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 31, 2004
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 31, 2004, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $400,000, for which Ms. Salkind paid
NCT $400,000 in cash. Also on December 31, 2004, NCT issued Carole Salkind an 8%
convertible note in the principal amount of $8,968,594.32 to cure NCT's default
under notes dated June 28, 2004 and June 30, 2004. The principal amount of this
December 31, 2004 note represents the aggregate principal rolled over
($7,861,028.67), default penalty (10% of the principal in default) and accrued
interest. The notes are secured by substantially all of the assets of NCT. The
notes mature on June 30, 2005. The notes bear interest at 8% per annum until the
due date of the notes, and bear 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
30, 2005. At the election of Ms. Salkind, the notes may be converted into an
aggregate of 520,477,462 shares of NCT common stock at a conversion price per
share of $0.018 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 notes contain 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 the issuance of these notes, NCT issued Ms. Salkind
five-year warrants to acquire an aggregate of 154,500,000 shares of NCT common
stock at an exercise price per share of $0.018.
The issuance of the notes and warrants 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 31, 2004 issued to Carole Salkind for the
purchase of 6,750,000 shares of NCT common stock at a purchase price
of $0.018 per share.
4.2 Warrant dated December 31, 2004 issued to Carole Salkind for the
purchase of 147,750,000 shares of NCT common stock at a purchase price
of $0.018 per share.
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10.01 Secured Convertible Note in principal amount of $400,000 dated
December 31, 2004 issued by NCT to Carole Salkind.
10.02 Secured Convertible Note in principal amount of $8,968,594.32 dated
December 31, 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: January 6, 2005
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