Annual report
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM10-K (Mark One)☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGEACT OF 1934 For the fiscal year endedJune 30, 2026 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ANDEXCHANGE ACT OF 1934For the transition period fromTo Commission file number:000-31203 LESAKA TECHNOLOGIES, INC.(Exact name of registrant as specified in its charter) Florida 98-0171860(State or other jurisdiction (IRS Employerof incorporation or organization) Identification No.) 7 Parks Boulevard,Oxford Parks,1st Floor,Dunkeld, Johannesburg,2196,South Africa(Address of principal executive offices, including zip code) Registrant’s telephone number, including area code: +27-11-343-2000 Securities registered pursuant to Section 12(b) of the Act: Title of each classTrading Symbol(s)Name of each exchangeon which registeredCommon stock, par value $0.001 per shareLSAK NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the SecuritiesAct. Yes☐ No☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act. Yes☐ No☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90days.Yes☒ No☐
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Indicate by check mark whether the registrant has submitted electronically every Interactive Data File requiredto be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12months (or for such shorter period that the registrant was required to submit such files).Yes☒ No☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-acceleratedfiler, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,”“accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of theExchange Act (check one): ☐Large accelerated filer ☒Accelerated filer ☐Non-accelerated filer ☐Smaller reporting company ☐Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extendedtransition period for complying with any new or revised financial accounting standards provided pursuant toSection 13(a) of the Exchange Act.☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’sassessment of the effectiveness of its internal control over financial reporting under Section 404(b) of theSarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued itsaudit report.☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financialstatements of the registrant included in the filing reflect the correction of an error to previously issued financialstatements.☒ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysisof incentive-based compensation received by any of the registrant’s executive officers during the relevantrecovery period pursuant to §240.10D-1(b).☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the ExchangeAct). Yes☐ No☒ The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as ofDecember 31, 2025 (the last business day of the registrant’s most recently completed second fiscal quarter),based upon the closing price of the common stock as reported by The NASDAQ Global Select Market on suchdate, was $252,144,046. This calculation does not reflect a determination that persons are affiliates for any otherpurposes. As of September 9, 2026,85,824,094 shares of the registrant’s common stock, par value $0.001 per share, netof treasury shares, were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the definitive Proxy Statement for our 2026 Annual Meeting of Shareholders areincorporated by reference into Part III of this Form 10-K.
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1 LESAKA TECHNOLOGIES, INC INDEX TO ANNUAL REPORT ON FORM 10-K Year Ended June 30, 2026 PagePART IItem 1. Business 2Item 1A. Risk Factors 13Item 1B. Unresolved Staff Comments 27Item 1C Cybersecurity 27Item 2. Properties 28Item 3. Legal Proceedings 28Item 4. Mine Safety Disclosures 28 PART IIItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and IssuerPurchases of Equity Securities 29 Item 6. [Reserved] 30Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57Item 8. Financial Statements and Supplementary Data 59Item 9. Changes in and Disagreements with Accountants on Accounting and FinancialDisclosures 60 Item 9A. Controls and Procedures 60Item 9B. Other Information 63Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 63 PART IIIItem 10. Directors, Executive Officers and Corporate Governance 64Item 11. Executive Compensation 64Item 12. Security Ownership of Certain Beneficial Owners and Management and RelatedStockholder Matters 64 Item 13. Certain Relationships and Related Transactions, and Director Independence 64Item 14. Principal Accountant Fees and Services 64 PART IVItem 15. Exhibits and Financial Statement Schedules 65Item 16. Form 10-K Summary 69 Signatures 70Financial Statements F-1
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2 PART IFORWARD LOOKING STATEMENTS In addition to historical information, this Annual Report on Form 10-K (“Annual Report”) contains forward-looking statementsthat involve risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or impliedin the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, thosediscussed in Item 1A—“Risk Factors.” In some cases, you can identify forward-looking statements by terminology such as “may,”“will,” “should,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or“continue” or the negative of such terms and other comparable terminology. You should not place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this Annual Report. We undertake no obligation to release publiclyany revisions to the forward-looking statements after the date of this Annual Report. You should carefully review the risk factorsdescribed in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), including theQuarterly Reports on Form 10-Q to be filed by us during our 2027 fiscal year, which runs from July 1, 2026 to June 30, 2027. All references to “the Company,” “we,” “us,” or “our” are references to Lesaka Technologies, Inc. and its consolidatedsubsidiaries, collectively, and all references to “Lesaka” are to Lesaka Technologies, Inc. only, except as otherwise indicated or wherethe context indicates otherwise. ITEM 1. BUSINESS Overview Lesaka provides financial technology solutions to underserviced consumers, merchants and enterprises, improving the way theymanage their daily financial activities and increasing financial inclusion in the markets in which we operate. In plain terms, we helpour customerspay, receive, borrow, insure and grow: we enable them to make and accept payments, receive income such as wagesand welfare grants, access credit, protect their families and assets through insurance, and grow their businesses and financial lives. Wedeliver these capabilities through three business divisions: Merchant, which provides payment acceptance, software, cash management,lending and alternative digital product solutions to merchants across our two channels; Community and Corporate. Consumer, whichprovides banking, lending and insurance solutions to consumers, principally recipients of social welfare grants in South Africa; andEnterprise, which provides payment processing, prepaid solutions and bill payment infrastructure connecting enterprises to consumersand businesses. We bring these customer communities together within a single ecosystem by enabling them to engage and transact with eachother. For example, an enterprise biller connected to our proprietary biller network can collect payment from a consumer who paystheir bill at a nearby merchant using cash withdrawn with a debit card linked to a transactional account we provide to that consumerto receive their welfare grant or wages with the merchant, in turn, digitizing the cash received through one of our cloud-connectedcash vaults. Each participant in this chain is a Lesaka customer, and each interaction deepens our data insight and our cross-sellopportunity. As of June 30, 2026, we served approximately 132,000 active merchants and approximately 2.1 million active consumers,and our Enterprise division connected a network of more than 650 billers and over 50 corporate clients across South Africa. To build and maintain our ecosystem, we have approximately 3,900 employees operating on the ground in five countries: SouthAfrica (our primary market), Namibia, Botswana, Zambia and Kenya as of June 30, 2026. Lesaka was created in 2022, and we havesince combined organic growth with acquisitions including the Connect Group (April 2022), Adumo (October 2024), Recharger(March 2025), and the proposed acquisition of Bank Zero (agreement signed June 2025, and closing subject to achievement of relevantcondition precedents) to assemble an integrated fintech platform, unified under a single Lesaka brand in fiscal 2026. For a discussionof specific developments during fiscal 2026, see Item 7 “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations–Developments during Fiscal 2026”. We serve a large and structurally underpenetrated market. Cash remains the dominant payment instrument across much ofSouthern Africa, and a material portion of consumers and small businesses remain outside, or only partially served by, the formalfinancial system. Across our footprint and adjacent markets accessible through strategic partnerships, we serve a market ofapproximately 250 million people with an estimated serviceable addressable market of approximately ZAR 416 billion in net revenueby 2030 as of the date of this Annual Report. This estimate is derived from management analysis using a range of external sourcesincluding but not limited to: Population Reference Bureau, IMF Database, Global Findex Report - 2025, Global Data Analytics – SACard and Payments Opportunities and Risks to 2028; July 2024, BDO – Unlocking potential Fintech in Africa; June 2024, BostonConsulting Group – Reimagining the Future of Finance; May 2023, combined with internal data, assumptions and management’s bestestimates.
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3 Our Go-To-Market Model Our go-to-market model describes how we serve and grow customer relationships in practice. It has five elements: 1. Wide breadth of solutions – Our solutions span the five things we help customers do – pay, receive, borrow, insure and grow– and we win a customer relationship with a single critical financial service at a relatively stable customer acquisition cost,expanding the relationship from there. For example, a community merchant will often first adopt our supplier-enabledpayments product to pay for inventory digitally, and subsequently add our cash vaults, card acquiring or a merchant cashadvance as their business grows. Similarly, a consumer typically joins us by opening a transactional account to receive theirmonthly social security grant and may over time take up a short-term loan or a funeral insurance policy. This approachincreases customer lifetime value with little incremental acquisition cost. As of June 30, 2026, approximately 51% of ouractive consumers and approximately 46% of our active merchants used two or more of our products; 2. Differentiated reach – Rather than relying on online-only sales or expensive branch networks, we deploy on-the-ground salesteams supported by cost-efficient branches and community service centers in the rural and peri-urban areas where ourcustomers live and transact, including close to the locations where grant payments are disbursed. Our merchant communitychannel is built on the same principle, acquiring merchants through direct, face-to-face sales with rapid conversion cycles; 3. Digital engagement – After the initial in-person sale, we steer customers to digital channels to serve them more efficientlyand deepen their use of our solutions. For consumers, this includes our banking app and unstructured supplementary servicedata (“USSD”) channels that work in real time on any mobile phone, including basic feature phones without internet access– while merchants manage their deposits, settlements and supplier payments through our digital merchant account; 4. Proprietary access to data – Our solutions give us unique visibility into the transaction flows of consumers and merchants,which we believe is rare in our markets, particularly among the underserviced. We put this data to work directly: our consumerlending is underwritten using our view of the money flowing in and out of a consumer’s account, and our merchant lendingis underwritten using our visibility into a merchant’s daily card and cash turnover; and 5. A unified brand – In November 2025, we relaunched our businesses under a single Lesaka brand, and during fiscal 2026 weconsolidated our brand identity, including a consistent articulation across all three segments – of what we enable ourcustomers to do: pay, receive, borrow, insure and grow. We believe a unified brand and a consistent expression of our offeringbuild trust, support customer awareness and acquisition across divisions and facilitate the roll-out and adoption of newsolutions. Our Business Segments We operate and report through three business segments: Merchant, Consumer and Enterprise. 1. Merchant Our Merchant Market We manage our Merchant operations through two distinct channels: Community: serves local, high-growth businesses ranging from kiosks and spaza shops (corner stores) to taverns, marketplacesand the sole proprietors and suppliers that serve them acquired through direct, face-to-face sales with rapid conversion cycles. Thesemerchants operate in a largely cash-based environment, and we believe they will increasingly adopt digital payment solutions andcomplementary services as the secular shift from cash to digital payments progresses. Corporate: serves larger, more formal businesses from small local retailers to multi-lane stores, franchises and large-scaleorganizations that require customized, multi-product solutions sold through a strategic, longer-term sales process. As of June 30, 2026, we served approximately 132,000 active merchants. Merchant Solutions Our merchant solutions serve merchants of all sizes, helping them accept payments, manage and digitize cash, run their operationsand access working capital. Our merchant solutions and products comprise: • Merchant Acquiring:card acceptance and payment processing solutions for merchants; • Software:integrated point-of-sale (“POS”) software and hardware, principally serving the restaurant industry, includingUnity, our cloud-based POS offering, which enables easier integration of our software and acquiring propositions into a singlebundle;
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4 • Cash Management:instantcash digitalization solutions in a merchant’s store through cloud-connected cash vaults, pairedwith digital accounts through which merchants can track deposits and pay suppliers; • Lending:access to working capital through merchant cash advances and business credit, underwritten using our proprietaryvisibility into merchants’ transaction activity; and • Alternative Digital Products (“ADP”):prepaid solutions (airtime, data, electricity and gaming), bill payments, and supplier-enabled payments, which allow community merchants to digitize payments to their suppliers at competitive pricing and serveas an entry point into the broader Lesaka merchant ecosystem. We are dependent on a limited number of software and hardware suppliers. Refer to “Item 1A. Risk Factors” included herein formore information. The proposed acquisition of Bank Zero, which is subject to conditions precedent described herein, primarily deepens, rather thanwidens, our merchant proposition. Our merchant product suite does not change; instead, we expect the banking license will enable usto enhance it in ways previously unavailable to us as a non-bank including same-day settlement for acquiring, integrated merchantbank accounts, savings accounts and remittance products, strengthening the competitiveness and completeness of our offering toexisting and prospective merchants. Merchant Competitive Landscape We estimate an addressable revenue pool of approximately ZAR 130 billion as of the date of this Annual Report, of which webelieve we have approximately 3% market share. This estimate is derived from management analysis using a range of external sourcesincluding but not limited to: Population Reference Bureau, IMF Database, Global Findex Report - 2025, Global Data Analytics – SACard and Payments Opportunities and Risks to 2028; July 2024, BDO – Unlocking potential Fintech in Africa; June 2024, BostonConsulting Group – Reimagining the Future of Finance; May 2023), peer company public quarterly results combined with internaldata, assumptions and management’s best estimates. We differentiate ourselves by being a customer-led, rather than product-led,provider. The industry remains highly fragmented, with most competitors providing one or two products, while we provide anintegrated suite of solutions; we believe no single competitor offers the range of solutions we provide. We accordingly face a differentcompetitive universe in each product area: traditional South African banks are the principal competitors in core merchant acquiring,while software, cash management and alternative digital products are contested by a fragmented set of specialist vendors ranging fromtraditional banks, digital lenders, payment service providers and fintechs . 2. Consumer Consumer Market Consumer focuses on individuals who have historically been excluded from, or underserviced by, traditional financial services.Although our products are designed for consumers at the lower socioeconomic end of the market, the infrastructure and productoffering allow for a frictionless move upstream to a wider market of consumers. There are approximately 12.0 million permanent grant beneficiaries in South Africa, and approximately 8.0 million peoplereceive a Social Relief of Distress (“SRD”) grant each month, according to the South African Social Security Agency (“SASSA”). Asof June 30, 2026, we had approximately 2.1 million active consumers of which approximately 89% are permanent grant beneficiariesand approximately 174,000 active payouts cardholders. We believe that for consumers receiving welfare grants from the South Africangovernment, no other provider offers a transactional account, lending and insurance product within one ecosystem. Our propositionincludes a distinctive “last mile” distribution model: we take our services to rural and peri-urban communities across the country, andthrough digitally enabled onboarding supported by Bonngwe, our proprietary customer relationship management engine. Ourconsultants can open an account and issue a physical card at the point of application in under five minutes. The acquisition of Bank Zero, which is subject to conditions precedent described herein, is expected to materially widen theconsumer market we can address. Our traditional addressable market comprises the approximately 12 million grant beneficiariesdescribed above. Bank Zero’s digital banking platform and license enable us to increase this addressable market to approximately 24million people, through the unlock of a further approximately 12 million salaried individuals, a segment positioned above our grant-beneficiary base on the income pyramid and for which Bank Zero’s low-cost, digital -first banking proposition is well suited. This is atargeted expansion, based on the product offering we intend to launch for this segment. Our existing consumer product suite does notchange as a result; rather, the banking license and Bank Zero’s deposit-taking capabilities allow us to extend our transactional, lendingand insurance offerings to this broader population over time.
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5 Consumer Solutions Our consumer solutions provide banking, credit and insurance capabilities that anchor our relationship with a consumer and growwith their needs over time. Our consumer product offering includes: • Transactional accounts:our low-cost transactional account, accessible via card, mobile application, web and USSD. USSDis an important channel for consumers with limited or no data connectivity. Consumers use a linked debit card and mobileapp to withdraw cash, make purchases and pay bills, forming the anchor relationship from which we cross-sell additionalfinancial services • Lending:short-term, unsecured personal loans to qualifying consumers, underwritten using our visibility of cash flows oftheir accounts. For many of our consumers, we provide their first access to regulated credit; • Insurance:funeral insurance policies that help our consumers protect their families and assets, cross-sold through ourdistribution network and Bonngwe engine. During fiscal 2026 we also launched a funeral insurance offering for grantbeneficiaries outside the Lesaka consumer base; and • Payouts:secure payout solutions for corporate employees who receive employment-related payments from their employersthrough us. We do not have a South African banking license and, therefore, we provide our banking offering through an arrangement with athird-party bank. Through the acquisition of Bank Zero, however, we expect to move our sponsorship arrangement from African Bankto Bank Zero. Refer to “Item 1A. Risk Factors” included herein for more information. Consumer Competitive Landscape The consumer market we address today is focused on South African grant beneficiaries and other payout cardholders. Weestimate an addressable revenue pool of approximately ZAR 43 billion as of the date of this Annual Report, of which we believe wehave approximately 5% market share. This estimate is derived from management analysis using a range of external sources includingbut not limited to: South African National Treasury Database 2025/2026, SASSA Statistical Database, peer company public quarterlyresults combined with internal data, assumptions and management’s best estimates. We face a different set of competitors in eachproduct area: banks are the principal competitors for transactional accounts, the lending market is dominated by micro-financecompanies and the insurance market by insurance companies. 3. Enterprise Enterprise Market Enterprise serves clients with large ecosystems of billpayers, tenants, employees or constituents, providing targeted solutions thatfacilitate payments between consumers and businesses. Our network comprises more than 650 billers and over 50 corporate clientsacross South Africa as of June 30, 2026, with deep integrations across municipal councils, utility providers, banks and mobile networkoperators who leverage our technology to create readily scalable solutions. Enterprise Solutions Our Enterprise product offering is focused across three core verticals: • ADP:integration technology enabling customers across South Africa to purchase prepaid solutions (such as airtime,electricity or gaming) and pay bills through channels such as retailer distribution networks and digital banking apps.Following the acquisition of MobileMart Proprietary Limited (“MobileMart”) in February 2026, we have direct integrationsinto the four primary mobile network operators in South Africa, providing access to preferential rates and supplier availability.Our ADP offering also includes 4All, a multi-store-of-value voucher developed by internal teams, which is redeemable atmore than 40 partners; • Utilities:a prepaid electricity submetering platform that enables tenants to purchase and top up prepaid electricity meters andallows landlords to manage tenant electricity usage without postpaid risk. This is a low-churn, annuity-style revenue model,serving approximately 382,000 active meters as of June 30, 2026, and; • Payments:the group’s proprietary payment technology, including our payment switch, which enables us to insourcecomponents of the payments value chain, create efficiencies and reduce third-party dependencies, together with ancillarysecurity and tokenization services offered to enterprise clients. Enterprise also increasingly acts as the group’s central procurement engine for prepaid products: the bulk of merchant electricityvolumes are now processed via the enterprise segment, reducing reliance on third-party providers, and we expect to migrate theremaining ADP volumes offered in merchant to the enterprise segment.
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6 The acquisition of Bank Zero, which is subject to conditions precedent described herein, is expected to extend Enterprise’saddressable product set into alliance banking which provides banking capabilities and infrastructure to third-party partners, a verticalthat was previously unavailable to us without a banking license. Alliance banking leverages Bank Zero’s existing digital bankingplatform and our enterprise integration capabilities and is consistent with the division’s capital-light operating model. Enterprise Competitive Landscape We estimate an addressable revenue pool of approximately ZAR 12 billion as of the date of this Annual Report, of which webelieve we have approximately 9% market share. This estimate is derived from management analysis using a range of external sourcesincluding but not limited to: Electrum – The State of Value -Added Services in South Africa; 2024, South African National TreasuryDatabase 2025/2026, peer company public quarterly results combined with internal data, assumptions and management’s bestestimates. As in Merchant and Consumer, we face competitors within each core product; at the ADP product offering, our competitorsare typically Value -Added Services (“VAS”) aggregators and payment infrastructure providers whereas within Lesaka UtilitiesProprietary Limited, formerly known as Recharger Proprietary Limited (“Utilities”), our competitors are the prepaid electricity vendorswho are a fragmented collection of private companies. However, we believe no single competitor participates across the integratedsuite of products offered by our Enterprise Division. Intellectual Property We rely on a combination of trademark and copyright laws and trade secret protections in South Africa, as well as confidentialityprocedures and contractual provisions, to protect the intellectual property rights in our products and services. In South Africa, we have registered intellectual property rights in respect of our trading name (“Lesaka”, and derivatives thereof)and certain product names and devices (logos). In Setswana and Sesotho (both common languages spoken in certain African countries),the word “Lesaka” means “kraal”, which is an enclosure or pen typically used for livestock. Given the general meaning of the term,other businesses use the word in their names and trademarks as well. We may thus have difficulty protecting our use of the word. Thesame applies to our decision to use the image of a foot and foot print as our logo. Being a technology-driven company, our employees develop intellectual property used in the conduct of our business. We alsocontract with external service providers and consultants to assist in the development of intellectual property. Where relevant, thecontract concluded with the relevant employee / service provider / consultant includes provisions for the assignment of ownership ofthe intellectual property so created to us, as well as other contractual protections in relation to such intellectual property. The industries in which we compete rely on the use of technology, and an enhanced / improved technology offering can be acompetitive advantage. There is no assurance that our intellectual property rights will not be challenged, invalidated, or circumvented;that others will not assert intellectual property rights to technologies that are relevant to us; or that our rights will give us a competitiveadvantage. In addition, the laws of certain countries may not protect our proprietary rights to the same extent as the laws of SouthAfrica. For additional information regarding some of the risks relating to our intellectual property see Item 1A—“Risk Factors —Risks Relating to Our Business—Defending our intellectual property rights or defending ourselves in infringement suits that may bebrought against us is expensive and time-consuming and may not be successful”. Human Capital Resources Our strong leadership helps enable us to take on transformational projects, including our focus on building One Lesaka, consistentwith our core values. Shifting our culture to enable our growth ambitions are a key focus area for us. Our core values: Integrity — Go barefoot on the straight and narrowCollective Wisdom — We dance better togetherEntrepreneurial Spirit — Blaze new trailsOwnership — Call for the ballBias to Action — Walk slow, run fastResilience — Put one foot in front of the otherEmpathy — Walk in someone else’s shoesCustomer First — Stand for your customerEfficiency — Every step countsMeritocracy — Recognize results, not roles These are our values that underpin our mission to make financial inclusion a reality for all who have been underserviced.
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7 Employee training and skills development Investing in skills development is key for us to ensure that we grow the best talent. Our employee training and developmentprograms ensure that we have the required available skills and helps us to unlock talent. Offering development and career progressionis a key aspect of our employee value proposition. We offer the following development programs to enhance employee performanceand skills: • training programs; • formal training programs for people with disabilities;• leadership development programs; • unemployed and employed learnerships; • internships; • financial assistance to pursue further studies and obtain formal qualifications; • other in-house and cross-functional training to aid with career advancement; and • succession planning – training interventions to address scarce and critical skills. Equal opportunity Our equal opportunity approach has not changed, providing a conducive work environment where talent from any backgroundcan thrive is important to us. Having an inclusive and diverse workforce which reflects our economically active population and societyin general, is crucial for helping the organization attract and retain talent and is important for long -term organizational success. Ourhuman capital team in partnership with our leaders drive recruiting and retaining a talented and diverse workforce with special focuson hiring previously disadvantaged groups whenever possible. We are committed to hiring qualified candidates without regard to theirpersonal status, while taking into account the unique circumstances affecting our operations in South Africa and the need to upliftpreviously disadvantaged groups. This commitment extends to all levels of our organization, including within senior management andour board of directors. As of June 30, 2026, the composition of our workforce was: • 54% female and 46% male;• 39.8% between 18 and 34 years old, 54.6% between 35 and 54 years old, and 5.6% over 55 years old; and• 67% Black, 10% two or more races, 10% Indian and 13% White. We continue to strive to build a more inclusive workforce and to enhance our pay structures by taking measures to eliminatepotential remuneration discrimination and to help close gender pay gaps to progress towards gender equality at work. We have takenpositive strides towards a rewards philosophy that rewards high performance and focuses on equal pay for work of equal value. Employee compensation programs We are committed to ensuring that all our employees are paid fair and competitive remuneration. To that end, we offer thefollowing to our employees: • Access to a comprehensive medical, dental, and vision plan that our employees have the option to join;• Access to a defined contribution retirement plan that our employees have the option to join;• Participation in our Lesaka Employee Share Ownership Plan for qualifying employees;• Paid sick, study, annual and family responsibility leave;• Maternity and paternity benefits;• Life and disability insurance coverage;• Financial aid to fund tertiary education for children of employees;• Employee assistance programs; and• Product discounts. Annual increases and incentive compensation are based on merit, which is communicated to employees at onboarding anddocumented as part of our annual remuneration review process.
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8 Our number of employees allocated on a segmental and group basis as of the years ended June 30, 2026, 2025 and 2024, ispresented in the table below: Number of employees2026 2025 2024Consumer(1) 1,514 1,542 1,333Merchant(1) 1,883 1,957 1,059Enterprise(1) 279 213 130Total segments 3,676 3,712 2,522Group(1) 185 16 9Total 3,861 3,728 2,531 (1) Fiscal 2026 includes one executive officer in Enterprise and four executive officers in Group. Fiscal 2025 includes fiveexecutive officers in Group. Fiscal 2024 includes one executive officer in each of Consumer and Merchant and two executive officersin Group. On a functional basis, as of June 30, 2026, 5 of our employees were our named executive officers, 13 senior managers, 1,544were employed in sales and marketing, 700 were employed in finance and administration, 423 were employed in informationtechnology and development and 1,176 were employed in operations. Health and safety laws and regulations We are subject to various South African laws and regulations that regulate the health and safety of our South African-basedworkforce, including those laws monitored by the South African Department of Employment and Labour which stipulates the legalframework within which we need to function. This framework comprises the Compensation for Occupational Injuries and DiseasesAct, No. 130 of 1993; the Occupational Health and Safety Act, No. 85 of 1993; the Basic Conditions of Employment Act, No. 75 of1997; the Labour Relations Act, No. 66 of 1995; the National Minimum Wage Act, No. 9 of 2018; the Employment Equity Act, No.55 of 1998; the Unemployment Insurance Act, 63 of 2001 and the Unemployment Insurance Contributions Act, No. 4 of 2002; andthe Broad-Based Black Economic Empowerment Act, No. 53 of 2003. We have implemented and regularly update human capital-related policies that are designed to ensure compliance with applicable South African laws and regulations.
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9 Our Executive Officers The table below presents our executive officers, their ages and their titles: Name Age TitleAli Mazanderani 44 Executive Chairman and DirectorDan Smith 54 Group Chief Financial Officer and DirectorNaeem E. Kola 53 Group Chief Operating Officer and DirectorLincoln Mali 58 Chief Executive Officer: Southern Africa and DirectorSteven Heilbron 61 Head of Corporate Development and Director Ali Mazanderani has been our Executive Chairman since February 1, 2024. He is a fintech investor and entrepreneur. He is theco-founder and chairman of Teya, a pan-European fintech. He is also a non-executive director on the board of several companiesincluding Thunes (Singapore based private fintech), Kushki (Latin American payments company) and is the president of The EuropeanDigital Payments Industry Alliance (EDPIA). He was previously on the board of several other leading payments companies globallyincluding StoneCo (Nasdaq: STNE) in Brazil and Network International Holdings Plc (LSE:NETW) in the Middle East. He wasformerly a Partner at Actis, a London-based emerging market private equity firm, where he led multiple landmark fintech investmentsglobally. Prior to his career at Actis, Mr. Mazanderani advised private equity and corporate clients for OC&C Strategy Consultants inLondon and served as lead strategy consultant for First National Bank based in Johannesburg. He holds postgraduate degrees inEconomics from the University of Pretoria, Oxford University and the London School of Economics, an MBA from INSEAD and aMasters in Business Law from the University of St Gallen. Dan Smith has been our Group Chief Financial Officer since October 1, 2024. He has held various roles in the financial servicessectors in South Africa and the United Kingdom. Mr. Smith is a director of ADvTECH Limited (JSE: ADH). He founded DLSAdvisors in 2020 and was its CEO until joining VCP in 2021, where he was employed until September 2024. Prior to that, he wasemployed by Standard Bank South Africa for a number of years where he accumulated vast corporate finance experience, includingheading the Mergers & Acquisitions investment banking team. He holds a Bachelor of Commerce, a Bachelor of Accounting and aHigher Diploma in Taxation Law from the University of Witwatersrand and is a Chartered Accountant (SA). He is a Graduate of theOxford Fintech Programme from the Saïd Business School, University of Oxford. He also has an Advanced Valuation Techniques certification from the Gordon Institute of Business Science and a Diploma in Strategic Client Management from the UCTGraduate School of Business. Naeem E. Kola has been our Group Chief Operating Officer since October 1, 2024, and was previously our Group Chief FinancialOfficer from March 1, 2022 until September 30, 2024. Mr. Kola has progressively held senior finance roles in Dubai, most notably asChief Financial Officer of the Emerging Markets Payments Group (“EMP”), a high-growth fintech business that grew materially andsuccessfully concluded and integrated five acquisitions during Mr. Kola’s six-year tenure as Chief Financial Officer. Prior to becomingChief Financial Officer, Mr. Kola was Senior Vice President for Investments, Strategy and Business Planning at Network International.Since the acquisition of EMP by Network International in 2017, Mr. Kola had been an Operations Director and Strategic Advisor tothe emerging market private equity firm Actis, where he again focused on fintech businesses. He is a qualified Chartered Accountant(SA) and a member of the South African Institute of Chartered Accountants. Lincoln Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executivewith over 25 years in the industry. Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, havingserved in many different roles within that organization since 2001. Mr. Mali chaired the board of directors of Diners Club South Africauntil April 2021, and was a member of the Central and Eastern Europe, Middle East and Africa Business Council for Visa. Mr. Maliholds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley ManagementCollege, various diplomas and attended an Advanced Management Program at Harvard Business School. In 2026, Mr. Mali wasawarded an honorary degree in Human Services from Urban College of Boston, a certificate of recognition from the City of Bostonfor his global contributions to philanthropy, youth development and community empowerment, as well as the 2026 Legacy Award, anofficial citation from the Massachusetts Senate. Steven Heilbronjoined us following the acquisition of Connect in 2022. Mr. Heilbron has two decades of financial servicesexperience, having spent 19 years working for Investec in South Africa and the UK, where he served as Global Head of PrivateBanking and Joint Chief Executive Officer of Investec Bank plc. He led a private consortium that acquired Lesaka Cash ManagementProprietary Limited, formerly Cash Connect Management Solutions Proprietary Limited, in 2013. Mr. Heilbron has presided oversignificant organic growth in the rebranded Connect Group, as well as spearheading the successful acquisition and integration ofKazang and EFTpos acquired from the Paycorp Group in February 2020. He is a member of the South African Institute of CharteredAccountants.
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10 Financial Information about Geographical Areas and Operating Segments Refer to Note 21 to our audited consolidated financial statements included in this Annual Report, which contains detailedfinancial information about our operating segments for fiscal 202 6, 2025 and 2024. Revenues based on the geographic location fromwhich the sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in thetable below: Revenue(1) Long lived assets2026 2025 2024 2026 2025 2024$'000 $'000 $'000 $'000 $'000 $'000South Africa 679,021 624,846 537,594 403,085 392,098 286,700India (MobiKwik) - - - - - 76,297Rest of the world 42,533 34,855 26,628 8,609 3,055 2,548Total 721,554 659,701 564,222 411,694 395,153 365,545(1) Refer to Note 16 to our audited consolidated financial statements included in this Annual Report which contains detailedfinancial information about our revenue for fiscal 2026, 2025 and 2024. Government Regulation We are subject to a wide range of laws, regulations, and legal requirements globally, including those that may apply to theproducts and services offered by our businesses, and those that apply more generally to companies operating in each jurisdiction inwhich we are incorporated and/or operate, including requirements related to (among others) privacy, data storage and protection,advertising, employment relations. These requirements are continually evolving, and they can be unclear and vary significantly acrossjurisdictions. We monitor material regulatory developments in the jurisdictions in which we operate and maintain procedures andcontrols designed to support compliance with applicable legal and regulatory requirements. A number of the products and servicesoffered by our businesses are subject to regulation by certain regulatory authorities / government bodies, and require us to haveappropriate licences, approvals, registrations, authorizations or regulatory approvals. South Africa Our South African operations are subject to the oversight of several regulatory authorities, including the following: The Prudential Authority, which is housed within the South African Reserve Bank, is responsible for supervising the soundness,governance, risk management and capital adequacy of financial institutions. Our insurance business, Lesaka Life Limited, is a licensedlife insurer and subject to prudential supervision and oversight by the Prudential Authority. The Prudential Authority exercises itsfunctions under the Financial Sector Regulation Act, 2017 and applicable sector laws. The Act establishes South Africa's "Twin Peaks"regulatory framework and creates the Prudential Authority and the Financial Sector Conduct Authority (discussed below). The Actgrants the Prudential Authority extensive supervisory, inspection, enforcement and information-gathering powers. Lesaka Life Limited is also subject to regulation under the Insurance Act, 2017 and Long-term Insurance Act, 1998 (togetherwith the applicable subordinated legislation). The Insurance Act is the primary prudential statute governing licensed insurers. For lifeinsurers such as Lesaka Life Limited, the Act regulates: licensing and ongoing authorization requirements; requirements regardingcapital adequacy, solvency and financial soundness; governance, risk management and internal control frameworks; fit and properrequirements for directors, key persons and significant owners; regulatory reporting and disclosure obligations; and compliance withprudential standards issued by the Prudential Authority. Remaining operative provisions of the Long-term Insurance Act are aimed at conduct of business policyholder protection.Together with the Policyholder Protection Rules, the Act regulates matters such as: policy terms and contractual requirements; fairtreatment of policyholders; premium collection, claims handling and settlement processes; restrictions on commissions andintermediary remuneration; and certain conduct-related requirements. The National Payment System Department is a department within the South African Reserve Bank responsible for the regulationof South Africa's National Payment System. A few of our group companies participate in the National Payment System, either as anauthorized system operator (an SO) or a registered third-party payments provider (a TPPP). These entities are subject to compliancewith the National Payment System Act, 1998 (together with the applicable directives published thereunder). TPPPs (which are subjectto regulation in terms of Directive 1 of 2007) are required to ensure that payments to third persons are processed in accordance withthe applicable regulatory framework and that proceeds of payment instructions are handled in a secure and controlled manner. SOs(which are subject to regulation in terms of Directive 2 of 2007) are required to ensure the reliable, secure and efficient operation ofpayment infrastructure that supports payment clearing and settlement activities. Both TPPPs and SOs are subject to ongoing oversightby the National Payment System Department and must comply with directives relating to, among other matters, conduct within theNational Payment System, operational resilience, cyber-risk management, reporting obligations and any conditions attached to theirregistration or authorization.
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11 The National Payment System Department is currently reviewing and modernising the regulatory framework applicable topayment system participants (which includes TPPPs and SOs) and have issued drafts of the proposed new directive, which is expectedto introduce a more comprehensive authorization and oversight framework for payment service providers. The proposed reforms havenot yet been finalised. Accordingly, affected group entities continue to comply with the existing regulatory framework whilemonitoring developments in the proposed reforms. Governance of the national payments system is also undergoing a significant transformation as part of the South African ReserveBank’s ongoing work to strengthen the regulatory, supervisory, oversight and operational architecture needed to support safe, efficient,transparent and resilient payments in South Africa. With effect from September 2, 2026, the South African Reserve Bank withdrewits recognition of the Payments Association of South Africa as the payment system management body and introduced transitionalarrangements relating to existing system operator authorizations and third-party payment provider registrations. Existingarrangements, rules, agreements and authorizations remain in force unless otherwise determined by the South African Reserve Bank. Furthermore, certain entities are authorized financial services providers (“FSPs”) under the Financial Advisory and IntermediaryServices Act, 2002. The Act regulates the rendering of financial advice and intermediary services to clients and establishes licensing,fit-and-proper, conduct and supervisory requirements for financial services providers and their representatives. Authorized FSPs aresubject to ongoing supervision and enforcement by the Financial Sector Conduct Authority (under the purview of the Financial SectorRegulation Act, 2017). Authorized FSPs are required to conduct their business honestly, fairly, with due skill, care and diligence, andin the interests of their customers while maintaining compliance with applicable conduct standards and regulatory requirements. Our consumer lending business, operated by Lesaka Financial Services Proprietary Limited, is a registered credit provider underthe National Credit Act, 2005, which serves to regulate the provision of credit, protect consumers, promote responsible lending andprevent over-indebtedness. The Act requires registered credit providers to conduct affordability assessments before extending credit,prohibits reckless lending and unfair credit practices, regulates credit marketing and disclosures, limits or prescribes maximum feesand interest charges, and grants consumers extensive rights relating to information, privacy and fair treatment. The Act also providesmechanisms for debt review and debt reorganisation where consumers become over-indebted, and establishes the National CreditRegulator and National Consumer Tribunal to supervise compliance and enforce the legislation. Further, both the life insurer and the financial services providers are also subject to compliance with Financial Institutions(Protection of Funds) Act, 2001, which seeks to regulate the integrity, safety, and proper administration of client funds held by financialinstitutions. The Act imposes duties on financial institutions and relevant persons concerning the custody, investment, administrationand protection of money and other property entrusted to them. The Financial Intelligence Centre Act, 2001 establishes South Africa's anti-money laundering, counter-terrorist financing andcounter-proliferation financing framework and imposes a range of obligations on entities classified as accountable institutions. Anumber of the group entities also qualify as accountable institutions. The Act requires accountable institutions to implement a risk-based compliance framework; conduct customer due diligence and beneficial ownership verification; screen against targeted financialsanctions; monitor and report prescribed transactions and suspicious activities; maintain appropriate records and training; and establishappropriate governance and oversight of compliance with the requirements of the Act. The Financial Intelligence Centre is SouthAfrica’s financial intelligence unit, mandated to assist in identifying the proceeds of crime, and in combating money laundering,terrorist financing and the financing of proliferation of weapons of mass destruction through its supervision of compliance with theAct.As a customer-focused business operating in the consumer domain, we are also subject to (i) the Consumer Protection Act, 2008,which regulates the supply of goods and services to consumers; and (ii) the Protection of Personal Information Act, 2013 which seeksto protect personal information relating to identifiable natural and juristic persons, where applicable and regulate how organisationscollect, use, store, share and delete, destroy or de-identify that information. Outside of South Africa In Botswana, the key legislation is the Electronic Payment Services Regulations, 2019 and the Financial Intelligence Act, 2022.In this regard, Lesaka Payment Services Botswana Proprietary Limited holds an electronic payments services (EPS) provider licenceissued by the Bank of Botswana and qualifies as an accountable institution under the Financial Intelligence Act, 2022. The ElectronicPayment Services Regulations require licensees to maintain appropriate governance structures, internal controls, risk managementframeworks, technological infrastructure, capital adequacy and liquidity arrangements. They also impose requirements relating to thesafeguarding of customer funds; execution of payment transactions; record retention; outsourcing arrangements; and regulatoryreporting. The Financial Intelligence Act, together with the relevant regulations / guidelines, regulates the measures to be taken toprevent and/or identify money laundering, terrorist financing and proliferation financing. In Botswana, the Financial IntelligenceAgency, is mandated to request, receive and disseminate information to investigatory, supervisory and other competent authorities, aswell as comparable bodies, to support the prevention, detection, investigation and prosecution of financial offences, including moneylaundering, terrorist financing and the financing of proliferation of weapons of mass destruction, and to assist supervisory authoritiesin carrying out their functions under the Act. We are also subject to (i) the Consumer Protection Act, 2018, which regulates the provision of goods and services to consumers;and (ii) Data Protection Act, 2024 which seeks to protect individuals’ personal data and regulate how organisations collect, use, store,disclose and destroy that data.
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12 In Namibia, the key regulation is the Payment System Management Act, 2023 (together with the applicable determinations /notices published thereunder). In this regard, two of our entities, Lesaka Online Namibia (Proprietary) Limited and Lesaka MerchantTechnologies Namibia (Proprietary) Limited, are licensed payment service providers, subject to regulation by the Bank of Namibia.The Act regulates the licensing and ongoing supervision of payment service providers, the authorization of payment system operators,safeguarding and trust-account arrangements where applicable, operational and technical requirements, consumer protection, reportingand the Bank of Namibia’s inspection and enforcement powers. In Kenya, privacy law is primarily governed by the Data Protection Act No. 24 of 2019, which applies to all public and privateorganisations. In the course of conducting our business in Kenya, we are obliged to comply with the provisions of the Act in relationto the collection, processing, storage and transfer of all personal data. The above focusses on those jurisdictions in which we have separately incorporated entities. In jurisdictions where we operatebut do not have incorporated entities, we comply with all applicable legal and regulatory requirements that apply to the products andservices offered by our businesses. For more information on the risks relating to our regulatory environment, see the section titled Item 1A—“Risk Factors—RisksRelating to Government Regulation.” Corporate history Lesaka was incorporated in Florida in May 1997 as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies,Inc. on May 12, 2022. In 2004, Lesaka acquired Net1 Applied Technology Holdings Limited (“Aplitec”), a public company listed onthe Johannesburg Stock Exchange (“JSE”). In 2005, Lesaka completed an initial public offering and listed on the NASDAQ StockMarket. In 2008, Lesaka listed on the JSE in a secondary listing, which enabled the former Aplitec shareholders (as well as SouthAfrican residents generally) to hold Lesaka common stock directly. Available information We maintain a website at www.lesaka.tech. Our Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, as well as our proxy statements, are available free of charge through the “SEC filings” portion ofour website, as soon as reasonably practicable after they are filed with the SEC. The information contained on, or accessible through,our website is not incorporated into this Annual Report. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other informationregarding issuers that file electronically with the SEC.
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13 ITEM 1A. RISK FACTORS OUR OPERATIONS AND FINANCIAL RESULTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES,INCLUDING THOSE DESCRIBED BELOW, THAT COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIALCONDITION, RESULTS OF OPERATIONS, CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOC K Risks Relating to Our Business To achieve our mission, our strategy is to build and operate the leading South African full-service fintech platform offeringcash management, payment and financial services. Our future success, and our ability to sustain profitability and positive cashflow, is substantially dependent on our ability to complete the implementation of this strategy successfully. Our board conducted an extensive review of our business strategy and operations in July 2020, and decided to focus on our SouthAfrican operations and other business opportunities in South Africa and, to a lesser extent, the rest of the African continent. Overrecent years, we have pursued strategic acquisitions, technology investments, business integration initiatives, and the expansion of ourfinancial services offering. These have included the integration of Lesaka Cash Management Pty Ltd, Adumo (RF) Pty Ltd, and LesakaUtilities Pty Ltd, as well as growth across the Group’s Consumer, Merchant, and Enterprise divisions. The proposed acquisition ofBank Zero described herein remains subject to the fulfilment or waiver of applicable conditions precedent. The successful realizationof anticipated benefits remains subject to various internal and external factors, including market conditions, competitive pressures,regulatory developments, technology advancements, integration execution, and customer adoption of products and services. However,we cannot assure you that we will be able to complete our strategy successfully and sustain profitability and positive cash flow. Even where we are profitable, achieving net income does not necessarily ensure positive cash flow. Failure to effectively executeon our strategy, achieve targeted synergies, sustain revenue growth, manage costs, or maintain positive cash generation could adverselyimpact financial performance, strategic objectives, and long-term shareholder value. We therefore cannot assure you that we willsustain or increase profitability in the future and if we do not, our business will be materially and adversely affected. We have a significant amount of indebtedness that requires us to comply with restrictive and financial covenants. If we areunable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our businessand financial condition. As of June 30, 2026, we had aggregate borrowings outstanding of ZAR 3.5 billion ($210.7 million translated at exchange ratesas of June 30, 2026). We partially funded certain of our acquisitions through South African bank borrowings. We, together with LesakaTechnologies Proprietary Limited (“Lesaka SA”) and the majority of Lesaka SA’s directly and indirectly wholly-owned subsidiaries,have agreed to guarantee the obligations of Lesaka SA and of the other borrowers under certain of the borrowings to the lenders.Certain of these borrowings contain customary covenants which include a requirement for Lesaka SA to maintain specified Net Debtto EBITDA and Interest Cover Ratios (as defined in the lending agreements) and restricts the ability of Lesaka SA, and certain of itssubsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additionalindebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporateactivities. The borrowings through our merchant lending operations, through Lesaka Capital Proprietary Limited (formerly known as CashConnect Capital Proprietary Limited) (“Lesaka Capital”) and Lesaka Fuel Proprietary Limited (formerly known as K2020 ConnectProprietary Limited) (“Lesaka Fuel”), include a ZAR 400 million revolving credit facility agreement. This facility contains customarycovenants that require the borrowing parties to collectively maintain a specified capital adequacy ratio, restrict the ability of the entitiesto make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments,engage in certain business combinations and engage in other corporate activities. These security arrangements and covenants may reduce our operating flexibility or our ability to engage in other transactions thatmay be beneficial to us. If we are unable to comply with the covenants, we could be in default and the indebtedness could beaccelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and asa result, our business, financial condition and stock price would suffer. Failure to complete, or delays in completing, the Bank Zero acquisition, could materially and adversely affect our results ofoperations and stock price. The completion of the Bank Zero acquisition is subject to a number of conditions precedent, including receipt of regulatoryapprovals and certain third-party consents. Some of these conditions are outside our control. To complete the acquisition, we must make certain filings with, and obtain certain consents and approvals from, variousgovernmental and regulatory authorities. The regulatory approval processes may take a lengthy period of time to complete, and therecan be no assurance as to the outcome of the approval processes, including the undertakings and conditions that may be required forapproval, or whether the regulatory approvals will be obtained at all. In addition, the completion of the acquisition is conditional on, among other things, no action or circumstance occurring thatwould result in a material adverse effect on the Bank Zero’s business operations or financial results.
