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): April 14, 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 April 14, 2005, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $390,000, for which Ms. Salkind paid
NCT $390,000 in cash. Also on April 14, 2005, NCT issued Carole Salkind an 8%
convertible note in the principal amount of $457,970.18 to cure NCT's default
under a note dated October 1, 2004. The principal amount of this note represents
the principal rolled over ($400,000), 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 October 14, 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 October 14, 2005. At the election of Ms. Salkind, the
notes may be converted into an aggregate of 65,228,475 shares of NCT common
stock at a conversion price per share of $0.013 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 14,750,000 shares of NCT common
stock at an exercise price per share of $0.013.
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
10.1(a) Form of Secured Convertible Note (new financings) issued by NCT
Group, Inc. to Carole Salkind (incorporated herein by reference to
Exhibit 10.8(a) of the registrant's Annual Report on Form 10-K for the
year ended December 31, 2004 (File No. 0-18267)).
10.1(b) Schedule of Secured Convertible Note (new financing) issued by NCT
Group, Inc. to Carole Salkind on April 14, 2005.
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10.2(a) Form of Secured Convertible Note (refinancings) issued by NCT
Group, Inc. to Carole Salkind (incorporated herein by reference to
Exhibit 10.9(a) of the registrant's Annual Report on Form 10-K for the
year ended December 31, 2004 (File No. 0-18267)).
10.2(b) Schedule of Secured Convertible Note (refinancing) issued by NCT
Group, Inc. to Carole Salkind on April 14, 2005.
10.3(a) Form of Warrant (new financings) issued by NCT Group, Inc. to
Carole Salkind (incorporated herein by reference to Exhibit 10.10(a)
of the registrant's Annual Report on Form 10-K for the year ended
December 31, 2004 (File No. 0-18267)).
10.3(b) Schedule of Warrant (new financing) issued by NCT Group, Inc. to
Carole Salkind on April 14, 2005.
10.4(a) Form of Warrant (refinancings) issued by NCT Group, Inc. to Carole
Salkind (incorporated herein by reference to Exhibit 10.11(a) of the
registrant's Annual Report on Form 10-K for the year ended December
31, 2004 (File No. 0-18267)).
10.4(b) Schedule of Warrant (refinancing) issued by NCT Group, Inc. to Carole
Salkind on April 14, 2005.
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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: April 20, 2005
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