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): September 22, 2006
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 September 22, 2006, NCT Group, Inc. ("NCT") issued Carole Salkind an 8%
convertible note in the principal amount of $550,000 for which Ms. Salkind paid
NCT $300,000 in cash. This note is due upon demand, but in no event later than
six months from the date of issuance. The convertible note is secured by
substantially all of the assets of NCT. The note bears interest at the stated
rate until the due date of the note, or until demand is made for repayment of
the note, and bears 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 or upon demand. Interest is payable upon maturity of the note or upon demand
for repayment. At the election of Ms. Salkind, the note may be converted into
shares of NCT common stock at a conversion price per share equal to the greater
of (i) $0.0025 or (ii) the par value of NCT common stock on the date of
conversion. At the election of Ms. Salkind, the note 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.
The issuance of the note 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 (demand) issued by NCT Group,
Inc. to Carole Salkind (incorporated by reference to Exhibit No.
10.1(a) to Form 8-K dated December 22, 2005).
10.1(b) Schedule of Secured Convertible Note (demand) issued by NCT
Group, Inc. to Carole Salkind on September 22, 2006.
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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: September 28, 2006
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