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14 We cannot provide any assurance regarding if or when all conditions precedent to the acquisition will be satisfied or waived. If,for any reason, the acquisition is not completed, or its completion is materially delayed and/or the transaction agreement is terminated,the market price of our common stock may be materially and adversely affected. In addition, if the acquisition is not completed for any reason, there are risks that (i) the announcement of the acquisition and (ii)the dedication of management’s attention and other of our resources to the completion thereof, could have a negative impact on ourrelationships with our stakeholders and could have a material adverse effect on our current and future operations, financial conditionand prospects. We may not realize some or all of the anticipated benefits from the Bank Zero acquisition or we may fail to realize some orall of the expected benefits of certain recently integrated acquisitions, including Adumo and Utilities Even if we complete the Bank Zero acquisition, we may experience unforeseen events, changes or circumstances that mayadversely affect us. For example, we may incur unexpected costs, charges or expenses resulting from the transaction, including chargesto future earnings if Bank Zero’s business does not perform as expected. Our expectations regarding Bank Zero’s business andprospects may not be realized, including as a result of changes in the financial condition of the markets that Bank Zero serves. Inaddition, there are risks associated with Bank Zero’s product and service offerings or results of operations, including the risk of failingto comply with certain regulatory rules required to operate its business. Further, there are numerous challenges, risks and costs involved with integrating the operations of Bank Zero with ours. Forexample, integrating Bank Zero into our company will require significant attention from our senior management which may diverttheir attention from our day-to-day business. The difficulties of integration may also be increased by cultural differences between ourtwo organizations and the necessity of retaining and integrating personnel, including Bank Zero’s key employees. Our Sarbanes-Oxley Act of 2002 (“Sarbanes”) management certification and auditor attestation regarding the effectiveness ofour internal control over financial reporting as of June 30, 2026, includes the operations of Adumo and Utilities as these entities arenow in scope for this attestation. However, the aforementioned entities are still in the process of becoming SOX compliant. Refer toItem 9A for further detail. The requirement to evaluate and report on our internal controls also applies to companies that we acquire,including Bank Zero. The future integration of Bank Zero into our internal control over financial reporting is expected to requiresignificant time and resources from our management and other personnel and is expected to increase our compliance costs. If we failto successfully integrate the operations of Bank Zero into our internal control over financial reporting, our internal control overfinancial reporting may not be effective. As such, if some or all of the aforementioned risks materialize, our ability to successfully integrate Bank Zero’s operations intoour business and realize the associated benefits of that acquisition could be adversely impacted. This could lead to the recording ofmaterial impairments, and as a result, our financial condition, results of operations, cash flows and stock price could suffer. We may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business. Acquisitions are an integral part of our new growth strategy as we seek to expand our business and deploy our technologies innew markets in Southern Africa. However, we may not be able to locate suitable acquisition candidates at prices that we considerappropriate. If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of thetransaction, finance it or, if the transaction occurs, integrate the new business into our existing business. These transactions may requiredebt financing or additional equity financing, resulting in additional leverage or dilution of ownership. Acquisitions of businesses or other material operations and the integration of these acquisitions or their businesses will requiresignificant attention from members of our senior management team, which may divert their attention from our day-to-day business.The difficulties of integration may be increased by the necessity of integrating personnel with disparate business backgrounds andcombining different corporate cultures. We also may not be able to retain key employees or customers of an acquired business orrealize cost efficiencies or synergies or other benefits that we anticipated when selecting our acquisition candidates. Acquisitioncandidates may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition. We may need to record write-downs from future impairments of goodwill or other intangible assets, which could reduce ourfuture reported earnings. We may identify additional errors related to our Value Added Tax (VAT) processes, indirect tax positions, or similartransaction-level tax matters, which could require future adjustments to our financial statements. During the second quarter of fiscal 2026, we identified errors in the historical VAT treatment of certain gaming vouchertransactions within our Merchant business. Although we have completed an initial review of the matter and determined to correct theidentified errors through revisions to our previously issued financial statements, our review is ongoing. Refer to Note 1 to our auditedconsolidated financial statements for additional information. The error arose from the incorrect application of indirect tax rules, theconfiguration of underlying systems, and operational practices involving downstream vendors.
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15 While we have implemented remedial actions, including enhancing our system of internal control and conducting further analyseswith our external advisors, there is a risk that we have not identified all errors associated with this matter. Additional issues may bediscovered as we continue to evaluate historical periods, refine our technical tax conclusions, or from inadequate updates to oursystems. Moreover, similar errors could exist in accounting and reporting for other indirect tax transactions particularly where ourbusiness involves complex multi-party arrangements, voucher products, commissions, or activities involving non-registered VATvendors. Identification of additional errors may require us to record further adjustments, amend or restate previously issued financialstatements, update our tax filings, make additional payments of tax, penalties, or interest, or make further enhancements to our internalcontrol processes. Any such developments could result in increased compliance costs, additional administrative burdens, diversion ofmanagement attention, or investor perceptions of weaknesses in our financial reporting or tax compliance processes. If material,additional errors could also adversely affect our financial condition, results of operations, liquidity, or internal control over financialreporting. Geopolitical conflicts, including the conflict between Russia and Ukraine and in the Middle East, may adversely affect ourbusiness and results of operations. Global economic and geopolitical conditions continue to influence the environment in which we operate. Heightened geopoliticaltensions, including the conflict between Russia and Ukraine and ongoing conflicts in the Middle East, have contributed to volatility inglobal financial markets and increased macroeconomic uncertainty. We have no direct operations, assets or revenue exposure in theaffected regions. However, the indirect effects of these developments may adversely impact the South African operating environment,our primary market, including through foreign exchange volatility, inflationary pressures, tighter external funding conditions, andreduced consumer affordability. While we do not currently believe these developments have had a material effect on our financialposition, results of operations or cash flows, geopolitical conditions remain fluid and their broader consequences are uncert ain.Acontinuation or escalation of these conflicts, or their expansion to surrounding areas, could adversely affect our business, and anymaterial changes to our risk profile or financial position will be disclosed in accordance with applicable regulatory requirements. A prolonged economic slowdown or lengthy or severe recession in South Africa or elsewhere could harm our operations. A prolonged economic downturn or recession in South Africa could materially impact our results from operations, particularlyin light of electricity disruptions, a significantly weak USD/ ZAR exchange rate compared with previous periods, and our strategicdecision to focus on our South African operations. In October 2025, South Africa exited the Financial Action Task Force grey listafter completing the required reforms. The removal from the grey list was widely viewed as positive for investor sentiment, capitalflows, funding costs, and international business confidence in South Africa. However, economic confidence in South Africa, our mainoperating environment, has been historically low and, as a result, there is a risk of a prolonged economic downturn, which could havea negative impact on merchants and retailers; mobile phone operators; our account holders; the level of transactions we process; thetake-up of the financial services we offer and the ability of our customers to repay our loans or to pay their insurance premiums. Iffinancial institutions and retailers experience decreased demand for their products and services, our hardware, software, relatedtechnology sales and processing revenue could decrease. Our consumer microlending loan book and merchant lending book expose us to credit risk and our allowance for doubtfulfinance loans receivable may not be sufficient to absorb future write-offs. All of our microfinance loans made are for a period of nine months or less and all of our merchant lending is for a period of lessthan 12 months. We have created an allowance for doubtful finance loans receivable related to these books. When creating theallowance, management considered factors including the period of the finance loan outstanding, creditworthiness of the customers andthe past payment history of the borrower. We consider this policy to be appropriate as it takes into account factors such as historicalbad debts, current economic trends and changes in our customer payment patterns. However, additional allowances may be requiredshould the ability of our customers to make payments when due deteriorate in the future. A significant amount of judgment is requiredto assess the ultimate recoverability of these microfinance loan receivables. We may face competition from other companies that offer innovative payment technologies and payment processing, whichcould result in the loss of our existing business and adversely impact our ability to successfully market additional products andservices. Our primary competitors in the payment processing market include other independent processors, as well as financial institutions,independent sales organizations, new digital and fintech entrants and, potentially card networks. Many of our competitors arecompanies who are larger than we are and have greater financial and operational resources than we have. These factors may allowthem to offer better pricing terms or incentives to customers, which could result in a loss of our potential or current customers and/orforce us to lower our prices. Either of these actions could have a significant effect on our revenues and earnings.
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16 Our future success will depend in part on our ability to attract, integrate, retain and incentivize key personnel and a sufficientnumber of skilled employees, particularly in the technical, sales and senior management areas. We believe our management team has the right experience and skills to execute on our strategy. However, in order to succeed inour product development and marketing efforts, we may need to identify and attract new qualified technical and sales personnel, aswell as motivate and retain our existing employees. As a result, an inability to hire and retain such employees would adversely affectour ability to achieve our strategic goals and maintain our technological relevance. We may face difficulty in assimilating, transitioningand integrating newly-hired personnel or management of any future acquisitions into our existing management team, and this mayadversely affect our business. Competitors may attempt to recruit our top management and employees. In order to attract and retainpersonnel in a competitive marketplace, we must provide competitive pay packages, including cash and equity -based compensationand the volatility in our stock price may from time to time adversely affect our ability to recruit or retain employees. We do notmaintain any “key person” life insurance policies. If we fail to attract, integrate, retain and incentivize key personnel and skilledemployees, our ability to manage and grow our business could be harmed and our product development and marketing activities couldbe negatively affected. Cybersecurity breaches and other system disruptions pose a significant threat to business operations. As a fintech organization reliant on digital infrastructure, we are highly susceptible to cybersecurity incidents involving sensitivedata such as personally identifiable information (“PII”), payment card information (“PCI”), and proprietary business records. Ourexposure includes the risk of data breaches, ransomware, denial-of-service attacks, and unauthorised system access. Although wefollow the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework in our security controls, evolving cyberthreats mean no system is invulnerable. A successful cybersecurity breach, especially with increased adoption of AI technologies,could result in financial losses, regulatory penalties, reputational damage, operational interruptions, and legal consequences. Prolongedor frequent breaches or system disruptions may diminish customer trust, potentially leading customers to consider our systemsunreliable, which could impact adoption and harm brand reputation. Addressing breaches or system disruptions can significantly strainstaff resources and delay new service launches. Furthermore, if customers rely on our products for critical transactions, a breach coulddisrupt their businesses and lead to claims for compensation. Even if unsuccessful, this type of claim could be time-consuming andcostly for us to address. Although certain of our systems have been designed to reduce downtime in the event of outages or catastrophic occurrences, theyremain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks,computer viruses, computer denial-of-service attacks and similar events. Some of our systems are not fully redundant, and our disasterrecovery planning may not be sufficient for all eventualities. Protection against fraud is of key importance to the purchasers and end users of our solutions. We incorporate security features,including encryption software, biometric identification and secure hardware, into our solutions to protect against fraud in electronictransactions and to provide for the privacy and integrity of cardholder data. Our solutions and systems may be vulnerable to breachesin security due to defects in the security mechanisms, the operating system, applications or the hardware platform as well as throughrisk introduced into our environment through third party suppliers, which the group relies heavily on. Security vulnerabilities couldjeopardize the security of information transmitted using our solutions. If the security of our solutions is compromised, our reputationand marketplace acceptance of our solutions may be adversely affected, which would cause our business to suffer, and we may becomesubject to damages claims. We have not yet experienced any significant security breaches affecting our business. Despite robust measures, unforeseen cyber incidents or natural disasters could trigger lengthy service interruptions. Existingbusiness interruption insurance may not adequately compensate for losses stemming from cybersecurity failures. Our use of artificial intelligence (“AI”) may present risks that could adversely affect our business, results of operations andreputation. While our use of AI is not currently material, we may increasingly incorporate AI technologies into our systems, operations andproduct offerings. The development, deployment and use of AI present a number of risks and uncertainties. AI systems may produceinaccurate, unreliable or otherwise flawed outputs, including as a result of limitations in model design, training data quality, bias orother technical constraints. Any such issues could impair the effectiveness of our products and services or expose us to liability. The use of AI is expected to increase cybersecurity, privacy, intellectual property and operational risks. For example, the use ofAI is likely to involve the processing of sensitive data, reliance on third-party tools, or the generation of outputs that are misused ormisinterpreted. In addition, AI technologies are expected to introduce new or evolving vulnerabilities that could be exploited, and ourrisk management processes may not be effective in identifying or mitigating all such risks. The legal and regulatory landscape relating to AI is rapidly evolving and uncertain. We may be subject to existing and emerginglaws, regulations and regulatory expectations in the United States and other jurisdictions (including South Africa) relating to, amongother things, data protection, consumer protection, intellectual property and the use of automated decision-making. Compliance withsuch requirements may increase our costs, limit the use or effectiveness of AI in our business, or require changes to our products oroperations. Failure to comply with applicable requirements, or the perception that our use of AI is inappropriate or controversial, couldresult in regulatory scrutiny, litigation, reputational harm or competitive disadvantage.
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17 As AI technologies continue to develop, we may not be able to anticipate or effectively manage all associated risks, especiallycybersecurity related risks. If any of these risks were to materialize, they could have a material adverse effect on our business, resultsof operations and financial condition. Defending our intellectual property rights or defending ourselves in infringement suits that may be brought against us isexpensive and time-consuming and may not be successful. Litigation to enforce our trademarks or other intellectual property rights or to protect our trade secrets could result in substantialcosts and may not be successful. Any loss of, or inability to protect, intellectual property in our technology could diminish ourcompetitive advantage and also seriously harm our business. In addition, the laws of certain foreign countries may not protect ourintellectual property rights to the same extent as do the laws in countries where we currently have protection. Our means of protectingour intellectual property rights in countries where we currently have protection, or any other country in which we operate, may not beadequate to fully protect our intellectual property rights. Similarly, if third parties claim that we infringe their intellectual propertyrights, we may be required to incur significant costs and devote substantial resources to the defense of such claims, to discontinueusing and selling any infringing technology and services, to expend resources to develop non-infringing technology or to purchaselicenses or pay royalties for other technology. In addition, if we are unsuccessful in defending any such third-party claims, we couldsuffer costly judgments and injunctions that could materially adversely affect our business, results of operations or financial condition. We may incur material losses in connection with our movement of cash through our infrastructure in South Africa. In our merchant business we collect and process large volumes of cash from our customers, assuming the risk of loss from themoment that cash is deposited into our vaults. We are then responsible for its collection and transportation to processing centers, whichwe outsource to various cash-in-transit service providers. These services extend across all areas of South Africa. South Africa suffers from high levels of crime and in particular cash-in-transit heists. We cannot insure against certain risks ofloss or theft of cash from our delivery and collection vehicles, and we will therefore bear the full cost of certain uninsured losses ortheft in connection with the cash handling process. Such losses could materially and adversely affect our financial condition, cashflows and results of operations. We have not incurred any material losses resulting from cash distribution in recent years, but there isno assurance that we will not incur any such material losses in the future. We depend upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harmour business. We obtain our smart cards, electronic payment and POS devices, components for our vaults, components to repair the ISV(independent software vendor) division’s POS hardware, and the other hardware we use in our business from a limited number ofsuppliers, and do not manufacture this equipment ourselves. We generally do not have long-term agreements with our manufacturersor component suppliers. If our suppliers become unwilling or unable to provide us with adequate supplies of parts or products whenwe need them, or if they increase their prices, we may not be able to find alternative sources in a timely manner and could be facedwith a critical shortage. This could harm our ability to meet customer demand and cause our revenues to decline. Even if we are ableto secure alternative sources in a timely manner, our costs could increase as a result of supply or geopolitical shocks, which may leadto an increase in the prices of goods and services from third parties. A supply interruption, such as the previous global shortage ofsemiconductors, or an increase in demand beyond current suppliers’ capabilities could harm our ability to distribute our equipmentand thus to acquire new customers who use our technology. Any interruption in the supply of the hardware necessary to operate ourtechnology, or our inability to obtain substitute equipment at acceptable prices in a timely manner, could impair our ability to meet thedemand of our customers, which would have an adverse effect on our business. Our Lesaka Life business exposes us to risks typically experienced by life assurance companies. Lesaka Life Limited (formerly known as EasyPay Insurance Limited) (“Lesaka Life”) is a life insurance company and exposesus to risks typically experienced by life assurance companies. Some of these risks include the extent to which we are able to continueto reinsure our risks at acceptable costs, reinsurer counterparty risk, maintaining regulatory capital adequacy, solvency and liquidityrequirements, our ability to price our insurance products appropriately, the risk that actual claims experience may exceed our estimates,the ability to recover policy premiums from our customers and the competitiveness of the South African insurance market. If we areunable to maintain our desired level of reinsurance at prices that we consider acceptable, we would have to either accept an increasein our risk exposure or reduce our insurance writings. If our reinsurers are unable to meet their commitments to us in a timely manner,or at all, we may be unable to discharge our obligations under our insurance contracts. As such, we are exposed to counterparty risk,including credit risk, of these reinsurers. Our product pricing includes long-term assumptions regarding investment returns, mortality, morbidity, persistency andoperating costs and expenses of the business. Using the wrong assumptions to price our insurance products could materially andadversely affect our financial position, results of operations and cash flows. If our actual claims experience is higher than our estimates,our financial position, results of operations and cash flows could be adversely affected. Finally, the South African insurance industryis highly competitive. Many of our competitors are well-established, represented nationally and market similar products and wetherefore may not be able to effectively penetrate the South African insurance market.
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18 Risks Relating to Operating in South Africa and Other Foreign Markets Operating in Southern and East Africa, both emerging markets, subjects us to greater risks than those we would face if weoperated in more developed markets. Emerging markets such as Southern Africa are subject to greater risks than more developed markets. While we focus our businessprimarily on emerging markets because that is where we perceive the greatest opportunities to market our products and servicessuccessfully, the political, economic and market conditions in these markets present risks that could make it more difficult to operateour business successfully. Some of these risks include:• Political, legal and economic instability, including higher rates of inflation and currency fluctuations;• High levels of corruption, including bribery of public officials;• Loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection;• A lack of well-developed legal systems which could make it difficult for us to enforce our intellectual property and contractualrights;• Logistical, utilities (including electricity and water supply) and communications challenges;• Potential adverse changes in laws and regulatory practices, including import and export license requirements and restrictions,tariffs, legal structures and tax laws;• Difficulties in staffing and managing operations and ensuring the safety of our employees;• Restrictions on the right to convert or repatriate currency or export assets;• Greater risk of uncollectible accounts and longer collection cycles;• Indigenization and empowerment programs; • Exposure to liability under the UK Bribery Act; and• Exposure to liability under U.S. securities and foreign trade laws, including the Foreign Corrupt Practices Act, or FCPA, andregulations established by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC. If we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South African businesses, wemay be subject to fines and we risk losing our government and/or private contracts. In addition, it is possible that we may berequired to increase the Black shareholding of our company in a manner that could dilute your ownership and/or change thecompanies from which we purchase goods or procure services (to companies with a better BEE Status Level). The legislative framework for the promotion of Broad-Based Black Economic Empowerment (“BEE”) in South Africa has beenestablished through the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended from time to time, and theAmended BEE Codes of Good Practice, 2013, or BEE Codes, and any sector-specific codes of good practice, or Sector Codes,published pursuant thereto. Sector Codes are fully binding between and among businesses operating in a sector for which a SectorCode has been published. Achievement of BEE objectives is measured by a scorecard which establishes a weighting for the variouselements. Scorecards are independently reviewed by accredited BEE verification agencies which issue a verification certificate thatpresents an entity’s BEE Status Level. This BEE verification process must be conducted on an annual basis, and the resultant BEEverification certificate is only valid for a period of 12 months from the date of issue. Under our consolidated scorecard, which includesall South African businesses, we currently hold a BEE Status Level 3. Two of our South African businesses, being Lesaka Financial Services (Pty) Ltd, formerly known as EasyPay Financial ServicesProprietary Limited, (“LFS”) and Lesaka Life, are subject to the Amended Financial Sector Code, or the FS Sector Code, and all otherbusinesses are consolidated under the Department of Trade and Industry (DTI) Generic Codes. The FS Sector Code has been amendedand aligned with the new BEE Codes and were promulgated in December 2017. Licensing and/or regulatory authorities overseeingthese South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating license totrade. The minimum requirement under the Financial Sector Code is Level 8. We currently have a BEE Status Level 2 for LFS andBEE Status Level 4 for Lesaka Life. The BEE scorecard includes a component relating to management control, which serves to determine the participation of Blackpeople in the board, as well as at various levels of management within a measured entity (including, inter alia, Executive Management,Senior Management, Middle Management and Junior Management). The BEE Codes and/or Sector Codes define the terms "SeniorManagement", "Middle Management" and "Junior Management" as those occupational categories as determined in accordance withthe Employment Equity Regulations, with specific emphasis on improving participation in proportion to the demographics of theEconomically Active Population of South Africa, as published by Statistics South Africa, from time to time. Employment Equitylegislation seeks to drive the alignment of the workforce with the racial composition of the economically active population of SouthAfrica and accelerate the achievement of employment equity targets, introducing monetary fines for non-compliance with theEmployment Equity legislation and misrepresented submissions. Annexure EEA9 to the Employment Equity Regulations sets out thevarious occupational levels which are determined in accordance with the relevant grading systems applied by the measured entity andreferred to in said Annexure.
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19 During fiscal 2026, we made cash contributions to 61 community-based organizations and enterprises to enable them to promotegrowth and strengthen their capacity to develop innovative platforms or provide services to the markets they serve. We were alsoinvolved in disaster relief efforts for 601 families who were affected by disasters such as floods and fires. However, it is possible that these and other actions may not be sufficient to enable us to achieve the applicable BEE objectivesset out for specific financial years. In that event, in order to maintain competitiveness in the South African marketplace, we may haveto seek to increase compliance through other means, including by selling or placing additional shares of Lesaka or of our South Africansubsidiaries to Black South Africans (either directly or indirectly), over and above what has already been approved, and/or changingto suppliers that have higher BEE Status Levels. Such sales or placements of shares could have a dilutive impact on your ownershipinterest, which could cause the market price of our stock to decline. We expect that our BEE Status Level will be important in order for us to remain competitive in the South African marketplace.We continually seek ways to improve our BEE Status Level, especially the ownership (so-called “equity”) and procurement elementsthereof. We may not be able to effectively and efficiently manage the disruption to our operations as a result of erratic electricitysupply in South Africa, which could adversely affect our, financial position, cash flows and future growth. Our businesses in South Africa are dependent on electricity generated and supplied by the state-owned utility, Eskom, in orderto operate, and, in recent years, Eskom has been unable to consistently generate and supply the amount of electricity required by theSouth African economy which has resulted in significant and often unpredictable electricity supply disruptions. Eskom hasimplemented a number of short- and long-term mitigation plans to correct these issues, but supply disruptions continued to occurregularly and with no predictability, although consistency of electricity supply has improved significantly since April 2024. As part ofour business continuity programs, we have installed back-up diesel generators in order for us to continue to operate our core dataprocessing facilities in the event of intermittent disruptions to our electricity supply. We have to perform regular monitoring andmaintenance of these generators and also source and manage diesel fuel levels. We may also be required to replace these generatorson a more frequent basis due to the additional burden placed on them. Our results of operations, financial position, cash flows and future growth could be adversely affected if Eskom is unable to raisesufficient funding to operate and/or commission new electricity-generating power stations in accordance with its plans, or at all, or ifwe are unable to effectively and efficiently test, maintain, source fuel for, and replace, our generators. Fluctuations in the value of the South African rand have had, and will continue to have, a significant impact on our reportedresults of operations, which may make it difficult to evaluate our business performance between reporting periods and may alsoadversely affect our stock price. The South African rand, or ZAR, is the primary operating currency for our business operations while our financial results arereported in U.S. dollars. Therefore, any depreciation in the ZAR against the U.S. dollar, would negatively impact our reported revenueand net income. The U.S. dollar/ZAR exchange rate has historically been volatile and we expect this volatility to continue (refer toItem 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Currency Exchange RateInformation.”). Due to the significant fluctuation in the value of the ZAR and its impact on our reported results, you may find itdifficult to compare our results of operations between financial reporting periods even though we provide supplemental informationabout our results of operations determined on a ZAR basis. Similarly, depreciation in the ZAR may negatively impact the prices atwhich our stock trades. We generally do not engage in any currency hedging transactions intended to reduce the effect of fluctuations in foreign currencyexchange rates on our results of operations, other than economic hedging using forward contracts relating to our inventory purchaseswhich are settled in U.S. dollars or euros. We cannot guarantee that we will enter into hedging transactions in the future or, if we do,that these transactions will successfully protect us against currency fluctuations. South Africa’s high levels of poverty, unemployment and crime may increase our costs and impair our ability to maintain aqualified workforce. While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment,relative to peer countries in Africa and other emerging economies, and there are significant differences in the level of economic andsocial development among its people, with large parts of the population, particularly in rural areas, having limited access to adequateeducation, healthcare, housing and other basic services, including water and electricity. In addition, South Africa has a high prevalenceof HIV/AIDS and tuberculosis, the impact of which may be exacerbated in the short-term by the discontinuation of the U.S.government’s funding of certain HIV/AIDS research and outreach programs. Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of citizens under previousgovernments may increase our costs and reduce our profitability, all of which could negatively affect our business. These problemsmay prompt emigration of skilled workers, hinder investment into South Africa and impede economic growth. As a result, we mayhave difficulties attracting and retaining qualified employees.
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20 The economy of South Africa is exposed to high rates of inflation, interest and corporate tax, which could increase ouroperating costs and thereby reduce our profitability. Furthermore, the South African government requires additional income tofund future government expenditures and may be required, among other things, to increase existing income tax rates, includingthe corporate income tax rate, amend existing tax legislation or introduce additional taxes. The economy of South Africa in the past has been, and in the future may continue to be, characterized by rates of inflation andinterest that are substantially higher than those prevailing in the United States and other highly-developed economies. High rates ofinflation could increase our South African-based costs and decrease our operating margins. High interest rates increase the cost of ourdebt financing, though conversely, they also increase the amount of income we earn on any cash balances. The South African corporateincome tax rate, of 27%, is higher than the U.S. federal income tax rate, of 21%. Any increase in the effective South African corporateincome tax rate would adversely impact our profitability and cash flow generation. Risks Relating to Government Regulation We are required to comply with certain laws and regulations, including economic and trade sanctions, which could adverselyimpact our future growth. We are subject to U.S. and other trade controls, economic sanctions and similar laws and regulations, including those in thejurisdictions where we operate. Our failure to comply with these laws and regulations could subject us to civil, criminal andadministrative penalties and harm our reputation. These laws and regulations place restrictions on our operations, trade practices,partners and investment decisions. In particular, our operations are subject to U.S. and foreign trade control laws and regulations,including various export controls and economic sanctions programs, such as those administered by OFAC. We monitor compliance inaccordance with the 10 principles as set out in the United Nations Global Compact Principles, the Organisation for Economic Co-operation and Development recommendations relating to corruption, and the International Labor Organization Protocol in terms ofcertain of the items to be monitored. As a result of doing business in foreign countries and with foreign partners, we are exposed to aheightened risk of violating trade control laws as well as sanctions regulations. Violations of trade control laws and sanctions regulations are punishable by civil penalties, including fines, denial of exportprivileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well ascriminal fines and imprisonment. We have developed policies and procedures as part of a company-wide compliance program that isdesigned to assist our compliance with applicable U.S. and international trade control laws and regulations, including trade controlsand sanctions programs administered by OFAC, and provide regular training to our employees to create awareness about the risks ofviolations of trade control laws and sanctions regulations and to ensure compliance with these laws and regulations. However, therecan be no assurance that all of our employees, consultants, partners, agents or other associated persons will not act in violation of ourpolicies and these laws and regulations, or that our policies and procedures will effectively prevent us from violating these regulationsin every transaction in which we may engage or provide a defense to any alleged violation. In particular, we may be held liable for theactions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may notbe subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business,results of operations and financial condition. Any expansion into developing countries, and our development of new partnerships andjoint venture relationships, could increase the risk of OFAC violations in the future. In addition, our payment processing and financial services activities are subject to extensive regulation. Compliance with therequirements under the various regulatory regimes may cause us to incur significant additional costs and failure to comply with suchrequirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability. We are required to comply with anti-corruption laws and regulations, including the FCPA and UK Bribery Act, in thejurisdictions in which we operate our business, which could adversely impact our future growth. The FCPA prohibits us from providing anything of value to foreign officials for the purposes of obtaining or retaining business,or securing any improper business advantage, and requires us to keep books and records that accurately and fairly reflect ourtransactions. As part of our business, we may deal with state-owned business enterprises, the employees of which are consideredforeign officials for purposes of the FCPA. The UK Bribery Act includes provisions that extend beyond bribery of foreign publicofficials and also apply to transactions with individuals not employed by a government and the act is also more onerous than the FCPAin a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties. Some of the internationallocations in which we operate or have investments lack a developed legal system and have higher than normal levels of corruption. Any failure by us to adopt appropriate compliance procedures and ensure that our employees, agents and business partnerscomply with the anti-corruption laws and regulations could subject us to substantial penalties, and the requirement that we complywith these laws could put us at a competitive disadvantage against companies that are not required to comply. For example, in manyemerging markets, there may be significant levels of official corruption, and thus, bribery of public officials may be a comm onlyaccepted cost of doing business. Our refusal to engage in illegal behavior, such as paying bribes, may result in us not being able toobtain business that we might otherwise have been able to secure or possibly even result in unlawful, selective or arbitrary action beingtaken against us.
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21 Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, as well as criminal fines andimprisonment. We have developed policies and procedures as part of a company-wide compliance program that is designed to assistour compliance with applicable U.S., South African and other international anti-corruption laws and regulations, and provide regulartraining to our employees to comply with these laws and regulations. However, there can be no assurance that all of our employees,consultants, partners, agents or other associated persons will not take actions in violation of our policies or these laws and regulations,or that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we mayengage, or provide a defense to any alleged violation. In particular, we may be held liable for the actions that our local, strategic orjoint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such aviolation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations andfinancial condition. We do not have a South African banking license and, therefore, we provide our banking offering through an arrangementwith a third-party bank, which limits our control over this business and the economic benefit we derive from it. If this arrangementwere to be terminated, we would not be able to operate our Lesaka EasyPay business without alternate means of access to a bankinglicense. We are also required to comply with the requirements of payment schemes, including VISA and Mastercard. Furthermore,we provide certain of our services under partnerships with South African banks. We will be unable to provide our payments andcard-acquiring businesses if we fail to comply with payment scheme rules, and/or fail to maintain certain regulatory licenses andregistrations, and/ or if we were unable to continue to partner with South African banks to provide our payments and card acquiringservices. The South African retail banking market is highly regulated. Under current law and regulations, our Lesaka EasyPay businessactivities require us to be registered as a bank in South Africa or to have access to an existing banking license. We are not currentlyso registered, but we have an agreement with African Bank Limited (“African Bank”), that enables us to implement our LesakaEasyPay program in compliance with the relevant laws and regulations. If this agreement were to be terminated, we would not be ableto operate these services unless we were able to obtain access to a banking license through alternate means. Furthermore, we have tocomply with the South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing controlregulations, when we open new bank accounts for our customers and when they transact. Failure to effectively implement and monitorresponses to the legislation and regulations may result in significant fines or prosecution of African Bank and ourselves. The South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries betweenfinancial product suppliers and consumers in South Africa to register as financial service providers. Lesaka Life and LFS were granteda Financial Service Provider (“FSP”) licenses on June 9, 2015, and July 11, 2017, respectively. If our FSP licenses are withdrawn orsuspended, we may be stopped from continuing our financial services businesses in South Africa unless we are able to enter into arepresentative arrangement with a third party FSP. Furthermore, the Conduct of Financial Institutions Bill (“COFI Bill”) will overhaul the current regulatory and legislativeframework by replacing the rules-based approach with an outcomes-driven and principles-based model, and the adoption of an activity-based licensing and authorization regime. It aims to establish a single, modern conduct architecture aligned to emerging risks acrossthe financial services sector, and embed fair outcomes across the value chain, thereby simplifying and rationalizing existing fragmentedconduct rules, and strengthening governance, culture and accountability. While the COFI Bill is expected to significantly change themanner in which we operate our business, including the conversion of existing licenses for the relevant Lesaka subsidiaries throughtransitional arrangements and other financial services activities which may require licensing, it is also likely to substantially increaseoperational costs as we seek to meet regulatory expectations. Although timing remains uncertain, the COFI Bill was introduced inParliament in April 2026. We are required to comply with the requirements of payment schemes, including VISA and Mastercard. We have deployed asignificant number of devices, and any mandatory compliance upgrades to our deployed POS devices would require significant capitalexpenditure and/or be disruptive to our customer base. Failure to comply with the payment schemes’ rules may result in significantfines and/or a loss of license to participate in the scheme(s). We provide card acquiring services to our customers by partnering with Nedbank Limited and ABSA Bank Limited, and paymentprocessing services in partnership with the largest banks in South Africa. If these agreements were to be terminated, certain of ourbusiness would not be able to operate their payment services unless they were able to enter alternative card acquiring or paymentprocessing agreements with other partners or obtain a direct designation license with the schemes and regulatory bodies. In addition,any loss of or failure to renew our current authorizations would result in an inability to operate its payment services. Compliance with the requirements under these various regulatory regimes may cause us to incur significant additional costs andfailure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, finesand/or civil or criminal liability.
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22 Proposed regulatory changes to the national payments system are expected to have a substantial impact on the South Africanpayments industry. It may change the manner in which we conduct business and likely lead to increased operating costs for ourbusiness as we work to ensure compliance with the new legislative and regulatory framework, which may have a material adverseeffect on our business. On March 3, 2025, the South African Reserve Bank (“SARB”) published certain draft regulatory documents for commentarythat are expected to have a substantial impact on how we conduct our business namely: (i) a draft directive entitled “Directive inrespect of specific payment activities within the national payment system” (the “Directive”); (ii) a draft exemption notice entitled“Designation by the Prudential Authority of specific activities conducted in the national payment system which shall be deemed notto constitute ‘the business of a bank’ under paragraph (cc) in section 1(1) of the Banks Act, 1990” (the “Exemption Notice”); and(iii) the National Payment System Bill (“NPS Bill”), which seeks to replace the existing National Payment System Act, 1998.Following the initial publication of the proposed regulations, for which we submitted detailed comments through our industry body,the Association of South African Payment Providers (“ASAPP”), revised versions of the Directive and the Exemption Notice werepublished for commentary on May 20, 2026, and detailed comments were submitted to ASAPP. The key objectives of the proposed regulations are to clarify the mandate and objectives of the SARB with respect to the nationalpayment system (“NPS”); and establish a robust regulatory, oversight, and supervisory framework for the NPS. The proposedregulations also aim to promote financial inclusion, competition, the prevention of financial crime, and the fair treatment and protectionof customers, while introducing an activity-based licensing and authorization regime. In this regard, the Directive defines seven“payment activities” and provides that a person, which can be a bank or a non-bank, providing a “payment activity" must obtainauthorisation from the SARB to undertake such activity. Under the Exemption Notice, certain payment activities are exempted fromthe definition of ‘the business of a bank’. Prior to the Exemption Notice, these activities could only be undertaken by a bank. Pursuantto the Exemption Notice, these activities can be undertaken by non-banks, subject to certain conditions. Certain of our businessescurrently undertake activities which would qualify as “payment activities” under the Directive and the NPS Bill. Under the currentregulatory framework, these activities are undertaken in partnership with a sponsoring bank and the sponsoring bank is subject toregulation by the SARB. In other words, the business undertaking the “payment activity” is not subject to direct regulation with respectto such payment activities. It is uncertain if and when the proposed regulations will enter into effect and the extent to which we as a non-bank may electwhether to conduct an exempted payment activity by partnering with a bank to do so, or on its own, if it is authorised by the SARB -i.e. whether both options will be available to a non-bank. Should our businesses be subject to direct regulation under this new regime(i.e., if our current sponsorship model is no longer available), we expect that we will incur significant operating costs to comply withthe new requirements, and to obtain authorization with respect thereto. Furthermore, while some requirements may already exist underother current regulatory frameworks for certain of our businesses, we will likely need to invest in additional resources, systems andprocesses to satisfy the regulatory requirements contemplated in the proposed regulations, which may also lead to increased operationalcosts, which may have a material adverse effect on our business. We may be subject to regulations regarding privacy, data use and/or security, which could adversely affect our business. We are subject to regulations in a number of the countries in which we operate relating to the processing (which includes, interalia, the collection, use, retention, security and transfer) of personal information about the people (whether natural or juristic) who useour products and services. The interpretation and application of user data protection laws are in a state of flux. These laws may beinterpreted and applied inconsistently from country to country and our current data protection policies and practices may not beconsistent with those interpretations and applications. Complying with these varying requirements could cause us to incur substantialcosts or require us to change our business practices in a manner adverse to our business. Any failure, or perceived failure, by us tocomply with any regulatory requirements or international privacy or consumer protection-related laws and regulations could result inproceedings or actions against us by governmental entities or others, subject us to significant penalties and negative publicity. Inaddition, as noted above, we are subject to the possibility of security breaches, which themselves may result in a violation of theselaws. Amendments to the NCA were signed into law in South Africa in August 2019. Compliance with these amendments mayadversely impact our micro-lending operations in South Africa. In August 2019, the National Credit Amendment Bill, or debt-relief bill, was signed into law in South Africa. The effective dateof the debt-relief bill has not yet been announced and has been significantly delayed. We believe that the debt-relief bill will restrictthe ability of financial services providers to provide lending products to certain low-income earners and will increase the cost of creditto these consumers. As a result, compliance with the debt -relief bill may adversely impact our micro-lending operations in SouthAfrica. Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implementthis new legislation in our lending processes and practices. Non-compliance with the provisions of this new legislation may result infinancial loss and penalties, reputational loss or other administrative punishment.
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23 Risks Relating to our Common Stock Our failure to prepare and timely file our periodic reports with the SEC limits our access to the public markets to raise debtor equity capital. Form S-3 permits eligible issuers to conduct registered offerings using a short form registration statement that allows the issuerto incorporate by reference its past and future filings and reports made under the Securities Exchange Act of 1934, as amended (the“Exchange Act”). In addition, Form S-3 enables eligible issuers to conduct primary offerings “off the shelf” under Rule 415 of theSecurities Act of 1933, as amended (the “Securities Act”). The shelf registration process, combined with the ability to forwardincorporate information, allows issuers to avoid delays and interruptions in the offering process and to access the capital markets in amore expeditious and efficient manner than raising capital in a standard registered offering pursuant to a Registration Statement onForm S-1. The ability to register securities for resale may also be limited as a result of the loss of Form S-3 eligibility. We did not file our 2025 Form 10-K within the timeframe required by the SEC; thus, we have not remained current in ourreporting requirements with the SEC. Although we regained status as a current filer by filing our Form 10-K/A to amend our 2025Form 10-K, as of the date of this Annual Report, we are ineligible to file new short form registration statements on Form S-3 and,absent a waiver of the Form S-3 eligibility requirements, we are no longer permitted to use our existing registration statements onForm S-3. If we wish to pursue an offering now, we would be required to conduct the offering on an exempt basis, such as in accordancewith Rule 144A, or file a registration statement on Form S-1. Using a Form S-1 registration statement for a public offering wouldlikely take significantly longer than using a registration statement on Form S-3 and increase our transaction costs, and could, to theextent we are not able to conduct offerings using alternative methods, adversely impact our ability to raise capital or completeacquisitions of other companies in a timely manner. Our stock price has been and may continue to be volatile. Our stock price has periodically experienced significant volatility. During the 2026 fiscal year, our stock price ranged from a lowof $3.62 to a high of $5.54. We expect that the trading price of our common stock may continue to be volatile as a result of a numberof factors, including, but not limited to the following:• Any adverse developments in litigation or regulatory actions in which we are involved;• Fluctuations in currency exchange rates, particularly the U.S. dollar/ZAR exchange rate;• Announcement of additional BEE transactions, especially one involving the issuance or potential issuance of equity securitiesor dilution or sale of our existing business in South Africa;• Quarterly variations in our operating results;• Significant fair value adjustments or impairment in respect of investments or intangible assets;• Announcements of acquisitions or disposals;• The timing of, or delays in the commencement, implementation or completion of major projects;• Large purchases or sales of our common stock; and• General conditions in the markets in which we operate.Additionally, shares of our common stock can be expected to be subject to volatility resulting from purely market forces overwhich we have no control. The put right we granted to the IFC Investors on the occurrence of certain triggering events may have adverse impacts on us. In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors. Certain IFC Investors werealso investors in Adumo and on October 1, 2024, we issued an aggregate of 1,989,162 additional shares of our common stock to theseIFC Investors pursuant to the Adumo transaction agreement. As of June 30, 2026, the IFC Investors held 8,430,676 shares. We grantedthe IFC Investors certain rights, including the right to require us to repurchase any share held by the IFC Investors pursuant to the May2016 and October 2024 transactions upon the occurrence of specified triggering events, which we refer to as a “put right.” The putprice per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price pershare prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection ofa bona fide offer, the put price per share will be the highest price offered by the offeror. If a put triggering event occurs, it couldadversely impact our liquidity and capital resources. In addition, the existence of the put right could also affect whether or on whatterms a third party might in the future offer to purchase our company. Our response to any such offer could also be complicated,delayed or otherwise influenced by the existence of the put right. Approximately 29% of our outstanding common stock is owned by two shareholders. The interests of these shareholders mayconflict with those of our other shareholders. There is a concentration of ownership of our outstanding common stock because approximately 29% of our outstanding commonstock is owned by two shareholders. Based on their most recent SEC filings disclosing ownership of our shares, Value Capital Partners(Pty) Ltd, or VCP, and IFC Investors, beneficially own approximately 19% and 10% of our outstanding common stock as of June 30,2026, respectively.
