UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

In the Matter of

CYCRA INC., a corporation, and

STEVEN CHADWICK JAMES, a/k/a CHAD

JAMES, individually and as an

officer of CYCRA INC.

FILE NO. 232 3007

AGREEMENT CONTAINING

CONSENT ORDER

The Federal Trade Commission (“Commission”) has conducted an investigation of

certain acts and practices of Cycra Inc. and Steven Chadwick James, individually and as an

officer of Cycra Inc. (collectively “Proposed Respondents”). The Commission’s Bureau of

Consumer Protection (“BCP”) has prepared a draft of an administrative Complaint (“draft

Complaint”). BCP and Proposed Respondents, individually or through their duly authorized

officers, enter into this Agreement Containing Consent Order (“Consent Agreement”) to resolve

the allegations in the attached draft Complaint through a proposed Decision and Order to present

to the Commission, which is also attached and made a part of this Consent Agreement.

IT IS HEREBY AGREED by and between Proposed Respondents and BCP, that:

1. The Proposed Respondents are:

a. Proposed Respondent Cycra Inc., a North Carolina corporation with its principal

office or place of business at 941 Old Hargrave Road, Lexington, NC 27295.

b. Proposed Respondent Steven Chadwick James, also known as Chad James, an

officer of the Proposed Corporate Respondent, Cycra Inc. Individually or in

concert with others, he formulates, directs, or controls the policies, acts, or

practices of Cycra Inc. His principal office or place of business is the same as

that of Cycra Inc.

2. Proposed Respondents neither admit nor deny any of the allegations in the Complaint,

except as specifically stated in the Decision and Order. Only for purposes of this action,

Proposed Respondents admit the facts necessary to establish jurisdiction.

3. Proposed Respondents waive:

a. Any further procedural steps;

b. The requirement that the Commission’s Decision contain a statement of findings

of fact and conclusions of law; and

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c. All rights to seek judicial review or otherwise to challenge or contest the validity

of the Decision and Order issued pursuant to this Consent Agreement.

4. This Consent Agreement will not become part of the public record of the proceeding

unless and until it is accepted by the Commission. If the Commission accepts this Consent

Agreement, it, together with the draft Complaint, will be placed on the public record for 30 days

and information about them publicly released. Acceptance does not constitute final approval, but

it serves as the basis for further actions leading to final disposition of the matter. Thereafter, the

Commission may either withdraw its acceptance of this Consent Agreement and so notify each

Proposed Respondent, in which event the Commission will take such action as it may consider

appropriate, or issue and serve its Complaint (in such form as the circumstances may require)

and decision in disposition of the proceeding, which may include an Order. See Section 2.34 of

the Commission’s Rules, 16 C.F.R. § 2.34 (“Rule 2.34”).

5. If this agreement is accepted by the Commission, and if such acceptance is not

subsequently withdrawn by the Commission pursuant to Rule 2.34, the Commission may,

without further notice to Proposed Respondents: (1) issue its Complaint, corresponding in form

and substance with the attached draft Complaint, and its Decision and Order; and (2) make

information about them public. Proposed Respondents agree that service of the Order may be

effected by its publication on the Commission’s website (ftc.gov), at which time the Order will

become final. See Rule 2.32(d). Proposed Respondents waive any rights they may have to any

other manner of service. See Rule 4.4.

6. When final, the Decision and Order will have the same force and effect and may be

altered, modified, or set aside in the same manner and within the same time provided by statute

for other Commission orders.

7. The Complaint may be used in construing the terms of the Decision and Order. No

agreement, understanding, representation, or interpretation not contained in the Decision and

Order or in this Consent Agreement may be used to vary or contradict the terms of the Decision

and Order.

8. Each Proposed Respondent agrees to comply with the terms of the proposed Decision and

Order from the date that Proposed Respondent signs this Consent Agreement. Proposed

Respondents understand that they may be liable for civil penalties and other relief for each

violation of the Decision and Order after it becomes final.

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CYCRA INC. FEDERAL TRADE COMMISSION

___________________

Steven Chadwick James

Chief Operating Officer

Cycra Inc.

