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): January 26, 2005
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 January 26, 2005, 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 January 26, 2005, NCT issued Carole Salkind an 8%
convertible note in the principal amount of $11,291,006.31 to cure NCT's default
under two notes dated July 16, 2004. The principal amount of this January 26,
2005 note represents the aggregate principal rolled over ($9,869,467.03),
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
July 26, 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 July 26, 2005. At the
election of Ms. Salkind, the notes may be converted into an aggregate of
679,709,669 shares of NCT common stock at a conversion price per share of
$0.0172 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 192,750,000 shares of NCT common
stock at an exercise price per share of $0.0172.
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 January 26, 2005 issued to Carole Salkind for the
purchase of 6,750,000 shares of NCT common stock at a purchase price
of $0.0172 per share.
4.2 Warrant dated January 26, 2005 issued to Carole Salkind for the
purchase of 186,000,000 shares of NCT common stock at a purchase price
of $0.0172 per share.
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10.01 Secured Convertible Note in principal amount of $400,000 dated January
26, 2005 issued by NCT to Carole Salkind.
10.02 Secured Convertible Note in principal amount of $11,291,006.31 dated
January 26, 2005 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: February 1, 2005
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