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24 The interests of VCP and the IFC Investors may be different from or conflict with the interests of our other shareholders. As aresult of the significant combined ownership by VCP and the IFC Investors, they may be able, if they act together, to significantlyinfluence the voting outcome of all matters requiring shareholder approval. This concentration of ownership may have the effect ofdelaying or preventing a change of control of our company, thus depriving shareholders of a premium for their shares, or facilitatinga change of control that other shareholders may oppose. We may seek to raise additional financing by issuing new securities with terms or rights superior to those of shares of ourcommon stock, which could adversely affect the market price of such shares. We may require additional financing to fund future operations, including expansion in current and new markets, programmingdevelopment and acquisition, capital costs and the costs of any necessary implementation of technological innovations or alternativetechnologies, or to fund acquisitions. We may also wish to raise additional equity funding to reduce the amount of debt funding on ourbalance sheet. Because of the exposure to market risks associated with economies in emerging markets, we may not be able to obtainfinancing on favorable terms or at all. If we raise additional funds by issuing equity securities, the percentage ownership of our currentshareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares ofcommon stock, which could adversely affect the market price and voting power of shares of common stock. If we raise additionalfunds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders ofshares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interestexpense for us. Issuances of significant amounts of stock in the future could potentially dilute your equity ownership and adversely affect theprice of our common stock. We believe that it is necessary to maintain a sufficient number of available authorized shares of our common stock in order toprovide us with the flexibility to issue shares for business purposes that may arise from time to time. For example, we could selladditional shares to raise capital to fund our operations, to reduce debt or to acquire other businesses, issue shares in a BEE transaction,issue additional shares under our stock incentive plan or declare a stock dividend. Our board may authorize the issuance of additionalshares of common stock without notice to, or further action by, our shareholders, unless shareholder approval is required by law or therules of the NASDAQ Stock Market. The issuance of additional shares could dilute the equity ownership of our current shareholdersand any such additional shares would likely be freely tradable, which could adversely affect the trading price of our common stock. We have identified material weaknesses in our internal control over financial reporting which, if not timely remediated, mayadversely affect the accuracy and reliability of our financial statements, and our reputation, business and stock price, as well aslead to a loss of investor confidence in us. As described under Item 9A—“Controls and Procedures.”, we concluded that our disclosure controls and procedures were noteffective as of June 30, 2026, and that we had, as of such date, material weaknesses in our internal control over financial reportingrelated to: ● Our Consumer lending, Consumer insurance and Group payroll processes, specifically insufficient risk assessment andmonitoring activities relating to changes in or migration of systems and processes, insufficient controls over internalinformation and information from service organizations, and insufficient design and implementation of InformationTechnology General Controls (“ITGCs”), controls over service organizations and process level controls, resulting inineffective process level controls, including a lack of validation of the completeness and accuracy of information used withinthe process; ● Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation ofcontrols including insufficient controls over information resulting in ineffective process level controls including a lack ofvalidation of the completeness of the journal entry population and inadequate validation of the completeness and accuracyof information used within the process; ● The failure of our Utilities, Lesaka Hospitality Proprietary Limited (formerly known as GAAP-Point-Of-Sale ProprietaryLimited) (“Lesaka Hospitality”), Lesaka Merchant Technologies and Lesaka Payments businesses to comply with the ourSarbanes program, specifically insufficient risk assessment and monitoring activities relating to systems and processes,insufficient controls over internal information and information from service organizations, and insufficient design andimplementation of ITGCs controls over service organizations and process level controls, resulting in ineffective processlevel controls, including a lack of validation of the completeness and accuracy of information used within the process;● An insufficient number of experienced and trained resources to execute on their internal control responsibilities resulting ininadequate risk assessment, ineffective design, implementation and operating effectiveness of process level controls forprocesses in the scope of our internal control over financial reporting evaluation.
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25 A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that thereis a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not beprevented or detected on a timely basis. The material weaknesses identified in Item 9A—“Controls and Procedures.”, resulted inimmaterial misstatements of prior period amounts, which have been corrected through revision of the prior period financial statementsas described in Note 1 to our consolidated financial statements, and in a corrected immaterial current period misstatement related torevenue; they did not require amendment of any previously filed report. We intend to remediate these material weaknesses. While we believe the steps we take to remediate these material weaknesseswill improve the effectiveness of our internal control over financial reporting and will remediate the identified deficiencies, if ourremediation efforts are insufficient to address the material weakness or we identify additional material weaknesses in our internalcontrol over financial reporting in the future, our ability to analyze, record and report financial information accurately, to prepare ourfinancial statements within the time periods specified by the rules and forms of the SEC and to otherwise comply with our reportingobligations under the federal securities laws may be adversely affected. The occurrence of, or failure to remediate, these materialweaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy andreliability of our financial statements and have other consequences that could materially and adversely affect our business, includingan adverse impact on the market price of our common stock, potential actions or investigations by the SEC or other regulatoryauthorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation. Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-OxleyAct, especially over companies that we may acquire, could have a material adverse effect on our business and stock price. Under Section 404 of Sarbanes, we are required to furnish a management certification and auditor attestation regarding theeffectiveness of our internal control over financial reporting. We are required to report, among other things, control deficiencies thatconstitute a “material weakness” or changes in internal control that materially affect, or are reasonably likely to materially affect,internal control over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such thatthere is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detectedon a timely basis. The requirement to evaluate and report on our internal controls also applies to companies that we acquire. While we continue todedicate resources and management time to ensuring that we have effective controls over financial reporting, failure to achieve andmaintain an effective internal control environment could have a material adverse effect on the market’s perception of our business andour stock price. The restatement of our prior quarterly financial statements may affect shareholder and investor confidence in us or harm ourreputation, and may subject us to additional risks and uncertainties, including increased costs and the increased possibility of legalproceedings and regulatory inquiries, sanctions or investigations. We identified material misstatements in the original filings of our Quarterly Report on Form 10-Q for the quarters endedSeptember 30, 2024, December 31, 2024 and March 31, 2025 (“Original Filings”) and withdrew reliance on these Original Filings onSeptember 10, 2025. We filed amended quarterly reports on November 5, 2025 which include restatement(s), refer to the section titled“Restatement” in Note 1 to the unaudited condensed consolidated financial statements in each of the amended filings on Form 10-Q/Afor the quarters ended September 30, 2024, December 31, 2024 and March 31, 2025, for additional information regarding therestatement(s). Management also identified material weaknesses in our internal control over financial reporting specific to theevaluation of information that was known or knowable at the time of the transaction or event included in the Original Filings, refer toItem 9A—“Controls and Procedures.” As a result of the restatement described above, we have incurred, and may continue to incur, unanticipated costs for accountingand legal fees in connection with, or related to, such restatement. In addition, such restatement could subject us to a number ofadditional risks and uncertainties, including the increased possibility of legal proceedings and inquiries, sanctions or investigations bythe SEC or other regulatory authorities. Any of the foregoing may adversely affect our reputation, the accuracy and timing of ourfinancial reporting, or our business, results of operations, liquidity and financial condition, or cause shareholders, investors andcustomers to lose confidence in the accuracy and completeness of our financial reports or cause the market price of our common stockto decline.
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26 You may experience some difficulties in effecting service of legal process, enforcing U.S and/or foreign judgments or bringingoriginal actions based upon U.S. laws, including federal securities laws or other foreign laws, against us or certain of our directorsand officers and experts. While Lesaka is incorporated in the state of Florida, United States, substantially all of the company’s assets are located outsidethe United States. For this reason, the majority of Lesaka’s directors and all its officers reside outside of the United States and themajority of our experts, including our independent registered public accountants, are based in South Africa. As a result, even though you could effect service of legal process upon Lesaka, as a Florida corporation, in the United States,you may not be able to collect any judgment obtained against Lesaka in the United States, including any judgment based on the civilliability provisions of U.S. federal securities laws, because substantially all of our assets are located outside the United States. Any legal processes initiating action in the United States against Lesaka's directors, officers, and experts who are located outsideof the United States, will need to be served on them in that country, in accordance with the procedures prescribed by the relevant U.S.court. South Africa is not a party to any treaties regarding the enforcement of foreign commercial judgments. In order to be able toenforce a foreign judgment, it is required for the South African courts to first "recognize" the U.S. judgment – in the absence of this,the foreign judgment has no automatic extra territorial effect. The foreign judgment constitutes a "cause of action" which may berecognized and enforced by South African courts. In order to achieve this, legal proceedings must be commenced in the South Africancourts. South Africa is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and itsInternational Arbitration Act 15 of 2017 provides that foreign arbitral awards must be recognised and enforced in South Africa.However, application must still be made to the South African High Court in order for the award to be recognised and enforceable inSouth Africa. Additional, practical, considerations relating to the enforcement of foreign judgments and arbitration awards in South Africainclude the following:● If a foreign judgment is enforced by a South African court, the approval of the SARB (or an Authorised Dealer of SARB) isrequired (i) before a defendant resident in South Africa may pay money to a non-resident plaintiff; and (ii) to settle thejudgement in a currency other than South African Rand; and ● A plaintiff who is not resident in South Africa may be required to provide security for costs when initiating court proceedingsin South Africa (including for the enforcement of foreign judgments and awards).
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27 ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY Our business depends on the availability, reliability and security of our information systems, networks, data and intellectualproperty. Any disruption, compromise or breach of our systems or data due to a cybersecurity threat or incident could adversely affectour operations, customer service, product development and competitive position. Such an event could also result in breach ofcontractual obligations or legal duties to protect the privacy and confidentiality of stakeholders and could expose us to businessinterruption, lost revenue, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation,regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to vendor relationships or loss of market share. This Item 1C should be read in conjunction with Item 1A, “Risk Factors,” for acomprehensive understanding of the risks and uncertainties related to our business and operations. We operate in the Southern African fintech industry, which is subject to cybersecurity risks that could adversely affect ourbusiness, financial condition and results of operations, including intellectual property theft, fraud, extortion, harm to employees orcustomers, violations of privacy laws, litigation and legal risk, regulatory scrutiny and reputational harm. We haveimplemented a risk-based approach to assessing, identifying and managing cybersecurity threats that could affect ourbusiness, information systems and data. These processes are integrated into our broader enterprise risk management framework, andcybersecurity risks are assessed and prioritized alongside our other principal enterprise risks. Our cybersecurity program is informedby recognized standards and regulatory requirements applicable to our business, including PCI DSS, the NIST CybersecurityFramework, SARB / Prudential Authority requirements applicable to cybersecurity and cyber-resilience within the National PaymentSystem, and the CIS Critical Controls. During the year, we continued to mature our cybersecurity program, including through ourtransition to NIST CSF 2.0, further development of cyber risk governance processes, and continued execution of divisionalcybersecurity roadmaps. We periodically conductthird-party security risk assessments toassess the potential impact and likelihood of cyber scenariosand to inform appropriate mitigation strategies and controls. We use a combination of technical, administrative and organizationalcontrols to manage cybersecurity risk, including endpoint and network monitoring, security operations monitoring, identity and accesscontrols, data protection tools, vulnerability management, penetration testing, threat intelligence, backup and recovery procedures, andcyber awareness and training programs. We also conduct periodic phishing simulations and crisis simulations to support workforcepreparedness and incident-response readiness. We maintain incident-response processes designed to provide a consistent basis for the identification, escalation, assessment andresponse to cybersecurity incidents. During the year, we issued an updated Group Incident Response Plan to support divisionalincident-response playbooks. We also maintain processes to oversee cybersecurity risks associated with third-party service providers that have access topersonal, confidential or proprietary information or support significant business processes. During the year, we enhanced our third-party risk management processes, including additional due diligence and assurance requirements for certain service providers and theestablishment of a cross-functional working group involving procurement, finance, risk and compliance, legal and information securitypersonnel to support vendor risk oversight. Management, led by ourGroup Chief Information Security Officer (“CISO”) and supported by information security, risk,compliance, legal and finance personnel, is responsible for assessing and managing cybersecurity risks. Management receivesinformation regarding cybersecurity risks through security monitoring, risk assessments, vulnerability assessments, incident -responseprocesses, third-party risk reviews and reports from internal and external security providers. Material cybersecurity matters areescalated to senior management and, where appropriate, to the Audit Committee and Board. The Board oversees cybersecurity risk through the Audit Committee.The Audit Committee receives quarterly reports from theGroup CISO regarding cybersecurity posture, compliance activities, progress against the Group cybersecurity strategy and roadmap,third-party risk, and material cybersecurity incidents, if any, and related remediation.The Group CISO is a qualified cybersecurityprofessional with over 25 years of experience and holds a Master’s in Information Security from Royal Holloway, University ofLondon. The Audit Committee reports to the Board on cybersecurity matters. As of the date of this Annual Report, we donot believe that risks from cybersecurity threats, including as a result of any previouscybersecurity incidents, have materially affected or are reasonably likely to materially affect the Company, including its businessstrategy, results of operations or financial condition.
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28 ITEM 2. PROPERTIES We lease our corporate headquarters facility which consists of approximately 90,880 square feet in Dunkeld, Johannesburg,South Africa. We also lease properties throughout South Africa, including 217 financial services branches, 17 financial servicecommunity sites and eight sites to support our integrated POS software and hardware to the hospitality industry operations. We alsolease additional office space in Johannesburg, Cape Town , and Durban, South Africa; Gaborone, Botswana; Windhoek Namibia; andNairobi, Kenya. These leases expire at various dates through 2036, assuming the exercise of options to extend. We believe that wehave adequate facilities for our current business operations. ITEM 3. LEGAL PROCEEDINGS Litigation related to CPS Lesaka SA was party to proceedings in the Constitutional Court of South Africa involving its former subsidiary, Cash PaymasterServices Proprietary Limited (“CPS”), which is in liquidation. The key objective of these proceedings was to procure an order for CPSto be ordered to pay to the South African Social Security Agency (“SASSA”) the profit generated by CPS from an agreement concludedbetween SASSA and CPS, following SASSA awarding a tender to CPS. This arose from prior court proceedings which concluded thatthe tender should not have been awarded to CPS (for technical reasons not related to any misconduct by CPS). Lesaka SA was includedin these proceedings to provide information relevant to determining the profit so made by CPS. The Constitutional Court delivered itsruling on April 8, 2026. The Court ordered CPS to refund certain adjusted certified profits to SASSA. The Court did not make anyadverse order against Lesaka SA. The Court’s ruling concluded the matter. General We are, from time to time, subject to claims and suits, or threats of claims or suits, relating to our business, including claims fordamages for personal injuries, breach of contract and employment related claims. In certain of these actions, plaintiffs request paymentfor damages, including punitive damages, which may not be covered by insurance or may otherwise have a material adverse effect onour business or results of operations. In the opinion of management, we are not currently a party to any proceedings that would havea material adverse effect on our business, financial condition, or results of operations. ITEM 4. MINE SAFETY DISCLOSURES Not applicable.
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29 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is listed on The NASDAQ Global Select Market, or Nasdaq, in the United States under the symbol “LSAK”and on the JSE in South Africa under the symbol “LSK.” The Nasdaq is our principal market for the trading of our common stock andwe have a secondary listing on the JSE. Our transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, NewJersey, 07310. According to the records of our transfer agent, as of September 7, 2026, there were 6 shareholders of record of ourcommon stock. We believe that a substantially greater number of beneficial owners of our common stock hold their shares thoughbanks, brokers, and other financial institutions (i.e. “street name”). Our transfer agent in South Africa is JSE Investor Services (Pty)Ltd, One Exchange Square, 2 Gwen Lane, Sandown, Sandton, 2196, South Africa. Dividends We have not paid any dividends on shares of our common stock during our last two fiscal years and presently intend to retainfuture earnings to finance the expansion of the business. We do not anticipate paying any cash dividends in the foreseeable future. Thefuture dividend policy will depend on our earnings, capital requirements, debt commitments, expansion plans, financial condition andother relevant factors. Issuer purchases of equity securities On September 2, 2025, our board of directors approved a share repurchase authorization to repurchase up to an aggregate of $15million of our common stock. The authorization has no expiration date. This share purchase authorization replaces our $100 millionshare repurchase authorization. The table below presents information relating to purchases of shares of our common stock during the fourth quarter of fiscal2026: Period (a) Total number ofshares purchased (b) Average pricepaid per share ($) (c) Total number of sharespurchased as part ofpublicly announcedplans or programs (d) Maximum dollar valueof shares that may yetbe purchased under theplans or programs ($)April 2026 0 - - 15,000,000May 2026(1) 5,625 4.93 - 15,000,000June 2026 0 - - 15,000,000Total 5,625 - (1) Relates to the delivery of shares of our common stock to us by certain of our employees to settle their income tax liabilities.These shares do not reduce the repurchase authority under our current $15 million share repurchase program.
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30 Share performance graph The chart below compares the five-year cumulative return, assuming the reinvestment of dividends, where applicable, on ourcommon stock with that of the S&P 500 Index and the NASDAQ Industrial Index. This graph assumes $100 was invested on June 30,2021, in each of our common stock, the companies in the S&P 500 Index, and the companies in the NASDAQ Industrial Index. ITEM 6. [RESERVED]
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31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with Item 8—“Financial Statements and SupplementaryData.” In addition to historical consolidated financial information, the following discussion and analysis contains forward-lookingstatements that involve risks, uncertainties and assumptions. See Item 1A— “Risk Factors” and “Forward Looking Statements.” U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAPmeasures and provide reconciliations to the most directly comparable GAAP measures. We discuss why we consider it useful topresent these non-GAAP measures and the material risks and limitations of these measures, as well as a reconciliation of these non-GAAP measures to the most directly comparable GAAP financial measure below at “—Results of Operations —Use of Non-GAAPMeasures” below. Overview We offer an integrated and holistic multiproduct platform that provides transactional accounts, lending, insurance, merchantacquiring, cash management, software and ADP. Targeted solutions and integrations facilitate payments between consumers andbusinesses. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in ourmarkets. Sources of Revenue We generate revenue through a diversified portfolio of financial, payment, software, and technology solutions, structured acrossthree reportable segments: Merchant, Consumer, and Enterprise. Merchant Revenues in Merchant are derived from a combination of transaction-based fees and an ad valorem pricing model. ● Merchant acquiring:We earn revenue from merchant acquiring on an ad valorem basis, based on a percentage of the totaltransaction value processed through our network. We also earn revenue from transaction fees charged to merchants. ● Software:Revenue is generated from providing licensing software and technology services and through selling hardware(such as POS devices) to merchants. ● Cash:We earn revenue on an ad valorem basis, based on a percentage of the total cash settlements processed through our cashvaulting network. We also earn transaction fees when customers utilize our ATM network.● Lending:We generate interest revenue from qualifying merchant customers who are able to access short-term business loans.This revenue stream includes interest charged on outstanding loan balances.● ADP:We also offer merchant customers access to platforms through which we (a) generate revenue from the sale of prepaidairtime and generate fees from distribution of ADP, including prepaid solutions (airtime, data, electricity and gaming), andsupplier enabled payments (bill payments, international money transfers and supplier payments). These fees are largelycharged on an ad valorem basis. Consumer Revenues in Consumer are generated from transactional banking fees, interest income, insurance premiums and card transactionprocessing fees. ● Transactional Fees: We earn revenue by charging a monthly fee and charge fees on an ad valorem basis for goods andservices purchased. Transactional fees associated with our consumer accounts include monthly account service fees, ATMwithdrawal fees, and other fees based on usage.● Lending: Revenue from our lending products is derived from a combination of origination fees, monthly interest onoutstanding loan balances and monthly service fees.● Insurance: Revenue from our insurance offerings is earned monthly and includes premiums paid by policyholders. Enterprise Like Merchant, Enterprise generates revenue from a combination of transaction-based fees and an ad valorem pricing model. ● ADP: Revenue from our ADP offering for Enterprise clients is primarily based on a fixed fee per transaction. A secondarypricing model is on an ad valorem basis, depending on the specific digital product being sold.● Utilities:Our utilities vertical generates revenue predominantly through an annuity-based model, with fees charged on an advalorem basis based on the total value of electricity vended through our platform. Ad-hoc hardware sales of utility metersalso an additional contribution to revenue which are sold on a fixed price basis.● Other:Our payment solutions enable payment acceptance for us and external enterprises, on which we earn a fixed fee pertransaction processed.
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32 Developments during Fiscal 2026 This item discusses our fiscal 2026 results across our three reportable segments: Merchant, Consumer, and Enterprise.Discussions of our fiscal 2025 results compared to our fiscal 2024 results can be found within our Annual Report on Form 10-K forthe year ended June 30, 2025. Group Level: 1. Merchant Fiscal 2026 marks a pivotal year of transformation and consolidation for Merchant. Following the acquisitions of the AdumoGroup in fiscal 2025, the division has been undertaking a deliberate, multi-faceted integration designed to eliminate duplication, unifyour brand go-to-market approach, and build a single, multi-product platform serving merchants across all segments. Thistransformation also included bolstering operational analytics, which now aligns the Merchant revenue drivers to a number of activemerchants and ARPU (Average Revenue Per User) basis, akin to Consumer. New leadership was appointed to drive the integrationexecuting against a clear set of priorities: integrating our Community and Corporate Merchant channels under a unified operatingmodel, rationalizing cost and infrastructure and deepening product penetration across our merchant base. 2. One Lesaka: Unification of Group Branding In November 2025, we launched a refreshed Lesaka master brand, accelerating the realignment of all merchant-facing brandsincluding Kazang, Adumo, GAAP, Card Connect, and Capital Connect under a single “One Lesaka” identity. We expect full brandalignment to be substantially complete by the end of calendar 2026, with certain brands already transitioned. This unification is notmerely cosmetic but it reflects the consolidation of our operating infrastructure, sales force, and distribution channels into a singleintegrated model. Coupled with the branding change, we have consolidated our Johannesburg office footprint into a single hub, withsimilar exercises close to completion in both Cape Town and Durban. As a result of these unification actions, we have incurred Lesakabrand refresh expenses (treated as a once-off item) and increased intangible asset amortization charges due to the shortening of thedeemed useful lives of certain brand trademark assets in fiscal 2026, and recorded right-of-use lease impairments. 3. Deleveraging: Approaching Our Medium-Term Capital Structure Target Our capital structure has continued to strengthen materially over the course of fiscal 2026, building on the debt refinancingactions in fiscal 2025 and 2026. Net debt to Group Adjusted EBITDA has reduced progressively through the year, from 2.9 times atthe start of the fiscal year to 1.9 times by the end of the fiscal year, achieving our medium term target of 2.0 times or lower. Thisdeleveraging has been achieved alongside continued investment in growth, including in our lending books, and reflects the combinedbenefit of the lower funding costs secured through our fiscal 2025 and 2026 refinancing, the cash generation of the underlying business,and disciplined capital allocation across the Group. We expect the proposed Bank Zero transaction, once completed, to support afurther step-change in our funding profile by enabling Lesaka to fund lending growth increasingly through customer deposits ratherthan wholesale debt, representing further structural improvement to the Group's funding profile and an additional, significantdeleveraging event at the Group level. 4. Portfolio Rationalization and Exit of Non-Core Activities During fiscal 2026, we have continued to simplify the Group. In the third quarter, we made the decision to exit our ATM business,which we had concluded was structurally loss-making and immaterial in scale, recognizing an impairment and once-off costs ofapproximately ZAR 27 million in connection with the wind-down. In the same quarter, we sunset SwitchPay Proprietary Limited(“SwitchPay”), a legacy buy-now-pay-later product, recognizing an impairment of $0.4 million (ZAR 6.5 million). We alsoderegistered Masterpayment GmbH (“Masterpayment”), a legacy offshore entity, recognizing a gain of $0.9 million (ZAR 14 million)on deregistration, and reversed a $1.5 million (ZAR 25 million) receivables allowance following the successful collection of moniesowed in respect of a legacy investment. Earlier in fiscal 2026, we finalized the liquidation of CPS, releasing provisions of ZAR 65million, and disposed of our remaining stake in Cell-C for proceeds of $3.9 million (ZAR 50 million). These actions collectivelyrepresent the substantial completion of the non-core portfolio rationalization that has been undertaken since fiscal 2023, allowingmanagement to focus capital and attention on our scalable, digitally-led growth platforms with a balance sheet representative ofpresent-day Lesaka and no material legacy investments. 5. Proposed Acquisition of Bank Zero: Regulatory Progress Our proposed acquisition of Bank Zero Mutual Bank, announced on June 26, 2025, has progressed through key regulatorymilestones during fiscal 2026. In November 2025, the South African Competition Commission recommended approval of thetransaction, and the Competition Tribunal subsequently granted its approval in the second quarter of fiscal 2026, a significant stepforward in the transaction timeline. We continue to engage with the Prudential Authority of the South African Reserve Bank regardingits final approval, which remains outstanding alongside South African Exchange Control approval. As these remaining regulatoryconsents are still being procured, on June 11, 2026 we agreed with the Bank Zero sellers’ representatives to extend the long-stop datefor fulfilment or waiver of remaining conditions precedent from August 6, 2026 to January 31, 2027. We do not believe this extensionsignals any impediment to closing; rather, it reflects the ordinary pace of the outstanding Prudential Authority process.
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33 Once completed, the transaction is expected to deliver meaningful funding and balance sheet benefits, including a reduction ingross debt of more than ZAR 1 billion, whereby Lesaka can fund lending growth through Bank Zero, supporting further deleveragingand improved cash conversion. Operating Segment Level: Merchant We manage our Merchant operations through two distinct channels: Community, which focuses on local, high-growth businessesacquired through direct, face-to-face sales and rapid conversion cycles; and Corporate, which serves large -scale organizations andfranchises requiring customized, multi-product solutions through a strategic, long-term sales process. In the second quarter of fiscal 2026, we introduced a refined reporting framework for the Merchant division to better represent theprimary drivers of our revenue and performance. Developed through a comprehensive review of our operational analytics, thisframework aligns our Merchant metrics, specifically active merchant count and blended ARPU with our Consumer divisionto provide a holistic view of our ecosystem. We are treating this updated approach as a baseline for future comparisons to ensureconsistent reporting across our channels; as such, this transition may result in non-material inconsistencies with certain legacy metrics. Our definition of an active merchant is any merchant that has made a voluntary transaction (debit and/or credit) within the last90 days. Previously, we reported on a point of presence basis, which was more focused on our device estate. This updated methodologyof an active merchant reflects the revenue generating engagement of our entire Merchant base and more accurately tracks our currentand future monetization strategy for the division. ARPU excludes once-off and non-recurring revenue such as hardware and installationcosts as well as revenue from non-South African subsidiaries. The underlying drivers of ARPU performance are based on cross-sell product penetration and the individual product related KeyPerformance Indicators (“KPI’s ”) are shown below. 2026 2025 2026 vs2025Merchant Active Merchants 131,545 127,588 3% Merchant ARPU(1) (ZAR per month) 1,784 1,884 (5%)Product Penetration Rate: 2 or more products 46% 46% 0%Product Penetration Rate: 3 or more products 7% 10% (29%) Merchant: AcquiringActive Merchants 73,714 70,294 5%Total Payment Volume (“TPV”) (ZAR billions) 43.7 34.5 27% Merchant: SoftwareActive Merchants 9,738 9,755 (0%) Merchant: Cash ManagementActive Merchants 4,942 4,837 2%TPV (ZAR billions) 119.0 114.8 4% Merchant: LendingLending Origination (ZAR millions) 844 847 (0%)Net Lending Portfolio Outstanding (ZAR millions) 463 402 15% Merchant: Alternative Digital ProductsActive Merchants 101,659 98,222 3%TPV (ZAR billions) 54.8 41.7 31%TPV - Prepaid Solutions (ZAR billions) 23.5 20.9 12%TPV - Supplier Enabled Payments (ZAR billions) 31.2 20.8 50% Notes: (1) ARPU is calculated on a revenue per active merchant basis based on a 3-month rolling average for the quarter ended June 30,2026.
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34 Notable developments within Merchant: Within Merchant Acquiring: Year -on-year comparison of TPV are not meaningful as fiscal 2025 only included Adumo for ninemonths, which is in the Corporate channel. In the Community channel it is comparable and TPV attributable to the Community channelincreased to ZAR 15.7 billion representing 15% year-on-year growth. This was driven primarily from the continued strategy to offera multi-product offering focused on cash management solutions and ADP, particularly Supplier Enabled Payments, to attract greatermerchant acquiring volumes in this segment. Within Software: Continued focus on deploying Unity, our cloud-based point-of-sale (POS) software offering to existing andnew merchants. Unity has a lower monthly cost than on-premises solutions, the increase in client numbers was offset by a decrease inaverage revenue per user, resulting in core revenue remaining flat. Migration to Unity enables easier integration of our Software andAcquiring propositions into one holistic bundle. Approximately 17% of our Software base currently use the Unity offering. Within Cash: Our business is experiencing differing secular trends in its two distinct markets. At the Corporate channel, cashcontinues to experience a downward trend of growth as digital payment adoption progressively increases in this sector. At theCommunity channel, we continue to see growth for our cash management solutions, with cash TPV growth totaling to 55% year-onyear. The Community channel now accounts for 20% of all processed cash TPV processed. This signals rapid growth among merchantswithin this segment aiming to digitize their cash holdings. Within Lending: Lending originations remained flat year-over-year, primarily reflecting the ongoing product refinement anddistribution strategy for this specific product within the Corporate channel. We experienced a modest increase in aggregate portfolioduration over the period. Within ADP: Core to our device placement strategy is the decision to focus on quality business and optimizing our existing fleet.This can be seen through the TPV growth which is primarily driven by our Supplier Enabled Payment product, delivering 50% yearon-year growth. This enables Community Merchants to digitize their required payments to suppliers at competitive pricing andintroduces them to the Lesaka Merchant ecosystem. Within the Prepaid Solutions product, TPV processed delivered 12% year-on-year growth. Although we continue to see sustained margin pressures from wholesale providers of airtime, we have seen an offset inTPV processed for other prepaid products such as electricity and vouchers. Consumer Our consumer base includes South African grant beneficiaries and other Lesaka Payouts cardholders. Our grant beneficiary base includes both permanent and non-permanent grant beneficiaries. As Consumer has evolved, both sub-categories of consumers are revenue generating and hence the combined consumer base metrics shown below are most appropriate tomeasure the performance of the division financially and operationally. Although historically we have shown these metrics separately,it is maintained that approximately 89% of the active consumer base are permanent grant beneficiaries. Our definition of an active consumer is any consumer that has made a voluntary transaction (debit and/or credit) within the last90 days. Consumers who may be charged a monthly banking fee but have not made a voluntary transaction in the last 90 days wouldnot be considered an active consumer. The definition of an active consumer reflects the revenue generating engagement of our entire consumer base and more accuratelytracks our current and future monetization strategy for the division. We will continue to show the Lesaka Payouts separately given thisfollows a different monetization model.
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35 The underlying drivers of ARPU performance are based on cross-sell product penetration and the individual product relatedKPI’s are shown below. 2026 2025 2026 vs2025Consumer Active Consumers (millions) 2.08 1.88 11%ARPU(1) (ZAR per month) 94 82 15%Product Penetration Rate: 2 or more products 51% 45% 11%Product Penetration Rate: 3 products 20% 16% 23% Consumer: Transactional AccountsActive Consumers (millions) 2.08 1.88 11%Net Activations (thousands) 202 349 (42%) Consumer: LendingNumber of Loans Originated (thousands) 1,523 1,299 17%Lending Origination (ZAR millions) 3,769 2,500 51%Lending Portfolio Outstanding (ZAR millions)(2) 1,396 997 40% Consumer: InsuranceNumber of Insurance Policies Written (thousands) 278 215 29%Active Insurance Policies (thousands) 753 563 34%Gross Written Premium (ZAR millions) 528 376 41% Consumer: Lesaka PayoutsApproximate number of active cardholders (thousands) 174 213 (18%)Approximate load value for the period (ZAR millions) 770 604 27% Notes: (1) ARPU is calculated on a revenue per active consumer basis whereby an active consumer can be both a permanent and nonpermanent grant. ARPU is a monthly figure based on a 3-month rolling average for the quarter ended June 30, 2026. (2) Gross loan book, before provisions. Notable developments within Consumer: Within Transactional Accounts: Growth in active consumers was driven primarily by continued product and technologyinnovation, including Bonngwe (our proprietary Customer Relationship Management (“CRM”) engine). These improvements to salesconsultant and consumer experience have driven higher cross-sell penetration for both our existing base and newly onboardedconsumers. As we grow our distribution footprint, further growth in active consumers has come from product augmentation, anexample being Pusha Manje, our USSD-focused, direct-to-consumer ADP platform, which allows consumers to purchase airtime,electricity, and other products directly from a mobile phone. Within Lending: We have continued to see strong growth in our lending products, with credit loss ratios tracking below our riskappetite. Reflecting the realized loss experience that has consistently come in below provisioning levels, and supported byenhancements to assessment criteria e.g. affordability, we have adjusted our provisioning from 6.5% to 5.5% of the outstanding lendingportfolio. The revised rate reflects management's current best estimate of expected credit losses and remains subject to regular reviewas the book evolves. Within Insurance: Our insurance product saw continued growth in Gross Written Premiums written which has been driven bycontinued adoption of our Bonngwe engine, enabling sales consultants to cross-sell an insurance policy in an efficient manner. Wehave launched our open market insurance offering which allows for consumers outside of the Lesaka base to purchase a policy, whichrepresents a key growth vector for the product offering.
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36 Enterprise Our Enterprise Division primarily consists of our ADP offering (which includes prepaid solutions and bill payments) and theUtilities offering. The underlying drivers of performance are primarily based on TPV processed. Individual product related KPI’s are shown below. 2026 2025 2026 vs2025Enterprise: ADPTPV (ZAR billions) 48.0 40.9 17% Enterprise: Utilities Active Meters (thousands) 382 345 11% TPV (ZAR millions) 1,934 771 151% Notable developments within Enterprise: Within ADP: We continue to see increased TPV for bill payments driven from increased usage from our existing bank channelpartners, which grew primarily from targeted marketing campaigns as well as newly onboarded channel partners across banking,fintech and retail. The launch of our “4All” product, a multi-store of value voucher which can be redeemed at 40+ partners, has seencontinued growth in TPV at higher take rates than bill payments, despite still being in early development. We have now migrated 95%of all other subproducts of ADP TPV offered in Merchant via the Enterprise division, reducing reliance on external partners. Within Utilities: We delivered results consistent with the stable, recurring nature of the business, underpinned by transaction-based revenue coupled with continued growth in the number of connected meters and sustained demand for prepaid electricityvouchers. Year -over-year comparisons for the vertical are not meaningful, as the business was consolidated into our results only fromthe third quarter of fiscal 2025 and therefore contributed a partial period in the prior year against a full twelve months in fiscal 2026.Performance over the period reflected the product’s core strengths of predictable, annuity-like revenue streams and steady volumegrowth. Critical Accounting Policies Our audited consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires managementto make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure ofcontingent assets and liabilities. As future events and their effects cannot be determined with absolute certainty, the determination ofestimates requires management’s judgment based on a variety of assumptions and other determinants such as historical experience,current and expected market conditions and certain scientific evaluation techniques. Management believes that the followingaccounting policies are critical due to the degree of estimation required and the impact of these policies on the understandi ng of theresults of our operations and financial condition. Recoverability of Goodwill A significant component of our growth strategy is to acquire and integrate businesses that complement our existing operations.The purchase price of an acquired business is allocated to the tangible and intangible assets acquired and liabilities assumed basedupon their estimated fair value at the date of purchase. The difference between the purchase price and the fair value of the net assetsacquired is recorded as goodwill. In determining the fair value of assets acquired and liabilities assumed in a business combination,we use various recognized valuation methods, including present value modeling. Further, we make assumptions using certain valuationtechniques, including discount rates and timing of future cash flows. We review the carrying value of goodwill annually (June 30) or more frequently if circumstances indicating impairment haveoccurred. For instance, we performed interim impairment testing as of March 31, 2026, related to goodwill allocated to our Switchpayreporting unit within our Merchant segment as triggering events were identified outside of the annual impairment test date. Inperforming this review, we are required to estimate the fair value of goodwill that is implied from a valuation of the reporting unit towhich the goodwill has been allocated after deducting the fair values of all the identifiable assets and liabilities that form part of thereporting unit. The determination of the fair value of a reporting unit requires us to make significant judgments and estimates. Changesin these judgements and estimates may impact on the outcome of the impairment test. For instance, the fair value of the Lesaka Payoutsreporting unit included in our Consumer segment exceeded the carrying value of the reporting unit as of June 30, 2026, by 15.8%. Ifwe had used a weighted average cost of capital (“WACC”) rate that was 2% higher, we would have recorded an impairment of $0.4million, and if the WACC rate was 2% lower, the headroom would have increased from 15.8% to 45.3%.
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37 In determining the fair value of reporting units for fiscal 2026 and fiscal 2025, we considered key judgements related to reportingunit revenue growth rates, the weighted-average cost of capital applicable to peer and industry comparables of the reporting units andthe forecast period to be used. In determining the fair value of reporting units for fiscal 2024, our key judgements related to reportingunit revenue growth rates and the weighted-average cost of capital applicable to peer and industry comparables of the reporting units.We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. In addition, wemake judgments and assumptions in allocating assets and liabilities to each of our reporting units. Refer to Note 10 to our auditedconsolidated financial statements for a summary of the key judgements used in our impairment testing. The results of our impairment tests during fiscal 2026 and 2025 indicated that the fair value of our reporting units exceeded theircarrying values, with the exception of the $0.4 million (related to the SwitchPay reporting unit) and $17.0 million (related to the LesakaCash Management , Lesaka MT, Lesaka Payouts and Lesaka Alternative Digital Products Proprietary Limited (formerly known asEasyPay Proprietary Limited) (“Lesaka ADP”) reporting units), respectively, of goodwill impaired during fiscal 2026 and 2025, asdiscussed in Note 10 to our audited consolidated financial statements. The results of our impairment tests during fiscal 2024 indicatedthat the fair value of our reporting units exceeded their carrying values and so did not require impairment. Intangible Assets Acquired Through Acquisitions The fair values of the identifiable intangible assets acquired through acquisitions were determined by management using thepurchase method of accounting. We completed the acquisition of Atom Operations Proprietary Limited (“Atom”) and MobileMartduring fiscal 2026 where we identified and recognized intangible assets. We completed the acquisition of Adumo and Utilities duringfiscal 2025 where we identified and recognized intangible assets. We did not identify any significant intangible assets related to theLesaka Insights Proprietary Limited (formerly known as Touchsides Proprietary Limited) (“Lesaka Insights”) acquisition in fiscal2024. We used the relief from royalty method to value identified brands identified in the Adumo acquisition, and the multi-periodexcess earnings method to value identified customer relationships and the replacement cost approach to value the identified technologyassets related to Atom, MobileMart, Adumo and Utilities. We have used the relief from royalty method, the multi-period excessearnings method, the income approach and the cost approach to value other historic acquisition-related intangible assets. In so doing,we made assumptions regarding expected future revenues and expenses to develop the underlying forecasts, applied contributory assetcharges, WACC rates, and useful lives. The valuations were based on information available at the time of the acquisition and the expectations and assumptions that weredeemed reasonable by us. No assurance can be given, however, that the underlying assumptions or events associated with such assetswill occur as projected. For these reasons, among others, the actual cash flows may vary from forecasts of future cash flows. To theextent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary. Management assessesthe useful life of the acquired intangible assets upon initial recognition and revisions to the useful life or impairment of these intangibleassets may be necessary in the future. For instance, during early calendar 2025, our executive considered the unification of our merchant segments operations and therealignment of our brands under the master brand “Lesaka”.Wehave identified the steps and timing to realign the affected brandsunder the master brand and expect to have complete alignment by February 2027, with certain brands already aligned by December2025. The change in brands has resulted in a change in the useful lives of certain of our brand and trademark intangible assets whichhas resulted in an increase (excluding the impact on “Adumo” and “GAAP” brands) in amortization expense of $6.3 million and $2.6million during the years ended June 30, 2026 and 2025, respectively, compared with the comparative periods assuming the originaluseful lives. Furthermore, we recorded an impairment loss of $1.8 million related to Lesaka MT intangible assets which were fullyimpaired during the year ended June 30, 2025. Refer to Note 10 of our audited consolidated financial statements for additionalinformation. Revenue recognition – principal versus agent considerations We generate revenue from the provision of transaction-processing services through our various platforms and service offerings.We use these platforms to (a) sell prepaid airtime vouchers that are held as inventory and (b) distribute ADP, including prepaid airtimevouchers (which we do not hold as inventory), prepaid electricity, gaming vouchers, and other services, to end consumers through ourplatforms. The determination of whether we act as a principal or as an agent when providing these services using guidance containedinAccounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers requires a significant amount ofjudgement. When we are the principal in a transaction, revenue is reported on a gross basis. When we are an agent in a transaction,revenue is recognized based on the amount that we are contractually entitled to receive for performing the distribution service onbehalf of our customers.
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38 Finance Loans Receivable and Allowance for Credit Losses Merchant lending The allowance for credit losses related to Merchant finance loans receivables is calculated by multiplying the expected write-offrate for doubtful or legal debt with the total actual receivables in default plus multiplying the expected loss rate with the month-endoutstanding lending book. Our risk management procedures include adhering to our proprietary lending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks. We consider theseprocedures to be appropriate because it takes into account a variety of factors such as the customer’s credit capacity and customer-specific risk factors when originating a loan. We use historical default experience over the lifetime of loans generated thus far in order to calculate an expected loss rate forthe lending book. In addition, management determines the expected write-off rate for doubtful or legal debt based on historical recoverytrends for defaulted receivables. The allowance for credit losses related to these merchant finance loans receivables is calculated bymultiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetimeloss rate with the month-end outstanding lending book. The expected loss rate as of June 30, 2026 and June 30, 2025, was 3.21% and1.14%, respectively. The performing component (that is, outstanding loan payments not in arrears), under-performing component (thatis, outstanding loan payments that are in arrears) and non-performing component (that is, outstanding loans for which paymentsappeared to have ceased) of the book represents approximately 92%, 7% and 1%, respectively, of the outstanding lending book as ofJune 30, 2026. The performing component, under-performing component and non-performing component of the book representsapproximately 95%, 4% and 1%, respectively, of the outstanding lending book as of June 30, 2025. Consumer microlending The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the expected loss ratewith the month-end outstanding lending book , excluding upfront initiation fees. Loans to customers have a tenor of up to nine months,with the majority of loans originated having a tenor of six months. Credit bureau checks as well as an affordability test are conductedas part of the origination process, both of which are in line with local regulations. We consider this policy to be appropriate becausethe affordability test it performs takes into account a variety of factors such as other debts and total expenditures on normal householdand lifestyle expenses. Additional allowances may be required should the ability of its customers to make payments when duedeteriorate in the future. While the allowance for credit losses is primarily determined utilizing a provisioning model, there is still anelement of judgment required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation ofthe creditworthiness of each customer. We have operated this lending book for more than five years and use historical default experience over the lifetime of loans inorder to calculate a expected loss rate for the lending book. We analyze this lending book as a single portfolio because the loans withinthe portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk of the lendingbook. The allowance for credit losses related to these microlending finance loans receivables is calculated by multiplying the expectedloss rate with the month end outstanding lending book, excluding upfront initiation fees. The expected loss rate as of June 30, 2026and 2025, was 5.50% and 6.50%, respectively. The performing component (that is, outstanding loan payments not in arrears) of thebook exceeds more than 99.0% and 98.0% of outstanding lending book as of June 30, 2026 and 2025, respectively. Recent Accounting Pronouncements Recent accounting pronouncements adopted Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements,including the dates of adoption and effects on financial condition, results of operations and cash flows. Recent accounting pronouncements not yet adopted as of June 30, 2026 Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements notyet adopted as of June 30, 2026, including the expected dates of adoption and effects on financial condition, results of operations andcash flows.
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39 Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1 June 30,2026 2025 2024ZAR : $ average exchange rate 16.9074 18.1644 18.7070Highest ZAR : $ rate during period 18.1650 19.6350 19.4568Lowest ZAR : $ rate during period 15.7392 17.1144 17.6278Rate at end of period 16.4072 17.7554 18.1808 Translation Exchange Rates We have translated the results of operations and operating segment information for the year ended June 30, 2026, 2025, and2024, provided in the tables below using the actual average exchange rates per month between the USD and ZAR. Thus, the averagerates used to translate this data for the years ended June 30, 2026, 2025 and 2024, vary slightly from the averages shown in the tableabove.
