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 7, 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 December 7, 2005, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $300,000 for which Ms. Salkind paid
NCT $300,000 in cash. Also on December 7, 2005, NCT issued Carole Salkind an 8%
convertible note in the principal amount of $959,383.98 to cure NCT's default
under notes dated May 16, 2005 and May 18, 2005. The principal amount of this
note represents the aggregate principal rolled over ($835,934.02), 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 six months
from the date of issuance. The notes bear interest at the stated rate until the
due date of the notes, and bear interest at a default rate equal to the stated
rate of interest plus 5% on any amount of principal or interest that is not paid
when due. Interest is payable upon maturity of the notes. At the election of Ms.
Salkind, the $300,000 note may be converted into shares of NCT common stock at a
conversion price per share equal to the greater of (i) $0.0045 or (ii) the par
value of NCT common stock on the date of conversion. At the election of Ms.
Salkind, the $959,383.98 note may be converted into shares of NCT common stock
at a conversion price per share equal to the greater of (i) $0.0052 or (ii) the
par value of NCT common stock on the date of conversion. At the election of Ms.
Salkind, the notes 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 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 the $300,000 note, NCT issued Ms. Salkind a
five-year warrant to acquire 20,000,000 shares of NCT common stock at an
exercise price per share equal to the greater of (i) $0.0045 or (ii) the par
value of NCT common stock on the date of exercise. In conjunction with the
issuance of the $959,383.98 note, NCT issued Ms. Salkind a five-year warrant to
acquire 16,000,000 shares of NCT common stock at an exercise price per share
equal to the greater of (i) $0.0052 or (ii) the par value of NCT common stock on
the date of exercise.
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.
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Item 9.01. Financial Statements and Exhibits.
(c) Exhibits
10.1(a) Form of Secured Convertible Note (new financings after October
31, 2005) issued by NCT Group, Inc. to Carole Salkind.
10.1(b) Schedule of Secured Convertible Note (new financings after
October 31, 2005) issued by NCT Group, Inc. to Carole Salkind on
December 7, 2005.
10.2(a) Form of Secured Convertible Note (refinancings after October 31,
2005) issued by NCT Group, Inc. to Carole Salkind.
10.2(b) Schedule of Secured Convertible Note (refinancings after October
31, 2005) issued by NCT Group, Inc. to Carole Salkind on December
7, 2005.
10.3(a) Form of Warrant (new financings after October 31, 2005) issued by
NCT Group, Inc. to Carole Salkind.
10.3(b) Schedule of Warrant (new financings after October 31, 2005)
issued by NCT Group, Inc. to Carole Salkind on December 7, 2005.
10.4(a) Form of Warrant (refinancings after October 31, 2005) issued by
NCT Group, Inc. to Carole Salkind.
10.4(b) Schedule of Warrant (refinancings after October 31, 2005) issued
by NCT Group, Inc. to Carole Salkind on December 7, 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: December 12, 2005
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