.

I would like to thank Mike Rounds  and Robert S. Anselmo for their clarifications.

    The Partners in AlchemyII were; Ken Forsse, who worked as an Imagineer for Disney. Larry Larsen, who had done the voices of the Wuzzles and voice-overs for Sid and Mary Croft (Croft Entertainment, i.e. 'Land of the Lost', etc). John Davies, a sculptor. All these guys had gotten together because they had wanted to do things other then their day to day jobs allowed. One large project they had built was the robot band out near Palm Springs (still there?). It was an entire orchestra of animatronic characters. As a side line they were also doing toy inventing.

    There is a great deal of Ken's philosophy and personality embodied in TEDDY RUXPIN. Ken Forsse took the best ideas and technologies into TEDDY RUXPIN as he knew how to implement. TR was first completed and shown as a prototype in 1983. AlchemyII had tried to get the toy industry to buy into it. However at that time Teddy was far too complicated, far too cumbersome and not refined enough. He was a two part unit. There was TEDDY RUXPIN and then a separate box that used FM signals to operate the bear. This version failed to attract buyers.

    After 2 prior attempts at getting TEDDY RUXPIN taken on by a toy maker, Lorimar productions (Of TV show 'Dallas' fame) was brought in and started putting money into the project. They assigned a coordinator who knew nothing about the toy industry. The coordinator then obtained an expert because they realized that they'd have to take this to the pacific rim. This was Buddy Franz. He had been a toy buyer for TRU in Hong Kong. He was sent off to work on finding manufactures who could make the toy.

    Over the next few months Franz worked, seemingly making less progress than might be expected. All this time the money being spent on Asia was perhaps more needed at AlchemyII. Efforts were continuing to refine TEDDY RUXPIN further. Very little money is actually is going to the group for basic living expenses so they have to take on other projects to make a living. After a while the project gets stalled.

    Meanwhile there are suspicions about Buddy Franz and how he's doing his job, so someone is sent to the orient to look in on Buddy. This person starts sending back messages saying that Buddy may or may not know what he's doing. He seemed to be living very high of the limitless expense account and doing little in the interest of AlchemyII. Neal Simmons then took action. Neal sets up a talk with Bill Licktenstein, the chairman of Aviva/Hasbro. During the talk Mike Rounds is mentioned and brought in.

    Rounds went out visit the creators of TEDDY RUXPIN. During this meeting they went over the basic concept of TEDDY RUXPIN and what was currently going on. He spent the next 3 hours telling them about the inner workings of the toy industry. By the end of that 3 hours the creators said they'd learned more about how things work in that time than from Buddy Franz in the past 6 months. At this point he was offered the job of product management for TEDDY RUXPIN.

    During a large meeting a few weeks later with all persons involved it becomes clear that the original overseas contact had not been doing things in the best interest of the project. Lorimar determined that they had been left out of the loop about final costs and up-front costs. This really got wild when it was found out the true costs totaled over 16 million for line of credit to overseas production. (There was understandable fallout from this)

    Rounds once again traveled to the pacific rim. Upon returning 12.7.84 he was met by Neal Simmons at the airport at which time he took the prototype TEDDY RUXPIN. He told Rounds to meet up with them the next day and a business meeting at AlchemyII. Upon arriving there the next day he was told he was fired, and that in fact everyone was fired. Lorimar's withdrawl was due in part to the 'Buddy' incident, and thus everything started anew at AlchemyII for the fourth time.

    Neal Simmons then went searching again. He found a Korean company that was interested in TR. Their interest was not truly in TR however, but in ripping off the idea and creating Gabby Bear . This was later removed from the shelves due to a lawsuit.

    In the meantime Neal started courting Don Kingsborough. Don had been President of Atari and had left after Jack Trameil was put on staff. Don had been looking for ~something~ that he could start a company with. After Neal showed Don TEDDY RUXPIN, it became clear that this was what he'd been looking for.

    Meanwhile the people at AlchemyII are literally starving. They'd run out of the extra projects and were having trouble making rent and putting food on the table. Don took this opportunity to help out and he started to subsidize AlchemyII. For the subsidization he wanted 50% equity in TEDDY RUXPIN.

    Everything was set up in a separate corporation called the Gray Corp. Don put a certain amount of money into Gray and AlchemyII pledged the asset of AlchemyII which is the licensing rights to TEDDY RUXPIN. Gray Corp. paid the people and it did the licensing. This meant that the inventors of TEDDY RUXPIN gave up their ownership rights to TEDDY RUXPIN. To this day the rights are truly held by Gray Corp. not AlchemyII. (Note: This seems to be correct, but other sources indicate otherwise)

Using this technique, Don had pre-sold 600,000 units before June of 1985.

    General Electronics made the servo motors and they were tasked with making a $1 servo motor. At the time the servo motors were Fatuba motors, and Fatuba had said if they (Gen. Electronics) could figure out a way to make them that cheaply, they'd buy from them.. On a side note, the original prototypes were slightly more slender in the face due to the original Fatuba motors. He was filled out in production to make space for the later types of servo motors.

    There was a female lead character designed, but never produced for sale or used in the stories named Amber  (Many thanks Robert Skegg!)

Time magazine 1.4.1988 ECONOMY & BUSINESS

For two years, Teddy Ruxpin, the talking toy bear, has delighted youngsters with tales in which he and his friend Grubby outwit the Mudblups, Bounders and assorted other villains. Too bad Teddy couldn't provide a last-minute rescue or happy ending for his creator, Worlds of Wonder. Last week the two-year-old Fremont, Calif., firm filed for bankruptcy protection. During the six months ending Sept. 30, WOW lost $53.5 million as sales fell to $72.7 million. During the same period a year ago, the firm earned $2.8 million on sales of $85.2 million. Eager to follow up on the phenomenal success of Teddy and a second hit, the Lazer Tag ray-gun game, WOW has introduced a host of high-tech toys, including talking versions of Mickey Mouse and Mother Goose. But the new products have not generated enough sales to cover promotion costs. ©1988 Time