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40 Results of operations The discussion of our consolidated overall results of operations is based on amounts as reflected in our audited consolidatedfinancial statements which are prepared in accordance with U.S. GAAP. We analyze our results of operations both in U.S. dollars, aspresented in the audited consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of theentities which contribute the majority of our results and is the currency in which the majority of our transactions are initially incurredand measured. Presentation of our reported results in ZAR is a non-GAAP measure. Due to the significant impact of currencyfluctuations between the U.S. dollar and ZAR on our reported results and because we use the U.S. dollar as our reporting currency,we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes inthe underlying trends of our business. Our operating segment revenue presented in “—Results of operations by operating segment” represents total revenue peroperating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue, as wellas the reconciliation between our segment performance measure and net income (loss) before tax expense (benefit), is presented in ouraudited consolidated financial statements in Note 21 to those statements. Our chief operating decision maker is our Executive Chairmanand he evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”),adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”) for each operating segment. We do not allocateonce-off items (as defined below), stock-based compensation charges, impairment of other intangible assets, other items (includinggains or losses on disposal of investments, fair value adjustments to equity securities), interest income, interest expense, income taxexpense or earnings from equity-accounted investments to our reportable segments. We have included an intercompany interestexpense in our Consumer Segment Adjusted EBITDA for fiscal 2025. Once-off items represent non-recurring expense items, includingcosts related to acquisitions and transactions consummated or ultimately not pursued. The Stock-based compensation adjustmentsreflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are thereforereported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to our income (loss) before incometax expense. Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Refer also “Results ofOperations—Use of Non-GAAP Measures” below. In fiscal 2026 we closed the acquisitions of Atom and MobileMart and have integrated their businesses into ours from December2025 and February 2026, respectively. In fiscal 2025 we closed the acquisitions of Adumo and Utilities and have integrated theirbusinesses into ours. Our fiscal 2025 financial results include Adumo from October 1, 2024 and Utilities from March 3, 2025, and donot include Atom and MobileMart. Refer also to Note 3 to the audited consolidated financial statements for additional informationregarding these transactions. Atom, MobileMart, Adumo and Utilities are not included in our financial results for fiscal 2024. We analyze our business and operations in terms of three inter-related but independent operating segments: (1) Merchant (2)Consumer and (3) Enterprise. In addition, corporate activities that are impracticable to allocate directly to the operating segments, aswell as any inter-segment eliminations, are included in Group costs. Inter-segment revenue eliminations are included in Eliminations. Fiscal 2026 Compared to Fiscal 2025 The following factors had a significant influence on our results of operations during fiscal 2026 as compared with the same periodin the prior year: ● Higher revenue:Our revenues increased by 9.4% in U.S. dollar and 1.7% in ZAR, primarily due to the inclusion of Utilitiesand MobileMart, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset bylower prepaid airtime revenue;● Operating income increase:Operating income increased primarily due to strong performance by Consumer and thecontribution from Utilities in Enterprise, which was partially offset by an increase in amortization of acquisition-relatedintangible assets;● Lower net interest charge: Net interest charge decreased to $15.6 million (ZAR 264.6 million) from $19.2 million (ZAR349.5 million) primarily due to a lower interest expense following lower interest rates and the exclusion of interest expenseincurred under our borrowing arrangements related to our Consumer lending book in fiscal 2026 compared with 2025. On acomparable basis the equivalent interest expense related to the Consumer lending book for fiscal 2025 was included in interestexpense from July 2024 to February 2025; and● Foreign exchange movements: The U.S. dollar was 6.9% weaker against the ZAR during fiscal 2026 compared to the priorperiod, which positively impacted our U.S. dollar reported results.
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41 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 2 In U.S. DollarsYear ended June 30,2026 2025 $ % $ ’000 $ ’000 changeRevenue 721,554 659,701 9%Cost of goods sold, IT processing, servicing and support(A) 490,834 487,186 1%Selling, general and administration(A)(1) 166,269 131,738 26%Depreciation and amortization 47,346 33,721 40%Impairment loss 4,035 18,863 (79%)Transaction costs related to Adumo, Utilities and Bank Zero acquisitions andcertain compensation costs 389 16,159 (98%)Operating income (loss) 12,681 (27,966) nmChange in fair value of equity securities 2,593 (59,828) nmLoss on impairment or disposal of equity-accounted investment 584 161 263%Reversal of allowance for doubtful loan receivable 1,500 - nmLoss on disposal of equity securities 730 - nmOther income 3,883 - nmInterest income 2,889 2,596 11%Interest expense(A) 18,506 21,824 (15%)Income (Loss) before income tax expense (benefit) 3,726 (107,183) nmIncome tax expense (benefit) (A) 1,429 (15,982) nmNet income (loss) before earnings from equity-accounted investments 2,297 (91,201) nmEarnings from equity-accounted investments 215 114 89%Net income (loss) 2,512 (91,087) nmAdd net loss attributable to non-controlling interest 246 130 89%Net income (loss) attributable to us 2,758 (90,957) nm (A) In order to correct the errors discussed in Note 1 to the consolidated statement of operations, Cost of goods sold, ITprocessing, servicing and support increased by $0.6 million, Selling, general and administration expense increased by $0.2 million,Operating income decreased by $0.9 million, Interest expense increased by $0.4 million, income tax expense (benefit) decreased by$2.2 million, and the subtotal captions from Income (Loss) before earnings (loss) from equity-accounted investments to Net income(loss) attributable to Lesaka decreased by $3.4 million for fiscal 2025 . (1) Selling, general and administration includes allowance for credit losses.
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42 Table 3 In South African RandYear ended June 30,2026 2025 ZAR % ZAR ’000 ZAR ’000 changeRevenue 12,180,962 11,980,399 2%Cost of goods sold, IT processing, servicing and support(A) 8,289,867 8,845,530 (6%)Selling, general and administration(A)(1) 2,806,221 2,392,857 17%Depreciation and amortization 802,598 612,298 31%Impairment loss 67,116 334,929 (80%)Transaction costs related to Adumo, Utilities and Bank Zero acquisitions andcertain compensation costs 6,664 291,358 (98%)Operating income (loss) 208,496 (496,573) nmChange in fair value of equity securities 43,957 (1,089,871) nmLoss on impairment or disposal of equity-accounted investment 10,342 2,886 258%Reversal of allowance for doubtful loan receivable 25,132 - nmLoss on disposal of equity securities 12,286 - nmOther income 65,353 - nmInterest income 48,621 47,108 3%Interest expense(A) 313,258 396,649 (21%)Income (Loss) before income tax expense (benefit) 55,673 (1,938,871) nmIncome tax expense (benefit) (A) 23,583 (289,008) nmNet income (loss) before earnings from equity-accounted investments 32,090 (1,649,863) nmEarnings from equity-accounted investments 3,593 2,035 77%Net income (loss) 35,683 (1,647,828) nmAdd net loss attributable to non-controlling interest 4,155 2,307 80%Net income (loss) attributable to us 39,838 (1,645,521) nm (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations, Cost of goods sold, IT processing,servicing and support increased by ZAR 11.6 million, Selling, general and administration expense increased by ZAR 4.1 million,Operating income decreased by ZAR 15.7 million, Interest expense increased by ZAR 6.8 million, income tax expense (benefit)decreased by ZAR 39.3 million, and the subtotal captions from Income (Loss) before earnings (loss) from equity-accountedinvestments to Net income (loss) attributable to Lesaka decreased by ZAR 61.7 million for fiscal 2025. (1) Selling, general and administration includes allowance for credit losses. Revenue increased by $61.9 million (ZAR 0.2 billion) or 9.4% (in ZAR, 1.7%). The increase was primarily due to the inclusionof Utilities and MobileMart, the impact of an increase in certain issuing fee base prices year-over-year, and transaction activity in ourissuing business, and an increase in insurance premiums collected and lending revenues (including interest) following higher loanoriginations, which was partially offset by the decrease in the volume of prepaid airtime sold. Refer to discussion above at “—Developments during Fiscal 2026” for a description of key trends impacting our revenue this fiscal year. Cost of goods sold, IT processing, servicing and support increased by $3.6 million (or 0.7%) and in ZAR decreased by ZAR0.6 billion (or 6.3%). The decrease in ZAR is primarily due to the decrease in the prepaid airtime costs, which was partially offset byan increase in lending related expenditures (including interest expense), higher insurance-related claims and third party transactionfees and the inclusion of Utilities and MobileMart. Selling, general and administration expenses increased by $34.5 million (ZAR 413.4 million), or 26.2% (in ZAR, 17.3%). Theincrease was primarily due to the inclusion of Adumo and Utilities; higher marketing costs related to the Lesaka rebrand, an increasein the allowance for credit losses as a result of higher lending activities by Consumer and Merchant, higher consulting fees, and theyear over-year impact of inflationary increases on certain expenses, which was partially offset by lower stock-based compensationcharges. Depreciation and amortization expense increased by $13.63 million (ZAR 190.3 million), or 40.4% (in ZAR, 31.1%). Theincrease was due to the change to a shorter useful life for certain of our brand and trademark intangible assets (refer to Note 10), theinclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Adumo and Utilitiesacquisitions.
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43 Impairment loss for fiscal 2026 includes an impairment loss of $2.6 million (ZAR 43.6 million) related to right-of-use assets and$1.0 million (ZAR 16.5 million) related to leasehold improvements recorded in property, plant and equipment for our existingoperating lease arrangements as certain of our leased facilities will no longer be utilized as originally intended as a result of the plannedtransition to our new corporate head office, an impairment loss of $0.7 million (ZAR 11.5 million) related to ATMs recorded inproperty, plant and equipment as a result of the exit of the ATM business, and an impairment loss of $0.4 million (ZAR 6.5 million)related to goodwill allocated to our SwitchPay reporting unit within the Merchant segment. Refer to Note 8 and Note 10 of our auditedconsolidated financial statements for additional information regarding these impairment losses. Transaction costs related to Adumo, Utilities and Bank Zero acquisitions and certain compensation costs includes fees paid toexternal service providers associated with legal and advisory services procured to close the Adumo transaction on October 1, 2024,and the Utilities transaction in March 2025, as well as post-combination compensation charges recognized related to the Utilitiesacquisition of $13.6 million (ZAR 245.7 million) and decreased primarily due to these post-combination compensation chargesexpensed in fiscal 2025. This caption also includes transaction costs related to the proposed acquisition of Bank Zero. Refer to Note 3to our audited consolidated financial statements for additional information. Our operating income (loss) margin in fiscal 2026 and 2025 was 1.8% and (4.2%), respectively.Wediscuss the components ofoperating loss margin under “—Results of operations by operating segment.” Werecorded an increase in the fair value of Cell C of $3.0 million (ZAR 50 million) during fiscal 2026 (refer to Note 6 foradditional information), partially offset by a non-cash change in fair value of equity securities of $0.4 million.Werecorded a non-cash change in fair value of equity securities of $59.8 million during fiscal 2025 related to a fair value adjustment loss related toMobiKwik. Werecently entered into discussions with Vantage Africa Limited (“VantagePay” ) regarding steps to recover $1.5 millionoutstanding from them.Webelieve that there is sufficient evidence to support the recoverability of the amount due from VantagePayand recorded a reversal of the allowance for credit losses of $1.5 million previously recognized during the year ended June 30, 2026.Refer to Note 4 for additional information. Werecorded a loss of $0.7 million (ZAR 12.3 million) related to the disposal of Humble Software Proprietary Limited(“Humble”) during the year ended June 30, 2026. Refer to Note 3 for additional information. In December 2025, we determined that the liquidation of CPS is at an advanced stage and released an accrual raised at the timeof deconsolidation of $3.9 million (ZAR 65.4 million) to Other income. Interest on surplus cash increased to $2.9 million (ZAR 48.6 million) from $2.6 million (ZAR 47.1 million), due to the inclusionof Adumo and increased cash balances, which was partially offset by lower interest rates. Interest expense decreased to $18.5 million (ZAR 313.3 million) from $21.8 million (ZAR 396.6 million). The decrease wasprimarily due to lower interest rates and the partial exclusion of interest expense incurred under our borrowing arrangements relatedto our Consumer lending book in fiscal 2026 compared with fiscal 2025. On a comparable basis the equivalent interest expense relatedto the Consumer lending book for fiscal 2025 was included in interest expense from July 2024 to February 2025. Fiscal 2026 income tax expense was $1.4 million (ZAR 23.6 million) compared to an income tax benefit of $16.0 million (ZAR289.0 million) in fiscal 2025. Our effective tax rate for fiscal 2026 was impacted by the tax expense recorded by our profitable SouthAfrican operations, non-taxable income (primarily related to the disposal of Cell C and other income) and non-deductible expenses(including transaction-related expenditures and the goodwill impairment). The income tax expense was also impacted by a higherdeferred tax benefit as a result of the reduction in the useful lives of certain of our brand and trademark intangible assets which hasresulted in an increase in amortization expense during fiscal 2026 and the release of $12.3 million related to certain valuationallowances created in prior years following an improvement in profitability of certain of the Company’s subsidiaries, which waspartially offset by the recognition of a valuation allowance related to an operating loss carryforward and other deferred tax assetstotalling $9.9 million following a determination by the management, after considering both positive and negative evidence, that thesedeferred tax assets would not be realized in future years. Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equitysecurities, the reversal of $12.8 million related to certain valuation allowances created in prior years following (i) an improvement inprofitability of certain of our subsidiaries and (ii) a change in judgment on the need for a valuation allowance of $11.4 million relatedto an entity which we believe has achieved sustainable profitability, the tax expense recorded by our profitable South Africanoperations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses (in transaction-related expenses), the on-going losses incurred by certain of our South African businesses and the associated valuation allowancescreated related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Our income tax benefitfor fiscal 2025 also includes a $2.2 million income tax expense related to the correction of the error discussed in Note 1.
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44 Results of operations by operating segment and group costs The composition of revenue and the contributions of our business activities to Group Adjusted EBITDA are illustrated below: Table 4 In U.S. DollarsYear ended June 30,2026 % of 2025 % of %Operating Segment $ ’000 total $ ’000 total change Consolidated revenue:Merchant 509,335 71% 526,600 80% (3%)Consumer 142,631 20% 96,008 15% 49%Enterprise 74,730 10% 42,554 6% 76%Subtotal: Operating segments 726,696 101% 665,162 101% 9%Eliminations (5,142) (1%) (5,461) (1%) (6%)Total consolidated revenue 721,554 100% 659,701 100% 9% Group Adjusted EBITDA:Merchant(A)(1) 35,533 47% 35,329 70% 1%Consumer(1) 46,193 61% 23,949 48% 93%Enterprise(1) 8,119 11% 1,287 3% 531%Group costs (14,103) (19%) (10,743) (21%) 31%Group Adjusted EBITDA (non-GAAP)(2) 75,742 100% 49,822 100% 52% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations, Merchant Segment AdjustedEBITDA and Group Adjusted EBITDA decreased by $0.9 million for fiscal 2025.(1) Segment Adjusted EBITDA for fiscal 2026, includes reorganization and retrenchment costs for Merchant of $0.8 million,Enterprise of $0.1 million, and Consumer of $0.4 million. Segment Adjusted EBITDA for fiscal 2025, includes reorganization andretrenchment costs for Merchant of $0.8 million, Enterprise of $0.8 million, and Consumer of $0.1 million.(2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Table 5 In South African RandYear ended June 30,2026 % of 2025 % of %Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue:Merchant 8,609,898 71% 9,562,360 80% (10%)Consumer 2,401,720 20% 1,744,429 15% 38%Enterprise 1,255,617 10% 773,057 6% 62%Subtotal: Operating segments 12,267,235 101% 12,079,846 101% 2%Eliminations (86,273) (1%) (99,447) (1%) (13%)Total consolidated revenue 12,180,962 100% 11,980,399 100% 2% Group Adjusted EBITDA:Merchant(A)(1) 601,573 47% 641,509 70% (6%)Consumer(1) 775,027 61% 435,193 48% 78%Enterprise(1) 136,164 11% 23,724 3% 474%Group costs (238,176) (19%) (193,853) (21%) 23%Group Adjusted EBITDA (non-GAAP)(2) 1,274,588 100% 906,573 100% 41% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations, Merchant Segment AdjustedEBITDA and Group Adjusted EBITDA decreased by ZAR 15.7 million for fiscal 2025.(1) Segment Adjusted EBITDA for fiscal 2026, includes reorganization and retrenchment costs for Merchant of ZAR 14.0million, Enterprise of ZAR 1.1 million, and Consumer of ZAR 7.1 million. Segment Adjusted EBITDA for fiscal 2025, includesreorganization and retrenchment costs for Merchant of ZAR 15.7 million, Enterprise ZAR 13.6 million, and Consumer of ZAR 1.5million.(2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”.
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45 Merchant Segment revenue decreased due to fewer prepaid airtime sales which was partially offset by the inclusion of Adumo, a highervolume of ADP provided (Pinless Airtime and gaming). In ZAR, the decrease in Segment Adjusted EBITDA is primarily due to higheroperating expenses incurred, which was partially offset by the inclusion of Adumo for the entire period compared with the prior period. Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for fiscal 2026 and 2025was 7.0% and 6.7%, respectively. Consumer Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, theimpact of an increase in certain issuing fee base prices year-over-year, and transaction activity in our issuing business, insurancepremiums collected, lending revenues following an increase in loan originations. This increase in revenue has translated into improvedprofitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations during theyear, higher insurance-related claims, interest expense (of ZAR 88.5 million) incurred to fund our lending book and the year-over-year impact of inflationary increases on certain expenses. Our Segment Adjusted EBITDA margin for fiscal 2026 and 2025 was 32.4% and 24.9%, respectively. Enterprise Segment revenue increased primarily due to the inclusion of Utilities and MobileMart and organic revenue growth due to newADP customers acquired. In ZAR, the significant increase in Segment Adjusted EBITDA is primarily due to the inclusion of Utilities. Our Segment Adjusted EBITDA margin for fiscal 2026 and 2025 was 10.9% and 3.0%, respectively. Group costs Our group costs primarily include employee related costs in relation to employees specifically hired for group roles and costsrelated directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes; non-employee directors’ fees;legal fees; group and US-listed related audit fees; and directors’ and officers’ insurance premiums. Our group costs for fiscal 2026 increased compared with the prior period due to higher employee related costs, consulting feesand compliance related expenditure. Fiscal 2025 Compared to Fiscal 2024 The following factors had a significant influence on our results of operations during fiscal 2025 as compared with the same periodin the prior year: ● Higher revenue:Our revenues increased by 16.9% in U.S. dollar and 13.5% in ZAR, primarily due to the inclusion of Adumoand Utilities, an increase in value-added services activity in Merchant, higher Pinned Airtime sales, as well as highertransaction, insurance and lending revenues in Consumer, which was partially offset by a lower contribution from our legacyEnterprise businesses;● Operating income increase, before transaction costs:Operating income, before transaction and related costs, increasedsignificantly primarily due to contributions from Adumo from October 1, 2024 and Utilities from March 3, 2025, which werepartially offset by increased costs and an increase in amortization of acquisition-related intangible assets related to theacquisition of Adumo and Utilities;● Non-cash fair value adjustment related to equity securities:We recorded a non -cash fair value loss of $59.8 million duringfiscal 2025 related to the disposal of our investment in MobiKwik;● Higher net interest charge: The net interest charge increased to $19.2 million (ZAR 349.5 million) from $16.9 million (ZAR315.6 million) primarily higher overall borrowings, which was partially offset by an increase in interest received as a resultof the inclusion of Adumo; and● Foreign exchange movements: The U.S. dollar was 4.2% weaker against the ZAR during fiscal 2025 compared to the priorperiod, which positively impacted our U.S. dollar reported results.
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46 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 6 In U.S. DollarsYear ended June 30,2025 2024 $ % $ ’000 $ ’000 changeRevenue 659,701 564,222 17%Cost of goods sold, IT processing, servicing and support(A) 487,186 443,293 10%Selling, general and administration(A) 131,738 92,185 43%Depreciation and amortization 33,721 23,665 42%Impairment loss 18,863 - nmTransaction costs related to Adumo, Utilities and Bank Zero acquisitions andcertain compensation costs 16,159 2,325 595%Operating (loss) income (27,966) 2,754 nmChange in fair value of equity securities (59,828) - nmReversal of allowance for doubtful loan receivable - 250 nmLoss on disposal of equity-accounted investment 161 - nmInterest income 2,596 2,294 13%Interest expense(A) 21,824 19,171 14%Loss before income tax (benefit) expense (107,183) (13,873) 673%Income tax (benefit) expense(A) (15,982) 3,363 nmNet loss before earnings (loss) from equity-accounted investments (91,201) (17,236) 429%Earnings (loss) from equity-accounted investments 114 (1,279) nmNet loss (91,087) (18,515) 392%Add net loss attributable to non-controlling interest 130 - nmNet loss attributable to us (90,957) (18,515) 391% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations for fiscal 2025 and 2024, Costof goods sold, IT processing, servicing and support increased by $0.6 million and $0.6 million, respectively, Selling, general andadministration expense increased by $0.2 million and $0.2 million, respectively, Operating income decreased by $0.9 million and $0.8million, respectively, Interest expense increased by $0.4 million and $0.2 million, respectively, for fiscal 2025, income tax expense(benefit) decreased by $2.2 million, and the subtotal captions for fiscal 2025 and 2024 from Income (Loss) before earnings (loss) fromequity-accounted investments to Net income (loss) attributable to Lesaka decreased by $3.4 million and $1.1 million, respectively. (1) Selling, general and administration includes allowance for credit losses.
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47 Table 7 In South African Rand(US GAAP)Year ended June 30,2025 2024 ZAR % ZAR ’000 ZAR ’000 changeRevenue 11,980,399 10,553,233 14%Cost of goods sold, IT processing, servicing and support(A)(A) 8,845,530 8,291,826 7%Selling, general and administration(A) 2,392,857 1,724,039 39%Depreciation and amortization 612,298 442,570 38%Impairment loss 334,929 - nmTransaction costs related to Adumo, Utilities and Bank Zero acquisitions andcertain compensation costs 291,358 43,154 575%Operating (loss) income (496,573) 51,644 nmChange in fair value of equity securities (1,089,871) - nmReversal of allowance for doubtful loan receivable - 4,741 nmLoss on disposal of equity-accounted investment 2,886 - nmInterest income 47,108 42,896 10%Interest expense(A) 396,649 358,510 11%Net loss before income tax (benefit) expense (1,938,871) (259,229) 648%Income tax (benefit) expense(A) (289,008) 62,616 nmNet loss before earnings (loss) from equity-accounted investments (1,649,863) (321,845) 413%Earnings (loss) from equity-accounted investments 2,035 (24,298) nmNet loss (1,647,828) (346,143) 376%Add net loss attributable to non-controlling interest 2,307 - nmNet loss attributable to us (1,645,521) (346,143) 375% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations for fiscal 2025 and 2024, Cost ofgoods sold, IT processing, servicing and support increased by ZAR 11.6 million and ZAR 8.8 million, respectively , Selling, generaland administration expense increased by ZAR 4.1 million and ZAR 3.1 million, respectively, Operating income decreased by ZAR15.7 million and ZAR 11.9 million, respectively, Interest expense increased by ZAR 6.8 million and ZAR 6.8 million, respectively,for fiscal 2025, income tax expense (benefit) decreased by ZAR 39.3 million, and the subtotal captions for fiscal 2025 and 2024 fromIncome (Loss) before earnings (loss) from equity-accounted investments to Net income (loss) attributable to Lesaka decreased by ZAR61.7 million and ZAR 22.4 million, respectively. (1) Selling, general and administration includes allowance for credit losses. Revenue increased by $95.5 million (ZAR 1.4 billion), or 16.9% (in ZAR, 13.5%). The increase in ZAR was primarily due to,the inclusion of Adumo, an increase in the volume of value-added services provided (Pinless Airtime and gaming), an increase inPinned Airtime sales, an increase in certain issuing fee base prices and transaction activity in our issuing business, and an increase ininsurance premiums collected and lending revenues following higher loan originations. Cost of goods sold, IT processing, servicing and support increased by $43.9 million (ZAR 0.6 billion), or 9.9% (in ZAR, 6.7%),primarily due to the inclusion of Adumo, higher commissions paid related to ADP revenue generated, and higher insurance-relatedclaims and third-party transaction fees, which was partially offset by the decrease in Pinned Airtime sales. Selling, general and administration expenses increased by $39.6 million (ZAR 668.8 million), or 42.9% (in ZAR, 38.8%). Theincrease was primarily due to the inclusion of Adumo; higher employee-related expenses (including annual salary increases); higherstock-based compensation charges, consulting fees and audit fees; and the year-over-year impact of inflationary increases on certainexpenses. Depreciation and amortization expense increased by $10.06 million (ZAR 169.7 million ), or 42.5% (in ZAR, 38.4%). Theincrease was due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant tothe Adumo and Utilities acquisitions and an increase in depreciation expense related to additional POS devices deployed. During fiscal 2025, we recorded an impairment loss which includes an impairment of goodwill of $17.0 million related to theimpairment of goodwill allocated to each of Merchant, Consumer and Enterprise as well as an impairment of intangible assets of $1.8million. Refer to Note 10 of our audited consolidated financial statements for additional information regarding these impairment losses.
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48 Transaction costs related to Adumo, Utilities and Bank Zero acquisitions and certain compensation costs includes fees paid toexternal service providers associated with legal and advisory services procured to close the Adumo transaction on October 1, 2024,and the Utilities transaction in March 2025, as well as post-combination compensation charges recognized related to the Utilitiesacquisition of $13.6 million (ZAR 245.7 million) and increased primarily due to these post-combination compensation charges. Thiscaption also includes transaction costs related to the proposed acquisition of Bank Zero. Refer to Note 3 to our audited consolidatedfinancial statements for additional information. Our operating (loss) income margin in fiscal 2025 and 2024 was (4.2%) and 0.5%, respectively.Wediscuss the components ofoperating loss margin under “—Results of operations by operating segment.” The change in fair value of equity securities of $59.8 million during fiscal 2025 represents a non-cash fair value adjustment lossrelated to MobiKwik. We did not record any changes in the fair value of equity interests in MobiKwik during the fiscal 2024, or anyfair value adjustments for Cell C during fiscal 2025 or 2024, respectively. We carried our investment in Cell C at $0 (zero) as of June30, 2025. Interest on surplus cash increased to $2.6 million (ZAR 47.1 million) from $2.3 million (ZAR 42.9 million), primarily due to theinclusion of Adumo and higher overall average cash balances on deposit during fiscal 2025 compared with 2024. Interest expense increased to $21.8 million (ZAR 396.6 million) from $19.2 million (ZAR 358.5 million). In ZAR, the increasewas primarily as a result of higher overall borrowings during fiscal 2025 compared with the comparable period in the prior quarter,which was partially offset by lower overall interest rates. Fiscal 2025 income tax benefit was $16.0 million (ZAR 289.0 million) compared to an income tax expense of $(3.4) million(ZAR (62.6) million) in fiscal 2024. Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair valueadjustment to our equity securities, the reversal of $12.8 million related to certain valuation allowances created in prior years following(i) an improvement in profitability of certain of our subsidiaries and (ii) a change in judgment on the need for a valuation allowanceof $11.4 million related to an entity which we believe has achieved sustainable profitability, the tax expense recorded by our profitableSouth African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses(in transaction-related expenses), the on-going losses incurred by certain of our South African businesses and the associated valuationallowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Our incometax benefit for fiscal 2025 also includes a $2.2 million income tax expense related to the correction of the error discussed in Note 1. Our effective tax rate for fiscal 2024 was impacted by the tax expense recorded by our profitable South African operations, adeferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurredby certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognizedregarding net operating losses incurred by these entities. Results of operations by operating segment and group costs The composition of revenue and the contributions of our business activities to Group Adjusted EBITDA are illustrated below: Table 8 In U.S. DollarsYear ended June 30,2025 % of 2024 % of %Operating Segment $ ’000 total $ ’000 total change Consolidated revenue:Merchant 526,600 80% 459,790 81% 15%Consumer 96,008 15% 69,211 12% 39%Enterprise 42,554 6% 46,897 8% (9%)Subtotal: Operating segments 665,162 101% 575,898 101% 15%Eliminations (5,461) (1%) (11,676) (1%) (53%)Total consolidated revenue 659,701 100% 564,222 100% 17% Group Adjusted EBITDA:Merchant(A)(1) 35,329 70% 28,334 78% 25%Consumer(1) 23,949 48% 12,679 35% 89%Enterprise(1) 1,287 3% 2,931 8% (56%)Group costs (10,743) (21%) (7,844) (21%) 37%Group Adjusted EBITDA (non-GAAP)(2) 49,822 100% 36,100 100% 38% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations, Merchant Segment Adjusted
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49 EBITDA and Group Adjusted EBITDA for fiscal 2025 and fiscal 2024 decreased by $0.9 million and $0.8 million, respectively.(1) Segment Adjusted EBITDA for fiscal 2025, includes reorganization and retrenchment costs for Merchant of $0.8 million,Enterprise of $0.8 million, and Consumer of $0.1 million. Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs forMerchant $0.3 million and Consumer of $0.2 million.(2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Table 9 In South African RandYear ended June 30,2025 % of 2024 % of %Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue:Merchant 9,562,360 80% 8,599,450 81% 11%Consumer 1,744,429 15% 1,294,632 12% 35%Enterprise 773,057 6% 877,317 8% (12%)Subtotal: Operating segments 12,079,846 101% 10,771,399 101% 12%Eliminations (99,447) (1%) (218,166) (1%) (54%)Total consolidated revenue 11,980,399 100% 10,553,233 100% 14% Group Adjusted EBITDA:Merchant(A)(1) 641,509 70% 529,861 78% 21%Consumer(1) 435,193 48% 237,362 35% 83%Enterprise(1) 23,724 3% 54,924 8% (57%)Group costs (193,853) (21%) (146,815) (21%) 32%Group Adjusted EBITDA (non-GAAP)(2) 906,573 100% 675,332 100% 34% (A) In order to correct the error discussed in Note 1 to the consolidated statement of operations, Merchant Segment AdjustedEBITDA and Group Adjusted EBITDA for fiscal 2025 and fiscal 2024 decreased by ZAR 15.7 million and ZAR 11.9 million,respectively.(1) Segment Adjusted EBITDA for fiscal 2025, includes reorganization and retrenchment costs for Merchant of ZAR 15.7million, Enterprise ZAR 13.6 million, and Consumer of ZAR 1.5 million. Segment Adjusted EBITDA for fiscal 2024, includesretrenchment costs for Merchant of ZAR 4.9 million and Consumer of ZAR 3.5 million.(2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non-GAAP Measures”. Merchant Segment revenue primarily increased due to the inclusion of Adumo, and a higher volume of ADP provided (Pinless Airtime andgaming) and an increase in fewer Pinned Airtime sales. In ZAR, the increase in Segment Adjusted EBITDA is primarily due to theinclusion of Adumo, which was partially offset by higher operating expenses incurred, including employment-related expenditures, toexpand our offering, an increase in the allowance for credit losses following higher loan originations and reorganization andretrenchment costs incurred during fiscal 2025. Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for fiscal 2025 and 2024was 6.7% and 6.2%, respectively. Consumer Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, anincrease in certain issuing fee base prices and transaction activity in our issuing business, insurance premiums collected, lendingrevenues following an increase in loan originations and the inclusion of Adumo. This increase in revenue has translated into improvedprofitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations during fiscal2025, higher insurance-related claims, interest expense (of ZAR 61.4 million) incurred to fund our lending book, higher computersoftware license costs, and the year-over-year impact of inflationary increases on certain expenses. We have included an intercompanyinterest expense in our Consumer Segment Adjusted EBITDA for fiscal 2025 compared with fiscal 2024. Our Segment Adjusted EBITDA margin for fiscal 2025 and 2024 was 24.9% and 18.3%, respectively.
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50 Enterprise Segment revenue decreased primarily due to fewer ad hoc hardware sales as well as lower revenue generated from the sale ofprepaid airtime vouchers, which was partially offset by the inclusion of Utilities. In ZAR, the significant decrease in Segment AdjustedEBITDA is primarily due to the impact of few sales, which was partially offset by the inclusion of Utilities. Our Segment Adjusted EBITDA margin in fiscal 2025 and 2024 was 3.0% and 6.2%, respectively. Group costs Our group costs for fiscal 2025 increased compared with the prior period due to higher employee costs resulting from an increasein the number of individuals allocated to group costs and base salary adjustments, higher bonus expense, travel, audit, consulting andlegal fees. Use of Non-GAAP Measures U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAPmeasures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDAis a non-GAAP measure. We provide this non-GAAP measure to enhance our evaluation and understanding of our financialperformance and trends. We believe that this measure is helpful to users of our financial information understand key operatingperformance and trends in our business because it excludes certain non-cash expenses (including depreciation and amortization andstock-based compensation charges) and income and expenses that we consider once-off in nature. Non-GAAP Measures Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non-operational transactions (including loss on disposal of equity-accounted investments, change in fair value of equity securities),(earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items. We included anintercompany interest expense in our Consumer Segment Adjusted EBITDA for eight months to February 28, 2025. We commencedutilizing our February 2025 lending facilities to fund a portion of our Consumer lending book from March 1, 2025. Once-off itemsrepresents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimatelynot pursued.
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51 The table below presents the reconciliation between GAAP net income (loss) attributable to Lesaka to Group Adjusted EBITDA: Table 10 Years ended June 30,2026 2025 2024$ ’000 $ ’000 $ ’000Income (Loss) attributable to Lesaka - GAAP(A) 2,758 (90,957) (18,515)Add net loss attributable to non-controlling interest 246 130 -Net income (loss) 2,512 (91,087) (18,515)(Earnings) loss from equity accounted investments (215) (114) 1,279Net income (loss) before earnings from equity-accounted investments 2,297 (91,201) (17,236)Income tax expense (benefit)(A) 1,429 (15,982) 3,363Income (loss) before income tax expense 3,726 (107,183) (13,873)Interest expense(A) 18,506 21,824 19,171Interest income (2,889) (2,596) (2,294)Reversal of allowance for doubtful loan receivable (1,500) - (250)Loss on disposal of equity securities 730 - -Net loss on impairment/ disposal of equity-accounted investment 584 161 -Other income (3,883) - -Change in fair value of equity securities (2,593) 59,828 -Operating income (loss) 12,681 (27,966) 2,754Impairments(1) 3,347 18,863 -PPA amortization (amortization of acquired intangible assets) 30,441 21,384 14,419Depreciation and amortization 16,905 12,337 9,246Stock-based compensation charges 6,969 9,550 7,911Interest adjustment - (2,195) -Once-off items(2) 5,452 17,826 1,853Unrealized (gain) loss FV for currency adjustments (53) 23 (83)Group Adjusted EBITDA - Non-GAAP(A) 75,742 49,822 36,100 (A)Loss attributable to Lesaka – GAAP and all subtotal captions to Income (Loss) before earnings (loss) from equity-accountedinvestments for fiscal 2025 and fiscal 2024 have been decreased by $3.4 million and $1.1 million, respectively, as a resultof the correction discussed in Note 1. Income tax expense (benefit) for fiscal 2025 has been decreased by 2.2 million. Interestexpense for fiscal 2025 and fiscal 2024 has been increased by $0.4 million and $0.2 million, respectively, as a result of thecorrection discussed in Note 1. Operating income and Group Adjusted EBITDA - Non-GAAP for fiscal 2025 and fiscal 2024have been decreased by $0.9 million and $0.8 million, respectively, as a result of the correction discussed in Note 1. Loss attributable to Lesaka – GAAP and all subtotal captions to Loss before income tax expense for fiscal 2026 have beendecreased by $0.4 million, as a result of the correction, as discussed in Note 1. Interest expense for fiscal 2026 has beenincreased by $0.1 million as a result of the correction, as discussed in Note 1, to the amount included in the caption Interestexpense for the three months ended September 30, 2025. Operating income and Group Adjusted EBITDA - Non-GAAP forfiscal 2026 have been decreased by $0.2 million, as a result of the correction, as discussed in Note 1, to the amounts includedin the caption Cost of goods sold, IT processing, servicing and support and Selling, general and administration expense forthe three months ended September 30, 2025. (1) Impairments excludes an amount of $0.7 million which is included in the caption exit of ATM business in the table below. (2) The table below presents the components of once-off items for the periods presented: Table 11 Years ended June 30,2026 2025 2024$ ’000 $ ’000 $ ’000Lesaka brand refresh 3,001 - -Exit of ATM business 1,599 - -Transaction costs 1,103 1,794 480Transaction costs related to Adumo, Utilities and Bank Zero acquisitions and certaincompensation costs 389 16,159 2,325Income recognized related to closure of legacy businesses (579) - (952)Indirect taxes provision (61) (127) -Total once-off items 5,452 17,826 1,853
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52 Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transactioncosts include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can spanmultiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo and Utilitiesover a number of quarters, and the transactions are generally non-recurring. Rebrand relates to costs incurred related to Lesaka’s new brand launched in November 2025, we expect that it will take theremainder of the 2026 calendar year to roll out the refreshed brand throughout the organization. These are non-recurring costs incurredas a necessary step in a set of strategic initiatives designed to create a “One Lesaka” identity for our customers and our employees. Exit of ATM business includes expenses incurred to exit our ATM business and the impairment of ATMs recorded in property,plant and equipment (refer to Note 10 to our audited consolidated financial statements for additional information). Income recognized related to closure of legacy businesses represents (i) gains recognized related to the release of the foreigncurrency translation reserve on deconsolidation of a subsidiary and (ii) costs incurred related to subsidiaries which we are in the processof deregistering/ liquidation and therefore we consider these costs non-operational and ad hoc in nature. Indirect tax provision release relates to the reversal of a non-recurring indirect tax provision created in fiscal 2023 which wasresolved in fiscal 2025 following settlement of the matter with the tax authority. Liquidity and Capital Resources At June 30, 2026, our unrestricted cash and cash equivalents were $81.4 million and comprised of ZAR-denominated balancesof ZAR 1.3 billion ($76.9 million), U.S. dollar-denominated balances of $2.6 million, and other currency deposits, primarily Botswanapula, of $2.0 million, all amounts translated at exchange rates applicable as of June 30, 2026. The increase in our unrestricted cashbalances from June 30, 2025, was primarily due to positive contribution from our operating segments, and the utilization of our generalbanking facilities to partially fund the growth in our Consumer lending book, which was partially offset by the application of theproceeds received from the disposal of MobiKwik to reduce our general banking facilities utilized, the utilization of cash reserves tofund certain scheduled repayments of our borrowings, acquisition of property, plant and equipment and intangible assets, to fund theincrease in our Consumer lending book and to settle amounts due to the sellers of Utilities and other entities acquired during the year. We generally invest any surplus cash held by our South African operations in overnight call accounts that we maintain at SouthAfrican banking institutions, and any surplus cash held by our non-South African companies in U.S. dollar-denominated money marketaccounts. Historically, we have financed most of our operations, research and development, working capital, and capital expenditures, aswell as acquisitions and strategic investments, through internally generated cash and our financing facilities. When consideringwhether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surpluscash and availability of tax efficient structures to moderate financing costs. Refer to Note 12 to our consolidated financial statementsfor the year ended June 30, 2026, for additional information related to our borrowings. Our ability to make payments on our indebtedness and to fund our operations may be dependent upon the operating income andthe distribution of funds from our subsidiaries. However, as local laws and regulations and/or the terms of our indebtedness restrictcertain of our subsidiaries from paying dividends and transferring assets to us, there is no assurance that our subsidiaries will bepermitted to provide us with sufficient dividends, distributions or loans when necessary. We are required to make a scheduled debt repayment of ZAR 200 million ($12.2 million) in March 2027. We expect to pay ZAR100.0 million ($6.1 million) on closing of the Bank Zero transaction. All amounts translated at exchange rates as of June 30, 2026.
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53 Available short-term borrowings Summarized below are our short-term facilities available and utilized as of June 30, 2026: Table 12 RMB GBF RMB Other Nedbank$ ’000 ZAR ’000 $ ’000 ZAR ’000 $ ’000 ZAR ’000Total short-term facilities available, comprising:Total overdraft 67,702 1,110,808 - - - -Indirect and derivative facilities(1) - - 5,534 90,793 9,542 156,556Total short-term facilities available 67,702 1,110,808 5,534 90,793 9,542 156,556 Utilized short-term facilities:Overdraft 20,671 339,156 - - - -Indirect and derivative facilities - - 4,279 70,199 129 2,114Total short-term facilities available 20,671 339,156 4,279 70,199 129 2,114 Interest rate, based on South African prime rate 10.00% N/A N/A (1) Other facilities include indirect and derivative facilities may only be used for guarantees, letters of credit and forwardexchange contracts to support guarantees issued by RMB and Nedbank to various third parties on our behalf. The facilities under the Restated GBF Agreement were available for utilization from March 30, 2026, and are subject to annualreview by RMB. In terms of a commitment provided to the lender under the CTA entered into on February 27, 2025, we have undertaken not toutilize more than ZAR 5.0 million ($0.3 million) of the Nedbank Facility. Long-term borrowings We have aggregate long-term borrowing outstanding of ZAR 3.5 billion ($210.7 million translated at exchange rates as of June30, 2026) as described in Note 12. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 2.8billion, which was used to refinance our previous long-term borrowings. We have utilized all of these long-term borrowings. As ofSeptember 9, 2026, we also have a revolving credit facility, of ZAR 400.0 million which is utilized to fund a portion of our merchantfinance loans receivable book and an asset backed facility of ZAR 214.5 million which is utilized to partially fund the acquisition ofPOS devices and vaults. Restricted cash We have also entered into cession and pledge agreements with Nedbank related to our Nedbank indirect credit facilities and wehave ceded and pledged certain bank accounts to Nedbank. The funds included in these bank accounts are restricted as they may notbe withdrawn without the express permission of Nedbank. Our cash, cash equivalents and restricted cash presented in our consolidatedstatement of cash flows as of June 30, 2026, includes restricted cash of $0.1 million that has been ceded and pledged. Arrangement with African Bank to fund our ATMs In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transitservice providers to fund our ATMs. Under this arrangement, African Bank used its cash resources to fund our ATMs and it isspecifically recorded that the cash in our ATMs was African Bank’s property. Therefore, as we had not utilized a facility to obtain thecash, and did not own or control the cash for an extended period of time, we did not record cash or cash equivalents and borrowingsin our consolidated statement of financial position. Cash withdrawn from our ATMs by our EPE customers and other consumers weresettled through the interbank settlement system from the ATM users bank account to African Bank’s bank accounts. We paid AfricanBank a monthly fee for the service provided which was calculated based on the cumulative daily outstanding balance of cash utilizedmultiplied by the South African prime interest rate less 1%. We were exposed to the risk of cash lost while it was in our ATMs (i.e.from theft) and were required to repay African Bank for any shortages. We intend to cancel this arrangement as part of the process ofwinding down our ATM business. Cash flows from operating activities Net cash provided by operating activities during fiscal 2026 was $52.4 million (ZAR 951.6 million) compared to net cash usedby operating activities of $9.1 million (ZAR 163.3 million) during fiscal 2025. Excluding the impact of income taxes, our cash providedby operating activities during fiscal 2026 was positively impacted by the positive contribution from our operating segments andpositive working capital movements, which was partially offset by cash utilized for the significant net growth in our Consumer financeloans receivable.
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54 Net cash used in operating activities during fiscal 2025 was $9.1 million (ZAR 163.3 million) compared to net cash provided byoperating activities of $28.8 million (ZAR 537.9 million) during fiscal 2024. Excluding the impact of income taxes, our cash used inoperating activities during fiscal 2025 includes cash utilized for the settlement of working capital movements within our Merchant andEnterprise businesses related to quarter-end transaction processing activities and which were settled in the following week (our fourthquarter of fiscal 2024 closed on a Sunday), and the net growth in our Consumer and Merchant finance loans receivable books, whichwas partially offset by the positive contribution from our Merchant and Consumer businesses. During fiscal 2026, we paid our first provisional South African tax payments of $4.0 million (ZAR 66.8 million) related to our2026 tax year. During fiscal 2026, we also made our second provisional South African tax payments of $4.8 million (ZAR 79.6 millionrelated to our 2026 tax year and received tax refunds of $0.06 million (ZAR 1.1 million). We also paid taxes totaling $1.1 million inother tax jurisdictions, primarily in Botswana and Namibia. During fiscal 2025, we paid our first provisional South African tax payments of $4.2 million (ZAR 76.1 million) related to our2025 tax year. During fiscal 2025, we also made our second provisional South African tax payments of $2.2 million (ZAR 39.3 millionrelated to our 2025 tax year and received tax refunds of $0.4 million (ZAR 7.2 million). We also paid taxes totaling $0.3 million inother tax jurisdictions, primarily in the Botswana and Namibia. During fiscal 2024, we paid our first provisional South African tax payments of $2.7 million (ZAR 49.5 million) related to our2024 tax year. During fiscal 2024, we also made our second provisional South African tax payments of $2.9 million (ZAR 52.7 millionrelated to our 2024 tax year and received tax refunds of $0.0 million (ZAR 0.8 million). We also paid taxes totaling $0.4 million inother tax jurisdictions, primarily in Botswana. Taxes paid during fiscal 2026, 2025 and 2024 were as follows: Table 13 Year ended June 30,2026 2025 2024 2026 2025 2024$ $ $ ZAR ZAR ZAR‘000 ‘000 ‘000 ‘000 ‘000 ‘000First provisional payments 3,969 4,182 2,663 66,795 76,118 49,534Second provisional payments 4,830 2,198 2,861 79,579 39,279 52,721Taxation paid related to prior years 506 225 641 8,818 4,081 12,187Tax refund received (64) (438) (38) (1,110) (7,173) (768)Dividend withholding taxes paid 91 - - 1,526 - -Total South African taxes paid 9,332 6,167 6,127 155,608 112,305 113,674Foreign taxes paid 1,100 314 379 18,412 5,738 7,063Total tax paid 10,432 6,481 6,506 174,020 118,043 120,737 We expect to make additional provisional income tax payments in South Africa related to our 2026 tax year in the first quarter offiscal 2027, however, the amount was not quantifiable as of the date of the filing of this Annual Report. Cash flows from investing activities Cash used in investing activities for fiscal 2026 included capital expenditures of $20.6 million (ZAR 374.6 million), primarilydue to the acquisition of vaults and POS devices. We also incurred capital expenditures of $4.4 million (ZAR 79.9 million), primarilyrelated to the capitalization of development costs, during fiscal 2026. During fiscal 2026, we also received $3.0 million from thedisposal of Cell C. During fiscal 2026, we paid $11.1 million related to acquisition of certain businesses, including $10.4 million forthe final tranche of the Utilities acquisition, $0.3 million for MobileMart and $0.3 million for Atom. We also invested $4.6 millionrelated to the acquisition of mutual funds by our insurance business in order to obtain a higher yield on funds invested by this business. Cash used in investing activities for fiscal 2025 included capital expenditures of $17.2 million (ZAR 307.9 million), primarilydue to the acquisition of vaults and POS devices. We also incurred capital expenditures of $3.9 million (ZAR 69.8 million), primarilyrelated to the capitalization of development costs, during fiscal 2025. During fiscal 2025, we paid $12.9 million related to acquisitionof certain businesses, including Adumo and Utilities. We also received $16.4 million related to the sale of our entire equity investmentin MobiKwik in June 2025. Cash used in investing activities for fiscal 2024 included capital expenditures of $12.7 million (ZAR 236.6 million), primarilydue to the acquisition of vaults and POS devices. During fiscal 2024, we received proceeds of $3.5 million related to the sale ofremaining interest in Finbond and $0.25 million related to the second (and final) tranche from the disposal of our entire equity interestin Carbon.