___________________

Julia Solomon Ensor

Attorney

Division of Enforcement

Bureau of Consumer Protection

Date:__________________

APPROVED:

STEVEN CHADWICK JAMES

_ ____________

Laura Koss

Assistant Director

Division of Enforcement

Bureau of Consumer Protection

____________________

Steven Chadwick James, individually and as

an officer of Cycra Inc.

Date:__________________

___________________

Thomas Goodhue

Maynard Cooper & Gale

Attorney for Proposed Respondents

Date:__________________

_______________________

James A. Kohm

Associate Director

Division of Enforcement

Bureau of Consumer Protection

_________________________

Samuel Levine

Director

Bureau of Consumer Protection

Date:_____________________

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2323007

UNITED STATES OF AMERICA

BEFORE THE FEDERAL TRADE COMMISSION

COMMISSIONERS: Lina M. Khan, Chair

Rebecca Kelly Slaughter

Alvaro M. Bedoya

In the Matter of

CYCRA INC., a corporation, and

STEVEN CHADWICK JAMES, a/k/a CHAD

JAMES, individually and as an

officer of CYCRA INC.

DECISION AND ORDER

DOCKET NO. CDECISION

The Federal Trade Commission (“Commission”) initiated an investigation of certain acts

and practices of the Respondents named in the caption. The Commission’s Bureau of Consumer

Protection (“BCP”) prepared and furnished to Respondents a draft Complaint. BCP proposed to

present the draft Complaint to the Commission for its consideration. If issued by the

Commission, the draft Complaint would charge the Respondents with violations of the Federal

Trade Commission Act.

Respondents and BCP thereafter executed an Agreement Containing Consent Order

(“Consent Agreement”). The Consent Agreement includes: 1) statements by Respondents that

they neither admit nor deny any of the allegations in the Complaint, except as specifically stated

in this Decision and Order, and that only for purposes of this action, they admit the facts

necessary to establish jurisdiction; and 2) waivers and other provisions as required by the

Commission’s Rules.

The Commission considered the matter and determined that it had reason to believe that

Respondents have violated the Federal Trade Commission Act, and that a Complaint should

issue stating its charges in that respect. The Commission accepted the executed Consent

Agreement and placed it on the public record for a period of 30 days for the receipt and

consideration of public comments. The Commission duly considered any comments received

from interested persons pursuant to Section 2.34 of its Rules, 16 C.F.R. § 2.34. Now, in further

conformity with the procedure prescribed in Rule 2.34, the Commission issues its Complaint,

makes the following Findings, and issues the following Order:

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Findings

1. The Respondents are:

a. Respondent Cycra Inc., a North Carolina corporation with its principal office or

place of business at 941 Old Hargrave Road, Lexington, NC 27295.

b. Respondent Steven Chadwick James, also known as Chad James, an officer of the

Corporate Respondent, Cycra Inc. Individually or in concert with others, he

formulates, directs, or controls the policies, acts, or practices of Cycra Inc. His

principal office or place of business is the same as that of Cycra Inc.

2. The Commission has jurisdiction over the subject matter of this proceeding and over the

Respondents, and the proceeding is in the public interest.

ORDER

Definitions

For purposes of this Order, the following definitions apply:

A. “Clear(ly) and conspicuous(ly)” means that a required disclosure is difficult to miss

(i.e., easily noticeable) and easily understandable by ordinary consumers, including in all

of the following ways:

1. In any communication that is solely visual or solely audible, the disclosure must

be made through the same means through which the communication is presented.

In any communication made through both visual and audible means, such as a

television advertisement, the disclosure must be presented simultaneously in both

the visual and audible portions of the communication even if the representation

requiring the disclosure (“triggering representation”) is made through only one

means.

2. A visual disclosure, by its size, contrast, location, the length of time it appears,

and other characteristics, must stand out from any accompanying text or other

visual elements so that it is easily noticed, read, and understood.

3. An audible disclosure, including by telephone or streaming video, must be

delivered in a volume, speed, and cadence sufficient for ordinary consumers to

easily hear and understand it.

4. In any communication using an interactive electronic medium, such as the

Internet or software, the disclosure must be unavoidable.

