content: 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 22, 2004
  
  
                                   NCT Group, Inc.
  --------------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
  
                                   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))
  
  <PAGE>
  
  
  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 22, 2004, NCT Group, Inc. ("NCT"), its subsidiary, Distributed Media
  Corporation  ("DMC"),  all of the individual members of NCT's Board of Directors
  (collectively  with NCT and DMC,  the  "NCT  Parties")  and  Carole  Salkind,  a
  beneficial  owner of  approximately  88% of NCT's common  stock,  entered into a
  settlement agreement. Under this agreement, Ms. Salkind irrevocably released the
  NCT  Parties  from and against all claims  recently  assigned to Ms.  Salkind by
  Production  Resource  Group,  LLC ("PRG"),  except as described  below.  The PRG
  claims include those asserted by PRG in three pending lawsuits,  two in Superior
  Court of the State of Connecticut  and one in the Court of Chancery of the State
  of Delaware in and for New Castle County.  In one of the  Connecticut  lawsuits,
  PRG's claims  include a claim of  collection on a $2.0 million Offer of Judgment
  previously  accepted  by NCT and DMC,  along  with  accrued  interest.  (On that
  judgment,  approximately  $135,000  had  been  collected  by  PRG  prior  to its
  assignment  of claims to Salkind.) In the Delaware  lawsuit,  PRG sought,  among
  other things,  the appointment of a receiver over the business and assets of NCT
  and DMC.  In  connection  with her  release,  Ms.  Salkind has agreed to dismiss
  (without prejudice) the three lawsuits described above.
  
  In  consideration  for entering  into the  settlement  agreement,  NCT issued to
  Carole  Salkind  a  five-year  convertible  note in the  principal  amount of $5
  million. The note is secured by substantially all of the assets of NCT. The note
  bears  interest,  retroactive  to  December  1, 2004,  at 12% per annum  payable
  quarterly in arrears  beginning October 1, 2005, and bears interest at a default
  rate of 17% per annum on any interest or  principal  not paid when due. The note
  may be prepaid in whole (but not in part) prior to March 31,  2005;  thereafter,
  the note may be prepaid in whole or in part under certain circumstances.  At the
  election of Ms. Salkind,  the note may be converted into  301,204,819  shares of
  NCT common  stock at a conversion  price per share of $0.0166 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,  including  the  failure to pay
  principal  or interest  when due and the failure to issue shares of common stock
  upon exercise of conversion  rights.  Upon an event of default (if not cured), a
  default penalty of 10% of the then outstanding principal becomes immediately due
  and payable,  as does all accrued  interest and all outstanding  principal.  The
  exception is that,  upon an event of default  consisting of a failure to make an
  interest  payment  when due and  payable,  a default  penalty of 10% of the then
  outstanding  principal becomes  immediately due and payable, as does all accrued
  interest, but outstanding principal does not. However, a failure to pay interest
  when due and payable  triggers the 10% default  penalty each and every time such
  failure occurs.
  
  The settlement  agreement  further provides that unless there is a default under
  the note,  Salkind may not  enforce any of the PRG claims or lawsuits  described
  above. Upon full  satisfaction of the note,  Salkind's release of the PRG claims
  automatically  becomes  unqualified  and Salkind  must  dismiss the PRG lawsuits
  described above,  this time with prejudice.  However,  if a default occurs under
  the
  
                                         2
  <PAGE>
  
  
  note,  all PRG claims and  lawsuits  against the NCT Parties may  thereafter  be
  enforced  by  Salkind,  including  the  lawsuits  previously  dismissed  without
  prejudice  and  including  the judgment of $2.0  million  plus accrued  interest
  described  above, all to the extent  necessary for full  satisfaction  under the
  note.
  
  In conjunction with the issuance of the note, NCT issued Ms. Salkind a five-year
  warrant to acquire  82,500,000  shares of NCT common stock at an exercise  price
  per share of $0.0166.
  
  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.
  
                                         3
  <PAGE>
  
  
  Item 9.01.     Financial Statements and Exhibits.
  
  (c) Exhibits:
  
  
  4.1       Warrant  dated  December  22,  2004  issued to Carole  Salkind for the
            purchase of 82,500,000  shares of NCT common stock at a purchase price
            of $0.0166 per share.
  
  10.01     Secured  Convertible  Note in  principal  amount of  $5,000,000  dated
            December 22, 2004 issued by NCT to Carole Salkind.
  
                                         4
  <PAGE>
  
  
                                     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.
  