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55 Cash flows from financing activities During fiscal 2026, we utilized $123.7 million from our South African general banking facilities to partially fund the growth ofour Consumer lending book, and repaid $129.4 million. We utilized $6.9 million of our long-term borrowings to fund our Merchantlending book and to finance the acquisition of POS devices and vehicles. We repaid $13.7 million of long-term borrowings inaccordance with our Facility B repayment schedule and under our asset-based facilities repayment schedule. We paid fees of $0.03million related to the September 2025 refinance of our facility to fund the growth of Merchant lending book. We paid $3.5 million topurchase Lesaka Hospitality non-controlling interests. We also paid $0.3 million to repurchase shares from employees in order for theemployees to settle taxes due related to the vesting of shares of restricted stock. During fiscal 2025, we utilized $98.6 million from our South African overdraft facilities to fund our ATMs and our cashmanagement business through Merchant as well as to partially fund the acquisition of Utilities and for the February 2025 refinance ofcertain of our facilities. We repaid $89.2 million of those facilities, including towards our refinanced facilities. We utilized $190.1million of our borrowings to settle a portion of the Adumo purchase consideration, pay certain transaction expenses, repay Adumo’sborrowings, repurchase shares of our common stock, fund the acquisition of certain capital expenditures, for working capitalrequirements and for the February 2025 refinance of certain of our facilities. We repaid $131.2 million of long-term borrowingstowards our refinanced facilities and in accordance with our repayment schedule, paid $7.2 million to settle Adumo’s borrowings, andsettled a portion of our revolving credit facility utilized. We also paid an origination fee of $1.0 million to secure additional borrowingsas well as paid dividends to the non-controlling interest of $0.4 million. During fiscal 2024, we utilized approximately $183.0 million from our South African overdraft facilities to fund our ATMs andrepaid $199.6 million of these facilities. We utilized $23.7 million of our long-term borrowings to fund the acquisition of certaincapital expenditures and for working capital requirements. We repaid $20.1 million of these long-term in accordance with ourrepayment schedule as well as to settle a portion of our revolving credit facility utilized. We received $0.1 million from the exerciseof stock options. We also paid $1.5 million to repurchase shares from employees in order for the employees to settle taxes due relatedto the vesting of shares of restricted stock. Contractual Obligations The following table sets forth our contractual obligations as of June 30, 2026: Table 14 Payments due by Period, as of June 30, 2026 (in $ ’000s) Total Less than 1year 2-3 years 3-5 years ThereafterShort-term credit facilities(A) 20,671 20,671 - - -Long-term borrowingsPrincipal repayments(A)(B) 210,711 16,114 194,295 302 -Interest payments(A)(B) 29,537 10,750 18,771 16 -Operating lease liabilities, including imputed interest(C) 34,460 6,946 9,106 6,012 12,396Purchase obligations 5,720 5,720 - - -Capital commitments 633 633 - - -Other long-term obligations reflected on our balancesheet(D)(E) 3,988 - - - 3,988Total 305,720 60,834 222,172 6,330 16,384 (A) – Refer to Note 12 to our audited consolidated financial statements. (B) – Long-term borrowings principal repayments for the 3-5 year period includes all unamortized fees as of June 30, 2026.Interest payments based on applicable interest rates as of June 30, 2026, and expected outstanding long-term borrowings overthe period. All amounts converted from ZAR to USD using the June 30, 2026, USD/ ZAR exchange rate. (C) – Refer to Note 8 to our audited consolidated financial statements. (D) –Includes policyholder liabilities of $3.7 million related to our insurance business. All amounts are translated at exchangerates applicable as of June 30, 2026. (E) – We have excluded cross-guarantees in the aggregate amount of $0.1 million issued as of June 30, 2026, to RMB andNedbank to secure guarantees it has issued to third parties on our behalf as the amounts that will be settled in cash are notknown and the timing of any payments is uncertain.
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56 Off-Balance Sheet Arrangements We have no off -balance sheet arrangements. Capital Expenditures Capital expenditures for the years ended June 30, 2026, 2025 and 2024 were as follows: Table 15 2026 2025 2024 2026 2025 2024$ $ $ ZAR ZAR ZAR’000 ’000 ’000 ’000 ’000 ’000Merchant 19,581 18,117 11,202 355,297 324,350 209,302Consumer 2,890 1,500 1,317 52,439 26,855 24,607Enterprise 2,578 1,482 146 46,778 26,532 2,728Total 25,049 21,099 12,665 454,514 377,737 236,637 Our capital expenditures for fiscal 2026, 2025 and 2024, are discussed under “—Liquidity and Capital Resources—Cash flowsfrom investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally-generated funds, except for certaincapital expenditures of POS devices and vaults, made through our Merchant business which were funded through the utilization ofasset-backed borrowings. We had outstanding capital commitments as of June 30, 2026, of $0.6 million. In addition to these capitalexpenditures, we expect that capital spending for fiscal 2027 will include acquisition of POS devices, vaults, computer software,computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa. Acquisition of these assetswill be funded through the use of internally-generated funds and available facilities.
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57 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We seek to manage our exposure to currency exchange, translation, interest rate, credit, microlending credit and equity price andliquidity risks as discussed below. Currency Exchange Risk We are subject to currency exchange risk because we purchase components for vaults, that we assemble, and inventories that weare required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar. We have used forward contracts in order tolimit our exposure in these transactions to fluctuations in exchange rates between the South African rand (“ZAR”), on the one hand,and the U.S. dollar and the euro, on the other hand. Wehad no outstanding foreign exchange contracts as of June 30, 2026 and 2025. Translation Risk Translation risk relates to the risk that our results of operations will vary significantly as the U.S. dollar is our reporting currency,but we earn a significant amount of our revenues and incur a significant amount of our expenses in ZAR. The U.S. dollar to the ZARexchange rate has fluctuated significantly over the past three years. As exchange rates are outside our control, there can be no assurancethat future fluctuations will not adversely affect our results of operations and financial condition. Interest Rate Risk As a result of our normal borrowing activities, our operating results are exposed to fluctuations in interest rates, which we manageprimarily through our financing activities. The ongoing conflict in the Middle East has contributed to higher oil and commodity pricesand increased global market volatility, resulting in increased inflationary pressures. In May 2026, the South African Reserve Bank (“SARB”) increased the repurchase rate by 25 basis points to 7.00% in responseto heightened inflation risks. The SARB subsequently maintained the repurchase rate at 7.00% in July 2026. While the outlook remainsuncertain, continued pressure on oil and other input prices presents an upside risk to inflation and, consequently, interest rates. We periodically evaluate the cost and effectiveness of interest rate hedging strategies to manage our exposure to changes in interestrates. We generally maintain surplus cash in cash equivalents and held-to-maturity investments and have occasionally invested inmarketable securities. We have short and long-term borrowings in South Africa as described in Note 12 to our consolidated financial statements whichattract interest at rates that fluctuate based on changes in the South African prime and South African Overnight Index Average(“ZARONIA”) interest rates. The following table illustrates the effect on our annual expected interest charge, translated at exchangerates applicable as of June 30, 202 6, as a result of changes in the South African prime and South African Overnight Index Average(“ZARONIA”) interest rates, using our outstanding short and long -term borrowings as of June 30, 2026. The effect of a hypothetical1% (i.e. 100 basis points) increase and a 1% decrease in the interest rates applicable to the borrowings as of June 30, 2026, are shown.The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios. Table 16 As of June 30, 2026 Annual expectedinterest charge ($ ’000) Hypotheticalchange ininterest rates Impact ofhypotheticalchange ininterest rates ($ ’000) Estimated annualexpected interestcharge afterhypothetical changein interest rates ($ ’000)Interest on South Africa borrowings 23,567 1% 2,322 25,889(1%) (2,322) 21,245 Credit Risk Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties.Wemaintain creditrisk policies in respect of our counterparties to minimize overall credit risk. These policies include an evaluation of a potentialcounterparty’s financial condition, credit rating, and other credit criteria and risk mitigation tools as our management deemsappropriate. With respect to credit risk on financial instruments, we maintain a policy of entering into such transactions only withSouth African and European financial institutions that have a credit rating of “B” (or its equivalent) or better, as determined by creditrating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings.
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58 Consumer microlending credit risk We are exposed to credit risk in our Consumer microlending activities, which provides unsecured short-term loans to qualifyingcustomers. Credit bureau checks as well as an affordability test are conducted as part of the origination process, both of which are linewith local regulations.Weconsider this policy to be appropriate because the affordability test we perform takes into account a varietyof factors such as other debts and total expenditures on normal household and lifestyle expenses. Additional allowances may berequired should the ability of our customers to make payments when due deteriorate in the future. A significant amount of judgmentis required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthinessof each customer. Merchant lending Wemaintain an allowance for doubtful finance loans receivable related to its Merchant services segment with respect to short-term loans to qualifying merchant customers. Our risk management procedures include adhering to our proprietary lending criteriawhich uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks.Weconsider these procedures to be appropriate because it takes into account a variety of factors such as the customer’s credit capacityand customer-specific risk factors when originating a loan. Equity Securities Price Risk Equity price risk relates to the risk of loss that we would incur as a result of the volatility in the exchange -traded price of equitysecurities that we hold. As of June 30, 2026, we did not have any equity securities that were exchange-traded and held as available forsale. Historically, exchange -traded equity securities held as available for sale were expected to be held for an extended period of timeand we were not concerned with short-term equity price volatility with respect to these securities provided that the underlying business,economic and management characteristics of the company remained sound. The market price of these exchange-traded equity securities may fluctuate for a variety of reasons and, consequently, the amountwe may obtain in a subsequent sale of these securities may significantly differ from the reported market value. Equity Securities Liquidity Risk Equity liquidity risk relates to the risk of loss that we would incur as a result of the lack of liquidity on the exchange on whichthose securities are listed.Wemay not be able to sell some or all of these securities at one time, or over an extended period of timewithout influencing the exchange-traded price, or at all. We monitor these investments for impairment and make appropriate reductions in carrying value when an impairment is deemedto be other-than-temporary. As of June 30, 2026, we did not own any exchange-traded equity securities.
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59 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our audited consolidated financial statements, together with the reports of our independent registered public accounting firms,appear on pages F-1 through F-95 of this Annual Report.
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60 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE Not applicable. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures Under the supervision and with the participation of our management, including our Executive Chairman and our Group ChiefFinancial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e)under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Executive Chairman andGroup Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026, due tothe material weaknesses in internal control over financial reporting as described below. Internal Control over Financial Reporting Internal control over financial reporting is a process designed by, or under the supervision of, our Executive Chairman and GroupChief Financial Officer, or persons performing similar functions, and effected by our board of directors, management, and otherpersonnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statementsfor external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that,in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receiptsand expenditures of the company are being made only in accordance with authorizations of our officers and directors; and (3) providereasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that couldhave a material effect on our audited consolidated financial statements. Inherent Limitations in Internal Control over Financial Reporting Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because ofits inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and issubject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can becircumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatementsmay not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitationsare known features of the financial reporting process. Therefore, it is possible to design safeguards into the process to reduce, thoughnot eliminate, this risk. Management’s Report on Internal Control Over Financial Reporting Management, including our Executive Chairman and our Group Chief Financial Officer, is responsible for establishing andmaintaining adequate internal control over our financial reporting. Management conducted an evaluation of the effectiveness ofinternal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation and as described below,management concluded that our internal control over financial reporting was not effective as of June 30, 2026. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that areasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented ordetected on a timely basis. As of June 30, 2026, we identified material weaknesses related to:● Our Consumer lending, Consumer insurance and Group payroll processes, specifically insufficient risk assessment andmonitoring activities relating to changes in or migration of systems and processes, insufficient controls over internalinformation and information from service organizations, and insufficient design and implementation of ITGCs, controls overservice organizations and process level controls, resulting in ineffective process level controls, including a lack of validationof the completeness and accuracy of information used within the processes;● Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation ofcontrols including insufficient controls over information resulting in ineffective process level controls including a lack ofvalidation of the completeness of the journal entry population and inadequate validation of the completeness and accuracyof information used within the process; ● The failure of our Utilities, Lesaka Hospitality, Lesaka Merchant Technologies and Lesaka Payments businesses to complywith our Sarbanes program, specifically insufficient risk assessment and monitoring activities relating to systems andprocesses, insufficient controls over internal information and information from service organizations, and insufficient designand implementation of ITGCs, controls over service organizations and process level controls, resulting in ineffective process
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61 level controls, including a lack of validation of the completeness and accuracy of information used within the process;● An insufficient number of experienced and trained resources to execute on their internal control responsibilities resulting ininadequate risk assessment, ineffective design, implementation and operating effectiveness of process level controls forprocesses in the scope of our internal control over financial reporting evaluation. Of the material weaknesses described above, the material weaknesses related to the journal entry process and the insufficientnumber of experienced and trained resources to execute on their internal control responsibilities resulted in corrected prior periodmisstatements related to the understatement of cost and accumulated depreciation for computer equipment and the correction ofdeferred tax asset included in deferred income taxes due to correction of intercompany transactions as described in Note 1 to theconsolidated financial statements. Additionally, of the material weaknesses described above, the material weakness related to an insufficient number of experiencedand trained resources to execute on their internal control responsibilities also resulted in corrected prior period misstatements relatedto the understatement of cost of goods sold, IT processing, servicing and support due to incorrect claim of indirect taxes and correctionof number of shares and amounts used for common stock and treasury shares and amounts for additional paid-in capital as describedin Note 1 to the consolidated financial statements. The material weakness also resulted in a corrected immaterial misstatement in thecurrent period related to revenue. All other material weaknesses did not result in any corrected material or immaterial misstatements; however, a reasonablepossibility exists that material misstatements in our consolidated financial statements may not be prevented or detected on a timelybasis. Lesaka’s independent registered public accounting firm, KPMG Inc, who audited the consolidated financial statements includedin this Annual Report, has expressed an adverse report on the operating effectiveness of our internal control over financial reportingas of June 30, 2026, which appears in Part II, Item 9A of this Annual Report. Remediation of Newly Identified Material Weaknesses To address the material weaknesses, our management, including our Information Technology (“IT”) team, has commenced withremediation of these material weaknesses including, but not limited to: (1) developing and implementing a comprehensive remediationplan that includes specific actions aimed at enhancing the understanding of control owners related to the operation and importance ofinternal controls over financial reporting, including the principles and requirements of each control, with a focus on the impactedprocesses including controls over service organizations, ITGCs, and other process level controls; (2) mandating improved riskassessment procedures with governance requirements upon implementing new or migrating existing systems within the Group togetherwith the design, implementation and monitoring of control activities; (3) the recruitment of additional appropriately skilled resourcesacross the Finance and Risk and Compliance disciplines coupled with the further upskilling and training of existing resourcesresponsible for the execution of key controls as well as a focus on a greater degree of automation of controls throughout theorganization, (4) the embedding of controls compliance in the key performance indicators of senior executives as well as process andcontrol owners across the business and (5) collaborating closely with internal and external assurance partners to ensure the robustnessof our remediation plan. While we are actively taking steps to implement our remediation plan, the material weaknesses will not be deemed resolved untilthe enhanced controls operate for a sufficient period of time and management has confirmed through testing that the same are operatingeffectively. We will continue to monitor the remediation plan's effectiveness and adjust our efforts as needed. As we assess and testour internal control over financial reporting, we may identify the need for additional measures or modifications to the plan. Remediation of Previously Identified Material Weaknesses Management has made progress in remediating the material weaknesses identified in the previous fiscal year related to theinsufficient design and implementation of controls and policies and procedures related to the goodwill impairment assessment,business combinations process and revenue recognition matters. Revised procedures have been implemented related to the validationof completeness and accuracy of the data used in the goodwill impairment model together with additional procedures implemented toenhance the precision levels in evaluating key assumptions utilized in this model. These have been adequately documented throughmanagement review controls. The implementation of robust revenue recognition controls for the review of new contracts and productofferings has mitigated key risks of potential material misstatement within the revenue process. This has been achieved through thethorough assessment and documentation of the relevant accounting considerations, ensuring the accurate classification and recognitionof revenue. Furthermore, the enhanced processes and procedures relating to business combinations operated effectively with respectto the acquisitions completed during the year; as no significant business combination occurred during the period, we will continue toevaluate these controls as they operate over future significant transactions. Changes in Internal Control over Financial Reporting Except as described above, there were no changes in our internal control over financial reporting during the quarter ended June30, 2026, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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62 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and Board of Directors of Lesaka Technologies, Inc. Opinion on Internal Control Over Financial Reporting We have audited Lesaka Technologies, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of June30, 2026, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee of SponsoringOrganizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on theachievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reportingas of June 30, 2026, based on criteria established inInternal Control – Integrated Framework (2013) issued by the Committee ofSponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the consolidated balance sheets of the Company as of June 30, 2026 and 2025, the related consolidated statements ofoperations, comprehensive (loss) income, changes in equity, and cash flows for each of the years in the three-year period ended June30, 2026, and the related notes (collectively, the consolidated financial statements), and our report dated September 9, 2026 expressedan unqualified opinion on those consolidated financial statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that thereis a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be preventedor detected on a timely basis. Material weaknesses related to insufficient risk assessment, insufficient experienced and trainedresources, insufficient design, implementation and operating effectiveness of control activities, insufficient controls over information,and insufficient monitoring activities have been identified and included in management’s assessment. The material weaknesses wereconsidered in determining the nature, timing, and extent of audit tests applied in our audit of the 2026 consolidated financial statements,and this report does not affect our report on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for itsassessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report onInternal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financialreporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent withrespect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securitiesand Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all materialrespects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financialreporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary inthe circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding thereliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally acceptedaccounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain tothe maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effecton the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG Inc.Johannesburg, Republic of South Africa September 9, 2026
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63 ITEM 9B. OTHER INFORMATION Our Section 16 officers and directors, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934 (the “Exchange Act”),may from time to time enter into plans for the purchase or sale of our common stock that are intended to satisfy the affirmative defenseconditions of Rule 10b5-1(c) of the Exchange Act. During the quarter ended June 30, 2026, no officers or directors, as defined in Rule16a-1(f),adopted,modified, orterminated a “Rule 10b5-1trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” asdefined in Item 408 of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENTINSPECTIONS Not applicable.
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64 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information about our executive officers is set out in Part I, Item 1 under the caption “Our Executive Officers.” The otherinformation required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2026 annualmeeting of shareholders entitled “Board of Directors and Corporate Governance” and “Additional Information.” ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2026annual meeting of shareholders entitled “Executive Compensation,” “Board of Directors and Corporate Governance—Compensationof Directors” and “—Remuneration Committee Interlocks and Insider Participation.” ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2026annual meeting of shareholders entitled “Security Ownership of Certain Beneficial Owners and Management” and “EquityCompensation Plan Information.” ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTORINDEPENDENCE The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2026annual meeting of shareholders entitled “Certain Relationships and Related Transactions” and “Board of Directors and CorporateGovernance.” ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2026annual meeting of shareholders entitled “Audit and Non-Audit Fees.”
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65 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES a) The following documents are filed as part of this report 1. Financial Statements The following financial statements are included on pages F-1 through F-95. Report of the Independent Registered Public Accounting Firm –KPMG, Inc. (PCAOB Firm ID1025) F-2Consolidated balance sheets as of June 30, 2026 and 2025 F-4Consolidated statements of operations for the years ended June 30, 2026, 2025 and 2024 F-5Consolidated statements of comprehensive (loss) income for the years ended June 30, 2026, 2025 and2024 F-6 Consolidated statements of changes in equity for the years ended June 30, 2026, 2025 and 2024 F-7Consolidated statements of cash flows for the years ended June 30, 2026, 2025 and 2024 F-10Notes to the consolidated financial statements F-11 2. Financial Statement Schedules Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwiseincluded. (b) Exhibits Incorporated by Reference HereinExhibitNo. Description of Exhibit IncludedHerewith Form Exhibit Filing Date 2.1 Sale of Shares Agreement, dated October 31, 2021,by and among Net1 Applied Technologies SouthAfrica Proprietary Limited; Net1 UEPSTechnologies, Inc.; Old Mutual Life AssuranceCompany (South Africa) Limited; Lirast (Mauritius)Company Limited; SIG International Investment(BVI) Limited; Aldgate International Limited; IvanMichael Epstein; PFCC (BVI) Limited; PCFInvestments (BVI) Limited; Ovobix (RF) ProprietaryLimited; Luxanio 227 Proprietary Limited; VistaCapital Investments Proprietary Limited; VistaTreasury Proprietary Limited; K2021477132 (SouthAfrica) Proprietary Limited; and Cash ConnectManagement Solutions Proprietary Limited. 8-K 10.1 November 2, 2021 2.2 Sale and Purchase Agreement, dated May 7, 2024,between Lesaka Technologies Proprietary Limited;Lesaka Technologies, Inc. and the parties listed inAnnexure A. 8-K 10.1 May 7, 2024 2.3 First Addendum to Sale and Purchase Agreement,datedOctober 1, 2024, between Lesaka TechnologiesProprietaryLimited; Lesaka Technologies, Inc. andthe parties listed inAnnexure A 8-K 2.2 October 2, 2024 2.4 Transaction Implementation Agreement, dated June26, 2025, entered into between the parties listed inAnnexure A and the parties listed in Annexure B andLesaka Technologies Proprietary Limited and ZeroResearch Proprietary Limited and Bank Zero MutualBank and Naught Holdings Ltd. 8-K 2.1 July 2, 20253.1 Amended and Restated Articles of Incorporation 8-K 3.1 May 17, 2022
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66 3.2 Amended and Restated By-Laws of LesakaTechnologies, Inc. 8-K 3.2 May 17, 20224.1 Form of common stock certificate 10-K 4.1 September 9, 20224.2 Description of registrant’s securities X10.1* Form of Restricted Stock Agreement 10-Q 10.49 February 7, 202310.2* Form of Stock Option Agreement 10-Q 10.50 February 7, 2023 10.3* Form of Restricted Stock Agreement (non-employeedirectors) 10-Q 10.51 February 7, 202310.4* Form of Indemnification Agreement 10-K 10.4 September 11, 202410.5* Form of non-employee director agreement 10-K 10.5 August 24, 2017 10.6* Amended and Restated 2022 Stock Incentive Plan ofLesaka Technologies, Inc. 14A A September 30, 2022 10.7* Amendment to the 2022 Amended and RestatedStock Incentive Plan of Lesaka Technologies, Inc. 14A B April 22, 2024 10.8* Amendment to the 2022 Amended and RestatedStock Incentive Plan of Lesaka Technologies, Inc. 14A A October 28, 2025 10.9* Amended and Restated Employment Agreement,dated as of July 30, 2026, between LesakaTechnologies, Inc. and Ali Mazanderani 8-K 10.1 July 30, 2026 10.10* Employment Agreement, dated as of July 30, 2026,between Lesaka Technologies (Pty) Ltd and AliMazanderani 8-K 10.2 July 30, 2026 10.11* Option Award Agreement between Ali Mazanderaniand Lesaka Technologies, Inc. 14A A April 22, 2024 10.12* Option Award Agreement between Ali Mazanderaniand Lesaka Technologies, Inc. 14A A July 2, 2026 10.13* Contract of Employment, effective February 5, 2021,between Net1 Applied Technologies South AfricaProprietary Limited and Lincoln Mali 8-K 10.1 February 11, 2021 10.14* Restrictive Covenants Agreement, effective February5, 2021, between Net1 Applied Technologies SouthAfrica Proprietary Limited and Lincoln Mali 8-K 10.2 February 11, 2021 10.15* Contract of Employment, dated as of December 9,2021, between Net1 Applied Technologies SouthAfrica (Pty) Ltd and Naeem Kola 8-K 10.1 December 10, 2021 10.16* Restrictive Covenants Agreement, dated as ofDecember 9, 2021, between Net1 AppliedTechnologies South Africa (Pty) Ltd and Naeem Kola 8-K 10.2 December 10, 2021 10.17* Employment Agreement, dated as of December 9,2021, between Net 1 UEPS Technologies, Inc. andNaeem Kola 8-K 10.3 December 10, 2021 10.18* Restrictive Covenants Agreement, dated as ofDecember 9, 2021, between Net 1 UEPSTechnologies, Inc. and Naeem Kola 8-K 10.4 December 10, 2021 10.19* Employment Agreement, dated as of February 8,2023, between Lesaka Technologies, Inc. and StevenJohn Heilbron 10-Q 10.52 May 9, 2023 10.20* Restrictive Covenants Agreement, dated as ofFebruary 8, 2023, between Lesaka Technologies, Inc.and Steven John Heilbron 10-Q 10.53 May 9, 2023 10.21* Contract of Employment, dated as of October 1,2024,between Lesaka Technologies (Pty) Ltd andDaniel LukeSmith 10-Q 10.53 May 7, 2025 10.22* Restrictive Covenants Agreement, dated as of October1,2024, between Lesaka Technologies (Pty) Ltd andDanielLuke Smith 10-Q 10.54 May 7, 2025
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67 10.23* Employment Agreement, dated as of October 1, 2024,between Lesaka Technologies, Inc. and Daniel LukeSmith 10-Q 10.55 May 7, 2025 10.24 Restrictive Covenants Agreement, dated as of October1, 2024, between Lesaka Technologies, Inc. andDaniel Luke Smith 10-Q 10.56 May 7, 2025 10.25 Policy Agreement, dated April 11, 2016, among theCompany and the IFC Investors 8-K 10.32 April 12, 2016 10.26 Amended & Restated Policy Agreement, datedOctober 28,2024, among Lesaka Technologies, Inc.and the IFCInvestors 10-Q 10.43 February 5, 2025 10.27 Cooperation Agreement, dated May 13, 2020, by andbetween Net 1 UEPS Technologies, Inc. and VCP(Proprietary) Limited 8-K 10.1 May 14, 2020 10.28 Amendment No. 1 to Cooperation Agreement, datedDecember 9, 2020, by and between Net 1 UEPSTechnologies, Inc. and Value Capital Partners (Pty)Ltd 8-K 10.1 December 10, 2020 10.29 Amendment No. 2 to Cooperation Agreement, datedMarch 22, 2022, by and between Net 1 UEPSTechnologies, Inc. and Value Capital Partners (Pty)Ltd 10-K 10.32 September 9, 2022 10.30 Securities Purchase Agreement, dated March 22, 2022,among Net1 UEPS Technologies, Inc., Net1 AppliedTechnologies South Africa Proprietary Limited andValue Capital Partners Proprietary Limited 10-Q 10.58 May 10, 2022 10.31 Amendment No. 1 to Securities Purchase Agreementdated March 16, 2023, among Lesaka Technologies,Inc. (formerly Net1 UEPS Technologies, Inc.), LesakaTechnologies Proprietary Limited (formerly Net1Applied Technologies South Africa ProprietaryLimited) and Value Capital Partners ProprietaryLimited 8-K 10.3 March 22, 2023 10.32 Sale of Shares Agreement dated October 1, 2024,betweenLesaka Technologies Proprietary Limited andCrossfinHoldings Proprietary Limited 8-K 10.40 October 1, 2024 10.33 Trust Deed of the Lesaka Employee Share Trustenteredinto between Lesaka Technologies, Inc. andNomaxabisoNorma Teyise and Zwelethu Masinga 14A A October 2, 2024 10.34 Relationship Agreement between LesakaTechnologies,Inc. and the Trustees for the time beingof the LesakaEmployee Share Trust 14A B October 2, 2024 10.35 Amendment and Restatement Agreement datedFebruary27, 2026, between amongst others, LesakaTechnologies Proprietary Limited, as Term/RCFBorrower, FirstRandBank Limited (acting through itsRand Merchant BankDivision), as facility agent, andBowwood and Main No 408(RF) Proprietary Limited,as Debt Guarantor 10-Q 10.51 May 6, 2026 10.36 Letter of Amendment, dated March 27, 2026, amongLesaka Technologies Proprietary Limited andFirstRandBank Limited (acting through its RandMerchant Bankdivision), as facility agent, related tothe amendment to theAmended and Restated CommonTerms Agreement 10-Q 10.52 May 6, 2026
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68 10.37 Senior Term Facility A Agreement between LesakaApplied Technologies Proprietary Limited (asTerm/RCFBorrower) and The Persons Listed inAnnexure A (asOriginal Senior Term Facility ALenders) and FirstRandBank Limited (acting throughits Rand Merchant BankDivision) (as Facility Agent)dated February 27, 2025 10-Q 10.47 May 7, 2025 10.38 Senior Term Facility B Agreement between LesakaApplied Technologies Proprietary Limited (asTerm/RCF Borrower) and The Persons Listed inAnnexure A (as Original Senior Term Facility BLenders) and FirstRand Bank Limited(acting throughits Rand Merchant Bank Division) (asFacility Agent)dated February 27, 2025 10-Q 10.48 May 7, 2025 10.39 Senior RCF Agreement between Lesaka AppliedTechnologies Proprietary Limited (as Term/RCFBorrower)and The Persons Listed in Annexure A (asOriginal SeniorRCF Lenders) and FirstRand BankLimited (acting throughits Rand Merchant BankDivision) (as Facility Agent) datedFebruary 27, 2025 10-Q 10.49 May 7, 2025 10.40 Pledge and Cession in Security Agreement betweenLesakaTechnologies, Inc. (as Cedent) and LesakaTechnologiesProprietary Limited (as Obligors' agentand Term/RCFBorrower) and Bowwood and Main No408 (RF)Proprietary Limited (as Debt Guarantor) andFirstRandBank Limited (acting through its RandMerchant BankDivision) (as Facility Agent) datedFebruary 27, 2025 10-Q 10.50 May 7, 2025 10.41 Subordination Agreement between Lesaka AppliedTechnologies Proprietary Limited (as Term/RCFBorrower)and The Persons Listed in Annexure A (asOriginalSubordinated Parties) and The Persons Listedin AnnexureB (as Original Obligors) and The PersonsListed inAnnexure C (As Original Lenders) andFirstRand BankLimited (acting through its RandMerchant Bank Division) (as Facility Agent) andBowwood and Main No 408 (RF)Proprietary Limited(as Debt Guarantor) dated February 28,2025 10-Q 10.51 May 7, 2025 10.42 General Banking Facility Agreement dated February27,2025 between Lesaka Technologies (Proprietary)Limitedand FirstRand Bank Limited (acting throughits RandMerchant Bank division) 10-Q 10.52 May 7, 2025 10.43 Letter of Amendment, dated March 27, 2026, amongLesaka Technologies Proprietary Limited andFirstRandBank Limited (acting through its RandMerchant Bankdivision), as facility agent, related tothe amendment to theOriginal General BankingFacility Agreement and FacilityLetter 10-Q 10.53 May 6, 2026 10.44 Facility Letter between Nedbank Limited and Net1Applied Technologies South Africa Limited andcertain of its subsidiaries dated as of December 13,2013 and First Addendum thereto dated as ofDecember 18, 2013 8-K 10.27 December 19, 2013 10.45 Letter from Nedbank Limited to Net1 AppliedTechnologies South Africa Proprietary Limited andcertain of its subsidiaries, dated December 7, 2016 8-K 10.50 December 9, 2016
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69 10.46 Revolving Credit Facility Agreement, datedSeptember 5, 2025, between Cash Connect CapitalProprietary Limited, the Parties Listed in Part I ofSchedule 1 (the Original Guarantors) and FirstRandBank Limited (acting through its Rand Merchant Bankdivision) (as Lender) 8-K 10.1 September 9, 202514 Code of Ethics X19 Insider Trading Policy X21 Subsidiaries of Registrant X 23.1 Consent of Independent Registered PublicAccounting Firm - KPMG, Inc. X 31.1 Certification of Principal Executive Officer pursuantto Rules 13a-14(a) and 15d-14(a) under the SecuritiesExchange Act of 1934, as amended X 31.2 Certification of Principal Financial Officer pursuantto Rules 13a-14(a) and 15d-14(a) under the SecuritiesExchange Act of 1934, as amended X32 Certification pursuant to 18 USC Section 1350 X97 Compensation Clawback Policy X101.INS XBRL Instance Document X101.SCH XBRL Taxonomy Extension Schema X101.CAL XBRL Taxonomy Extension Calculation Linkbase X101.DEF XBRL Taxonomy Extension Definition Linkbase X101.LAB XBRL Taxonomy Extension Label Linkbase X101.PRE XBRL Taxonomy Extension Presentation Linkbase X 104 Cover Page Interactive Data File (formatted as inlineXBRL and continued in Exhibit 101) X * Indicates a management contract or compensatory plan or arrangement. ITEM 16. FORM 10-K SUMMARY None.
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70 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has dulycaused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LESAKA TECHNOLOGIES, INC. By: /s/ Ali Mazanderani Ali MazanderaniExecutive Chairman and Director Date: September 9, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ Kuben Pillay Lead Independent Director and Director September 9, 2026Kuben Pillay /s/ Ali Mazanderani Executive Chairman and Director (Principal ExecutiveOfficer) September 9, 2026Ali Mazanderani /s/ Dan Smith Group Chief Financial Officer and Director (PrincipalFinancial and Accounting Officer) September 9, 2026Dan Smith /s/ Antony Ball Director September 9, 2026Antony Ball /s/ Nonkululeko Gobodo Director September 9, 2026Nonkululeko Gobodo /s/ Steven Heilbron Director September 9, 2026Steven Heilbron /s/ Lincoln Mali Director September 9, 2026Lincoln Mali /s/ Venessa Naidoo Director September 9, 2026Venessa Naidoo /s/ Ekta Singh-Bushell Director September 9, 2026Ekta Singh-Bushell /s/ Dean Sparrow Director September 9, 2026Dean Sparrow
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F-1 LESAKA TECHNOLOGIES, INC.LIST OF CONSOLIDATED FINANCIAL STATEMENTS Report of the Independent Registered Public Accounting Firm – KPMG Inc. F-2Consolidated balance sheets as of June 30, 2026 and 2025 F-4Consolidated statements of operations for the years ended June 30, 2026, 2025 and 2024 F-5Consolidated statements of comprehensive (loss) income for the years ended June 30, 2026, 2025 and2024 F-6 Consolidated statements of changes in equity for the years ended June 30, 2026, 2025 and 2024 F-7Consolidated statements of cash flows for the years ended June 30, 2026, 2025 and 2024 F-10Notes to the consolidated financial statements F-11
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F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and Board of Directors of Lesaka Technologies, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Lesaka Technologies, Inc. and subsidiaries (the Company)as of June 30, 2026 and 2025, the related consolidated statements of operations, comprehensive (loss) income, changes in equity, andcash flows for each of the years in the three-year period ended June 30, 2026, and the related notes (collectively, the consolidatedfinancial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial positionof the Company as of June 30, 2026 and 2025, and the results of its operations and its cash flows for each of the years in the three-yearperiod ended June 30, 2026, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)(PCAOB), the Company’s internal control over financial reporting as of June 30, 2026, based on criteria established in Internal Control– Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our reportdated September 9, 2026 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to expressan opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOBand are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicablerules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform theaudit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whetherdue to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidatedfinancial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures includedexamining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits alsoincluded evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overallpresentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financialstatements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts ordisclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, orcomplex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financialstatements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on thecritical audit matter or on the accounts or disclosures to which it relates. Assessment of goodwill impairment test for certain reporting units As discussed in Notes 2 and 10 to the consolidated financial statements, the Company recorded goodwill of $215,298 thousandas of June 30, 2026. The Company tests for impairment of goodwill on an annual basis and at any other time if events or circumstanceschange that could trigger an impairment test. The Company uses a discounted cash flow model to estimate the fair value for eachreporting unit, which requires the Company to make significant estimates and certain assumptions related to the reporting units’revenue growth rates, terminal revenue growth rates, forecast period for certain reporting units and weighted average cost of capital. We identified the assessment of the Company’s goodwill impairment test for certain reporting units as a critical audit matter.Subjective auditor judgement and specialized skills and knowledge were required to evaluate certain assumptions used in thediscounted cashflow model. Specifically, reporting units’ revenue growth rates, terminal revenue growth rates, forecast period forcertain reporting units and the weighted average cost of capital. Changes in these assumptions could have a significant impact on thefair value of the reporting units. The following are the primary procedures we performed to address this critical audit matter: • We evaluated the revenue growth rates by comparing the revenue growth rates against historic performance, approvedbudgets and challenged management on the expected future performance based on reporting unit specific factors. • We performed sensitivity analyses over revenue growth rates and the forecast period of certain reporting units to assess theirimpact on the Company’s determination of the fair values in respect to the reporting units. • We involved valuation professionals with specialized skills and knowledge who assisted in:o independently recalculating the terminal revenue growth rates for the reporting units considering industry, productand country specific information;o evaluating the weighted average cost of capital, by developing an independent estimate of weighted average cost of
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F-3 capital range and comparing it to the weighted average cost of capital selected by the Company for each reportingunit; and o performing a sensitivity and scenario type analysis on terminal revenue growth rates and weighted average cost ofcapital to assess the impact of changes in those assumptions on the Company’s determination of fair value for eachreporting unit. /s/KPMG Inc. We have served as the Company’s auditor since 2024.Johannesburg, Republic of South Africa September 9, 2026
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LESAKA TECHNOLOGIES, INC.CONSOLIDATED BALANCE SHEETSas of June 30, 2026 and 2025 F-4 June 30, June 30,2026 2025(In thousands, except share data)ASSETSCURRENT ASSETSCash and cash equivalents $ 81,409$ 76,520Restricted cash related to short-term credit facilities (Note 12)129 119Accounts receivable, net and other receivables (Note 4) 43,765 42,525Finance loans receivable, net (Note 4) 103,810 74,110Inventory (Note 5) 20,113 23,551Total current assets before settlement assets 249,226 216,825Settlement assets 18,504 27,098Total current assets 267,730 243,923PROPERTY, PLANT AND EQUIPMENT, NET (Note 1 and Note 7) 50,212 44,924OPERATING LEASE RIGHT-OF-USE (Note 8) 20,161 9,691EQUITY-ACCOUNTED INVESTMENTS (Note 9) 295 199GOODWILL (Note 10) 215,298 199,395INTANGIBLE ASSETS, NET (Note 10), including integrated platform - 2026: $73,211; 2025: $79,343 123,425 139,215DEFERRED TAX ASSETS, NET(A) 12,470 10,338OTHER LONG-TERM ASSETS, including equity securities (Note 9 and 11) 9,697 3,809TOTAL ASSETS 699,288 651,494 LIABILITIESCURRENT LIABILITIESShort-term credit facilities (Note 12) 20,671 24,469Accounts payable 23,986 19,867Other payables (Note 13)(A) 83,262 76,035Operating lease liability - current (Note 8) 4,408 4,007Current portion of long-term borrowings (Note 12) 16,114 11,956Income taxes payable 1,691 1,400Total current liabilities before settlement obligations 150,132 137,734Settlement obligations 18,530 26,695Total current liabilities 168,662 164,429DEFERRED TAX LIABILITIES, NET 28,379 33,921OPERATING LEASE LIABILITY - LONG TERM (Note 8) 19,338 6,129LONG-TERM BORROWINGS (Note 12) 194,597 188,813OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 11) 3,988 2,991TOTAL LIABILITIES 414,964 396,283REDEEMABLE COMMON STOCK (Note 14) 78,972 88,957 EQUITYCOMMON STOCK (Note 14)Authorized:200,000,000 with $0.001 par value;Issued and outstanding shares, net of treasury - 2026:83,306,794; 2025:81,249,097(A) 84 84 PREFERRED STOCKAuthorized shares:50,000,000 with $0.001 par value;Issued and outstanding shares, net of treasury: 2026:- ; 2025:- - -ADDITIONAL PAID-IN CAPITAL(A) 152,554 135,505TREASURY SHARES, AT COST: 2026:2,548,472; 2025:3,999,049(A) (234) (7,059)ACCUMULATED OTHER COMPREHENSIVE LOSS (Note 15)(A) (166,319) (185,626)RETAINED EARNINGS(A) 219,267 216,509TOTAL LESAKA EQUITY 205,352 159,413NON-CONTROLLING INTEREST - 6,841TOTAL EQUITY 205,352 166,254 TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY$ 699,288$ 651,494 (A) Amounts for June 30, 2025 revised to correct the errors discussed in Note 1.See accompanying notes to consolidated financial statements.
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LESAKA TECHNOLOGIES, INC.CONSOLIDATED STATEMENT S OF OPERATIONSfor the years ended June 30, 2026, 2025 and 2024 F-5 2026 2025 2024(In thousands, except per share data) REVENUE (Note 16) $ 721,554$ 659,701$ 564,222Services rendered 630,377 613,201 529,818Loan-based fees received 65,696 37,344 29,948Sale of goods 10,158 9,157 4,456Income from rentals 15,323 - - EXPENSE Cost of goods sold, IT processing, servicing and support, exclusive of depreciation andamortization shown separately below(A) 490,834 487,186 443,293Selling, general and administration, exclusive of depreciation and amortization shownseparately below(A) 153,473 123,727 87,027Movement in allowance for credit losses (Note 4)(B) 12,796 8,011 5,158Depreciation and amortization 47,346 33,721 23,665Transaction costs related to Adumo, Utilities and Bank Zero acquisitions and certaincompensation costs (Note 3) 389 16,159 2,325Impairment loss (Note 10) 4,035 18,863 - OPERATING INCOME (LOSS) 12,681 (27,966) 2,754 CHANGE IN FAIR VALUE OF EQUITY SECURITIES (Note 6 and 9) 2,593 (59,828) - OTHER INCOME (Note 13) 3,883 - - REVERSAL OF ALLOWANCE FOR DOUBTFUL LOAN RECEIVABLE (Note 4andNote9) 1,500 - 250 NET LOSS ON IMPAIRMENT OF EQUITY-ACCOUNTED INVESTMENT/ LOSS ONDISPOSAL OF EQUITY-ACCOUNTED INVESTMENT (Note 9) 584 161 - LOSS ON DISPOSAL OF EQUITY SECURITIES (Note 3) 730 - -INTEREST INCOME 2,889 2,596 2,294 INTEREST EXPENSE(A) 18,506 21,824 19,171 INCOME (LOSS) BEFORE INCOME TAX EXPENSE (BENEFIT) 3,726 (107,183) (13,873) INCOME TAX EXPENSE (BENEFIT) (Note 18)(A) 1,429 (15,982) 3,363 INCOME (LOSS) BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTEDINVESTMENTS 2,297 (91,201) (17,236) EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS (Note 9)215 114 (1,279) NET INCOME (LOSS) 2,512 (91,087) (18,515)ADD NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST246 130 - NET INCOME (LOSS) ATTRIBUTABLE TO LESAKA $ 2,758$ (90,957) $ (18,515) Net earnings (loss) per share, in United States dollars(Note 19):Basic earnings (loss) attributable to Lesaka shareholders(A) $ 0.03 $ (1.19) $ (0.29)Diluted earnings (loss) attributable to Lesaka shareholders(A) $ 0.03 $ (1.19) $ (0.29) (A) Revised to correct the errors discussed in Note 1.(B) Movement in allowance for credit losses for the years ended June 30, 2025, and 2024, were previously included in selling, general andadministration.See accompanying notes to consolidated financial statements.