5. On a product label, the disclosure must be presented on the principal display

panel.

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6. The disclosure must use diction and syntax understandable to ordinary consumers

and must appear in each language in which the triggering representation appears.

7. The disclosure must comply with these requirements in each medium through

which it is received, including all electronic devices and face-to-face

communications.

8. The disclosure must not be contradicted or mitigated by, or inconsistent with,

anything else in the communication.

9. When the representation or sales practice targets a specific audience, such as

children, the elderly, or the terminally ill, “ordinary consumers” includes

reasonable members of that group.

B. “Made in the United States” means any representation, express or implied, that a

product or service, or a specified component thereof, is of U.S.-origin, including, but not

limited to, a representation that such product or service is “made,” “manufactured,”

“built,” “produced,” or “crafted” in the United States or in America, or any other U.S.-

origin claim.

C. “Product or Service” means any good or service, including any plan or program.

D. “Respondents” means the Corporate Respondent and the Individual Respondent

individually, collectively, or in any combination.

1. “Corporate Respondent” means Cycra Inc., a corporation, and its successors and

assigns.

2. “Individual Respondent” means Steven Chadwick James, also known as Chad

James.

Provisions

I.

Prohibited Misrepresentations Regarding U.S.-Origin Claims

IT IS ORDERED that Respondents, and Respondents’ officers, agents, employees, and

attorneys, and all other persons in active concert or participation with any of them, who receive

actual notice of this Order, whether acting directly or indirectly, in connection with the

manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of any

Product or Service, must not make any representation, expressly or by implication, that a product

is Made in the United States unless:

A. The final assembly or processing of the product occurs in the United States, all

significant processing that goes into the product occurs in the United States, and all or

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virtually all ingredients or components of the product are made and sourced in the United

States; or

B. A Clear and Conspicuous qualification appears immediately adjacent to the

representation that accurately conveys the extent to which the product contains foreign

parts, ingredients or components, and/or processing; or

C. For a claim that a product is assembled in the United States, the product is last

substantially transformed in the United States, the product’s principal assembly takes

place in the United States, and United States assembly operations are substantial.

II.

Prohibited Misleading and Unsubstantiated Representations

IT IS FURTHER ORDERED that Respondents, and Respondents’ officers, agents,

employees, and attorneys, and all other persons in active concert or participation with any of

them, who receive actual notice of this Order, whether acting directly or indirectly, in connection

with the manufacturing, labeling, advertising, promotion, offering for sale, sale, or distribution of

any Product or Service, must not make any representation regarding the country of origin of any

Product or Service, unless the representation is non-misleading, including that, at the time such

representation is made, Respondents possess and rely upon a reasonable basis for the

representation.

III.

Monetary Relief

IT IS FURTHER ORDERED that:

A. Liability in the amount of $872,577 is entered in favor of the Commission against

Respondents, jointly and severally, as monetary relief.

B. Respondents must pay the Commission $221,385.66, which Respondents stipulate their

counsel holds in escrow for no purpose other than payment to the Commission. Such

payment must be made within 8 days of the effective date of this Order by electronic fund

transfer in accordance with instructions provided by a representative of the Commission.

Upon such payment, the remainder of the liability is suspended, subject to the Provisions

below.

C. The Commission’s agreement to the suspension of part of the liability is expressly

premised upon the truthfulness, accuracy, and completeness of Respondents’ sworn

financial statements and related documents (collectively, “Financial Representations” )

submitted to the Commission, namely:

1. The Financial Statement of Individual Respondent Steven Chadwick James

signed on January 27, 2023, including the attachments; and

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2. The Financial Statement of Corporate Respondent Cycra Inc. signed by Steven

Chadwick James on January 27, 2023, including the attachments.

D. The suspension will be lifted as to any Respondent if the Commission concludes that

Respondent failed to disclose any material asset, materially misstated the value of any

asset, or made any other material misstatement or omission in the Financial

Representations identified above.

E. If the suspension is lifted, the liability becomes immediately due as to that Respondent in

the amount specified in Provision A above (which the parties stipulate only for purposes

of this Section represents the consumer injury alleged in the Complaint), less any

payment previously made pursuant to this Section, plus interest computed from the date

of issuance of this Order.

