since the Company's
initial public offering in June 1996, and represents a discount of approximately
53% to the Company's book value per share at June 30, 1998. The Exchange Offer
will expire at 5:00 p.m. New York City time, on October 19, 1998, unless
extended by the Company.
The Rights Offering is scheduled to expire at 5:00 p.m. Minnesota time on
September 21, 1998. For additional information regarding procedures for
exercising Rights, see "The Rights Offering -- Method for Exercising Rights" in
the accompanying Prospectus. In light of the Exchange Offer by Ugly Duckling,
Cygnet 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
by executing and delivering the Right to Rescind accompanying this Prospectus
Supplement to Norwest Bank Minnesota, N.A., the Distribution Agent, not later
than 5:00 p.m. Minnesota time on September 29, 1998.
The completion of the Rights Offering and the closing of the Split-up are
subject to certain contingencies as more fully described under "The Rights
Offering -- Contingencies to the Split-up and the Closing Thereof" at page 34 of
Cygnet's Prospectus dated August 26, 1998. Even if all of these contingencies
are satisfied, the Rights Offering may be abandoned, postponed or modified, or
conditions thereto waived, at any time for any reason in the sole discretion of
Ugly Duckling's Board of Directors.
