USCB FINANCIAL HOLDINGS INC

We are not currently subject to any material legal proceedings. We are from time to time subject to claims and litigation

arising

in

the

ordinary

course

of

These

claims

and

may

include,

among

other

things,

allegations

of

violation of banking and other applicable regulations, competition

law, labor laws and consumer

protection laws, as well as

claims or

to intellectual

property,

securities, breach

of contract

and tort.

We

intend to

defend ourselves

vigorously against any pending or future claims and litigation.

The

Company

disclosed

that

(the

“Litigation”)

had

been

commenced

on

July

13,

by

three

individuals

who

were

of

the

Bank

prior

to

the

reorganization

into

the

holding

company

form

of

organization in 2021

(the “Plaintiffs”)

against six

persons, all

of whom were

directors of

the Bank at

the relevant

time (the

“Defendants”), in the Circuit Court, Eleventh Judicial Circuit for Miami-Dade County, Florida (the “Court”) (Benes et al. v. de

la

Aguilera

et

al.)

alleging

the

Defendants

(i) caused

the

Bank,

as

thereof,

to

engage

in ultra

vires

conduct by

devising

and

the

exchange

effected

in

July

pursuant

to

which

the

then

shares of Class C and Class D preferred stock was exchanged for shares of Class A voting common stock in the

Bank (the

“Exchange Transaction”),

which action

the Plaintiffs

allege was

not permitted

by the

Bank’s Articles

of Incorporation,

and

(ii) breached

their

fiduciary

duty as

of the

Bank

by

and

engaging

in

the

Exchange

Transaction.

The

Plaintiffs sought the

Court to certify the

action as a class

action and to award

damages in an

amount to be

proven at trial.

Plaintiffs

sought

damages

exceeding

$750,000

plus

attorney’s

fees

and

costs

as

well

as

such

other

relief

as

the

Court

determined to award.

The Defendants filed a motion to dismiss the Litigation with

prejudice (the “Motion”). On December 27, 2023, the Court,

after reviewing

the Motion,

the Plaintiff’s response

thereto and

the Defendant’s reply

as well

as the

oral arguments presented

by

the

parties

on

14,

2023,

granted

the

Motion,

dismissing

the

Litigation

with

prejudice

and

rendering

final

judgment in favor of the Defendants. The Court reserved jurisdiction

to award costs or grant any post-judgment relief.

There can be no

assurance that any

future legal proceedings

to which we are

a party will not

be decided adversely

to

our interests and have a material adverse effect

on our financial condition and operations.