This transformation exists primarily or exclusively within the Pre-Super Genesis Wave continuity. Information in this article may not be canonical to the storyline of the games or any other Sonic continuity.
When Ixis Naugus raided Nate Morgan's secret tundra lab, he, as well as Sonic and Tails, were infused with energies from a large cache of super magic rings. Ugly Naugus was seemingly invincible, however, Ultra Sonic and Hyper Tails were eventually able to defeat him. (StH #66)
Powers and abilities
As Ugly Naugus, Ixis Naugus' innate talents are greatly increased, granting him greatly enhanced strength, speed and reflexes. Additionally, he is able to fly through mid-air in his normal form without shifting into an elemental being, and invulnerable to virtually any harm.
While in this state, Ixis Naugus' Ixis Magicks are increased dramatically; he is able to generate a variety of powerful elemental spells against his opponents, as well as blasts of energy. Most threatening of all, however, Ugly Naugus' enhanced power allowed him to open a portal to the Zone of Silence, in order to merge his personal dimension with reality itself to become omnipotent.
Ugly Naugus' name was not given in his initial appearance, and so he was dubbed Ultra Naugus by fans. The form was eventually named "Ugly Naugus" in Sonic the Hedgehog: The Complete Sonic Comic Encyclopedia. The name in the book was written with quotation marks, however, so it may be that the form doesn't have any "official" name.
Incidentally, Ugly Naugus' transformation seemed to last longer than those of Ultra Sonic or Hyper Tails. It is unknown if Naugus absorbed more Power Rings than the heroes, if the portal to the Zone of Silence bolstered the duration of his superpowered state, or if other factors were involved.