IV.

Additional Monetary Provisions

IT IS FURTHER ORDERED that:

A. Respondents relinquish dominion and all legal and equitable right, title, and interest in all

assets transferred pursuant to this Order and may not seek the return of any assets.

B. The facts alleged in the Complaint will be taken as true, without further proof, in any

subsequent civil litigation by or on behalf of the Commission to enforce its rights to any

payment pursuant to this Order, such as a nondischargeability complaint in any

bankruptcy case.

C. The facts alleged in the Complaint establish all elements necessary to sustain an action by

or on behalf of the Commission pursuant to Section 523(a)(2)(A) of the Bankruptcy

Code, 11 U.S.C. § 523(a)(2)(A), and this Order will have collateral estoppel effect for

such purposes.

D. All money paid to the Commission pursuant to this Order may be deposited into a fund

administered by the Commission or its designee to be used for relief, including consumer

redress and any attendant expenses for the administration of any redress fund. If a

representative of the Commission decides that direct redress to consumers is wholly or

partially impracticable or money remains after redress is completed, the Commission may

apply any remaining money for such other relief (including consumer information

remedies) as it determines to be reasonably related to Respondents’ practices alleged in

the Complaint. Any money not used is to be deposited to the U.S. Treasury.

Respondents have no right to challenge any activities pursuant to this Provision.

E. In the event of default on any obligation to make payment under this Order, interest,

computed as if pursuant to 28 U.S.C. § 1961(a), shall accrue from the date of default to

the date of payment. In the event such default continues for 10 days beyond the date that

payment is due, the entire amount will immediately become due and payable.

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F. Each day of nonpayment is a violation through continuing failure to obey or neglect to

obey a final order of the Commission and thus will be deemed a separate offense and

violation for which a civil penalty shall accrue.

G. Respondents acknowledge that their Taxpayer Identification Numbers (Social Security or

Employer Identification Numbers), which Respondents must submit to the Commission,

may be used for collecting and reporting on any delinquent amount arising out of this

Order, in accordance with 31 U.S.C. § 7701.

V.

Customer Information

IT IS FURTHER ORDERED that Respondents must directly or indirectly provide

sufficient customer information, including sufficient identification of all resellers, to enable the

Commission to efficiently administer consumer redress to all purchasers of wholly imported

Cycra products labeled as “Made in the USA” between August 2021 and May 2022. If a

representative of the Commission requests in writing any information related to redress,

Respondents must provide it, in the form prescribed by the Commission representative, within 14

days.

VI.

Notice to Customers

IT IS FURTHER ORDERED that Respondents must notify customers as follows:

A. Respondent must identify all consumers who purchased any Cycra product imported

from Taiwan and labeled as “Made in the USA” or “USA” on or after March 1, 2019

(“Affected Customers”).

1. Such Affected Customers, and their contact information, must be identified to the

extent such information is in Respondents’ possession, custody or control;

2. Affected Customers include those identified at any time including after

Respondents’ execution of the Consent Agreement through the eligibility period,

which runs for 1 year after the issuance date of the Order.

B. Respondents must notify all identified Affected Customers by mailing or emailing each a

notice in the form shown in Attachment A. The communication containing the notice

may contain a copy of this Order, but no other document or enclosure.

C. Respondents must notify all Affected Customers within 30 days after the issuance date of

this Order and any eligible customers identified thereafter within 30 days of their

identification.

D. Respondents must report on their notification program under penalty of perjury:

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1. Respondents must submit a report within 60 days of issuance of this Order and at

the conclusion of the program summarizing their compliance to date.

2. If a representative of the Commission requests any information regarding the

program, including any of the underlying customer data, Respondents must

submit it within 10 days of the request.

3. Failure to provide required notices or any requested information will be treated as

a continuing failure to obey this Order.

VII.

Acknowledgments of the Order

IT IS FURTHER ORDERED that Respondents obtain acknowledgments of receipt of

this Order:

A. Each Respondent, within 10 days after the effective date of this Order, must submit to the

Commission an acknowledgment of receipt of this Order sworn under penalty of perjury.

