content: <PAGE>
   
                        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): May29, 1997
  
                              The Failure Group, Inc.
              ------------------------------------------------------
              (Exact name of registrant as specified in its charter)
  
  
  
            Delaware                        0-18655               77-0218904
            --------                        -------               ----------
  (State or other jurisdiction of          (Commission          (I.R.S. Employer
   incorporation or organization)          File Number)        Identification No.)
  
  
  
  149 Commonwealth Drive, Menlo Park, California                       94025
  ----------------------------------------------                       -----
    (Address of principal executive offices)                         (Zip Code)
  
  
  
        Registrant's telephone number, including area code: (415) 326-9400
                                                            --------------
  
                                        N/A
           -------------------------------------------------------------
           (Former name or former address, if changed since last report)
  <PAGE>
   
  ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
           ------------------------------------
  
           On May 16, 1997, The Failure Group Washington, Inc., a wholly-owned
  subsidiary ("Sub") of The Failure Group, Inc. ("Failure Group"), merged (the
  "Merger") with and into Performance Technologies, Incorporated d.b.a. PTI
  Environmental Services, a Washington corporation ("PTI"). As a result of the
  Merger, PTI became a wholly-owned subsidiary of Failure Group.
  
           The Merger occurred pursuant to the terms of the Agreement and Plan of
  Reorganization dated as of April 27, 1997, as amended by Amendment Number 1
  thereto dated as of May 7, 1997, entered into by and among Failure Group; Sub;
  PTI; Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen and
  Larry F. Marx (collectively the "Principal Shareholders"); and Chase Trust
  Company of California (the "Reorganization Agreement") and pursuant to a related
  Plan of Merger between Sub and PTI filed with the Secretary of State of the
  state of Washington as of May 16, 1997 (the "Plan of Merger"). The Merger has
  been accounted for under the purchase method of accounting. In addition to $7.5
  million in cash, an aggregate of 480,002 shares of Failure Group Common Stock
  were issued in connection with the Merger.
  
           All of the shares of Failure Group Common Stock issued pursuant to the
  Merger were placed into escrow to satisfy certain indemnification obligations of
  PTI and the Principal Shareholders pursuant to the escrow provisions of the
  Reorganization Agreement.
  
  ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.
           ---------------------------------
  
           (a)      Financial Statements of Business Acquired.
  
                    It is impractical for the registrant to provide the required
  financial statements for the business acquired at the time of filing of this
  report, but the registrant will file such required financial statements by
  amendment as soon as practicable, but not later than 60 days after this report
  must be filed.
  
           (b)      Pro Forma Financial Information.
  
                    It is impractical for the registrant to provide the required
  pro forma financial information for the business acquired at the time of filing
  of this report, but the registrant will file such required pro forma financial
  information by amendment as soon as practicable, but not later than 60 days
  after this report must be filed.
  
           (c)      Exhibits.
  <TABLE> 
                    <C>      <S> 
                    2.1      Agreement and Plan of Reorganization dated as of April 27, 1997, entered into by and among
                             The Failure Group, Inc., The Failure Group Washington, Inc., Performance Technologies,
                             Incorporated d.b.a. PTI Environmental Services, Robert C. Barrick, Gary N. Bigham, Thomas
                             C. Ginn, Marc W. Lorenzen, Larry F. Marx, and Chase Trust Company of California.
  
  </TABLE> 
  
                                        -2-
  <PAGE>
   
  <TABLE> 
                    <C>      <S>  
                    2.2      Amendment Number 1 dated as of May 7, 1997, to the Agreement and Plan of Reorganization
                             dated as of April 27, 1997, entered into by and among The Failure Group, Inc., The Failure
                             Group Washington, Inc., Performance Technologies, Incorporated d.b.a. PTI Environmental
                             Services, Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen, Larry F.
                             Marx, and Chase Trust Company of California.
  
                    2.3      Plan of Merger filed as of May 16, 1997, by and between The Failure Group Washington, Inc.
                             and Performance Technologies, Incorporated d.b.a. PTI Environmental Services.
  
                    4.1      Registration Rights Agreement dated May 16, 1997.
  
                    27.1*    Financial Data Schedule.
  </TABLE> 
  *To be filed by amendment.
  
                                        -3-
  <PAGE>
   
                                     SIGNATURE
  
           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.
  
  
  
                                          THE FAILURE GROUP, INC.
  
  
  Dated:  May 29, 1997                    By:  /s/ Gail A. Aldrich
                                             -------------------------------
                                               Corporate Vice President
                                               and Secretary
  
  
  
                                        -4-
  <PAGE>
   
                                 INDEX TO EXHIBITS
  
  
  <TABLE> 
  <CAPTION> 
  
  
  Exhibit No.
  -----------
  <C>               <S> 
   2.1              Agreement and Plan of Reorganization dated as of April 27, 1997, entered into by and among
                    The Failure Group, Inc., The Failure Group Washington, Inc., Performance Technologies, Incorporated
                    d.b.a. PTI Environmental Services, Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W.
                    Lorenzen, Larry F. Marx, and Chase Trust Company of California.
  
   2.2              Amendment Number 1 dated as of May 7, 1997, to the Agreement and Plan of Reorganization
                    dated as of April 27, 1997, entered into by and among The Failure Group, Inc., The Failure Group
                    Washington, Inc., Performance Technologies, Incorporated d.b.a. PTI Environmental Services, Robert
                    C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen, Larry F. Marx, and Chase Trust
                    Company of California.
  
   2.3              Plan of Merger filed as of May 16, 1997, by and between The Failure Group Washington, Inc.
                    and Performance Technologies, Incorporated d.b.a. PTI Environmental Services.
  