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LESAKA TECHNOLOGIES, INC.CONSOLIDATED STATEMENT S OF COMPREHENSIVE (LOSS) INCOMEfor the years ended June 30, 2026, 2025 and 2024 F-6 2026 2025 2024(In thousands) Net income (loss) (A)$ 2,512 $ (91,087) $ (18,515) Other comprehensive income (loss), net of taxes:Movement in foreign currency translation reserve(A) 20,037 2,412 6,209Movement in foreign currency translation reserve related to equity-accountedinvestments (Note 15) - - 489Release of foreign currency translation reserve related to disposal/ impairment ofequity-accounted investments (Note 9 and Note 15) 550 - 1,543Release of foreign currency translation reserve related to disposal/ liquidation ofsubsidiaries (Note 15) (520) 6 (952)Total other comprehensive income, net of taxes 20,067 2,418 7,289 Comprehensive income (loss) 22,579 (88,669) (11,226)(Less) Add comprehensive (income) loss attributable tonon-controlling interest (518) 313 -Comprehensive income (loss) attributable to Lesaka $ 22,061 $ (88,356) $ (11,226) (A) Revised to correct the errors discussed in Note 1.See accompanying notes to consolidated financial statements
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LESAKA TECHNOLOGIES, INC.Consolidated Statements of Changes in Equity for the year ended June 30, 2024 (dollar amounts in thousands) F-7 Lesaka Technologies, Inc. Shareholders Number ofShares Amount Number ofTreasuryShares TreasuryShares Number ofshares, net oftreasury AdditionalPaid-InCapital RetainedEarnings Accumulatedothercomprehensiveloss TotalLesakaEquity Non-controllingInterest Total RedeemablecommonstockBalance – July 1, 2023(A) 63,640,246 $ 64 - $ - 63,640,246 $ 47,477 $ 325,981 $ (195,516) $ 178,006 $ - $ 178,006 $ 79,429 Treasury shares repurchased(A) (319,522) - - - (319,522) (1,495) (1,495) (1,495) Shares issued (Note 17) 194,454 - 194,454 - - - Restricted stock granted 1,002,241 1,002,241 - - - Exercise of stock options 54,287 54,287 165 165 165 Stock-based compensation charge (Note17) 8,045 8,045 8,045 Reversal of stock-based compensationcharge (Note 17) (299,463) (299,463) (134) (134) (134) Stock-based compensation chargerelated to equity-accounted investment(Note 9) (133) (133) (133) Net loss(A) (18,515) (18,515) - (18,515) Other comprehensive income (Note15)(A) 7,289 7,289 - 7,289 Balance – June 30, 2024(A) 64,272,243 $ 64 - $ - 64,272,243 $ 53,925 $ 307,466 $ (188,227) $ 173,228 $ - $ 173,228 $ 79,429 (A) Revised to correct the errors discussed in Note 1.
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LESAKA TECHNOLOGIES, INC.Consolidated Statements of Changes in Equity for the year ended June 30, 2025 (dollar amounts in thousands) F-8 Lesaka Technologies, Inc. Shareholders Number ofShares Amount Number ofTreasuryShares TreasuryShares Number ofshares, net oftreasury AdditionalPaid-InCapital RetainedEarnings Accumulatedothercomprehensiveloss TotalLesakaEquity Non-controllingInterest Total RedeemablecommonstockBalance – July 1, 2024(A) 64,272,243 $ 64 - $ - 64,272,243 $ 53,925 $ 307,466 $ (188,227)$ 173,228 $ - $ 173,228 $ 79,429 Treasury shares repurchased(A) (371,187) - (5,091,410) (11,929) (5,462,597) (1,731) (13,660) (13,660) Shares issued (Note 14) (Note 17) 19,960,181 19 19,960,181 73,237 73,256 73,256 9,528 Gain recognized related to issue ofshares included in treasury shares (Note3) - - 1,092,361 4,870 1,092,361 408 5,278 5,278 Restricted stock granted 1,499,610 1,499,610 - - - Exercise of stock options 38,011 1 38,011 116 117 117 Stock-based compensation charge (Note17) 9,639 9,639 9,639 Reversal of stock-based compensationcharge (Note 17) (150,712) (150,712) (89) (89) (89) Adumo non-controlling interestacquired (Note 3) - - 7,586 7,586 Net loss(A) (90,957) (90,957) (130) (91,087) Dividends paid to non-controllinginterests - (432) (432)Other comprehensive income (loss)(Note 15)(A) 2,601 2,601 (183) 2,418 Balance – June 30, 2025(A) 85,248,146 $ 84 (3,999,049) $ (7,059) 81,249,097 $ 135,505 $ 216,509 $ (185,626)$ 159,413 $ 6,841 $ 166,254 $ 88,957 (A) Revised to correct the errors discussed in Note 1.
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LESAKA TECHNOLOGIES, INC.Consolidated Statements of Changes in Equity for the year ended June 30, 2026 (dollar amounts in thousands) F-9 Lesaka Technologies, Inc. Shareholders Number ofShares Amount Number ofTreasuryShares TreasuryShares Number ofshares, net oftreasury AdditionalPaid-InCapital RetainedEarnings Accumulatedothercomprehensiveloss TotalLesakaEquity Non-controllingInterest Total Redeemablecommonstock Balance – July 1, 2025(A) 85,248,146 $ 84 (3,999,049) $ (7,059) 81,249,097 $ 135,505 $ 216,509 $ (185,626)$ 159,413 $ 6,841 $ 166,254 $ 88,957 Treasury shares repurchased (84,758) - - - (84,758) (339) (339) (339) Gain recognized related to issue ofshares included in treasury shares (Note3) 1,757,344 8,036 1,757,344 (51) 7,985 - 7,985 Restricted stock granted 1,081,595 1,081,595 - - - Exercise of stock options 21,196 - 21,196 63 63 63 Stock-based compensation charge (Note17) 7,271 7,271 7,271 Reversal of stock-based compensationcharge (Note 17) (410,913) (410,913) (302) (302) (302) Deconsolidation of Humble (Note 14) (306,767) (1,211) (306,767) - (1,211) (43) (1,254) Transfer from redeemable commonstock to additional paid-in-capital (Note14) 9,985 9,985 - 9,985 (9,985) Lesaka Hospitality non-controllinginterest acquired (Note 14) - 422 422 (7,312) (6,890) Net income (loss) 2,758 2,758 (246) 2,512 Dividends paid to non-controllinginterests - - - Other comprehensive income (Note 15) 19,307 19,307 760 20,067 Balance – June 30, 2026 85,855,266 $ 84 (2,548,472) $ (234) 83,306,794 $ 152,554 $ 219,267 $ (166,319)$ 205,352 $ - $ 205,352 $ 78,972 (A) Revised to correct the errors discussed in Note 1.See accompanying notes to consolidated financial statements.
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LESAKA TECHNOLOGIES, INC.CONSOLIDATED STATEMENT S OF CASHFLOWSfor the years ended June 30, 2026, 2025 and 2024 F-10 2026 2025 2024(In thousands)Cash flows from operating activitiesNet income (loss)(A) $ 2,512 $ (91,087) $ (18,515)Adjustments to reconcile net income (loss) to net cash provided by (used in) operatingactivities:Depreciation and amortization 47,346 33,721 23,665Impairment loss (Note 10) 4,035 18,863 -Movement in allowance for credit losses 12,796 8,011 5,158Fair value adjustment related to financial liabilities (238) (120) (853)Change in fair value of equity securities (Note 6 and 9) (2,593) 59,828 -Other income (3,883) - -Loss on disposal of equity securities (Note 3) 730 - -Loss on impairment/ disposal of equity-accounted investment (Note 9) 584 161 -Gain on deconsolidation of subsidiary (848) - -(Profit) Loss on disposal of property, plant and equipment (316) 13 (305)Stock-based compensation charge (Note 17) 6,969 9,550 7,911(Earnings) Loss from equity-accounted investments (Note 9) (215) (114) 1,279Reversal of allowance for doubtful loans receivable (1,500) - (250)Dividends received from equity-accounted investments 105 96 95Interest payable 20 4,723 1,119Facility fee amortized (Note 12) 413 429 443Increase (Decrease) in income taxes payable 402 485 (400)Deferred tax benefit(A) (9,451) (21,739) (2,712)Changes in net working capitalDecrease (Increase) in accounts receivable (Note 20) 3,500 1,081 (10,873)Increase in finance loans receivable (Note 20) (34,421) (34,614) (10,029)Decrease in inventory 6,704 169 9,840 Increase (Decrease) in accounts payable and other payables(A) 19,793 (12,164) 23,216Deferred consideration included in other payables (Note 3 and Note 13) - 13,586 -Net cash provided by (used in) operating activities 52,444 (9,122) 28,789Cash flows from investing activitiesCapital expenditures (20,646) (17,199) (12,665)Proceeds from disposal of property, plant and equipment 1,849 1,938 1,565Acquisition of intangible assets (4,403) (3,900) (294)Acquisitions, net of cash acquired (Note 3) (11,117) (12,946) (1,583)Proceeds from disposal of equity securities (Note 6 and 9) 2,971 16,441 -Investment in equity securities (450) - -Cash disposed on disposal of subsidiary (165) - -Proceeds from disposal of equity-accounted investment (Note 9) - - 3,508Repayment of loans by equity-accounted investments - - 250Acquisition of insurance entity investments (4,598) - -Net change in settlement assets 10,822 4,324 (7,196)Net cash used in investing activities (25,737) (11,342) (16,415)Cash flows from financing activitiesProceeds from bank overdraft (Note 12) 123,712 98,616 182,990Repayment of bank overdraft (Note 12) (129,417) (90,309) (199,642)Long-term borrowings utilized (Note 12) 6,949 190,061 23,728Repayment of long-term borrowings (Note 12) (13,741) (149,511) (20,073)Non-refundable deal origination fees/ guarantee fees (Note 12) (285) (970) -Repurchase of shares of common stock and treasury stock (Note 14) (339) (13,660) (1,495)Proceeds from exercise of stock options 63 116 165Acquisition of non-controlling interests (Note 14) (3,538) - -Dividends paid to non-controlling interest - (432) -Net change in settlement obligations (10,390) (4,179) 7,214Net cash (used in) provided by financing activities (26,986) 29,732 (7,113) Effect of exchange rate changes on cash 5,178 1,453 2,025Net increase in cash, cash equivalents and restricted cash 4,899 10,721 7,286Cash, cash equivalents and restricted cash – beginning of period 76,639 65,918 58,632Cash, cash equivalents and restricted cash – end of period (Note 20) $ 81,538 $ 76,639 $ 65,918(A) Revised to correct the errors discussed in Note 1.See accompanying notes to consolidated financial statements
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-11 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Lesaka Technologies, Inc. (“Lesaka” and collectively with its consolidated subsidiaries, the “Company”), formerly named Net 1UEPS Technologies, Inc., was incorporated in the State of Florida on May 8, 1997. The Company provides financial technologysolutions to underserviced consumers, merchants and enterprises, improving the way they manage their daily financial activities andincreasing financial inclusion in the markets in which we operate. In plain terms, the Company helps its customerspay, receive,borrow, insure and grow: the Company enables them to make and accept payments, receive income such as wages and welfare grants,access credit, protect their families and assets through insurance, and grow their businesses and financial lives. The Company deliversthese capabilities through three business divisions: Merchant, which provides payment acceptance, software, cash management,lending and alternative digital product solutions to merchants across our two channels; Community and Corporate. Consumer, whichprovides banking, lending and insurance solutions to consumers, principally recipients of social welfare grants in South Africa; andEnterprise, which provides payment processing, prepaid solutions and bill payment infrastructure connecting enterprises to consumersand businesses. Basis of presentation The accompanying consolidated financial statements include subsidiaries over which Lesaka exercises control and have beenprepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Implications of reverse acquisition concluded in June 2004 On June 7, 2004, Lesaka and the former shareholders of Net 1 Applied Technology Holdings Limited (“Aplitec”) implementeda transaction under which the former shareholders of Aplitec obtained a majority voting interest in Lesaka. Aplitec was a holdingcompany established and existing under the laws of Republic of South Africa and was liquidated and deregistered following the closingof the transaction. GAAP requires that the company whose shareholders retain a majority interest in a combined business be treatedas the acquirer for accounting purposes. Consequently, this transaction was accounted for as a reverse acquisition. For the period fromJune 7, 2004, the financial information reported for the Company represents the consolidated results of Lesaka and Aplitec with Lesakaas the acquired entity. Although Aplitec is deemed to be the acquiring company for financial and reporting purposes, the legal status of the Lesaka asthe surviving corporation did not change. Revision of Previously Issued Financial Statements Understatement of cost and accumulated depreciation for computer equipment In October 2025, the Company identified that it had understated its June 30, 2025, amounts of cost and accumulated depreciationfor computer equipment as well as the totals for cost and accumulated depreciation by $6.5 million in the notes to the auditedconsolidated financial statements for the years ended June 30, 2025 and 2024. The carrying value of property, plant and equipmentreported as of June 30, 2025, was not impacted by the error. The Company has recast the amounts of cost and accumulated depreciationfor computer equipment as well as the totals for cost and accumulated depreciation by $6.5 million in the Property, Plant andEquipment, net note, refer to Note 7. The Company assessed the materiality of this error and change in presentation on prior period consolidated financial statementsin accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99 “Materiality” and SAB No. 108, “Considering the Effects of PriorYear Misstatements when Quantifying Misstatements in the Current Year Financial Statements.” Based on this assessment, theCompany has concluded that previously issued financial statements were not materially misstated based upon overall considerationsof both quantitative and qualitative factors. Understatement of cost of goods sold, IT processing, servicing and support due to incorrect claim of indirect taxes Subsequent to the issuance of the Company’s Quarterly Report on Form 10-Q for the three months ended September 30, 2025,it determined that its certain indirect taxes had not been accounted for correctly in its consolidated balance sheet, consolidatedstatements of operations, consolidated statement of comprehensive loss, consolidated statement of changes in equity, consolidatedstatement of cash flows and related notes to the consolidated financial statements included in previously filed Annual Reports on Form10-K and Quarterly Reports on Form 10-Q since June 30, 2022, and these filings were incorrect. In these previous filings, the amountof certain indirect taxes were incorrectly claimed in monthly indirect tax submission to the taxing authority and were incorrectlyexcluded from the Company’s reported cost of goods sold, IT processing, servicing and support in the consolidated statements ofoperations and other payables and retained earnings in the consolidated balance sheet. The corrected presentation in the revisedconsolidated financial statements includes certain indirect taxes in cost of goods sold, IT processing, servicing and support in theconsolidated statements of operations and other payables and retained earnings in the consolidated balance sheet.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-12 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Revision of Previously Issued Financial Statements (continued) Understatement of cost of goods sold, IT processing, servicing and support due to incorrect claim of indirect taxes (continued) The Company has also determined that it may also be liable for penalties and interest related to the indirect taxes not paid in atimely manner and has recorded the penalties in the selling, general and administration expense and the interest in interest expense inthe revised consolidated statements of operations. The cumulative sum of the penalties and interest are included in other payables andretained earnings in the revised consolidated balance sheet. The Company has determined that at this time it is more likely than not that it will be unable to claim an income tax deductionrelated to the error, however, it is performing further analysis of its tax position with its external tax advisors. Therefore, there are noincome tax adjustments reflected in these consolidated financial statements related to the correction of this error. The Company has revised the previous presentations on the consolidated statements of operations for the years ended June 30,2025 and 2024, and corrected them in this filing. The Company has also included the impact of the correction for the three monthsended September 30, 2025, in the consolidated statements of operations for the year June 30, 2026, included in this filing. The impactof these revisions has increased cost of goods sold, IT processing, servicing and support, selling, general and administration expenseand interest expense, and all subtotals from operating income to net income (loss) attributable to Lesaka for the affected periods. The Company has revised the consolidated balance sheet as of June 30, 2025, and corrected it in this filing where these amountsare presented as comparative prior period amounts in other payables and retained earnings and affected subtotals and totals. Specifically, for the year ended June 30, 2026, Cost of goods sold, IT processing, servicing and support increased by $0.2 million,Selling, general and administration expense increased by $0.06 million, Operating income decreased by $0.2 million, Interest expenseincreased by $0.1 million, and Net income attributable to Lesaka decreased by $0.4 million, as a result of the correction to amountsreported for the three months ended September 30, 2025. Basic and Diluted earnings per share for the year ended June 30, 2026, werenot impacted by the correction to amounts reported for the three months ended September 30, 2025. Correction of deferred tax asset included in deferred income taxes due to correction of intercompany transactions While preparing its Annual Report on Form 10-K for the year ended June 30, 2026, the Company determined that certainintercompany transactions processed in previous periods were incorrectly recorded which resulted in the incorrect amount of deferredincome taxes recorded in its consolidated balance sheet, consolidated statements of operations, consolidated statements ofcomprehensive loss, consolidated statements of changes in equity, consolidated statements of cash flows and related notes to theconsolidated financial statements included in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q since June 30,2025, and these filings were incorrect. The deferred tax assets, net included in the Company’s consolidated balance sheet as of June30, 2025, and subsequently presented balance sheets, were overstated by $2.2 million and retained earnings were overstated by $2.2million. Income tax benefit for the year ended June 30, 2025, included in the consolidated statement of operations was overstated by$2.2 million. The corrected presentation in the revised consolidated financial statements includes adjustments for deferred taxes inincome tax benefit in the consolidated statements of operations and deferred income taxes and retained earnings in the consolidatedbalance sheet. The Company has revised the previous presentations on the consolidated statements of operations for the year ended June 30,2025, and corrected them in this filing. The impact of these revisions has decreased income taxes benefit, and all subtotals fromoperating income to net income (loss) attributable to Lesaka for the affected periods. The Company has revised the consolidatedbalance sheet as of June 30, 2025, and corrected it in this filing where these amounts are presented as comparative prior period amountsin deferred tax assets, net and retained earnings and affected subtotals and totals. The Company assessed the materiality of these errors and change in presentation on prior period consolidated financial statementsin accordance with SAB No. 99“Materiality” and SAB No. 108, “Considering the Effects of Prior Year Misstatements whenQuantifying Misstatements in the Current Year Financial Statements.” Based on this assessment, the Company has concluded thatpreviously issued financial statements were not materially misstated based upon overall considerations of both quantitative andqualitative factors.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-13 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Revision of Previously Issued Financial Statements (continued) The tables below present the impact of the revisions to specific captions to the Company’s consolidated balance sheet andconsolidated statements of operations for the periods identified. Consolidated balance sheet June 30, 2025As reported Correction As revisedDeferred tax assets, net $ 12,554 $ (2,216) $ 10,338Other payables 72,079 3,956 76,035Accumulated other comprehensive loss (185,664) 38 (185,626)(2,216)Retained earnings $ 222,719 $ (3,994) $ 216,509 Consolidated statement of operations Year ended June 30, 2025As reported Correction As revised(in thousands, except per share data)Cost of goods sold, IT processing, servicing and support $ 486,546 $ 640 $ 487,186Selling, general and administration, exclusive of depreciation and amortization(A) 131,512 226 131,738Interest expense 21,453 371 21,824Income tax expense (benefit) $ (18,198) $ 2,216 $ (15,982) Basic earnings (loss) per share attributable to Lesaka shareholders $ (1.14) $ (0.05) $ (1.19)Diluted earnings (loss) per share attributable to Lesaka shareholders $ (1.14) $ (0.05) $ (1.19) (A) As reported for selling, general and administration, exclusive of depreciation and amortization includes the movement inallowance for credit losses of $8,011, which is now presented separately on the consolidated statement of operations. Consolidated statement of operations Year ended June 30, 2024As reported Correction As revised(in thousands, except per share data)Cost of goods sold, IT processing, servicing and support $ 442,673 $ 620 $ 443,293Selling, general and administration, exclusive of depreciation and amortization(A) 91,969 216 92,185Interest expense 18,932 239 19,171 Basic earnings (loss) per share attributable to Lesaka shareholders $ (0.27) $ (0.02) $ (0.29)Diluted earnings (loss) per share attributable to Lesaka shareholders $ (0.27) $ (0.02) $ (0.29) (A) As reported for selling, general and administration, exclusive of depreciation and amortization includes the movement inallowance for credit losses of $5,158, which is now presented separately on the consolidated statement of operations.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-14 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Revision of Previously Issued Financial Statements (continued) Correction of number of shares and amounts used for common stock and treasury shares and amounts for additional paid-incapital Subsequent to the issuance of the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2026, itdetermined that the presentation of the number of shares and amounts used for common stock and treasury shares and the amount ofadditional paid-in capital in its consolidated balance sheets and consolidated statement of changes in equity and related notes to theconsolidated financial statements included in previously filed Annual Reports on Form 10-K and Quarterly Reports on Form 10-Qsince June 30, 2006, were incorrect. In these previous filings, shares of Lesaka’s common stock repurchased by Lesaka were incorrectlypresented as treasury shares. Under the Florida Business Corporation Act, shares acquired directly by the issuing corporation arerestored by operation of Florida law to the status of authorized but unissued shares. However, shares repurchased by a company arepresented as treasury shares if (i) there is a provision in a corporation’s articles of incorporation designating the repurchase of acorporation’s shares as treasury shares, or (ii) in the case of a corporation whose shares are registered on a national securities exchange,the repurchased shares that have been designated as treasury shares in the corporation’s bylaws or in resolutions of its board ofdirectors. Shares repurchased by Lesaka were not designated as treasury shares under (i) or (ii) as described in the preceding sentence. Guidance under U.S. GAAP requires that the repurchase of shares by a company should conform with applicable law andtherefore the repurchase of shares of its common stock by Lesaka should have reduced the number of common stock and amount andthe amount of additional paid-in capital presented. The corrected presentation in the revised consolidated financial statements includesthe repurchases of common stock by Lesaka as a reduction of the number of shares of common stock and amount and reduces theamount of additional paid-in capital. Total Lesaka equity and the number of issued and outstanding shares are not affected by thisrevision. Acquisition of shares of Lesaka’s common stock by its subsidiaries are not affected by the aforementioned rules and theseshares will continue to be presented as treasury shares in these consolidated financial statements. The Company assessed the materiality of this error and change in presentation on prior period consolidated financial statementsin accordance with SAB No. 99“Materiality” and SAB No. 108, “Considering the Effects of Prior Year Misstatements whenQuantifying Misstatements in the Current Year Financial Statements.” Based on this assessment, the Company has concluded thatpreviously issued financial statements were not materially misstated based upon overall considerations of both quantitative andqualitative factors. The Company has revised the previous presentations on the consolidated balance sheet as of June 30, 2025, and corrected themin this filing. The Company has also included the impact of the correction for the years ended June 30, 2025 and 2024, respectively,in the consolidated statement of changes in equity for the years ended June 30, 2025 and 2024, included in this filing. The impact ofthese revisions has decreased the amount for common stock, treasury shares, at cost, and additional paid-in capital on the consolidatedbalance sheet as of June 30, 2025. The impact of these revisions has decreased the number of shares and amount for common stock,decreased the number of shares and amount of treasury shares, and decreased the amount of additional paid-in capital on theconsolidated statement of changes in equity for the years ended June 30, 2025 and 2024, respectively.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-15 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Revision of Previously Issued Financial Statements (continued) Correction of number of shares and amounts used for common stock and treasury shares and amounts for additional paid-incapital (continued) The table below presents the impact of the revisions to specific captions to the Company’s consolidated balance sheet as of June30, 2025. Consolidated balance sheet June 30, 2025As reported Correction As revisedCommon stock $ 103 $ (19) $ 84Treasury shares, cost (298,523) 291,464 (7,059)Additional paid-in capital $ 426,950 $ (291,445) $ 135,505 The table below presents the impact of the revisions to specific captions to the Company’s consolidated statement of changes inequity for the periods identified. Consolidated statement of changes in equityYear ended June 30, 2025As reported Correction As revised(in thousands, except per share data)Common stock:Balance - July 1, 2024:Number of shares 89,836,051 (25,563,808) 64,272,243Amount $ 83 $ (19) $ 64Treasury shares repurchasedNumber of shares - (371,187) (371,187)Balance - June 30, 2025:Number of shares 111,183,141 (25,934,995) 85,248,146Amount $ 103 $ (19) $ 84Treasury shares:Balance - July 1, 2024:Number of shares (25,563,808) 25,563,808 -Amount $ (289,733) $ 289,733 $ -Treasury shares repurchasedNumber of shares (5,462,597) 371,187 (5,091,410)Amount $ (13,660) $ 1,731 $ (11,929)Balance - June 30, 2025:Number of shares (29,934,044) 25,934,995 (3,999,049)Amount $ (298,523) $ 291,464 $ (7,059)Additional paid-in capital:Balance - July 1, 2024: $ 343,639 $ (289,714) $ 53,925Treasury shares repurchased $ - $ (1,731) $ (1,731)Balance - June 30, 2025: $ 426,950 $ (291,445) $ 135,505
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-16 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION (continued) Revision of Previously Issued Financial Statements (continued) Correction of number of shares and amounts used for common stock and treasury shares and amounts for additional paid-incapital (continued) The table below presents the impact of the revisions to specific captions to the Company’s consolidated statement of changes inequity for the periods identified. Consolidated statement of changes in equityYear ended June 30, 2024As reported Correction As revised(in thousands, except per share data)Common stock:Balance - July 1, 2023:Number of shares 88,884,532 (25,244,286) 63,640,246Amount $ 83 $ (19) $ 64Treasury shares repurchasedNumber of shares - (319,522) (319,522)Balance - June 30, 2024:Number of shares 89,836,051 (25,563,808) 64,272,243Amount $ 83 $ (19) $ 64Treasury shares:Balance - July 1, 2023:Number of shares (25,244,286) 25,244,286 -Amount $ (288,238) $ 288,238 $ -Treasury shares repurchasedNumber of shares (319,522) 319,522 -Amount $ (1,495) $ 1,495 $ -Balance - June 30, 2024:Number of shares (25,563,808) 25,563,808 -Amount $ (289,733) $ 289,733 $ -Additional paid-in capital:Balance - July 1, 2023: $ 335,696 $ (288,219) $ 47,477Treasury shares repurchased $ - $ (1,495) $ (1,495)Balance - June 30, 2024: $ 343,639 $ (289,714) $ 53,925
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-17 2. SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The financial statements of entities which are controlled by Lesaka, referred to as subsidiaries, are consolidated. Inter-companyaccounts and transactions are eliminated upon consolidation. The Company, if it is the primary beneficiary, consolidates entities which are considered to be variable interest entities (“VIE”).The primary beneficiary is considered to be the entity that will absorb a majority of the entity's expected losses, receive a majority ofthe entity's expected residual returns, or both. The Company has an obligation to absorb the financial losses of the Lesaka EmployeeShare Trust (“Lesaka ESOP Trust”) and also has the ability to control this trust and therefore it has been consolidated. This trust doesnot generate significant losses or residual returns. Business combinations The Company accounts for its business acquisitions under the acquisition method of accounting. The total value of theconsideration paid for acquisitions is allocated to the underlying net assets acquired, based on their respective estimated fair values.The Company uses a number of valuation methods to determine the fair value of assets and liabilities acquired, including discountedcash flows, external market values, valuations on recent transactions or a combination thereof, and believes that it uses the mostappropriate measure or a combination of measures to value each asset or liability. The Company recognizes measurement-periodadjustments in the reporting period in which the adjustment amounts are determined. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions thataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from thoseestimates. Translation of foreign currencies The primary functional currency of the consolidated entities is the South African Rand (“ZAR”) and the Company’s reportingcurrency is the U.S. dollar. Assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Revenues andexpenses are translated at average rates for the period. Translation gains and losses are reported in accumulated other comprehensiveincome in total equity. The Company releases the foreign currency translation reserve included in accumulated other comprehensiveincome attributable to a foreign entity upon sale or complete, or substantially complete, liquidation of the investment in that foreignentity and includes the release in the gain or loss reported related to the sale or liquidation of the foreign entity. Foreign exchange transactions are translated at the spot rate ruling at the date of the transaction. Monetary items are translated atthe closing spot rate at the balance sheet date. Transactional gains and losses are recognized in selling, general and administrationexpense on the Company’s consolidated statement of operations for the period. Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand and funds deposited in bank accounts with financial institutions that are liquid,unrestricted and readily available. Restricted cash represents cash which is legally or contractually restricted as to use and includescash related to cash withdrawn from the Company’s debt facilities to fund ATMs as well cash in certain bank accounts that have beenceded to under certain of the Company’s borrowings. Allowance for credit losses The Company uses historical default experience over the lifetime of loans in order to develop an expected loss rate for its lendingbooks. The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the expected lossrate with the month-end outstanding lending book. The allowance for credit losses related to Merchant finance loans receivables iscalculated by adding together actual receivables in default plus multiplying the expected loss rate with the month-end outstandinglending book. The Company writes off microlending finance loans receivable and related service fees and interest if a borrower is inarrears with repayments for more than three months or is deceased. The Company writes off merchant and working capital financereceivables and related fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legalaction, have failed.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-18 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Allowance for credit losses (continued) For accounts receivables, the Company uses a lifetime loss rate by expressing write-off experience as a percentage ofcorresponding invoice amounts (as opposed to outstanding balances). The allowance for credit losses related to these receivables hasbeen calculated by multiplying the lifetime loss rate with recent invoice/origination amounts. Non-recoverability is assessed based ona quarterly review by management of the ageing of outstanding amounts, the location and the payment history of the customer inrelation to those specific amounts. Inventory Inventory is valued at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis and includestransport and handling costs. Property, plant and equipment Property, plant and equipment are shown at cost less accumulated depreciation. Property, plant and equipment are depreciatedon the straight-line basis at rates which are estimated to amortize the assets to their anticipated residual values over their useful lives.Within the following asset classifications, the expected economic useful lives are approximately: Vaults 10 yearsComputer equipment 3 to9 yearsOffice equipment 2 to10 yearsVehicles 3 to8 yearsFurniture and fittings 3 to15 years The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds andthe carrying amount of the asset and is recognized in income. Leases The Company determines whether an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use assets (“ROU”), operating lease liability - current, and operating lease liability – long term in its consolidated balance sheets.The Company does not have any significant finance leases as of June 30, 2026 and 2025, respectively, but its policy is to includefinance leases in property and equipment, other payables, and other long-term liabilities in its consolidated balance sheets. A ROU asset represents the Company’s right to use an underlying asset for the lease term and the lease liabilities represent itsobligation to make lease payments arising from the lease arrangement. Operating lease ROU assets and liabilities are recognized atcommencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not providean implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralizedborrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any leaseprepayments made and excludes lease incentives. The terms of the Company’s lease arrangements may include options to extend orterminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments isrecognized on a straight-line basis over the lease term. The Company does not recognize right-of-use assets and lease liabilities for lease arrangements with a term of twelve months orless. The Company accounts for all components in a lease arrangement as a single combined lease component. Costs incurred in theadaptation of leased properties to serve the requirements of the Company (leasehold improvements) are capitalized and amortized overthe shorter of the estimated useful life of the asset and the remaining term of the lease.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-19 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Equity-accounted investments The Company uses the equity method to account for investments in companies when it has significant influence but not controlover the operations of the company. Under the equity method, the Company initially records the investment at cost and thereafteradjusts the carrying value of the investment to recognize its proportional share of the equity-accounted company’s net income or loss.In addition, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degreeof influence), the cost of acquiring the additional interest in the investee is added to the current basis of the Company’s previouslyheld interest and the equity method would be applied subsequently from the date on which the Company obtains the ability to exercisesignificant influence over the investee. The Company releases a pro rata portion of the foreign currency translation reserve related to an equity-accounted investmentthat is included in accumulated other comprehensive income to earnings upon the sale of a portion of its ownership interest in theequity-accounted investment. The release of the pro rata portion of the foreign currency translation reserve is included in themeasurement of the gain or loss on sale of a portion of the Company’s ownership interest in the equity-accounted investment. TheCompany does not recognize cumulative losses in excess of its investment or loans in an equity-accounted investment except if it hasan obligation to provide additional financial support. Dividends received from an equity-accounted investment reduce the carrying value of the Company’s investment. The Companyhas elected to classify distributions received from equity method investees using the nature of the distribution approach. This electionrequires the Company to evaluate each distribution received on the basis of the source of the payment and classify the distribution aseither operating cash inflows or investing cash inflows. The Company reviews its equity-accounted investments for impairmentwhenever events or circumstances indicate that the carrying amount of the investment may not be recoverable. Goodwill Goodwill represents the excess of the purchase price of an acquired enterprise over the fair values of the identifiable assetsacquired and liabilities assumed based upon their estimated fair value at the date of purchase. The Company reviews the carrying valueof goodwill annually or more frequently if circumstances indicate impairment has occurred. Circumstances that could trigger an impairment test include but are not limited to: a significant adverse change in the businessclimate or legal factors; an adverse action or assessment by a regulator; unanticipated competition; loss of key personnel; the likelihoodthat a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed; and results of testing for recoverabilityof a significant asset group within a reporting unit. If goodwill is allocated to a reporting unit and the carrying amount of the reportingunit exceeds the fair value of that reporting unit, an impairment loss is recorded in the statement of operations. Measurement of thefair value of a reporting unit is based on present value techniques of estimated future cash flows. Intangible assets Intangible assets are shown at cost less accumulated amortization. Intangible assets are amortized over the following useful lives: Customer relationships 1 to15 yearsSoftware, integrated platform and unpatented technology 3 to10 yearsFTS patent 10 yearsExclusive licenses 7 yearsBrands and trademarks 0.5 to20 years Intangible assets are periodically evaluated for recoverability, and those evaluations take into account events or circumstancesthat warrant revised estimates of useful lives or that indicate that impairment exists.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-20 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Debt and equity securities Debt securities The Company is required to classify all applicable debt securities as either trading securities, available for sale or held to maturityupon investment in the security. Held to maturity Debt securities acquired by the Company which it has the ability and the positive intent to hold to maturity are classified as heldto maturity debt securities. The Company is required to make an election to classify these debt securities as held to maturity and thesesecurities are carried at amortized cost. The amortized cost of held to maturity debt securities is adjusted for amortization of premiumsand accretion of discounts to maturity. Interest received from the held to maturity security together with this amortization is includedin interest income in the Company’s consolidated statement of operations. The Company had a held to maturity security as of June 30,2025. The Company uses historical default experience over the lifetime of debt securities in order to calculate a lifetime loss rate forits held to maturity debt securities. The Company hadno held to maturity debt securities as of June 30, 2026. As of June 30, 2025,the carrying value of the Company’s held to maturity debt securities was $0. Impairment of debt securities With regard to held to maturity debt securities, the Company considers (i) the ability and intent to hold the debt security for aperiod of time to allow for recovery of value (ii) whether it is more likely than not that the Company will be required to sell the debtsecurity; and (iii) whether it expects to recover the entire carrying amount of the debt security. The Company records an impairmentloss in its consolidated statement of operations representing the difference between the debt securities carrying value and the currentfair value as of the date of the impairment if the Company determines that it intends to sell the debt security or if that it is more likelythan not that it will be required to sell the debt security before recovery of the amortized cost basis. However, the impairment loss issplit between a credit loss and a non-credit loss for debt securities that the Company determines that it does not intend to sell or that itis more likely than not that it will not be required to sell the debt securities before the recovery of the amortized cost basis. The creditloss portion, which is measured as the difference between the debt security’s cost basis and the present value of expected future cashflows, is recognized in the Company’s consolidated statement of operations. The non-credit loss portion, which is measured as thedifference between the debt security’s cost basis and its current fair value, is recognized in other comprehensive income, net ofapplicable taxes. Equity securities Equity securities are measured at fair value. Changes in the fair value of equity securities are recorded in the Company’sconsolidated statement of operations within the caption titled “change in fair value of equity securities”. The Company may elect tomeasure equity securities without readily determinable fair values at its cost minus impairment, if any, plus or minus changes resultingfrom observable price changes in orderly transactions for the identical or a similar investment of the same issuer (“cost minus changesin observable prices equity securities”). Changes in the fair value of the Company’s cost minus changes in observable prices equitysecurities are discussed in Note 9. The Company performs a qualitative assessment on a quarterly basis and recognizes an impairmentloss if there are sufficient indicators that the fair value of the equity security is less than its carrying value.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-21 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Policy reserves and liabilities Reserves for policy benefits and claims payable The Company determines its reserves for policy benefits under its life insurance products using models which estimate claimsincurred that have not been reported, expenses that are expected to be incurred when settling these claims, and the total present valueof disability claims-in-payment at the balance sheet date. These models allow for best estimate assumptions based on experience(where sufficient) plus a risk adjustment for non-financial risk, as required in the markets in which these products are offered, namelySouth Africa. The best estimate assumptions include (i) mortality and morbidity assumptions reflecting the company’s most recent experience,(ii) expense assumptions based on the expected claims handling cost and (iii) claim reporting delays reflecting Company specific andindustry experience. The disability claims-in-payment reserve is largely reinsured and the reported values were based on the reserveheld by the relevant reinsurer. The values of matured guaranteed endowments are increased by late payment interest. Deposits on investment contracts For the Company’s interest-sensitive life contracts, liabilities approximate the policyholder’s account value. Reinsurance contracts held The Company enters into reinsurance contracts with reinsurers under which the Company is compensated for the entire amountor a portion of losses arising on one or more of the insurance contracts it issues. The expected benefits to which the Company is entitled under its reinsurance contracts held are recognized as reinsurance assets.These assets consist of short-term balances due from reinsurers (classified within Accounts receivable, net and other receivables) aswell as long-term receivables (classified within other long-term assets) that are dependent on the expected claims and benefits arisingunder the related reinsurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amountsassociated with the reinsured contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets are assessedfor impairment at each balance sheet date. If there is reliable objective evidence that amounts due may not be recoverable, the Companyreduces the carrying amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss in its consolidatedstatement of operations. Reinsurance premiums are recognized when due for payment under each reinsurance contract. Redeemable common stock Common stock that is redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of theholder, or (3) upon the occurrence of an event that is not solely within the control of Company is presented outside of total Lesakaequity (i.e. permanent equity). Redeemable common stock is initially recognized at issuance date fair value and the Company does notadjust the issuance date fair value if redemption is not probable. The Company re-measures the redeemable common stock to themaximum redemption amount at the balance sheet date once redemption is probable. Reduction in the carrying amount of theredeemable common stock is only appropriate to the extent that the Company has previously recorded increases in the carrying amountof the redeemable equity instrument as the redeemable common stock may not be carried at an amount that is less than the initialamount reported outside of permanent equity. Redeemable common stock is reclassified as permanent equity when presentation outside permanent equity is no longer required(if, for example, a redemption feature lapses, or there is a modification of the terms of the instrument). The existing carrying amountof the redeemable common stock is reclassified to permanent equity at the date of the event that caused the reclassification and priorperiod consolidated financial statements are not adjusted.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-22 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount thatreflects the consideration the Company expects to receive in exchange for those products or services. The Company enters intocontracts that can include various combinations of products and services, which are generally capable of being distinct and accountedfor as separate performance obligations based on observable standalone selling prices. Revenue is recognized net of allowances forreturns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of products and services Acquiring The Company provides its customers with acquiring processing services that involve the collection, transmittal and retrieval ofall transaction data in exchange for consideration upon completion of the transaction and recognizes revenue from these activities at apoint in time. In certain instances, the Company also provides a funds collection and settlement service for its customers and recognizesrevenue from these activities at a point in time. ADP The Company purchases airtime vouchers for resale to customers and acts as a principal in these transactions. Airtime purchasedfor resale is included in inventory and released to cost of goods sold, IT processing, servicing and support upon sale of the inventory.The Company negotiates and agrees sales prices for airtime sales with its customers and revenue is measured at the agreed contractualprice. The Company recognizes revenue when the airtime is delivered to the customer. The Company, as a transaction processor and in the capacity of an agent, facilitates the delivery of ADP to its customers(including prepaid airtime vouchers, prepaid electricity and gaming vouchers) and earns a commission once these services aredelivered to the customer. The Company recognizes revenue from these activities at a point in time. Revenue from these transactionsfluctuates based on the volume of ADP services distributed. The Company provides its customers with transaction processing services that involve the collection, transmittal and retrieval ofall transaction data (including related to bill payments) in exchange for consideration upon completion of the transaction andrecognizes revenue from these activities at a point in time. In certain instances, the Company also provides a funds collection andsettlement service for its customers and recognizes revenue from these activities at a point in time. Cash The Company provides customers with cash management and digitization services which enables its merchant customers todeposit cash into digital vaults operated by the Company, after which the funds are then electronically accessible by customers toeither transfer to their nominated bank account or to pay certain pre-selected suppliers and recognizes revenue from these activities ata point in time. The Company considers each of these services as a single performance obligation. The Company’s contracts specifya transaction price for services provided. Cash revenue fluctuates based on the type and the volume of transactions processed. Revenueis recognized on the completion of the processed transaction and recognizes revenue at a point in time. Software The Company provides rental and support services under a master rental agreement with customers. Control of the rental assetis transferred through the right of use on a monthly basis as per the master rental agreement terms. Customers are required to pay themonthly rental and support fee in advance. The performance obligation for the service component is provided over the month andrevenue is recognized at the end of the month. The Company recognizes revenue from these activities over time.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-23 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition (continued) Nature of products and services (continued) Lending The Company provides short-term loans to merchants in South Africa and levies interest on the amount lent. The Company doesnot charge these customers up-front initiation fees or monthly service fees. Interest earned from customers is recognized using theeffective interest rate method, which requires the utilization of the rate of return implicit in the loan, that is, the contractual interestrate adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or acquisition of the loan. Theinterest rate included in the contract with the customer generally changes with changes to benchmark rates of interest set by the SouthAfrican Reserve Bank (“SARB”). The Company also provides short-term loans to customers (consumers) in South Africa and charges up-front initiation fees,interest and monthly service fees. Interest earned from customers is recognized using the effective interest rate method, which requiresthe utilization of the rate of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan initiationfees or costs, premium, or discount existing at the origination or acquisition of the loan. Monthly service fee revenue is recognizedunder the contractual terms of the loan. The monthly service fee are earned over time and is fixed upon initiation and does not changeover the term of the loan and is recognized when billed on a monthly basis. Transactional fees Customers serviced by the Company’s Consumer operating segment that have a bank account managed by the Company areissued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant point of sale device (“POS”). The Companyalso earns transaction fees from transactions processed for these customers. The Company’s contracts specify a transaction price foreach service provided (for instance, ATM withdrawal, balance enquiry, etc.). Transaction revenue fluctuates based on the type andvolume of transactions performed by the customer. Revenue is recognized on the completion of the processed transaction at a point intime. The Company also provides bank accounts to customers and this service is underwritten by a regulated banking institutionbecause the Company is not a bank. The Company charges its customers a fixed monthly bank account administration fee for all activebank accounts regardless of whether the account holder has transacted or not. The Company recognizes account holder fees on amonthly basis on all active bank accounts, which are earned over time and billed on a monthly basis. Revenue from account holders’fees fluctuates based on the number of active bank accounts. Insurance The Company writes life insurance contracts, and policy holders pay the Company a monthly insurance premium at the beginningof each month. Premium revenue is recognized on a monthly basis net of policy lapses. Policy lapses are provided for on the basis ofexpected non-payment of policy premiums. Utilities The Company facilitates the delivery of prepaid electricity tokens to its customers and earns a commission from the delivery ofthese tokens. The Company recognizes revenue from these activities at a point in time. Other The Company supplies hardware and licenses for its customers to use the Company’s technology. Hardware includes the sale ofPOS devices, SIM cards and other consumables which can occur on an ad hoc basis. The Company recognizes revenue from hardwareat the transaction price specified in the contract as the hardware is delivered to the customer. Licenses include the right to accesscertain technology developed by the Company and the associated revenue is recognized ratably over the license period. Accounts Receivable, Contract Assets and Contract Liabilities The Company recognizes accounts receivable when its right to consideration under its contracts with customers becomesunconditional. The Company has no contract assets or contract liabilities.