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): July 8, 2005
NCT Group, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 0-18267 59-2501025
- ---------------------------- --------------------- --------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
20 Ketchum Street, Westport, CT 06880
- ---------------------------------------- ----------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (203) 226-4447
----------------
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 July 8, 2005, NCT Group, Inc. ("NCT") issued Carole Salkind an 8% convertible
note in the principal amount of $27,129,266.96 to cure NCT's default under four
notes dated December 17, 2004, December 22, 2004, December 31, 2004 and December
31, 2004. The principal amount of this note represents the aggregate principal
rolled over ($23,702,178.88), 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 six months from the date of issuance. 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 2,260,772,247 shares of NCT common stock
at a conversion price per share of $0.012 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 the issuance of the note, NCT issued Ms. Salkind a five-year
warrant to acquire 446,750,000 shares of NCT common stock at an exercise price
per share of $0.012.
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
10.1(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))..
10.1(b) Schedule of Secured Convertible Note (refinancing) issued by NCT
Group, Inc. to Carole Salkind on July 8, 2005.
2
10.2(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)).
10.2(b) Schedule of Warrant (refinancing) issued by NCT Group, Inc. to
Carole Salkind on July 8, 2005.
3
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
-----------------------
Cy E. Hammond
Senior Vice President,
Chief Financial Officer
Date: July 14, 2005
4