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Ugly Duckling and Cygnet Financial Terminate Rights Offering

28 September 1998

Ugly Duckling Corp. and Cygnet Financial Corp. Terminate Rights Offering


    PHOENIX--Sept. 28, 1998--Ugly Duckling Corp. (Nasdaq NM:UGLY) and Cygnet Financial Corp. (Nasdaq NM:CGNTR) Monday announced that they have terminated the sale of Cygnet common stock in a rights offering to Ugly Duckling's stockholders.
    The decision was primarily based on the lack of a sufficient number of investors for Cygnet to meet Nasdaq requirements. The company is continuing to explore alternatives for separating its dealership and non-dealership operations. In the meantime, Cygnet will remain a wholly owned subsidiary of Ugly Duckling.
    Shareholders who participated in the rights offering will receive a full refund of their subscription payment. For information about this refund, contact Corporate Investor Communications Inc., the designated information agent, at 888/673-4478.
    The termination of the rights offering does not affect the exchange offer announced by Ugly Duckling on Sept. 17, which enables stockholders to exchange their shares in Ugly Duckling for 12 percent, five-year subordinated debentures. Under the terms of that offer, each share of common stock can be exchanged for $6.50 principal amount of debentures. The expiration date of the exchange offer is Oct. 19, 1998.
    With headquarters in Phoenix, Ugly Duckling is a used car sales and finance company that operates the nation's largest chain of used car dealerships focused exclusively on the sub-prime market. The company underwrites, finances and services sub-prime contracts generated at its 51 Ugly Duckling dealerships. Cygnet Financial engages in the business of providing various financial services primarily to the sub-prime segment of the automobile financing industry.
    This news 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, Ugly Duckling undertakes no obligation to update these statements for revisions or changes after the date of this news release. Factors that could cause or contribute to such differences include, but are not limited to, factors detailed in this news release and in the sections titled "Management's Discussion and Analysis of Financial Condition and Results of Operations-Risk Factors," "Factors That May Affect Future Results and Financial Condition" and "Factors That May Affect Future Stock Performance" in Ugly Duckling's most recent reports on Form 10-K and Form 10-Q (including Exhibit 99 to any such Form 10-Q), factors detailed in the section "Risk Factors" in Ugly Duckling's definitive proxy statement dated Aug. 4, 1998, and elsewhere in Ugly Duckling's Securities and Exchange Commission filings.