B. Individual Respondent, for any business that such Respondent, individually or

collectively with the Corporate Respondent, is the majority owner or controls directly or

indirectly, and Corporate Respondent, must deliver a copy of this Order to: (1) all

principals, officers, directors, and LLC managers and members; (2) all employees having

managerial responsibilities for conduct related to the subject matter of the Order and all

agents and representatives who participate in conduct related to the subject matter of the

Order; and (3) any business entity resulting from any change in structure as set forth in

the Provision titled Compliance Reports and Notices. Delivery must occur within 10

days after the effective date of this Order for current personnel. For all others, delivery

must occur before they assume their responsibilities.

C. From each individual or entity to which a Respondent delivered a copy of this Order, that

Respondent must obtain, within 30 days, a signed and dated acknowledgment of receipt

of this Order.

VIII.

Compliance Reports and Notices

IT IS FURTHER ORDERED that Respondents make timely submissions to the

Commission:

A. One year after the issuance date of this Order, each Respondent must submit a

compliance report, sworn under penalty of perjury, in which:

1. Each Respondent must: (a) identify the primary physical, postal, and email

address and telephone number, as designated points of contact, which

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representatives of the Commission, may use to communicate with Respondent;

(b) identify all of that Respondent’s businesses by all of their names, telephone

numbers, and physical, postal, email, and Internet addresses; (c) describe the

activities of each business, including the goods and services offered, the means of

advertising, marketing, and sales, and the involvement of any other Respondent

(which Individual Respondent must describe if he knows or should know due to

his own involvement); (d) describe in detail whether and how that Respondent is

in compliance with each Provision of this Order, including a discussion of all of

the changes the Respondent made to comply with the Order; and (e) provide a

copy of each Acknowledgment of the Order obtained pursuant to this Order,

unless previously submitted to the Commission.

2. Additionally, Individual Respondent must: (a) identify all his telephone numbers

and all his physical, postal, email and Internet addresses, including all residences;

(b) identify all his business activities, including any business for which such

Respondent performs services whether as an employee or otherwise and any

entity in which such Respondent has any ownership interest; and (c) describe in

detail such Respondent’s involvement in each such business activity, including

title, role, responsibilities, participation, authority, control, and any ownership.

B. Each Respondent must submit a compliance notice, sworn under penalty of perjury,

within 14 days of any change in the following:

1. Each Respondent must submit notice of any change in: (a) any designated point

of contact; or (b) the structure of Corporate Respondent or any entity that

Respondent has any ownership interest in or controls directly or indirectly that

may affect compliance obligations arising under this Order, including: creation,

merger, sale, or dissolution of the entity or any subsidiary, parent, or affiliate that

engages in any acts or practices subject to this Order.

2. Additionally, Individual Respondent must submit notice of any change in:

(a) name, including alias or fictitious name, or residence address; or (b) title or

role in any business activity, including (i) any business for which such

Respondent performs services whether as an employee or otherwise and (ii) any

entity in which such Respondent has any ownership interest and over which

Respondent has direct or indirect control. For each such business activity, also

identify its name, physical address, and any Internet address.

C. Each Respondent must submit notice of the filing of any bankruptcy petition, insolvency

proceeding, or similar proceeding by or against such Respondent within 14 days of its

filing.

D. Any submission to the Commission required by this Order to be sworn under penalty of

perjury must be true and accurate and comply with 28 U.S.C. § 1746, such as by

concluding: “I declare under penalty of perjury under the laws of the United States of

America that the foregoing is true and correct. Executed on: _____” and supplying the

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date, signatory’s full name, title (if applicable), and signature.

E. Unless otherwise directed by a Commission representative in writing, all submissions to

the Commission pursuant to this Order must be emailed to DEbrief@ftc.gov or sent by

overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement,

Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue

NW, Washington, DC 20580. The subject line must begin: In re Cycra Inc.

IX.

