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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 2 to
[X] Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the fiscal year ended January 3, 1997
OR
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________
Commission File Number 0-18655
THE FAILURE GROUP, INC.
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(Exact name of registrant as specified in its charter)
Delaware 77-0218904
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(State or other jurisdiction of (I.R.S. employer identification no.)
incorporation or organization)
149 Commonwealth Drive, Menlo Park, California 94025
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code: (415) 326-9400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
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(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
- --
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statement
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant (based on the closing sale price of the Common Stock as reported on
the Nasdaq National Market February 28, 1997, was approximately $15,755,311.
For purposes of this determination, shares of Common Stock held by each officer
and director and by each person who owns 5% or more of the outstanding Common
Stock have been excluded in that such persons may be deemed to be affiliates.
This determination of affiliate status is not necessarily a conclusive
determination for other purposes.
The number of shares of the issuer's Common Stock outstanding as of February 28,
1997 was 6,805,837.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Stockholders for its fiscal
year ended January 3, 1997, are incorporated by reference in Parts II and
IV of this Form 10-K to the extent stated herein.
1
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EXPLANATORY NOTE
This Annual Report on ("Form 10-K/A") is being filed as Amendment No. 2
to the Registrant's Annual Report on Form 10-K filed with the Securities and
Exchange Commission on March 30, 1997 ("Form 10-K") and Amendment No. 1
("Form 10-K/A") filed May 5, 1997 for the purpose of amending the Independent
Auditors' Report on Schedule and Exhibit 23.1, Independent Auditors' Consent.
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Independent Auditors' Report on Schedule
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The Board of Directors and Stockholders
The Failure Group, Inc.:
Under date of January 30, 1997, we reported on the consolidated balance sheets
of The Failure Group, Inc. and subsidiaries as of January 3, 1997 and December
29, 1995, and the related consolidated statements of income (loss),
stockholders' equity, and cash flows for each of the years in the three-year
period ended January 3, 1997, as contained the 1996 annual report to
stockholders. These consolidated financial statements and our report thereon are
incorporated by reference in the January 3, 1997, annual report on Form 10-K of
The Failure Group, Inc. In connection with our audits of the aforementioned
consolidated financial statements, we also audited the related financial
statement schedule as listed in Item 14(a)(2) of this Form 10-K. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion on this financial statement schedule
based on our audits.
In our opinion, such financial statement schedule, when considered in relation
to the basic consolidated financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG Peat Marwick LLP
Palo Alto, California
January 30, 1997
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Exhibit 23.1
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Independent Auditors' Consent
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The Board of Directors and Stockholders
The Failure Group, Inc.:
We consent to incorporation by reference in the registration statements (Nos.
33-38479, 33-46054, 33-72510, and 33-79368) on Form S-8 of The Failure Group,
Inc. of our reports date January 30, 1997, relating to the consolidated balance
sheets of The Failure Group, Inc. and subsidiaries as of January 3, 1997 and
December 29, 1995, and the related consolidated statements of income (loss),
stockholders' equity, and cash flows for each of the years in the three-year
period ended January 3, 1997, and the related schedule, which reports appear
or are incorporated by reference in the January 3, 1997, annual report on
Form 10-K of The Failure Group, Inc.
/s/ KPMG Peat Marwick LLP
Palo Alto, California
March 31, 1997