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-24 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Research and development expenditure Research and development expenditure is charged to net income in the period in which it is incurred. During the years endedJune 30, 2026, 2025 and 2024, the Company incurred research and development expenditures of $0.8 million, $0.5 million and $0.5million, respectively. Computer software development Product development costs in respect of software intended for sale to licensees are expensed as incurred until technologicalfeasibility is attained. Technological feasibility is attained when the Company’s software has completed system testing and has beendetermined to be viable for its intended use. Once technological feasibility is reached, the Company capitalized such costs andamortizes these costs over the products’ estimated life. The time between the attainment of technological feasibility and completionof software development is generally short with insignificant amounts of development costs incurred during this period. Costs in respect of the development of software for the Company’s internal use are expensed as incurred, except to the extentthat these costs are incurred during the application development stage. All other costs including those incurred in the projectdevelopment and post-implementation stages are expensed as incurred. Income taxes The Company provides for income taxes using the asset and liability method. This approach recognizes the amount of incometaxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of eventsrecognized in the financial statements and tax returns. Deferred taxes are adjusted to reflect the effects of changes in tax laws or ratesin the period of enactment. The majority of the Company’s income taxes and deferred tax balances arise in the South Africa. TheCompany used the enacted statutory tax rate of27% for the years ended June 30, 2026, 2025 and 2024 to measure current tax expense(benefit) and deferred tax expense (benefit) in South Africa. The Company measured its South African current tax expense for theyears ended June 30, 2026 and 2025 and its South African deferred tax assets and liabilities as of June 30, 2026 and 2025, using theenacted statutory tax rate in South Africa of27%. In establishing the appropriate deferred tax asset valuation allowances, the Company assesses the realizability of its deferred taxassets, and based on all available evidence, both positive and negative, determines whether it is more likely than not that the deferredtax assets or a portion thereof will be realized. The Company does not consider future reversals of existing taxable temporarydifferences associated with indefinite lived assets where the timing of the reversal cannot be predicted as a source of income to supportdeferred tax assets for carryforward that do not expire. Unrecognized tax benefits are recorded in the financial statements for positions which are not considered more likely than not,based on the technical merits of the position, of being sustained upon examination by the taxing authorities. For positions that meetthe more likely than not standard, the measurement of the tax benefit recognized in the financial statements is based upon the largestamount of tax benefit that, in management’s judgement, is greater than 50% likely of being realized based on a cumulative probabilityassessment of the possible outcomes. The Company’s policy is to include interest related to income taxes in interest expense andpenalties in selling, general and administration in the consolidated statements of operations. The Company has elected the period cost method and records U.S. inclusions in taxable income related to global intangible lowtaxed income (“GILTI”) as a current-period expense when incurred. Stock-based compensation Stock-based compensation represents the cost related to stock-based awards granted. The Company measures equity-based stock-based compensation cost at the grant date, based on the estimated fair value of the award, and recognizes the cost as an expense on astraight-line basis (net of estimated forfeitures) over the requisite service period. In respect of awards with only service conditions thathave a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service periodfor the entire award. The forfeiture rate is estimated using historical trends of the number of awards forfeited prior to vesting. Theexpense is recorded in the statement of operations and classified based on the recipients’ respective functions. The Company recordsdeferred tax assets for awards that result in deductions on the Company’s income tax returns, based on the amount of compensationcost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between thedeferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income taxreturn are recorded in income tax expense in the consolidated statement of operations.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-25 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Equity instruments issued to third parties Equity instruments issued to third parties for services provided represents the cost related to equity instruments granted. TheCompany measures this cost at the grant date, based on the estimated fair value of the award, and recognizes the cost as an expenseon a straight-line basis (net of estimated forfeitures) over the requisite service period. The forfeiture rate is estimated based on theCompany’s expectation of the number of awards that will be forfeited prior to vesting. The Company records deferred tax assets forequity instrument awards that result in deductions on the Company’s income tax returns, based on the amount of equity instrumentcost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between thedeferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income taxreturn are recorded in the statement of operations. Settlement assets and settlement obligations The Company provides customers with cash management and digitization services which enable its merchant customers todeposit cash into digital vaults operated by the Company, after which the funds are then electronically accessible by customers toeither transfer to their nominated bank account or to pay certain pre-selected suppliers. Settlement assets comprise (1) cash received from merchant customers from cash deposits into the Company’s vaults, which arethen electronically accessible by customers to either transfer to their nominated bank account or to pay certain pre-selected suppliers,(2) cash received from credit card companies (as well as other types of payment services) which have business relationships withmerchants selling goods and services that are the Company’s customers and on whose behalf it processes the transactions betweenvarious parties, and (3) cash received from gift card customers. Settlement obligations comprise (1) amounts that the Company is obligated to disburse to merchant customers or to theirnominated pre-selected suppliers, (2) amounts that the Company is obligated to disburse to merchants selling goods and services thatare the Company’s customers and on whose behalf it processes the transactions between various parties and settles the funds from thecredit card companies to the Company’s merchant customers, and (3) amounts that the Company is obliged to pay to various partiesas a result of transaction performed using gift cards. The balances at each reporting date may vary widely depending on the timing of the receipts and payments of these assets andobligations. Recent accounting pronouncements adopted In December 2023, the Financial Accounting Standards Board (“FASB”) issued guidance regardingIncome Taxes (Topic 740)to improve income tax disclosure requirements. The guidance requires entities, on an annual basis, to (1) disclose specific categoriesin the income tax rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (ifthe effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pre-tax income orloss by the applicable statutory income tax rate). This guidance was effective for the Company beginning July 1, 2025 for its yearended June 30, 2026. Refer to Note 18. Recent accounting pronouncements not yet adopted as of June 30, 2026 In November 2024, the FASB issued guidance regardingIncome Statement—Reporting Comprehensive Income—ExpenseDisaggregation Disclosures(Subtopic 220-40) which requires disaggregated disclosure of income statement expenses for publicbusiness entities. The guidance does not change the expense captions an entity presents on the face of the income statement; rather, itrequires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financialstatements. This guidance is effective for the Company beginning July 1, 2027, and interim reporting periods during that fiscal year.Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements and relateddisclosures. In July 2025, the FASB issued guidance regardingFinancial Instruments-Credit Losses (Topic 326) Measurement of CreditLosses for Accounts Receivable and Contract Assets which amends current guidance to provide a practical expedient (for all entities)and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to theestimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accountedfor underRevenue From Contracts With Customers (Topic 606).This guidance is effective for the Company beginning July 1, 2026,and interim reporting periods during that fiscal year. The Company will apply the guidance from the effective date and elect thepractical expedient. The Company does not expect the impact of this guidance to be material on its financial statements and relateddisclosures.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-26 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Recent accounting pronouncements not yet adopted as of June 30, 2026 (continued) On September 18, 2025, the FASB issued guidance regardingIntangibles—Goodwill and Other— Internal-Use Software(Subtopic 350-40) which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The newguidance makes targeted improvements to existing guidance but does not fully align the framework for accounting for internallydeveloped software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externallythat is subject to guidance regardingCosts of Software to Be Sold, Leased, or Marketed(Subtopic ASC 985-20). The new guidancealso does not amend the guidance on costs of software licenses that are within the scope of ASC 985 -20. The amendments supersedethe guidance on website development costs in guidance regardingWebsite Development Costs (Subtopic ASC 350-50) and relocatethat guidance, along with the recognition requirements for development costs specific to websites, to ASC 350 -40. This guidance iseffective for the Company beginning July 1, 2028, and interim reporting periods during that fiscal year. Early adoption is permitted.Entities may apply the guidance prospectively, retrospectively, or via a modified prospective transition method. The modifiedprospective transition approach would allow entities to account for an in-process project that, before the transition date, met thecapitalization requirements but would no longer meet the requirements for capitalization under the new guidance by derecognizing thecapitalized costs for that in-process project through a cumulative-effect adjustment to the opening balance of retained earnings. TheCompany is currently assessing the impact of this guidance on its financial statements and related disclosures. On December 8, 2025, the FASB issued guidance regardingInterim Reporting (Topic 270) which is intended to improve thenavigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if itprovides “interim financial statements and notes in accordance with GAAP.” The updated guidance also addresses the form and contentof such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishesa principle under which an entity must “disclose events since the end of the last annual reporting period that have a material impacton the entity.” As the FASB stated in the proposed guidance and reiterates in the ASU, the amendments are not intended to “changethe fundamental nature of interim reporting or expand or reduce current interim disclosure requirements.” This guidance is effectivefor the Company beginning July 1, 2028, and interim reporting periods during that fiscal year. Early adoption is permitted. Entitiesmay apply the guidance prospectively or retrospectively.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-27 3. ACQUISITIONS AND DISPOSITIONS The cash paid, net of cash received related to the Company’s acquisition during the years ended June 30, 2026, 2025 and 2024,is summarized in the table below: 2026 2025 2024Total cash paid $ 13,294 $ 24,161 $ 2,248Less: cash acquired 2,177 11,215 665Total cash paid, net of cash received $ 11,117 $ 12,946 $ 1,583 Acquisitions 2027 Proposed acquisitions of Bank Zero On June 26, 2025, Lesaka SA entered into a Transaction Implementation Agreement (the “Transaction ImplementationAgreement”) with Zero Research Proprietary Limited (“Zero Research”), Bank Zero Mutual Bank (“Bank Zero”), and other partiesidentified in Annexure A to the Transaction Implementation Agreement (being all of the shareholders of Bank Zero save for ZeroResearch and Naught Holdings Ltd, the “Bank Zero Sellers”), the parties listed in Annexure B to the Transaction ImplementationAgreement (being all of the shareholders of Zero Research save for Naught Holdings Ltd, the “Zero Research Sellers”) and NaughtHoldings Ltd. All amounts below translated at the closing rate of $1: ZAR17.76 as of June 30, 2025. The purchase consideration payable by Lesaka SA in exchange for the relevant shares in Bank Zero and the subscriptionconsideration payable by Lesaka SA in exchange the subscription shares will be settled through a combination of delivery of Lesakashares of common stock and up to ZAR91.0 million ($5.1 million) in cash. Zero Research will apply the cash and Lesaka sharesreceived by it to settle the repurchase consideration due to the Zero Research Sellers. Following implementation of each of these steps,and subject to the below adjustment, the Bank Zero Sellers, Zero Research Sellers and Naught Holdings Ltd will own approximately12% of Lesaka's fully diluted shares at the time of completion of the proposed transaction. The Transaction Implementation Agreementallows a mechanism (in certain circumstances) pursuant to which the Bank Zero Sellers and the Zero Research Sellers may acquirefewer shares in Lesaka and a larger cash consideration. The Transaction Implementation Agreement includes customary interim period undertakings which required each of ZeroResearch and Bank Zero, among other things (i) to conduct their business in the ordinary course during the period between theexecution of the Transaction Implementation Agreement and the closing of the transaction contemplated thereby, and (ii) not to engagein certain kinds of transactions during such period. The Transaction Implementation Agreement is subject to the fulfilment of certainconditions precedent. The Transaction Implementation Agreement will lapse if all of the conditions precedent are not met or notwaived by January 31, 2027 (or such later date as may be agreed). Bank Zero and Lesaka SA have agreed to implement a long-term incentive arrangement following implementation of thetransaction, under which an agreed portion of a number of shares of Lesaka's shares of common stock calculated will be granted by (i)dividing ZAR70.0 million ($3.9 million) by an agreed value (as defined in the Transaction Implementation Agreement) (the“Retention LTIP Shares”) and (ii) dividing ZAR30.0 million ($1.7 million) by such agreed value (the “Performance LTIP Shares”).The Retention LTIP Shares will be subject to time and certain performance-based vesting conditions. The terms of the long-termincentive plan are required to be considered, and if necessary approved, by Lesaka's remuneration committee. The Company incurred transaction-related expenditures of $0.4 million and $0.6 million during the years ended June 30, 2026and 2025, respectively, related to the proposed acquisition of Bank Zero. The Company’s accruals presented in Note 13 of as June 30,2026, includes an accrual of transaction related expenditures of $0.4million and the Company expects to incur further transaction costsof $0.2 million during the 2027 fiscal year. 2026 Acquisitions Atom Operations Proprietary Limited On November 10, 2025, the Company, through its wholly owned subsidiary, Prism Holdings Proprietary Limited (“Prism”),entered into a Sale of Shares Agreement (the “Atom Purchase Agreement”) with Gravaton Investments Proprietary Limited(“Gravaton”) and Atom Operations Proprietary Limited (“Atom”). Pursuant to the Atom Purchase Agreement and subject to its termsand conditions, Prism agreed to acquire, and Gravaton agreed to sell, all of the outstanding equity interests in Atom for a total purchaseconsideration of $0.7 million which comprised of $0.4 million (ZAR6.0 million, translated at December 1, 2025 exchange rates) incash and76,716 shares of the Company’s shares of common stock (which had an aggregate value of $0.3 million (76,716 multipliedby $3.95) on closing). The transaction closed on December 1, 2025. The Company did not incur any significant transaction costsrelated to this acquisition.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-28 3. ACQUISITIONS AND DISPOSITIONS (continued) 2026 Acquisitions (continued) Mobilemart Proprietary Limited On January 30, 2026, the Company, through Prism, entered into a Sale of Shares Agreement (the “Mobilemart PurchaseAgreement”) with BASA Ventures Proprietary Limited (“BASA”) and Mobilemart Proprietary Limited (“MobileMart”). Pursuant tothe Mobilemart Purchase Agreement and subject to its terms and conditions, Prism agreed to acquire, and BASA agreed to sell, all ofthe outstanding equity interests in MobileMart for a total purchase consideration of $2.5 million (ZAR40.0 million, translated atFebruary 6, 2026 exchange rates) in cash. The transaction closed on February 6, 2026. The Company did not incur any significanttransaction costs related to this acquisition. These acquisitions were allocated to our Enterprise operating segment. Pro forma results related to acquisitions Pro forma results of operations have not been presented for the acquisitions of Atom and MobileMart because the effect of theseacquisitions, individually and in aggregate, are not material to the Company. Since the closing of these acquisitions, they havecontributed revenue and net loss of $10.9 million and $0.2 million, respectively, for the year ended June 30, 2026. 2025 Acquisitions October 2024 acquisition of Adumo On May 7, 2024, the Company entered into a Sale and Purchase Agreement (the “Purchase Agreement”) with Lesaka SA, andCrossfin Apis Transactional Solutions (Pty) Ltd and Adumo ESS (Pty) Ltd (“the Sellers”). Pursuant to the Purchase Agreement andsubject to its terms and conditions, Lesaka, through its subsidiary, Lesaka SA, agreed to acquire, and the Sellers agreed to sell, all ofthe outstanding equity interests and certain claims in the Adumo (RF) Proprietary Limited (“Adumo”). The transaction closed onOctober 1, 2024. Adumo is an independent payments and commerce enablement platform in Southern Africa, with operations across South Africa,Namibia, Botswana and Kenya. For more than two decades, Adumo facilitated physical and online commerce between retail merchantsand end-consumers by offering a unique combination of payment processing and integrated software solutions, which currently includeembedded payments, integrated payments, reconciliation services, merchant lending, customer engagement tools, card issuing programmanagement and data analytics. Adumo operated across three businesses, which provided payment processing and integrated software solutions to different endmarkets: ● The Adumo Payments business offers payment processing, integrated payments and reconciliation solutions to small-and-medium (“SME”) merchants in South Africa, Namibia and Botswana, and the Lesaka Payouts Proprietary Limited, formerlyknown as Adumo Payouts Proprietary Limited , (“Lesaka Payouts”), business provides card issuing program management tocorporate clients such as Anglo American and Coca-Cola (Lesaka Payments Proprietary Limited, formerly known as AdumoPayments Proprietary Limited (“Lesaka Payments”) was allocated to Merchant operating segment and Lesaka Payouts wasallocated to the Consumer operating segment);● The Adumo ISV business, Lesaka Hospitality Proprietary Limited, formerly known as GAAP Point of Sale Proprietary Limited(“Lesaka Hospitality”), has operations in South Africa, Botswana and Kenya, and clients in a number of other countries, and isthe leading provider of integrated point-of-sales software and hardware to the hospitality industry in Southern Africa, servingclients such as KFC, McDonald’s, Pizza Hut, Nando’s and Krispy Kreme (Adumo ISV was allocated to Merchant operatingsegment); and ● The Adumo Ventures business offers online commerce solutions (Lesaka Online Proprietary Limited, formerly known asAdumo Online Proprietary Limited, (“Lesaka Online”)), cloud-based, multi-channel point-of-sales solutions (Humble SoftwareProprietary Limited (“Humble”) and an aggregated payment and credit platform for in-store and online commerce (SwitchPayProprietary Limited (“SwitchPay”) to SME merchants and corporate clients in South Africa and Namibia (Adumo Venture wasallocated to the Merchant operating segment).
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-29 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) October 2024 acquisition of Adumo (continued) The total purchase consideration was ZAR1.67 billion ($96.2 million) and comprised the issuance of17,279,803 shares of theCompany’s common stock (“Consideration Shares”) with a value of $82.8 million (17,279,803 multiplied by $4.79 per share) andcash of $13.4 million. The purchase consideration was settled through the combination of the Consideration Shares and a ZAR232.2million ($13.4 million, translated at the prevailing rate of $1: ZAR17.3354 as of October 1, 2024) payment in cash. The Company’sclosing price on the Johannesburg Stock Exchange on October 1, 2024, was ZAR83.05 ($4.79 using the October 1, 2024, $1: ZARexchange rate). Certain indirect shareholders of the sellers were investors in Adumo and the Company. These shareholders ultimatelyreceived an aggregate of1,989,162 shares of the Company’s common stock at a price of $4.79 which was included in redeemablecommon stock (refer to Note 14). The closing of the transaction was subject to customary closing conditions which we fulfilled prior to closing. The Companyagreed to file a resale registration statement with the United States Securities and Exchange Commission (“SEC”) covering the resaleof the Consideration Shares by the Sellers. The resale registration statement was declared effective by the SEC on December 6, 2024. The Company incurred transaction-related expenditures of $0.003 million, $1.6 million and $2.3 million during the years endedJune 30, 2026, 2025 and 2024, respectively, related to the acquisition of Adumo. March 2025 acquisition of Utilities On November 19, 2024, the Company, through Lesaka SA, entered into a Sale of Shares Agreement (the “Utilities PurchaseAgreement”) with Imtiaz Dhooma (Utilities’ former chief executive officer) and Ninety Nine Proprietary Limited (“the Seller”).Pursuant to the Utilities Purchase Agreement and subject to its terms and conditions, Lesaka, through its subsidiary, Lesaka SA, agreedto acquire, and the Seller agreed to sell, all of the outstanding equity interests in Lesaka Utilities Proprietary Limited, previously knownas Recharger Proprietary Limited (“Utilities”). The transaction closed on March 3, 2025. At the same time, Utilities also entered into independent contractor agreement with Utilities’ former chief executive officerwhich had a term of12 months and required him, among other things, to support operational activities of the Utilities business, inconsultation with Company representatives, facilitate the handover process and assist Utilities in transitioning ownership to LesakaSA, avail himself for important customer and vendor meetings, attend scheduled weekly management committee meetings regardingoperational and business activities of the Utilities business, and providing support on an ad-hoc basis to Company representatives withregard to operational matters and in facilitating the hand over, as and when reasonably required. This acquisition has been reported as part of the Company’s Enterprise operating segment and demonstrates positive advancementof the Company’s strategy in its Enterprise operating segment. The Company expects the acquisition to act as an entry point for it intothe South African private utilities space while augmenting Enterprise’s alternative payment offering. The transaction consideration per the Utilities Purchase Agreement was ZAR503.4 million ($27.0 million) and comprised ZAR328.4 million ($17.6 million) in cash and ZAR175.0 million ($9.4 million) in shares of the Company’s common stock, to be settledin two tranches. The share price applied to determine the number of shares of common stock to be issued for the equity considerationis based on the volume-weighted average price of the Company’s common shares for the three-month period prior to the disbursal ofeach tranche. Lesaka SA extended a ZAR43.1 million ($2.3 million) loan to Utilities at closing which was exclusively used to repayan existing loan due by Utilities to the Seller. The first tranche, comprising ZAR153.4 million ($8.2 million) in cash and1,092,361 shares of the Company’s common stockwith a value of ZAR98.3 million ($5.3 million), was settled at closing. The value of the shares of common stock was calculated usingthe shares issued multiplied by the Company’s closing price on the Johannesburg Stock Exchange on March 3, 2025, of ZAR90.00,and translated to U.S. dollars at the exchange rate of $1: ZAR18.63. Lesaka SA delivered1,092,361 shares of the Company’s commonstock from a pool of shares it purchased in October 2024, and the Company recognized a gain in additional paid-in-capital during theyear ended June 30, 2025, of $0.4 million related to the difference between in the value on March 3, 2025, and the price paid per sharein October 2024.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-30 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) March 2025 acquisition of Utilities (continued) The second and final tranche was settled on March 3, 2026, and comprised a contractual cash payment of ZAR175.0 million($10.4 million) and the delivery of shares of Lesaka’s common stock with a contractual value of ZAR75.0 million ($4.6 million). Thenumber of shares to be delivered was calculated as1,017,914 shares of Lesaka’s common stock using the contractual value of ZAR75.0 million divided by the volume-weighted average price of the Company’s common shares on the Johannesburg Stock Exchangefor the three-month period prior to February 24, 2026. Lesaka SA delivered the1,017,914 shares of the Company’s common stockfrom a pool of shares it purchased in October 2024, and the Company recognized a loss in additional paid-in-capital during the yearended June 30, 2026, of $0.1 million related to the difference between in the value on March 3, 2026, and the price paid per share inOctober 2024. The total purchase consideration was ZAR294.8 million ($15.8 million) and comprised the issuance of the1,092,361 shares ofthe Company’s common stock with a value of ZAR98.3 million ($5.3 million), the settlement of the pre-existing relationshipshareholder loan of ZAR43.1 million ($2.3 million) and cash of ZAR153.4 million ($8.2) million. Pursuant to the Utilities Purchase Agreement, payment of the second tranche in March 2026 was contingent on Utilities’ formerchief executive officer’s ongoing service under the independent contractor agreement until June 30, 2025. The second tranche wouldnot have been paid if he failed to provide the requisite service, except if failure to provide future services is due to expiry of thecontract, mutual agreement or death of the former chief executive officer. The former chief executive officer was also a director of theSeller, and signed the Utilities Purchase Agreement on behalf of himself, Utilities and the Seller. He also signed an independentcontractor agreement under which he is required to provide post-combination service to Utilities until March 2026 (but the vesting ofthe shares is only for services to June 30, 2025). The Company has determined that as the payment of the second tranche is contingenton these post-combination services, the value of the second tranche is not treated as purchase consideration and rather, under GAAP,represents compensation for post-combination services. In late May 2025, an addendum was signed to reduce the post-combinationperiod from twelve months to four months (i.e. from March 2025 to June 2025). The post-combination services for the year ended June 30, 2025, of $13.6 million was calculated as the sum of the future cashpayment and the value of future shares to be provided. The value of the future shares to be provided was calculated using the contractualvalue of ZAR75.0 million divided by the volume-weighted average price of the Company’s common shares for the three-month periodprior to June 30, 2025, and at the applicable exchange rate. The post-combination compensation charge is included in the captiontransaction costs related to Adumo, Utilities and Bank Zero acquisitions and certain compensation costs included on the consolidatedstatement of operations. The Company records stock-based compensation charges that are cash-settled awards in other payables. The liability for thefuture payments was included in the caption Other payables in the consolidated balance sheet as of June 30, 2025, refer to Note 13.There was no unrecognized compensation costs related to the post-combination compensation charge as of June 30, 2025. TheCompany recorded a fair value loss of $0.4 million during the year ended June 30, 2026, related to the settlement of the1,017,914shares of Lesaka’s common stock under the caption change in fair value of equity securities in the consolidated statement of operations.The fair value loss was calculated as the difference between the fair value of the shares of common stock transferred on March 3,2026, and the amount recorded in other payables as of June 30, 2025.The fair value of the shares of common stock in U.S. dollars onMarch 3, 2026, was calculated using the shares issued multiplied by the Company’s closing price on the Johannesburg Stock Exchangeon March 3, 2026, of ZAR75.37, and translated to U.S. dollars at the exchange rate of $1: ZAR16.35. The Company incurred transaction-related expenditures of $0.01 million, $0.4 million and $0.03 during the years ended June 30,2026, 2025 and 2024, respectively, related to the acquisition of Utilities. Other acquisitions Effective November 1, 2024, the Company, through its wholly owned subsidiary Lesaka Merchant Technologies ProprietaryLimited, formerly known as Adumo Technologies Proprietary Limited, (“Lesaka MT”), acquired the remaining shares (representing50% of the issued and outstanding shares) it did not own in Lesaka Merchant Technologies Namibia, formerly known as InnervationValue Added Services Namibia Pty Ltd, (“Lesaka Nam”) for $0.4 million (ZAR6.0 million, translated at November 1, 2024 exchangerates). Lesaka Nam was accounted for using the equity method prior to the acquisition of a controlling interest in the company. LesakaMT paid ZAR2.0 million of the purchase price prior to the acquisition of Adumo by the Company and the balance of ZAR4.0 millionwill be paid intwo equal tranches, one in March 2025 and the other in September 2025. The Company did not incur any significanttransaction costs related to this acquisition.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-31 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) Other acquisitions (continued) The Company, through Lesaka SA, acquired100% of Lesaka Digital Risk Proprietary Limited, formerly known as Genisus RiskProprietary Limited (“Lesaka Digital Risk”), for a cash consideration of ZAR2.0 million ($0.1 million). The Company did not incurany significant transaction costs related to this acquisition. The Company, through its wholly owned subsidiary Lesaka Cash Management Proprietary Limited, formerly known as CashConnect Management Solutions Proprietary Limited, (“LCM”), acquired100% of Lesaka Fuel Software Proprietary Limited, formerlyknown as Master Fuel Proprietary Limited (“Lesaka Fuel Software”) for a cash consideration of ZAR2.0 million ($0.1 million). TheCompany did not incur any significant transaction costs related to this acquisition. The purchase price allocation for all acquisitions closed during the year ended June 30, 2025, were finalized as of June 30, 2025,except for Utilities. The Company completed the purchase price allocation related to the Utilities acquisition during the three monthsended September 30, 2025. There were no changes to the Utilities preliminary purchase price allocation as of June 30, 2025. Thepurchase price allocation of acquisitions during the year ended June 30, 2025, translated at the foreign exchange rates applicable onthe date of acquisition, is provided in the table below: Acquisitions during fiscal 2025Adumo Utilities Other TotalFinal Final FinalCash and cash equivalents $ 9,227 $ 1,720 $ 268 $ 11,215Accounts receivable 6,799 17 728 7,544Inventory 5,122 194 3 5,319Property, plant and equipment 9,170 39 28 9,237Operating lease right of use asset 1,025 401 - 1,426Equity-accounted investment 477 - - 477Goodwill 71,992 3,614 508 76,114Intangible assets 28,806 16,171 69 45,046Deferred income taxes assets 1,061 81 55 1,197Other long-term assets 2,809 - - 2,809Current portion of long-term borrowings (1,178) - - (1,178)Accounts payable (3,266) (149) (440) (3,855)Other payables (28,116) (1,439) (252) (29,807)Operating lease liability - current (948) (185) - (1,133)Income taxes payable (150) (4) (42) (196)Deferred income taxes liabilities (7,107) (4,366) (19) (11,492)Operating lease liability - long-term (326) (269) - (595)Long-term borrowings (7,308) - - (7,308)Other long-term liabilities (140) - - (140)Settlement assets 8,603 - - 8,603Settlement liabilities (8,530) - - (8,530)Fair value of assets and liabilities on acquisition $ 88,022 $ 15,825 $ 906 $ 104,753 The fair value of the non-controlling interests recorded was $7.6 million. The fair value of the non-controlling interest wasdetermined as the non-controlling interests respective portion of the equity value of the entity acquired by the Company, and whichwas adjusted for a20% minority discount. Pro forma results related to acquisitions Pro forma results of operations have not been presented for the acquisition of Lesaka Nam, Lesaka Digital Risk and Lesaka FuelSoftware because the effect of these acquisitions, individually and in aggregate, are not material to the Company. Since the closing ofthese acquisitions, the entities have contributed revenue and net income of $0.8 million and $0.1 million, respectively, for the yearended June 30, 2025.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-32 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) Pro forma results related to acquisitions (continued) The results of the Adumo and Utilities’ operations are reflected in the Company’s financial statements from October 1, 2024,and March 3, 2025, respectively. The following unaudited pro forma revenue and net income information has been prepared as if theacquisitions of Adumo and Utilities had occurred on July 1, 2023, using the applicable average foreign exchange rates for the periodspresented: Year ended June 30,2025 2024Revenue $ 673,536 $ 630,672Net loss $ (68,367) $ (37,324) The unaudited pro forma financial information presented above includes the business combination accounting and other effectsfrom the acquisitions including (1) amortization expense related to acquired intangibles and the related deferred tax; (2) the loss ofinterest income, net of taxation, as a result of funding a portion of the purchase price in cash; (3) an adjustment to exclude all applicabletransaction-related costs recognized in the Company’s consolidated statement of operations for year ended June 30, 2025, and includethe applicable transaction-related costs for the year ended June 30, 2024; an adjustment to exclude the post-combination compensationexpenses related to the Utilities acquisition recognized in the Company’s consolidated statement of operations for year ended June 30,2025, and include the expense during the year ended June 30, 2024. The unaudited pro forma net income presented above does notinclude any cost savings or other synergies that may result from the acquisition. The unaudited pro forma information as presented above is for information purposes only and is not indicative of the results ofoperations that would have been achieved if the acquisition had occurred on these dates. Since the closing of the acquisitions, Adumo and Utilities have contributed aggregate revenue of $48.6 million and net lossattributable to the Company, including intangible assets amortization related to assets acquired, net of deferred taxes, and the post-combination compensation charge, of $16.4 million. 2024 Acquisitions April 2024 acquisition of Insights In April 2024 the Company closed the acquisition of Lesaka Insights Proprietary Limited, formerly known as TouchsidesProprietary Limited, (“Insights”). Insight s has been allocated to our Merchant operating segment. The final purchase price allocationof the Insights acquisition, translated at the foreign exchange rates applicable on the date of acquisition, is provided in the table below: InsightsCash and cash equivalents $ 665Accounts receivable 788Property, plant and equipment 1,106Operating lease right of use asset 112Intangible assets 33Accounts payable (53)Other payables (279)Operating lease liability – current (63)Deferred income taxes liabilities (9)Operating lease liability - long-term (52)Fair value of assets and liabilities on acquisition $ 2,248Pro forma results of operations have not been presented because the effect of the Insights acquisition is not material to theCompany. During the year ended June 30, 2024, the Company incurred acquisition-related expenditure of $0.1 million related to thisacquisition. Since the closing of the Insights acquisition, it contributed revenue and net loss of $0.9 million and $0.2 million,respectively, for the year ended June 30, 2024.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-33 3. ACQUISITIONS AND DISPOSITIONS (continued) Transaction costs and certain compensation costs The Company didnot incur any transaction costs related to the Bank Zero acquisitions during the year ended June 30, 2024. Thetable below presents transaction costs incurred related to the acquisition of Adumo and Utilities, and the proposed acquisition of BankZero, as well as certain post-combination compensation costs expensed during the years ended June 30, 2026, 2025 and 2024: Year ended June 30,2026 2025 2024Bank Zero transaction costs $ 374 $ 599 $ -Utilities transaction costs 12 410 32Adumo transaction costs 3 1,564 2,293Total transaction costs 389 2,573 2,325Utilities post-combination services expensed - 13,586 -Total $ 389 $ 16,159 $ 2,325 Dispositions 2026 Dispositions December 2025 disposal of Humble On December 1, 2025, Adumo (RF) Proprietary Limited, a wholly -owned subsidiary of the Company, disposed of its entireinvestment in Humble Software Proprietary Limited (“Humble”) and received306,767 shares of the Company’s common stock asconsideration. The fair value of these306,767 shares of the Company’s common stock on December 1, 2025, was $1.2 million. Theseshares have been included in the Company’s treasury shares. The table below presents the impact of the deconsolidation of Humbleand the calculation of the net loss recognized on deconsolidation: Deconsolidation of Humble HumbleFair value of consideration received $ 1,211Add carrying value of non-controlling interest on deconsolidation 47Less: carrying value of Humble, comprising 1,988Cash and cash equivalents 162Accounts receivable, net 26Inventory 10Property, plant and equipment, net 1Goodwill 1,515Intangible assets, net 63Deferred income taxes assets 300Accounts payable (4)Other payables (58)Income taxes payable (1)Released from accumulated other comprehensive income – foreign currency translation reserve (26)Loss recognized on disposal, before transaction costs (730)Loss recognized on disposal, before tax (730)Taxes related to gain recognized on disposal -Tax benefit related to loss recognized on disposal(1) -Release of valuation allowance(1) -Loss recognized on disposal, after tax $ (730) (1)The Company incurred a capital loss of $0.04 million. The Company recorded a valuation allowance of $0.04 million relatedto the capital loss generated.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-34 4. ACCOUNTS RECEIVABLE, net AND OTHER RECEIVABLES and FINANCE LOANS RECEIVABLE, net Accounts receivable, net and other receivables The Company’s accounts receivable, net, and other receivables as of June 30, 2026, and June 30, 2025, are presented in thetable below: June 30, June 30,2026 2025 Accounts receivable, trade, net $ 19,329 $ 16,433Accounts receivable, trade, gross 22,536 18,186Allowance for credit losses, end of period 3,207 1,753Beginning of period 1,753 1,241Reversed to statement of operations (388) (521)Charged to statement of operations 2,109 1,856Write-offs (526) (847)Deconsolidation (4) -Foreign currency adjustment 263 24 Current portion of amount outstanding related to sale of interest in Carbon, net ofallowance of: 2026: $750, 2025: $750 - -Amount due from VantagePay, net of allowance of: 2026: $0, 2025: $1,500 2,010 -Other receivables 22,426 26,092Total accounts receivable, net $ 43,765 $ 42,525 Trade receivables include amounts due from customers which generally have a very short-term life from date of invoice or serviceprovided to settlement. The duration is less than a year in all cases and generally less than 30 days in many instances. The short-termnature of these exposures often results in balances at month-end that are disproportionately small compared to the total invoicedamounts. The month-end outstanding balances are more volatile than the monthly invoice amounts because they are affected byoperational timing issues and the fact that a balance is outstanding at month-end is not necessarily an indication of increased risk butrather a matter of operational timing. Current portion of amount outstanding related to sale of interest in Carbon represents the amount due from the purchaser relatedto the sale of the Company’s interest in Carbon Tech Limited (“Carbon”), which was accounted for as an equity-accounted investment,of $0.25 million, net of an allowance for doubtful loans receivable of $0.25 million as of June 30, 2023, and an amount due related tothe sale of the loan, with a face value of $3.0 million, which was sold in September 2022 for $0.75 million, net of an allowance fordoubtful loans receivable of $0.75 million, refer to Note 9 for additional information. The Company received the outstanding $0.25million related to the sale of the equity -accounted investment in October 2023, and has reversed the allowance for doubtful loansreceivable of $0.25 million during the year ended June 30, 2024. The Company has not yet received the outstanding $0.75 millionrelated to the sale of the $3.0 million loan, and continues to engage with the purchaser to recover the outstanding balance. The Company previously provided Vantage Africa Limited (“VantagePay”) with a working capital facility of $1.5 million. TheCompany created an allowance for credit losses related to loans receivable of $1.5 million during the year ended June 30, 2021, relatedto the full amount outstanding as of June 30, 2021. This amount was still outstanding as of June 30, 2025. In May 2026, the Companyentered into a binding head of terms agreement with VantagePay which outlines the steps to recover the amount outstanding. TheCompany believes that there is sufficient evidence to support the recoverability of the amount due from VantagePay. The Companyrecorded a reversal of the allowance for credit losses of $1.5 million previously recognized during the year ended June 30, 2026. TheCompany also recognized outstanding interest of $0.5 million during the year ended June 30, 2026. Other receivables include prepayments, deposits, income taxes receivable and other receivables.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-35 4. ACCOUNTS RECEIVABLE, net AND OTHER RECEIVABLES and FINANCE LOANS RECEIVABLE, net(continued) Finance loans receivable, net The Company’s finance loans receivable, net, as of June 30, 2026, and June 30, 2025, is presented in the table below: June 30, June 30,2026 2025 Microlending finance loans receivable, net $ 80,584 $ 52,492Microlending finance loans receivable, gross 85,265 56,140Allowance for credit losses - finance loans receivable, end of period 4,681 3,648Beginning of period 3,648 1,947Reversed to statement of operations - (161)Charged to statement of operations 7,261 4,301Write-offs (6,600) (2,499)Foreign currency adjustment 372 60 Merchant finance loans receivable, net 23,226 21,618Merchant finance loans receivable, gross 28,664 23,214Allowance for credit losses - finance loans receivable, end of period 5,438 1,596Beginning of period 1,596 2,697Reversed to statement of operations (117) (22)Charged to statement of operations 3,931 2,576Write-offs (459) (3,709)Foreign currency adjustment 487 54 Total finance loans receivable, net $ 103,810 $ 74,110 Total finance loans receivable, net, comprises the Consumer operating segment’s microlending finance loans receivable relatedto the Company’s microlending operations in South Africa as well as its Merchants operating segment’s merchant finance loansreceivable lending activities in South Africa. Certain merchant finance loans receivable with an aggregate balance of $22.5 million asof June 30, 2026 have been pledged as security for the Company’s revolving credit facility (refer to Note 12). Allowance for credit losses Microlending finance loans receivable Microlending finance loans receivable is related to the Company’s microlending operations in South Africa whereby it providesunsecured short-term loans to qualifying customers. Loans to customers have a tenor of up tonine months, with the majority of loansoriginated having a tenor ofsix months. The Company analyses this lending book as a single portfolio because the loans within theportfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk of the lending book.Refer to Note 6 related to the Company risk management process related to these receivables. The Company has operated this lending book for more thanfive years and uses historical default experience over the lifetime ofloans in order to develop an expected loss rate for the lending book. The allowance for credit losses related to these microlendingfinance loans receivables is calculated by multiplying the expected loss rate with the month end outstanding lending book. Default isdefined as loans in 90 days in arrears or greater and is primarily driven by missed or disrupted customer payments, as a result of non-receipt of social grant income and broader affordability pressures. Loss outcomes are further influenced by limited post-defaultrecoveries. The Company continues to undertake recovery activity for up to six months post write-off; however, recoveries during thisperiod are minimal. After six months, collection activity ceases and recoveries are considered negligible.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-36 4. ACCOUNTS RECEIVABLE, net AND OTHER RECEIVABLES and FINANCE LOANS RECEIVABLE, net(continued) Finance loans receivable, net (continued) In June 30, 2026, the Company reassessed the expected loss rate related to its microlending allowance for credit losses. Theassessment considered the performance of the lending portfolio, historical loss experience, portfolio migration trends, sensitivityanalyses relating to larger loan amounts and longer loan terms. Based on this review, the Company’s concluded that expected lossrates should be reduced from6.5% to5.5%. The review indicated that, despite the introduction of larger loan amounts and longerrepayment terms, the portfolio continued to perform broadly in line with expectations and the model-derived expected credit lossrequirement remained below the historical expected loss ratio, including during periods of elevated delinquency and operationaldisruptions. The reduction in the expected loss ratio resulted in a decrease in the allowance for credit losses of $0.9 million (ZAR14.0million, translated at exchange rates applicable as of June 30, 2026) which is included in the caption selling, general and administrationto the consolidated statement of operations for the year ended June 30, 2026. The underlying model methodology, including the useof historical lifetime loss experience as the foundation of the expected credit loss estimate, remained unchanged. The expected loss rate as of June 30, 2026 and 2025, was5.50% and6.50%, respectively. The performing component (that is,outstanding loan payments not in arrears) of the book exceeds more than99.0% and98.0% of outstanding lending book as of June 30,2026 and 2025, respectively. Merchant finance loans receivable Merchant finance loans receivable is related to the Company’s Merchant lending activities in South Africa whereby it providesunsecured short-term loans to qualifying customers. Loans to customers have a tenor of up totwelve months, with the majority ofloans originated having a tenor of approximatelyeight months. The Company analyses this lending book as a single portfolio becausethe loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit riskof the lending book. Refer to Note 6 related to the Company risk management process related to these receivables. The Company uses historical default experience over the lifetime of loans generated thus far in order to develop an expected lossrate for the lending book. A loan is classified as being in default where a client has missed seven or more instalments, at which pointa full allowance for outstanding capital and accrued interest is raised as a top-up to the general provision level. Upon default, theCompany commences recovery procedures including the use of external debt collectors, asset attachment through the Sheriff of theHigh Court, and judgements against clients in both their personal and entity capacities. An account is only written off once all recoveryprocedures have failed and management confirms no further recovery is possible. The allowance for credit losses related to these merchant finance loans receivables is calculated by adding together (i) actualreceivables in default plus (ii) the month-end outstanding lending book multiplied by the expected loss rate. The expected loss rate asof June 30, 2026 and 2025, was approximately3.21% and1.14%, respectively. The performing component (that is, outstanding loanpayments not in arrears), under-performing component (that is, outstanding loan payments that are in arrears) and non-performingcomponent (that is, outstanding loans for which payments appeared to have ceased) of the book represents approximately92%,7%and1%, respectively, of the outstanding lending book as of June 30, 2026.The performing component, under-performing component and non-performing component of the book represents approximately95%,4% and1%, respectively, of the outstanding lending bookas of June 30, 2025. 5. INVENTORY The Company’s inventory comprised the following categories as of June 30, 2026, and 2025. June 30, June 30,2026 2025 Raw materials $ 2,378 $ 2,963Work in progress 204 293Finished goods 17,531 20,295$ 20,113 $ 23,551
