UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): December 22, 2004
NCT Group, Inc.
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(Exact name of registrant as specified in its charter)
NCT Group, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 0-18267 59-2501025
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
20 Ketchum Street, Westport, CT 06880
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (203) 226-4447
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Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under
an Off-Balance Sheet Arrangement of a Registrant.
Item 3.02. Unregistered Sales of Equity Securities.
On December 22, 2004, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $13,933,584.56 to cure NCT's default
under three notes dated June 15, 2004 and two notes dated June 16, 2004. The
principal amount of this December 22, 2004 note represents the aggregate
principal rolled over ($12,193,812.57), default penalty (10% of the principal in
default) and accrued interest. The note is secured by substantially all of the
assets of NCT. The note matures on June 22, 2005. The note bears interest at 8%
per annum until the due date of the note, and bears interest at a default rate
of 13% on any amount of principal or interest that is not paid when due.
Interest is payable on June 22, 2005. At the election of Ms. Salkind, the note
may be converted into 839,372,564 shares of NCT common stock at a conversion
price per share of $0.0166 or exchanged for shares of common stock of any
subsidiary of NCT (except Pro Tech Communications, Inc.) that makes a public
offering of its common stock (at the public offering price). The note contains
events of default, any one of which (if not cured) triggers a default penalty of
10% of the then outstanding principal. If triggered, the default penalty, along
with the outstanding principal and accrued interest, becomes immediately due and
payable. Events of default include the failure to pay principal and interest
when due and the failure to issue shares of common stock upon exercise of
conversion rights.
In conjunction with this note issuance, NCT issued Ms. Salkind a five-year
warrant to acquire 229,500,000 shares of NCT common stock at an exercise price
per share of $0.0166.
The issuance of the note and warrant was not registered under the Securities Act
of 1933, as amended, in reliance upon the exemption set forth in Section 4(2) of
the Securities Act relating to transactions by an issuer not involving a public
offering.
Item 9.01 Financial Statements and Exhibits.
(c) Exhibits
4.1 Warrant dated December 22, 2004 issued to Carole Salkind for the
purchase of 229,500,000 shares of NCT common stock at a purchase price
of $0.0166 per share.
10.01 Secured Convertible Note in principal amount of $13,933,584.56 dated
December 22, 2004 issued by NCT to Carole Salkind.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
NCT GROUP, INC.
By: /s/ Cy E. Hammond
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Cy E. Hammond
Senior Vice President and
Chief Financial Officer
Date: December 23, 2004
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