Recordkeeping

IT IS FURTHER ORDERED that Respondents must create certain records and retain

each such record for 5 years, unless otherwise specified below. Specifically, Corporate

Respondent and Individual Respondent, for any business that such Respondent, individually or

collectively with the Corporate Respondent, is a majority owner or controls directly or indirectly,

must create and retain the following records:

A. Accounting records showing the revenues from all goods or services sold, the costs

incurred in generating those revenues, and resulting net profit or loss;

B. Personnel records showing, for each person providing services in relation to any aspect of

the Order, whether as an employee or otherwise, that person’s: name; addresses;

telephone numbers; job title or position; dates of service; and (if applicable) the reason

for termination;

C. Copies or records of all consumer complaints and refund requests concerning the subject

matter of this Order, whether received directly or indirectly, such as through a third party,

and any response;

D. A copy of each unique advertisement or other marketing material making a representation

subject to this Order;

E. For 5 years from the date of the last dissemination of any representation covered by this

Order, all materials that were relied upon in making the representation; and

F. All records necessary to demonstrate full compliance with each provision of this Order,

including all submissions to the Commission.

X.

Compliance Monitoring

IT IS FURTHER ORDERED that, for the purpose of monitoring Respondents’

compliance with this Order:

A. Within 10 days of receipt of a written request from a representative of the Commission,

each Respondent must: submit additional compliance reports or other requested

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information, which must be sworn under penalty of perjury, and produce records for

inspection and copying.

B. For matters concerning this Order, representatives of the Commission are authorized to

communicate directly with each Respondent. Respondents must permit representatives

of the Commission to interview anyone affiliated with any Respondent who has agreed to

such an interview. The interviewee may have counsel present.

C. The Commission may use all other lawful means, including posing through its

representatives as consumers, suppliers, or other individuals or entities, to Respondents or

any individual or entity affiliated with Respondents, without the necessity of

identification or prior notice. Nothing in this Order limits the Commission’s lawful use

of compulsory process, pursuant to Sections 9 and 20 of the FTC Act, 15 U.S.C. §§ 49,

57b-1.

D. Upon written request from a representative of the Commission, any consumer reporting

agency must furnish consumer reports concerning the Individual Respondent, pursuant to

Section 604(2) of the Fair Credit Reporting Act, 15 U.S.C. § 1681b(a)(2).

XI.

Order Effective Dates

IT IS FURTHER ORDERED that this Order is final and effective upon the date of its

publication on the Commission’s website (ftc.gov) as a final order. This Order will terminate 20

years from the date of its issuance (which date may be stated at the end of this Order, near the

Commission’s seal), or 20 years from the most recent date that the United States or the

Commission files a complaint (with or without an accompanying settlement) in federal court

alleging any violation of this Order, whichever comes later; provided, however, that the filing of

such a complaint will not affect the duration of:

A. Any Provision in this Order that terminates in less than 20 years;

B. This Order’s application to any Respondent that is not named as a defendant in such

complaint; and

C. This Order if such complaint is filed after the Order has terminated pursuant to this

Provision.

Provided, further, that if such complaint is dismissed or a federal court rules that the

Respondent did not violate any provision of the Order, and the dismissal or ruling is either not

appealed or upheld on appeal, then the Order will terminate according to this Provision as though

the complaint had never been filed, except that the Order will not terminate between the date

such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the

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date such dismissal or ruling is upheld on appeal.

By the Commission.

April J. Tabor

Secretary

SEAL:

ISSUED:

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ATTACHMENT A: NOTICE TO CUSTOMERS

The notification email must be in the following form, from an authorized Cycra Inc. email

address, and contain a Cycra Inc. signature line with the sender’s full contact information:

Subject: Settlement of FTC false advertising case

Dear <Name of customer>:

Our records show that you bought a motorcycle, motocross, or ATV product from Cycra

Inc. labeled and advertised as “Made in the USA.” We’re writing to tell you that the Federal

Trade Commission, the nation’s consumer protection agency, has sued us for making false

claims.

To settle the FTC’s lawsuit, we’re contacting you to tell you that the product you bought

was not all or virtually all Made in the USA. In fact, that product was imported from Taiwan.

If you have questions about this lawsuit, visit [get URL]. For more information about

Made in USA advertising, visit https://www.ftc.gov/musa.

Sincerely,

[signature]

[Cycra Inc.]

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