FOCUS UNIVERSAL INC.

The issuance of shares of our Common Stock, or other securities convertible into shares of our Common Stock, in accordance with any offerings would dilute, and thereby reduce, each existing stockholder’s proportionate ownership in our Common Stock. Existing stockholders do not have preemptive rights to subscribe to additional shares that may be issued by us in order to maintain their proportionate ownership of our Common Stock.

The issuance of shares of Common Stock in one or more non-public offerings could have an anti-takeover effect. Such issuance could dilute the voting power of a person seeking control of the Company, thereby deterring or rendering more difficult a merger, tender offer, proxy contest or an extraordinary corporate transaction opposed by the Company.

Our Board has not yet determined the terms and conditions of any Future Offerings. As a result, the level of potential dilution cannot be determined at this time, but as discussed above, we may not issue more than $250 million worth of shares of Common Stock in the aggregate (or not more than 250 million shares of Common Stock in the aggregate). It is possible that if we conduct a non-public stock offering, some of the shares we sell could be purchased by one or more investors who could acquire a large block of our Common Stock. This would concentrate voting power in the hands of a few stockholders who could exercise greater influence on our operations or the outcome of matters put to a vote of stockholders in the future.

We cannot determine what the actual net proceeds of the Potential Future Offerings would be until such Potential Future Offerings are completed, but as discussed above, the aggregate dollar amount of the non-public offerings will be no more than $250 million and the maximum number of shares of Common Stock issuable (directly or on conversion of a convertible security) will not exceed 250 million shares of Common Stock.

We expect that the net proceeds of any Potential Future Offerings will be used to fund the Company’s potential purchases of digital assets, including cryptocurrency, and to further our digital asset treasury strategy while keeping adequate working capital for the Company’s existing operating business segments, and potentially other strategic initiatives that may be approved by our Board from time to time. At this time, we have not entered into any binding agreements or commitments with investors regarding any specific transaction, and there can be no assurance that any offering will be completed.