   4.1              Registration Rights Agreement dated May 16, 1997.
  
  27.1*             Financial Data Schedule.
  
  </TABLE> 
  
  
  
  *To be filed by amendment
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text: 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): May29, 1997
  
                              The Failure Group, Inc.
              ------------------------------------------------------
              (Exact name of registrant as specified in its charter)
  
            Delaware                        0-18655               77-0218904
            --------                        -------               ----------
  (State or other jurisdiction of          (Commission          (I.R.S. Employer
   incorporation or organization)          File Number)        Identification No.)
  
  149 Commonwealth Drive, Menlo Park, California                       94025
  ----------------------------------------------                       -----
    (Address of principal executive offices)                         (Zip Code)
  
        Registrant's telephone number, including area code: (415) 326-9400
                                                            --------------
  
                                        N/A
           -------------------------------------------------------------
           (Former name or former address, if changed since last report)
  ITEM 2.  ACQUISITION OR DISPOSITION OF ASSETS
           ------------------------------------
  
           On May 16, 1997, The Failure Group Washington, Inc., a wholly-owned
  subsidiary ("Sub") of The Failure Group, Inc. ("Failure Group"), merged (the
  "Merger") with and into Performance Technologies, Incorporated d.b.a. PTI
  Environmental Services, a Washington corporation ("PTI"). As a result of the
  Merger, PTI became a wholly-owned subsidiary of Failure Group.
  
           The Merger occurred pursuant to the terms of the Agreement and Plan of
  Reorganization dated as of April 27, 1997, as amended by Amendment Number 1
  thereto dated as of May 7, 1997, entered into by and among Failure Group; Sub;
  PTI; Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen and
  Larry F. Marx (collectively the "Principal Shareholders"); and Chase Trust
  Company of California (the "Reorganization Agreement") and pursuant to a related
  Plan of Merger between Sub and PTI filed with the Secretary of State of the
  state of Washington as of May 16, 1997 (the "Plan of Merger"). The Merger has
  been accounted for under the purchase method of accounting. In addition to $7.5
  million in cash, an aggregate of 480,002 shares of Failure Group Common Stock
  were issued in connection with the Merger.
  
           All of the shares of Failure Group Common Stock issued pursuant to the
  Merger were placed into escrow to satisfy certain indemnification obligations of
  PTI and the Principal Shareholders pursuant to the escrow provisions of the
  Reorganization Agreement.
  
  ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS.
           ---------------------------------
  
           (a)      Financial Statements of Business Acquired.
  
                    It is impractical for the registrant to provide the required
  financial statements for the business acquired at the time of filing of this
  report, but the registrant will file such required financial statements by
  amendment as soon as practicable, but not later than 60 days after this report
  must be filed.
  
           (b)      Pro Forma Financial Information.
  
                    It is impractical for the registrant to provide the required
  pro forma financial information for the business acquired at the time of filing
  of this report, but the registrant will file such required pro forma financial
  information by amendment as soon as practicable, but not later than 60 days
  after this report must be filed.
  
           (c)      Exhibits.
  2.1      Agreement and Plan of Reorganization dated as of April 27, 1997, entered into by and among
                             The Failure Group, Inc., The Failure Group Washington, Inc., Performance Technologies,
                             Incorporated d.b.a. PTI Environmental Services, Robert C. Barrick, Gary N. Bigham, Thomas
                             C. Ginn, Marc W. Lorenzen, Larry F. Marx, and Chase Trust Company of California.
  -2-
  2.2      Amendment Number 1 dated as of May 7, 1997, to the Agreement and Plan of Reorganization
                             dated as of April 27, 1997, entered into by and among The Failure Group, Inc., The Failure
                             Group Washington, Inc., Performance Technologies, Incorporated d.b.a. PTI Environmental
                             Services, Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen, Larry F.
                             Marx, and Chase Trust Company of California.
  
                    2.3      Plan of Merger filed as of May 16, 1997, by and between The Failure Group Washington, Inc.
                             and Performance Technologies, Incorporated d.b.a. PTI Environmental Services.
  
                    4.1      Registration Rights Agreement dated May 16, 1997.
  
                    27.1*    Financial Data Schedule.
  *To be filed by amendment.
  
                                        -3-
  SIGNATURE
  
           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.
  
                                          THE FAILURE GROUP, INC.
  
  Dated:  May 29, 1997                    By:  /s/ Gail A. Aldrich
                                             -------------------------------
                                               Corporate Vice President
                                               and Secretary
  
                                        -4-
  INDEX TO EXHIBITS
  Exhibit No.
  -----------
  2.1              Agreement and Plan of Reorganization dated as of April 27, 1997, entered into by and among
                    The Failure Group, Inc., The Failure Group Washington, Inc., Performance Technologies, Incorporated
                    d.b.a. PTI Environmental Services, Robert C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W.
                    Lorenzen, Larry F. Marx, and Chase Trust Company of California.
  
   2.2              Amendment Number 1 dated as of May 7, 1997, to the Agreement and Plan of Reorganization
                    dated as of April 27, 1997, entered into by and among The Failure Group, Inc., The Failure Group
                    Washington, Inc., Performance Technologies, Incorporated d.b.a. PTI Environmental Services, Robert
                    C. Barrick, Gary N. Bigham, Thomas C. Ginn, Marc W. Lorenzen, Larry F. Marx, and Chase Trust
                    Company of California.
  
   2.3              Plan of Merger filed as of May 16, 1997, by and between The Failure Group Washington, Inc.
                    and Performance Technologies, Incorporated d.b.a. PTI Environmental Services.
  
   4.1              Registration Rights Agreement dated May 16, 1997.
  
  27.1*             Financial Data Schedule.
  *To be filed by amendment