Lost Memories Pt III: (Failure.)
As previously mentioned, those who failed were naturally disposed of.
The ones who had failed in phase one, otherwise known as the first trial didn't have to be disposed of in any particular manner seeing as the sole requirement for the first trial was survival.
All the subject had to do was survive the process of having a serum with the information from their respective chips injected into their bodies, which would slowly, but surely alter the subject's reaction speed and 5 senses.
They didn't go through the trouble of teaching the children martial arts or combat techniques much less the usage of various weapons at that point, but when they started inserting brain chips on anything that required the body, the children were able to absorb it all like sponges that had been dried in the desert.
After a few more trials, an additional side effect was exposed.