  Date:  December 23, 2004
  
                                                    By:  /s/ Cy E. Hammond
                                                         -------------------------
                                                         Cy E. Hammond
                                                         Senior Vice President and
                                                         Chief Financial Officer
  
                                         5
metadata_documents: [{"type": "8-K", "sequence": "1", "filename": "nct8k_salkind-122204a.txt", "description": "FORM-8K", "secsgml_size_bytes": 8050}]
metadata_filer: {"company-data": {"conformed-name": "NCT GROUP INC", "cik": "0000722051", "assigned-sic": "3690", "irs-number": "592501025", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "000-18267", "film-number": "041224327"}, "business-address": {"street1": "20 KETCHUM ST", "city": "WESTPORT", "state": "CT", "zip": "06880", "phone": "2032264447"}, "mail-address": {"street1": "20 KETCHUM ST", "city": "WESTPORT", "state": "CT", "zip": "06880"}, "former-company": [{"former-conformed-name": "NOISE CANCELLATION TECHNOLOGIES INC", "date-changed": "19920703"}, {"former-conformed-name": "ION TECHNOLOGIES INC/NV", "date-changed": "19850512"}, {"former-conformed-name": "PRETORIA TECHNOLOGY INC", "date-changed": "19840404"}]}
text: 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 22, 2004
  
                                   NCT Group, Inc.
  --------------------------------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
                                   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 December 22, 2004, NCT Group, Inc. ("NCT"), its subsidiary, Distributed Media
  Corporation  ("DMC"),  all of the individual members of NCT's Board of Directors
  (collectively  with NCT and DMC,  the  "NCT  Parties")  and  Carole  Salkind,  a
  beneficial  owner of  approximately  88% of NCT's common  stock,  entered into a
  settlement agreement. Under this agreement, Ms. Salkind irrevocably released the
  NCT  Parties  from and against all claims  recently  assigned to Ms.  Salkind by
  Production  Resource  Group,  LLC ("PRG"),  except as described  below.  The PRG
  claims include those asserted by PRG in three pending lawsuits,  two in Superior
  Court of the State of Connecticut  and one in the Court of Chancery of the State
  of Delaware in and for New Castle County.  In one of the  Connecticut  lawsuits,
  PRG's claims  include a claim of  collection on a $2.0 million Offer of Judgment
  previously  accepted  by NCT and DMC,  along  with  accrued  interest.  (On that
  judgment,  approximately  $135,000  had  been  collected  by  PRG  prior  to its
  assignment  of claims to Salkind.) In the Delaware  lawsuit,  PRG sought,  among
  other things,  the appointment of a receiver over the business and assets of NCT
  and DMC.  In  connection  with her  release,  Ms.  Salkind has agreed to dismiss
  (without prejudice) the three lawsuits described above.
  
  In  consideration  for entering  into the  settlement  agreement,  NCT issued to
  Carole  Salkind  a  five-year  convertible  note in the  principal  amount of $5
  million. The note is secured by substantially all of the assets of NCT. The note
  bears  interest,  retroactive  to  December  1, 2004,  at 12% per annum  payable
  quarterly in arrears  beginning October 1, 2005, and bears interest at a default
  rate of 17% per annum on any interest or  principal  not paid when due. The note
  may be prepaid in whole (but not in part) prior to March 31,  2005;  thereafter,
  the note may be prepaid in whole or in part under certain circumstances.  At the
  election of Ms. Salkind,  the note may be converted into  301,204,819  shares of
  NCT common  stock at a conversion  price per share of $0.0166 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,  including  the  failure to pay
  principal  or interest  when due and the failure to issue shares of common stock
  upon exercise of conversion  rights.  Upon an event of default (if not cured), a
  default penalty of 10% of the then outstanding principal becomes immediately due
  and payable,  as does all accrued  interest and all outstanding  principal.  The
  exception is that,  upon an event of default  consisting of a failure to make an
  interest  payment  when due and  payable,  a default  penalty of 10% of the then
  outstanding  principal becomes  immediately due and payable, as does all accrued
  interest, but outstanding principal does not. However, a failure to pay interest
  when due and payable  triggers the 10% default  penalty each and every time such
  failure occurs.
  
  The settlement  agreement  further provides that unless there is a default under
  the note,  Salkind may not  enforce any of the PRG claims or lawsuits  described
  above. Upon full  satisfaction of the note,  Salkind's release of the PRG claims
  automatically  becomes  unqualified  and Salkind  must  dismiss the PRG lawsuits
  described above,  this time with prejudice.  However,  if a default occurs under
  the
  
                                         2
  note,  all PRG claims and  lawsuits  against the NCT Parties may  thereafter  be
  enforced  by  Salkind,  including  the  lawsuits  previously  dismissed  without
  prejudice  and  including  the judgment of $2.0  million  plus accrued  interest
  described  above, all to the extent  necessary for full  satisfaction  under the
  note.
  
  In conjunction with the issuance of the note, NCT issued Ms. Salkind a five-year
  warrant to acquire  82,500,000  shares of NCT common stock at an exercise  price
  per share of $0.0166.
  
  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.
  
                                         3
  Item 9.01.     Financial Statements and Exhibits.
  
  (c) Exhibits:
  
  4.1       Warrant  dated  December  22,  2004  issued to Carole  Salkind for the
            purchase of 82,500,000  shares of NCT common stock at a purchase price
            of $0.0166 per share.
  
  10.01     Secured  Convertible  Note in  principal  amount of  $5,000,000  dated
            December 22, 2004 issued by NCT to Carole Salkind.
  
                                         4
  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.
  
  Date:  December 23, 2004
  
                                                    By:  /s/ Cy E. Hammond
                                                         -------------------------
                                                         Cy E. Hammond
                                                         Senior Vice President and
                                                         Chief Financial Officer
  
                                         5