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): March 23, 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 March 23, 2005, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $2,001,439.22 to cure NCT's default
under two notes dated September 14, 2004. The principal amount of the note
represents the aggregate principal rolled over ($1,751,034.50), default penalty
(10% of the principal in default) and accrued interest. The note matures on
September 23, 2005. The note is secured by substantially all of the assets of
NCT. 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 upon maturity of the note. At the
election of Ms. Salkind, the note may be converted into an aggregate of
109,368,263 shares of NCT common stock at a conversion price per share of
$0.0183 or may be 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 the issuance of these notes, NCT issued Ms. Salkind
five-year warrants to acquire an aggregate of 33,000,000 shares of NCT common
stock at an exercise price per share of $0.0183.
The issuance of the note 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 March 23, 2005 issued to Carole Salkind for the purchase
of 33,000,000 shares of NCT common stock at a purchase price of
$0.0183 per share.
10.01 Secured Convertible Note in principal amount of $2,001,439.22 dated
March 23, 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: March 29, 2005
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