WESTPORT, Conn.--(BUSINESS WIRE)--April 8, 2004--NCT Group, Inc. (OTCBB: NCTI) reported that total revenue for the year ended December 31, 2003 was $4.9 million compared to $7.3 million in the same period in 2002, a decrease of $2.4 million. The overall change was primarily due to a $1.5 million drop in technology licensing fees and royalties, reflecting a decrease in the recognition of deferred license fees. Net loss for the year ended December 31, 2003 was $30.3 million compared to $40.1 million in the same period in 2002, a favorable variance of $9.8 million or 24.4%, primarily due to a $12.2 million decrease in total costs and expenses versus last year. Last year's expenses included $9.2 million for repurchased licenses. There was no similar expense item in 2003. Costs associated with our financing activities continue to account for a significant portion of our non-operating items. Such costs were $18.6 million in 2003 versus $14.2 million in 2002, an increase of $4.4 million or 31%. Net cash used in operating activities increased slightly from $9.7 million in 2002 to $10.3 million in 2003, a increase of $0.6 million or 5.8%, a reflection of our limited cash resources and continued strict spending controls.

Total revenues for the three months ended December 31, 2003 were $1.4 million compared to $1.5 million in the same period in 2002. Net loss for the three months ended December 31, 2003 was $13.3 million compared to $9.0 million for the three months ended December 31, 2002. Expenses related to the issuance of options and warrants for services were $4.7 million in the three months ended December 31, 2003 versus only $0.9 million in the prior year.

Please refer to the table and notes below for a further comparison of our results.

"On March 22, 2004, Artera's enterprise partner introduced a new service offering based on Artera Turbo technology called Avaya Network Bandwidth Optimization," said Michael J. Parrella, Chairman and CEO, NCTI. "Artera's technical and sales teams have been working closely with this partner for over a year to arrive at this point and we have every reason to believe Avaya Network Bandwidth Optimization will be well received by major enterprise customers. We believe that this relationship has the potential to significantly improve our revenue results. Furthermore, we continue to build our residential and small business distribution channels for Artera Turbo both domestically and abroad."

"In addition," continued Mr. Parrella, "we believe the revenue picture should improve for our Pro Tech Communications subsidiary with the launch of some very exciting, new headset products this year as well as for our media and technology licensing endeavors."

About NCT Group, Inc.

NCT Group, Inc. is a publicly traded, high-tech company with three business segments: communications, media and technology. NCTI's strong technology base drives leading edge technological innovations. For more information refer to www.nctgroupinc.com.

Cautionary Statement Regarding Forward-Looking Statements

Certain information contained in this press release comprise forward-looking statements within the meaning of the Private Securities Litigation Act of 1995 (the "Act"), which became law in December 1995. In order to obtain the benefits of the "safe harbor" provisions of the Act for any such forward-looking statements, NCTI wishes to caution investors and prospective investors about significant factors, which among others, have in some cases affected NCTI's actual results and are in the future likely to affect NCTI's actual results and cause them to differ materially from those expressed in any such forward-looking statements. Investors and prospective investors should read this press release in conjunction with NCTI's recent filings with the Securities and Exchange Commission available online in the EDGAR database at http://www.sec.gov.

NCT Group, Inc.

(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
----------------------- -----------------------
(In millions, except
per share amounts) 2002 2003 2002 2003
---------- ---------- ---------- ----------
Total revenue $ 1.5 $ 1.4 $ 7.3 $ 4.9

Operating costs and
expenses $ 7.1 (a) $ 8.5 (b) $ 32.3 (c) $ 21.8 (d)

Non-operating items $ 3.4 (e) $ 6.2 (f) $ 15.1 (g) $ 13.3 (h)

Net loss $ (9.0) $(13.3) $(40.1) $(30.3)

Net loss per share $(0.02) $(0.02) $(0.10)(i) $(0.06)(i)

Weighted average
number of common
shares outstanding 488.1 645.0 446.4 563.5

Footnotes:

(a) Includes $2.1 million relating to impairment of other intangibles
and $0.9 million for the cost of issuing options and warrants for
services.

(b) Includes $4.7 million for the cost of issuing options for
services.

(c) Includes $9.2 million for repurchased licenses, $2.1 million
relating to impairment of other intangibles and $4.7 million for
the cost of issuing options and warrants for services.

(d) Includes $8.4 million for the cost of issuing options and warrants
for services.

(e) Includes $2.7 million related to interest, penalties and other
costs associated with our financing activities.

(f) Consists of interest, penalties and other costs associated with
our financing activities.

(g) Includes $14.2 million for interest, penalties and other costs
associated with our financing activities, and $0.8 million for the
realization of loss on securities.

(h) Includes $18.6 million for interest, penalties and other costs
associated with our financing activities, partially offset by a
$5.3 million gain related to litigation settlements.

(i) The year 2002 and 2003 loss per share is based upon the net loss
attributable to common stockholders. Each year reflects beneficial
conversion features and preferred stock dividends of $2.9 million.