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-37 6. FAIR VALUE OF FINANCIAL INSTRUMENTS Fair value of financial instruments Initial recognition and measurement Financial instruments are recognized when the Company becomes a party to the transaction. Initial measurements are at cost,which includes transaction costs. Risk management The Company manages its exposure to currency exchange, translation, interest rate, credit, microlending credit and equity priceand liquidity risks as discussed below. Currency exchange risk The Company is subject to currency exchange risk because it purchases components for its vaults, that the Company assembles,and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar. The Company has usedforward contracts in order to limit its exposure in these transactions to fluctuations in exchange rates between the South African rand(“ZAR”), on the one hand, and the U.S. dollar and the euro, on the other hand. Translation risk Translation risk relates to the risk that the Company’s results of operations will vary significantly as the U.S. dollar is its reportingcurrency, but it earns a significant amount of its revenues and incurs a significant amount of its expenses in ZAR. The U.S. dollar tothe ZAR exchange rate has fluctuated significantly over the past three years. As exchange rates are outside the Company’s control,there can be no assurance that future fluctuations will not adversely affect the Company’s results of operations and financial condition. Interest rate risk As a result of its normal borrowing activities, the Company’s operating results are exposed to fluctuations in interest rates, whichit manages primarily through its financing activities. In May 2026, the SARB increased the repurchase rate by 25 basis points to 7.00%against a backdrop of heightened inflation risks, including higher oil and fuel prices associated with the ongoing conflict in the MiddleEast. The SARB subsequently maintained the repurchase rate at 7.00% in July 2026. Inflation risks nevertheless remain elevated andfurther increases in interest rates remain possible should inflationary pressures persist or intensify. Accordingly, assuming no changes in the margins applicable to the Company’s borrowings (refer to Note 12) or the amount ofborrowings outstanding, an increase in benchmark interest rates would result in a corresponding increase in the Company’s cost ofborrowing. The Company periodically evaluates the cost and effectiveness of interest rate hedging strategies to manage this risk. TheCompany generally maintains surplus cash in cash equivalents and held-to-maturity investments and has occasionally invested inmarketable securities. Credit risk Credit risk relates to the risk of loss that the Company would incur as a result of non-performance by counterparties. TheCompany maintains credit risk policies in respect of its counterparties to minimize overall credit risk. These policies include anevaluation of a potential counterparty’s financial condition, credit rating, and other credit criteria and risk mitigation tools as theCompany’s management deems appropriate. With respect to credit risk on certain financial instruments, the Company maintains apolicy of entering into such transactions only with South African and European financial institutions that have a credit rating of “B”(or its equivalent) or better, as determined by credit rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings. Consumer microlending credit risk The Company is exposed to credit risk in its Consumer microlending activities, which provides unsecured short-term loans toqualifying customers. Credit bureau checks as well as an affordability test are conducted as part of the origination process, both ofwhich are in line with local regulations. The Company considers this policy to be appropriate because the affordability test it performstakes into account a variety of factors such as other debts and total expenditures on normal household and lifestyle expenses. Additionalallowances may be required should the ability of its customers to make payments when due deteriorate in the future. Judgment isrequired to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthinessof each customer.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-38 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Risk management (continued) Merchant lending The Company maintains an allowance for doubtful finance loans receivable related to its Merchant services segment with respectto short-term loans to qualifying merchant customers. The Company’s risk management procedures include adhering to its proprietarylending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and creditbureau checks. The Company considers these procedures to be appropriate because it takes into account a variety of factors such asthe customer’s credit capacity and customer-specific risk factors when originating a loan. Equity price and liquidity risk Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded priceof equity securities that it holds from time to time. The market price of these securities may fluctuate for a variety of reasons and,consequently, the amount that the Company may obtain in a subsequent sale of these securities may significantly differ from thereported market value. Equity liquidity risk relates to the risk of loss that the Company would incur as a result of the lack of liquidity on the exchangeon which those securities are listed. The Company may not be able to sell some or all of these securities at one time, or over anextended period of time without influencing the exchange-traded price, or at all. Financial instruments Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderlytransaction between market participants at the measurement date and in the principal or most advantageous market for that asset orliability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability,not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance riskincluding the Company’s own credit risk. Fair value measurements and inputs are categorized into a fair value hierarchy which prioritizes the inputs into three levels basedon the extent to which inputs used in measuring fair value are observable in the market. Each fair value measurement is reported inone of the three levels which is determined by the lowest level input that is significant to the fair value measurement in its entirety. These levels are: ●Level 1 – inputs are based upon unadjusted quoted prices for identical instruments traded in active markets. ●Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similarinstruments in markets that are not active, and model-based valuation techniques for which all significant assumptions areobservable in the market or can be corroborated by observable market data for substantially the full term of the assets orliabilities. ●Level 3 – inputs are generally unobservable and typically reflect management’s estimates of assumptions that marketparticipants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniquesthat include option pricing models, discounted cash flow models, and similar techniques. The following section describes the valuation methodologies the Company uses to measure its significant financial assets andliabilities at fair value.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-39 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Financial instruments (continued) Asset measured at fair value using significant observable inputs – investment in MobiKwik The Company’s disposed of its entire holding, comprising6,215,620 equity shares, in MobiKwik in late June 2025. MobiKwiklisted on the National Stock Exchange of India (“NSE”) on December 18, 2024. Up until its listing MobiKwik did not have a readilydeterminable fair value and the Company elected to measure its investment in MobiKwik at cost minus impairment, if any, plus orminus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the sameissuer (“cost plus or minus changes in observable prices equity securities”). From the date of MobiKwik’s listing, the Company usedMobiKwik’s closing price reported on the NSE on the last trading day related to last day of each of the Company’s external reportingperiods through March 31, 2025 to determine the fair value of the equity securities owned by the Company. Refer to Note 9 foradditional information. Asset measured at fair value using significant unobservable inputs – investment in Cell C The Company held75,000,000 class “A” shares in Cell C Limited (“Cell C”), a significant mobile telecoms provider in SouthAfrica. In November 2025, Cell C completed a restructuring process in anticipation of its listing on the securities exchange operatedby the JSE Limited. Under this process, a new holding company, Cell C Holdings Limited (“Cell C Listco”), was established for CellC, with a transaction step including the transfer of shares in Cell C by its existing shareholders to Cell C Listco in exchange for CellC Listco issuing shares to the existing Cell C shareholders (the “Flip-up”). The Company exchanged its75,000,000 class “A” sharesin Cell C for76,590 shares in Cell C Listco. Cell C Listco listed on November 23, 2025. On October 31, 2025, in considering the proposed restructure and listing of Cell C Listco, Lesaka SA entered into an agreementwith The Prepaid Company Proprietary Limited (“TPC”) to dispose of its shares in Cell C (or, after the Flip-up is implemented, itsshares in Cell C Listco) (“Relevant Shares”), if certain conditions were met. Under the terms of the agreement, if:● the listing occurred by November 30, 2025, and the value of Lesaka SA’s shares in Cell C was less than ZAR50 million,then Lesaka SA could choose to either hold the shares, or sell the Relevant Shares to TPC for a purchase price equal to ZAR50 million; or● the listing did not occur by November 30, 2025 (or, earlier than this date, it is determined that the listing will not proceed),then Lesaka SA could sell the Relevant Shares to TPC for ZAR35 million. If, after this sale and before April 30, 2026, theListing occurs and the list price per share (“A”) is more than the price paid to Lesaka SA per Relevant Share (the aggregateZAR35 million) (“B”), then TPC shall pay an amount equal to the difference between A and B, multiplied by the number ofRelevant Shares to Lesaka SA as a top-up to the purchase consideration. The value of Lesaka SA’s shares in Cell C Listco was less than ZAR50 million on listing and Lesaka SA elected to sell its CellC Listco shares to TPC for ZAR50 million ($3.0 million) and received the cash proceeds in December 2025. The Company’s Level 3 asset represented an investment of75,000,000 class “A” shares in Cell C. The Company used adiscounted cash flow model developed by the Company to determine the fair value of its investment in Cell C as of June 30, 2025,and valued Cell C at $0.0 (zero) as of June 30, 2025. The Company assumed that Cell C’s deferred tax assets would be utilized overthe forecast period. The Company has assumed a marketability discount of15% as of June 2025 and a minority discount of17%. TheCompany utilized the latest business plan provided by Cell C management for the period ended May 31, 2030, for the June 30, 2025,valuation. The following key valuation inputs were used as of June 30, 2025: Weighted Average Cost of Capital ("WACC"): 24%Long-term growth rate: 4.5%Marketability discount: 15%Minority discount: 17%Net adjusted external debt - June 30, 2025:(1) ZAR8.3 billion ($0.5 billion), no lease liabilities included (1) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2025.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-40 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Financial instruments (continued) Derivative transactions - Foreign exchange contracts As part of the Company’s risk management strategy, the Company enters into derivative transactions to mitigate exposures toforeign currencies using foreign exchange contracts. These foreign exchange contracts are over-the-counter derivativetransactions. Substantially all of the Company’s derivative exposures are with counterparties that have long-term credit ratings of “B”(or equivalent) or better. The Company uses quoted prices in active markets for similar assets and liabilities to determine fair value(Level 2). The Company has no derivatives that require fair value measurement under Level 1, Level 2 or Level 3 of the fair valuehierarchy. The Company hadno outstanding foreign exchange contracts as of June 30, 2026 and June 30, 2025, respectively. The following table presents the Company’s assets measured at fair value on a recurring basis as of June 30, 2026, according tothe fair value hierarchy: Quoted Price inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservableInputs(Level 3) TotalAssetsRelated to insurance business: $ $ $ $ Mutual fund (included in cash,cash equivalents and restrictedcash) - 3,688 - 3,688Cash, cash equivalents andrestricted cash (included in otherlong-term assets) 141 - - 141Mutual fund (included in otherlong-term assets) - 4,598 - 4,598Total assets at fair value $ 141 $ 8,286 $ - $ 8,427 The following table presents the Company’s assets measured at fair value on a recurring basis as of June 30, 2025, according tothe fair value hierarchy: Quoted Price inActive Markets forIdentical Assets(Level 1) Significant OtherObservable Inputs(Level 2) SignificantUnobservableInputs(Level 3) TotalAssetsInvestment in Cell C $ - $ - $ - $ -Related to insurance businessCash and cash equivalents(included in other long-termassets) 125 - - 125Fixed maturity investments(included in cash and cashequivalents) 4,739 - - 4,739Total assets at fair value $ 4,864 $ - $ - $ 4,864
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-41 6. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued) Financial instruments (continued) During the year ended June 30, 2026, the Company transferred its investment in Cell C Listco out of Level 3 following thedisposal of these equity securities. During the year ended June 30, 2026, the Company recorded an increase in the carrying value ofits investment in Cell C Listco prior to the disposal of these equity securities. There have beenno transfers in or out of Level 3 duringthe year ended June 30, 2025. There wasno movement in the carrying value of assets measured at fair value on a recurring basis, andcategorized within Level 3, during the year ended June 30, 2025. Summarized below is the movement in the carrying value of assets measured at fair value on a recurring basis, and categorizedwithin Level 3, during the year ended June 30, 2026: Carrying valueAssetsBalance as of June 30, 2025 $ -Gain on fair value re-measurement 2,971Disposal of investment in Cell C (2,971)Foreign currency adjustment(1) -Balance as of June 30, 2026 $ -(1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollaron the carrying value. Summarized below is the movement in the carrying value of assets and liabilities measured at fair value on a recurring basis, andcategorized within Level 3, during the year ended June 30, 2025: Carrying valueAssetsBalance as at June 30, 2024 $ -Foreign currency adjustment(1) -Balance as of June 30, 2025 $ -(1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollaron the carrying value. Trade, finance loans and other receivables Trade, finance loans and other receivables originated by the Company are stated at cost less allowance for credit losses. The fairvalue of trade, finance loans and other receivables approximates their carrying value due to their short-term nature. Trade and other payables The fair values of trade and other payables approximates their carrying amounts, due to their short-term nature. Assets and liabilities measured at fair value on a nonrecurring basis The Company measures equity investments without readily determinable fair values at fair value on a nonrecurring basis. Thefair values of these investments are determined based on valuation techniques using the best information available, and may includequoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost ofthe asset exceeds its fair value and the excess is determined to be other-than-temporary. Refer to Note 9 for impairment chargesrecorded during the reporting periods presented herein. The Company hasno liabilities that are measured at fair value on a nonrecurringbasis. Long-term borrowings The fair value of long-term borrowings approximates its carrying amounts because they represent the carrying amounts ofvariable-rate borrowings that are reset quarterly.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-42 7. PROPERTY, PLANT AND EQUIPMENT, net Summarized below is the cost, accumulated depreciation and carrying amount of property, plant and equipment as of June 30,2026 and 2025: June 30, June 30,2026 2025CostVaults $ 41,427 $ 33,276Computer equipment(A) 60,214 52,047Furniture and office equipment 11,141 9,723Motor vehicles 7,053 4,873Plant and machinery 143 91119,978 100,010 Accumulated depreciation:Vaults 17,806 11,911Computer equipment(A) 39,935 34,158Furniture and office equipment 8,130 7,225Motor vehicles 3,815 1,747Plant and machinery 80 4569,766 55,086 Carrying amount:Vaults 23,621 21,365Computer equipment 20,279 17,889Furniture and office equipment 3,011 2,498Motor vehicles 3,238 3,126Plant and machinery 63 46$ 50,212 $ 44,924 (A) Cost and accumulated depreciation for computer equipment and totals for cost and accumulated depreciation as of June 30,2025, have each been increased by $6.5 million to correct the error discussion in Note 1. 8. LEASES The Company has entered into leasing arrangements classified as operating leases under accounting guidance. These leasingarrangements relate primarily to the lease of its corporate head office, administration offices, a manufacturing facility, and branchlocations through which the Company operates its financial services business in South Africa. The Company’s operating leases havea remaining lease term of betweenone year toten years. The Company also operates parts of its financial services business fromlocations which it leases for a period of less thanone year. The Company’s operating lease expense during the years ended June 30, 2026, 2025 and 2024, was $5.9 million, $4.8 million,and $3.2 million, respectively. The Company does not have any significant leases that have not commenced as of June 30, 2026, exceptfor a new regional office in Cape Town , Western Cape, South Africa (refer below). The Company has entered into short-term leasing arrangements, primarily for the lease of branch locations and other locationsto operate its financial services business in South Africa. The Company’s short-term lease expense during the years ended June 30,2026, 2025 and 2024, was $1.9 million, $4.7 million and $3.6 million, respectively. New corporate head office and other leases obtained In December 2025, the Company, through Lesaka SA, entered into a leasing arrangement for a new corporate head office inDunkeld, Gauteng, South Africa with Oxford Parks Proprietary Limited, a limited liability private company incorporated in SouthAfrica. The lease commenced on July 1, 2026 and is for a period of10 years withtwo renewal options offive years each. The Companysecured beneficial occupation from April 1, 2026, and recorded a ROU asset and an operating lease liability related to this lease inApril 2026 upon taking beneficial occupation. The Company was required to provide a bank guarantee or cash totaling $0.5 million(ZAR7.5 million, translated at exchange rates applicable as of June 30, 2026) to the lessor and on May 29, 2026, it procured anddelivered a bank guarantee to the lessor. The Company expects to pay an annual basic lease expense of $1.5 million (ZAR25.1 million,translated at exchange rates applicable as of June 30, 2026), which increases by6.25% per annum.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-43 8. LEASES (continued) New corporate head office and other leases obtained (continued) In April 2026, the Company, through Lesaka SA, entered into a binding offer to lease for a new regional office in Cape Town,Western Cape, South Africa with Growthpoint Securitisation Warehouse Trust, a trust incorporated in South Africa. The leasecommences on October 1, 2026 and is for a period of10 years. The Company secured beneficial occupation from August 1, 2026, andrecorded a ROU asset and an operating lease liability related to this lease in August 2026 upon taking beneficial occupation. TheCompany expects to pay an annual basic lease expense of $0.7 million (ZAR11.3 million, translated at exchange rates applicable asof June 30, 2026), which increases by7.50% per annum. Impairment of previous corporate head office lease and other leases In March 2026, the Company determined that its existing operating lease arrangements for its corporate head office and certainrelated leased facilities will no longer be utilized as originally intended as a result of the new lease arrangement and the plannedtransition of its corporate head office and other operating activities to the new premises. In June 2026, the Company determined thatother existing operating lease arrangements, primarily in Cape Town, for leased facilities will no longer be utilized as originallyintended as a result of the new lease arrangement concluded in April 2026. Accordingly, the Company identified indicators ofimpairment for these related ROU assets and certain items of property, plant and equipment during the year ended June 30, 2026. The Company evaluated the impacted ROU assets for impairment in March 2026 and again in June 2026. The asset groupsconsisted of operating lease ROU assets and related leasehold improvements associated with the affected locations as well as certainitems of property, plant and equipment, including furniture and office equipment. The recoverability tests indicated that the carryingamounts of these asset groups were not recoverable, as the undiscounted future cash flows were insufficient to recover their carryingvalues. The Company initially measured these operating lease ROU assets and related leasehold improvements at fair value on anon-recurring basis during the nine months ended March 31, 2026, as a result of impairment. In June 2026, the Company reassessedthe initial measurement of the fair value exercises performed in March 2026, and remeasured the fair value of these operating leaseROU assets and related leasehold improvements at fair value using updated information as of June 30, 2026. The Company updatedits inputs for the remaining lease terms, expected sublease income and market rental rates with current information available as ofJune 30, 2026. The Company also measured other operating lease ROU assets and related leasehold improvements at fair value on anon-recurring basis during the three months ended June 30, 2026, as a result of impairment. These fair value measurements areclassified within Level 3 of the fair value hierarchy. Fair value was estimated using a discounted cash flow methodology, whichincorporates significant unobservable inputs, including assumptions related to remaining lease terms, expected sublease income andmarket rental rates.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-44 8. LEASES (continued) As a result, the Company recorded an impairment charge of $2.6 million during the year ended June 30, 2026, representing theexcess of the carrying amount of the affected ROU assets and related leasehold improvements over their estimated fair value. Theimpairment charge is included in the caption impairment loss (refer to Note 10) in the consolidated statement of operations for theyear ended June 30, 2026. The impairment did not impact the related operating lease liabilities. The following table presents supplemental balance sheet disclosure related to our right-of-use assets and our operating leasesliabilities as of June 30, 2026 and 2025: June 30, June 30,2026 2025Right-of-use assets obtained in exchange for lease obligationsWeighted average remaining lease term (years) 6.59 2.84Weighted average discount rate 10.1% 9.8% Maturities of operating lease liabilities2027 $ 6,9462028 5,4132029 3,6932030 3,2522031 2,760Thereafter 12,396Total undiscounted operating lease liabilities 34,460Less imputed interest 10,714Total operating lease liabilities, included in 23,746Operating lease liability - current 4,408Operating lease liability - long-term $ 19,338 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS Equity-accounted investments The Company’s ownership percentage in its equity-accounted investments as of June 30, 2026 and 2025, was as follows: June 30, June 30,2026 2025Sandulela Technology Proprietary Limited ("Sandulela") 49 % 49 %SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”) 50 % 50 % SmartSwitch Namibia The Company recorded a loss on impairment of equity-accounted investment of $0.6 million during the nine months ended March31, 2026, which primarily includes the release of accumulated other comprehensive loss (refer to Note 15). Finbond In December 2023, the Company sold its entire remaining equity interest in Finbond which comprised of220,523,358 shares,and which represented approximately27.8% of Finbond’s issued and outstanding ordinary shares immediately prior to the sale. LesakaSA had pledged, among other things, its entire equity interest in Finbond as security for its previous South African facilities. Sale of Finbond shares during the year ended June 30, 2024 On August 10, 2023, the Company, through its wholly owned subsidiary Net1 Finance Holdings (Pty) Ltd, entered into anagreement with Finbond to sell its remaining shareholding to Finbond for a cash consideration of ZAR64.2 million ($3.5 million), orZAR0.2911 per share. The transaction closed in December 2023. The Company didnot record a gain or loss on the disposal becausethe sale proceeds were equivalent to the net carrying value, including accumulated reserves, of the investment in Finbond as of thedisposal date. The cash proceeds received of ZAR64.2 million ($3.5 million) were used to repay capitalized interest under ourborrowing facilities, refer to Note 12.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-45 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Equity-accounted investments (continued) Finbond (continued) Sale of Finbond shares during the year ended June 30, 2024 (continued) The following table presents the calculation of the loss on disposal of Finbond shares during the year ended June 30, 2024:Year endedJune 30,2024Loss on disposal of Finbond shares:Consideration received in cash $ 3,508Less: carrying value of Finbond shares sold (2,112)Less: release of foreign currency translation reserve from accumulated other comprehensive loss (1,543)Add: release of stock-based compensation charge related to equity-accounted investment 147Loss on sale of Finbond shares $ - Finbond impairments recorded during the year ended June 30, 2024 The Company performed an impairment assessment of its holding in Finbond, including the foreign currency translation reserveand other equity account amounts, as of September 30, 2023. The Company recorded an impairment loss of $1.2 million during thequarter ended September 30, 2023, which represented the difference between the determined fair value of the Company’s interest inFinbond and the Company’s carrying value, including the foreign currency translation reserve (before the impairment). The Companyused the price of ZAR0.2911 referenced in the August 2023 agreement referred to above to calculate the determined fair value forFinbond. Carbon In September 2022, the Company entered into a binding term sheet to sell its entire interest, or25%, in Carbon for $0.5 millionand a loan due from Carbon, with a face value of $3 million, for $0.75 million. Both the equity interest and the loan had a carryingvalue of $0 (zero) at June 30, 2022. The Company received $0.25 million on closing and the outstanding balance due by Etobicokewas expected to be paid as follows: (i) $0.25 million on September 30, 2023 (the amount was received in October 2023), and (ii) theremaining amount, of $0.75 million in March 2024 (the amount has not been received as of June 30, 2026 (refer to Note 4)). TheCompany has allocated the $0.25 million received on closing to the sale of the equity interest and allocated the subsequent fundsreceived first to the sale of the equity interest and then to the loans. The Company believed that the fair value of the Carbon shares provided as security was $0 (zero), which was in line with thecarrying value as of June 30, 2022, and created an allowance for doubtful loans receivable related to the $1.0 million previously duefrom Etobicoke. The Company did not incur any significant transaction costs. The Company has included the gain of $0.25 millionrelated to the sale of the Carbon equity interest in the caption net gain on disposal of equity-accounted investments in the Company’sconsolidated statements of operations.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-46 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Equity-accounted investments (continued) Summarized below is the movement in equity-accounted investments during the years ended June 30, 2026 and 2025, whichincludes the investment in equity and the investment in loans provided to equity-accounted investees: Other(1) TotalInvestment in equityBalance as of June 30, 2024 $ 206 $ 206Comprehensive income: 114 114Other comprehensive income - -Equity accounted earnings 114 114Share of net income 114 114Dividends received (96) (96)Sale of shares in equity-accounted investment (507) (507)Equity-accounted investment acquired in business combination (Note 3) 477 477Foreign currency adjustment(2) 5 5Balance as of June 30, 2025 199 199Comprehensive income: 215 215Other comprehensive income - -Equity accounted earnings 215 215Share of net income 215 215Dividends received (105) (105)Impairment (34) (34)Foreign currency adjustment(2) 20 20Balance as of June 30, 2026 $ 295 $ 295 (1) Includes Sandulela and SmartSwitch Namibia;(2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR and Namibian dollar, against the U.S.dollar on the carrying value. Other long-term assets Summarized below is the breakdown of other long-term assets as of June 30, 2026, and June 30, 2025: June 30, June 30,2026 2025 Total equity investments $ 450 $ -Investment in10% of Cowdi at fair value and loan(1) 450 -Investment in Cell C (June 30, 2025:5%) at fair value (Note 6)(2) - -Investment in87.50% of CPS (June 30, 2025:87.50%) at fair value(1)(3) - -Insurance investments 4,598 -Policy holder assets under investment contracts (Note 11) 141 125Reinsurance assets under insurance contracts (Note 11) 2,416 1,837Other long-term assets 2,092 1,847Total other long-term assets $ 9,697 $ 3,809 (1) The Company determined that Cowdi and CPS do not have readily determinable fair values and therefore elected to recordits investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactionsfor the identical or a similar investment of the same issuer.(2) The Company disposed of its entire shareholding in Cell C in December 2025, refer to Note 6 for additional information.(3) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that Cash Paymaster Services (Pty)Ltd (“CPS”) be placed into liquidation.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-47 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Other long-term assets (continued) Cowdi During the year ended June 30, 2026, the Company invested $0.3 million to acquire a10% interest in Cowdi Limited (“Cowdi”),an entity incorporated in England and Wales, with operations through a Kenyan wholly-owned subsidiary offering digital loans tocustomers in that country. The Company also extended a $0.75 million credit facility to Cowdi and they withdraw $0.2 million duringthe year ended June 30, 2026. Cowdi had utilized $0.2 million of the facility as of June 30, 2026, and this amount was repaid in fullin July 2026. MobiKwik The Company signed a subscription agreement with MobiKwik, which is one of India’s largest independent mobile paymentsnetworks and buy now pay later businesses. Pursuant to the subscription agreement, the Company agreed to make an equity investmentof up to $40.0 million in MobiKwik over a24-month period. The Company made an initial $15.0 million investment in August 2016and a further $10.6 million investment in June 2017, under this subscription agreement. During the year ended June 30, 2019, theCompany paid $1.1 million to subscribe for additional shares in MobiKwik. The Company owned6,215,620 equity shares inMobiKwik, which as of June 30, 2024, represented approximately10% of MobiKwik’s issued share capital. Refer to 6 for additional information regarding the determination of the fair value of Company’s investment in MobiKwik. TheCompany disposed of its entire equity interest in MobiKwik for $16.4 million during the year ended June 30, 2025, and recorded aloss of $59.8 million. This loss comprised of (i) fair value adjustments to decrease the carrying value of its investment by $54.2 millionfrom $76.3 million as of June 30, 2024, to $22.1 million as of March 31, 2025, and (ii) a further loss $5.6 million upon disposal in thefourth quarter of fiscal 2025. The loss is included in the caption “Change in fair value of equity securities” in the consolidated statementof operations for the year ended June 30, 2025. The Company did not identify any observable transactions during the year ended June 30, 2024, and therefore there was nochange in the fair value of MobiKwik during that year. During the year ended June 30, 2021, MobiKwik entered into a number ofseparate agreements with new shareholders to raise additional capital through the issuance of additional shares. The Company usedthe valuation from MobiKwik’s June 2021 capital raise as the basis for its fair value determination of $76.3 million as of June 30,2024. Cell C On August 2, 2017, the Company, through its subsidiary, Net1SA, purchased75,000,000 class “A” shares of Cell C for anaggregate purchase price of ZAR2.0 billion ($151.0 million) in cash. The Company funded the transaction through a combination ofcash and a borrowing facility. Net1 SA has pledged, among other things, its entire equity interest in Cell C as security for the previousSouth African facilities described in Note 12. On September 30, 2022, Cell C completed its recapitalization process which includedthe issuance of additional equity instruments by Cell C. The Company’s effective percentage holding in Cell C’s equity reduced from15% to5% following the recapitalization. The Company’s investment in Cell C was carried at fair value as of June 30, 2025. Refer toNote 6 for additional information regarding changes in the fair value of Cell C. CPS The Company deconsolidated its investment in CPS in May 2020. As of June 30, 2026 and 2025, respectively, the Companyowned87.5% of CPS’ issued share capital.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-48 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Other long-term assets (continued) Summarized below are the components of the Company’s equity securities without readily determinable fair value and held tomaturity investments as of June 30, 2026: Cost basis Unrealizedholding gains Unrealizedholding losses CarryingvalueEquity securities:Investment in Cowdi $ 250 $ - $ - $ 250Investment in CPS - - - -Total $ 250 $ - $ - $ 250 Summarized below are the components of the Company’s equity securities without readily determinable fair value and held tomaturity investments as of June 30, 2025: Cost basis Unrealizedholding gains Unrealizedholding losses CarryingvalueEquity securities:Investment in CPS $ - $ - $ - $ -Held to maturity:Investment in Cedar Cellular notes - - - - 10. GOODWILL AND INTANGIBLE ASSETS, net Goodwill Summarized below is the movement in the carrying value of goodwill for the years ended June 30, 2026, 2025 and 2024: Gross value Accumulatedimpairment Carrying valueBalance as of July 1, 2023 $ 152,619 $ (18,876) $ 133,743Foreign currency adjustment(1) 5,280 (472) 4,808Balance as of June 30, 2024 157,899 (19,348) 138,551Impairment loss - (17,041) (17,041)Acquisitions (Note 3)(2) 76,114 - 76,114Foreign currency adjustment(1) 2,096 (325) 1,771Balance as of June 30, 2025 236,109 (36,714) 199,395Impairment loss - (388) (388)Acquisition (Note 3)(3) 1,586 - 1,586Deconsolidation of Humble (Note 3) (1,515) - (1,515)Foreign currency adjustment(1) 18,770 (2,550) 16,220Balance as of June 30, 2026 $ 254,950 $ (39,652) $ 215,298 (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand against the U.S.dollar on the carrying value.(2) – Represents goodwill arising from the acquisition of Adumo, Utilities, Lesaka Nam and Lesaka Fuel Software and translatedat the foreign exchange rates applicable on the date the transactions became effective. This goodwill has been allocated to the Merchant(a portion Adumo, Lesaka Nam and Lesaka Fuel Software), Consumer (a portion of Adumo) and Enterprise (Utilities) reportableoperating segments.(3) – Represents goodwill arising from the acquisition of MobileMart and translated at the foreign exchange rates applicable onthe date the transactions became effective. This goodwill has been allocated to the Enterprise reportable operating segment. Goodwill associated with the acquisitions represents the excess of cost over the fair value of net assets acquired. Goodwill arisingfrom these acquisitions is not deductible for tax purposes. See Note 3 for the allocation of the purchase price to the fair value ofacquired net assets.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-49 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Goodwill (continued) Impairment loss The Company assesses the carrying value of goodwill for impairment annually, or more frequently, whenever events occur andcircumstances change indicating potential impairment. The Company performs its annual impairment test as at June 30 of each year.The Company did not perform a qualitative assessment during the years ended June 30, 2026, 2025 and 2024, respectively. Except asdiscussed below, no goodwill has been impaired during the years ended June 30, 2026, 2025 and 2024, respectively. In order to determine the amount of the goodwill impairments, the estimated fair value of our reporting units’ business assets andliabilities were compared to the carrying value of their assets and liabilities. The Company used a discounted cash flow model in orderto determine the fair value of the businesses (this is a Level-3 fair value measurement). Based on this analysis, the Company determinedthat the carrying value of the reporting units’ business assets and liabilities exceeded their fair value at the reporting date. In determining the fair value of the reporting units, the Company considered key judgements related to the reporting units’revenue growth rates, weighted-average cost of capital (“WACC”) applicable to peer and industry comparables of the reporting units,and the forecast periods used. The Company may record an impairment loss in future if actual growth rates are lower than thoseincluded in the Company’s discounted cash flow model. Furthermore, use of a higher weighted-average cost of capital may also resultin an impairment loss in the future. Year ended June 30, 2026 goodwill impairment loss The Company recognized an impairment loss of $0.4 million as a result of the impairment analysis performed as of March 31,2026, related to goodwill allocated to its SwitchPay reporting unit within its Merchant segment. The impairment is included withinthe caption impairment loss in the consolidated statement of operations for the year ended June 30, 2026. At June 30, 2025, the fair value of the SwitchPay reporting unit exceeded its carrying value by50%. The impairment loss in theSwitchPay reporting unit resulted from the termination of its sole customer contract during fiscal 2026 which adversely impacted itsfuture cash flows, growth prospects and its ability to continue as a going concern. Year ended June 30, 2025 goodwill impairment loss The Company recognized an impairment loss of $17.0 million as a result of its annual impairment analysis related to goodwillallocated to its LCM and Lesaka MT reporting units within its Merchant segment, its Lesaka Payouts reporting unit within Consumersegment and its Lesaka Alternative Digital Products Proprietary Limited, formerly known as EasyPay Proprietary Limited, (“LesakaADP”) reporting unit within its Enterprise segment. The impairments are included within the caption impairment loss in theconsolidated statement of operations for the year ended June 30, 2025. At June 30, 2024, the fair value of the LCM reporting unit exceeded its carrying value by11%.The impairment loss in the LCMreporting unit resulted from a reassessment of the business’ growth prospects in the context of its strategic market positioning,optimized capital expenditures and increase WACC over prior years. The impairment loss in the Lesaka MT reporting unit resulted from a reassessment of the business’ growth prospects, a strategicdecision to exit low return and sub-optimal merchants’ contracts. The impairment loss in the Lesaka Payouts reporting unit resulted from a reassessment of the business’ growth prospects of thereporting unit with lower revenue and therefore lower free cash flow generation expected compared to when performing the purchaseprice allocation. Lesaka ADP was acquired in fiscal 2006. At June 30, 2024, the fair value of the Lesaka ADP reporting unit exceeded its carryingvalue by318%. The impairment loss in the Lesaka ADP reporting unit during the year ended June 30, 2025, resulted from areassessment of the business’ growth and the expected impact on its future cash flows as a result the cash outflows expected frominitiatives to modernize its existing technology platform to retain and expand its product offering and customer base. The fair value of the Lesaka Hospitality and Humble reporting units (both allocated to Merchant) included in the Company’sacquisition of Adumo did not substantially exceed the carrying value of their respective reporting unit. The fair value of the LesakaHospitality reporting unit exceeded the carrying value by2.4% and Humble exceeded the carrying value by1%. As of June 30, 2025,carrying value of goodwill allocated to Lesaka Hospitality and Humble was $34.0 million and $1.5 million, respectively. All otherreporting units’ fair value exceeded the carrying value of the reporting unit by at least28%.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-50 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Goodwill (continued) Impairment loss (continued) Year ended June 30, 2025 goodwill impairment loss (continued) The table below presents the impairment per reporting unit for the year ended June 30, 2025 and the revenue growth rates, WACCand forecast period for reporting units used in the discounted cash flow models for the June 30, 2025 and June 30, 2024, and for entitiesacquiring during the current fiscal year, the information used in the purchase price allocation: Segments and reporting unitswith impairments Impairment Remaininggoodwill Range ofrevenuegrowth rates(%) Terminalrevenuegrowth rates(%) WACC (%) Forecastperiod (years)Merchant $ 9,268 $ 22,283Lesaka Cash Management 5,688 22,283Used at June 30, 2025 3.2 -23 6.0 15.6 5 Used at June 30, 2024 10 -13.9 5.0 14.7 5 Lesaka MT 3,580 -Used at June 30, 2025 (10) -37 (10.0) 18.5 5 Used at acquisition 6.7 -14.9 N/A 18.9Consumer 2,197 6,027Lesaka Payouts 2,197 6,027Used at June 30, 2025 7.5 -40.2 6.0 18.2 5 Used at acquisition 11.8 -26.6 N/A 18.9 4 Enterprise 5,576 3,533Lesaka ADP 5,576 3,533Used at June 30, 2025 6 -65.6 6.0 22.5 10 Used at June 30, 2024 (21.7) -6.9 6.0 14.7 5 Total $ 17,041 $ 31,843 In the event that there is a deterioration in the Company’s operating segments, or in any other of the Company’s businesses, thismay lead to impairments in future periods. Furthermore, the difficulties of integrating acquired businesses may be increased by thenecessity of integrating personnel with disparate business backgrounds and combining different corporate cultures. The Company alsomay not be able to retain key customers of an acquired business or realize cost efficiencies or synergies or other benefits that itanticipated when selecting its acquisition candidates. These factors may also lead to impairments in future periods.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-51 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Goodwill (continued) Goodwill has been allocated to the Company’s reportable segments as follows: Merchant Consumer Enterprise Carrying valueBalance as of July 1, 2023 $ 119,117 $ - $ 14,626 $ 133,743Foreign currency adjustment(1) 4,279 - 529 4,808Balance as of June 30, 2024 123,396 - 15,155 138,551Impairment loss (9,268) (2,197) (5,576) (17,041)Acquisitions (Note 3) 63,808 8,423 3,883 76,114Foreign currency adjustment(1) 1,698 (199) 272 1,771Balance as of June 30, 2025 179,634 6,027 13,734 199,395Impairment loss (388) - - (388)Acquisitions (Note 3) - - 1,586 1,586Deconsolidation of Humble (Note 3) (1,515) - - (1,515)Foreign currency adjustment(1) 14,635 495 1,090 16,220Balance as of June 30, 2026 $ 192,366 $ 6,522 $ 16,410 $ 215,298 (1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand, against the U.S.dollar on the carrying value. The table presents the components of impairment loss for the years ended June 30, 2026 and 2025:2026 2025Goodwill impairment loss $ 388 $ 17,041Impairment of right-of-use assets (Note 8) 2,623 -Impairment of property, plant and equipment(1) 989 -Impairment of intangible assets 35 1,822Total $ 4,035 $ 18,863(1) During the nine months ended March 31, 2026, the Company commenced the process to wind down its ATM business andrecognized an impairment related to ATMs recorded in property, plant and equipment to reduce the carrying amounts of these assetsto their estimated recoverable values. The recoverable values were determined based on estimated proceeds expected to be realizedprimarily through the piecemeal disposal of the assets. The Company’s management estimated the recoverable values based onobservable market pricing for similar assets, adjusted for the condition, age and expected timing of sale. These estimates representmanagement’s best estimate of fair value less costs to sell. The fair value measurements associated with the impairment were classifiedwithin Level 3 of the fair value hierarchy, as the valuation incorporates significant unobservable inputs, including assumptionsregarding expected selling prices and market demand for used ATM equipment. Actual proceeds may differ from these estimatesarising from changes in market conditions or the timing and manner of disposal.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-52 10. GOODWILL AND INTANGIBLE ASSETS, net Intangible assets Intangible assets acquired Summarized below is the fair value of intangible assets acquired, translated at the exchange rate applicable as of the relevantacquisition dates, and the weighted-average amortization period: Fair value as ofacquisition date Weighted-averageamortizationperiod (in years)Finite-lived intangible asset:Acquired during the year ended June 30, 2025:Adumo – technology assets $ 13,998 3 -7Adumo – customer relationships 11,185 5 -10Adumo – brands 3,623 10 -15Utilities – technology assets 1,161 4Utilities – customer relationships 15,010 5Lesaka Digital Risk – technology assets $ 69 0.1 On acquisition of these businesses, the Company recognized an aggregate deferred tax liability of approximately $12.2 millionrelated to the acquisition of intangible assets during the year ended June 30, 2025. Impairment loss during the years ended June 30, 2026 and 2025 The Company assesses the carrying value of intangible assets for impairment whenever events occur or circumstances changeindicating that the carrying amount of the intangible asset may not be recoverable.No intangible assets have been impaired during theyears ended years ended June 30, 2026, 2025 and 2024, respectively, except for intangible assets of $0.04 million and $1.8 million,respectively, related to Lesaka MT which were fully impaired during the years ended June 30, 2026 and 2025. The impairment wasidentified during the Company’s annual goodwill impairment testing. The method for determining fair value is discussed above underGoodwill—Impairment loss. The impairment loss related to the impairment of the intangible assets is included in the captionImpairment loss in the consolidated statements of operations.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-53 10. GOODWILL AND INTANGIBLE ASSETS, net (continued) Intangible assets (continued) Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2026, and June 30,2025: As of June 30, 2026 As of June 30, 2025 Grosscarryingvalue Accumulatedamortizationandimpairment Netcarryingvalue Grosscarryingvalue Accumulatedamortization NetcarryingvalueFinite-lived intangible assets:Software, integratedplatform and unpatentedtechnology(1) $ 153,867 $ (62,220) $ 91,647 $ 137,099 $ (41,925) $ 95,174Customer relationships(1) 57,862 (26,084) 31,778 53,369 (18,568) 34,801FTS patent 2,335 (2,335) - 2,158 (2,158) -Brands and trademarks(1)(2) 19,732 (19,732) - 18,233 (8,993) 9,240Total finite-livedintangible assets $ 233,796 $ (110,371) $ 123,425 $ 210,859 $ (71,644) $ 139,215(1) June 30, 2025, balances include the intangible assets acquired as part of the Adumo acquisition in October 2024, and theUtilities and Lesaka Digital Risk acquisitions in March 2025. (2) During early calendar 2025, the Company’s executive considered the unification of the Company’s merchant segmentsoperations and the realignment of the Company’s brands under the master brand “Lesaka”. The Company’s Board of Directorsapproved the realignment of certain of the Company’s brands to the master brand in May 2025. The Company identified the steps andtiming to realign the affected brands under the master brand and expects to have complete alignment by February 2027, with certainbrands aligned in December 2025. The change in brands has resulted in a change in the useful lives of certain of the Company’s brandand trademark intangible assets which has resulted in an increase (excluding the impact on “Adumo” and “GAAP” brands) inamortization expense of $6.3 million and $2.6 million during the years ended June 30, 2026 and 2025, respectively, compared withthe comparative periods assuming the original useful lives. The change in the useful lives resulted in a $4.6 million decrease in theCompany’s net income from continuing operations for the year ended June 30, 2026, and did not have a significant impact on earningsper share. The change in the useful lives resulted in a $1.9 million increase in the Company’s net loss from continuing operations forthe year ended June 30, 2025, and did not have a significant impact on loss per share. The change did not impact the year ended June30, 2024. Aggregate amortization expense on the finite-lived intangible assets for the years ended June 30, 2026, 2025 and 2024, wasapproximately $29.7 million, $22.0 million and $14.4 million, respectively. Future estimated annual amortization expense for the next five fiscal years and thereafter, using the exchange rates that prevailedon June 30, 2026, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as aresult of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors. Fiscal 2027 $ 23,794Fiscal 2028 23,110Fiscal 2029 22,383Fiscal 2030 20,447Fiscal 2031 16,963Thereafter 16,728Total future estimated annual amortization expense $ 123,425
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-54 11. ASSETS AND POLICYHOLDER LIABILITIES UNDER INSURANCE AND INVESTMENT CONTRACTS Reinsurance assets and policyholder liabilities under insurance contracts Summarized below is the movement in reinsurance assets and policyholder liabilities under insurance contracts during the yearsended June 30, 2026 and 2025: ReinsuranceAssets(1) Insurancecontracts(2) Balance as of July 1, 2024 $ 1,469 $ (2,241)Increase in policyholder benefits under insurance contracts 461 (10,127)Claims and policyholders’ benefits under insurance contracts (131) 9,781Foreign currency adjustment(3) 38 (57)Balance as of June 30, 2025 1,837 (2,644)Increase in policyholder benefits under insurance contracts 799 (13,437)Claims and policyholders’ benefits under insurance contracts (412) 12,690Foreign currency adjustment(3) 192 (297)Balance as of June 30, 2026 $ 2,416 $ (3,688) (1) Included in other long-term assets (refer to Note 9);(2) Included in other long-term liabilities;(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar. The Company has agreements with reinsurance companies in order to limit its losses from large insurance contracts, however, ifthe reinsurer is unable to meet its obligations, the Company retains the liability. The value of insurance contract liabilities is based onthe best estimate assumptions of future experience plus a risk adjustment for non-financial risk, as required in the markets in whichthese products are offered, namely South Africa. The process of deriving the best estimates assumptions plus risk adjustments includeassumptions related to claim reporting delays (based on average industry experience) and their associated costs as well as assumptionsrelated to the present value of disability claims in payment. Assets and policyholder liabilities under investment contracts Summarized below is the movement in assets and policyholder liabilities under investment contracts during the years ended June30, 2026 and 2025: Assets(1) Investmentcontracts(2) Balance as of July 1, 2024 $ 216 $ (216)Increase in policyholder benefits under investment contracts 5 (5)Claims and decrease in policyholders’ benefits under investment contracts (101) 101Foreign currency adjustment(3) 13 (5)Balance as of June 30, 2025 133 (125)Increase in policyholder benefits under investment contracts 6 (6)Foreign currency adjustment(3) 2 (10)Balance as of June 30, 2026 $ 141 $ (141) (1) Included in other long-term assets (refer to Note 9);(2) Included in other long-term liabilities;(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar. The Company does not offer any investment products with guarantees related to capital or returns.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-55 12. BORROWINGS Reference rate reform After the transition away from certain interbank offered rates in foreign jurisdictions (“IBOR reform”), the reforms to SouthAfrica’s reference interest rate are now accelerating rapidly. The Johannesburg Interbank Average Rate (“JIBAR”) will be replacedby the new South African Overnight Index Average (“ZARONIA”) following the cessation of JIBAR after its final publication onDecember 31, 2026. ZARONIA reflects the interest rate at which rand-denominated overnight wholesale funds are obtained bycommercial banks. The “No New JIBAR” initiative commenced on May 1, 2026, marking the cut-off date from which marketparticipants should no longer enter into new financial contracts referencing JIBAR, except in clearly defined and limited circumstances.Certain of the Company’s borrowings referenced JIBAR as a base interest rate. In February 2026, the Company amended its borrowingagreement to change the reference rate from JIBAR to ZARONIA from April 1, 2026 in anticipation of the “No New JIBAR” initiative.The reference rate applicable to Facilities A and B uses ZARONIA plus a credit adjustment spread (“CAS”), which is intended toplace the parties in substantially the same economic position as if JIBAR had not ceased. South Africa The ZARONIA rate and CAS on June 30, 2026, was6.73% and0.1619%, respectively. The prime rate, the benchmark rate atwhich private sector banks lend to the public in South Africa, on June 30, 2026, was10.50%. Facilities obtained in February 2025 Lesaka SA has obtained four loan facilities from FirstRand Bank Limited (acting through its Rand Merchant Bank division)(“RMB”), FirstRand Bank Limited (acting through its WesBank division) (“WesBank”), FirstRand Bank Limited being a SouthAfrican corporate and investment bank, Investec Bank Limited (acting through its Investment Banking division: Corporate Solutions)(“Investec” and together with RMB and WesBank, the “Lenders”). These comprise a term loan of up to ZAR2.2 billion ($121.4million) (“Facility A”), an amortizing loan of ZAR1.0 billion ($56.3 million) (“Facility B”) and a senior revolving credit facility ofup to ZAR2.2 billion ($121.4 million) (“Senior RCF”), and a general banking facility from RMB of up to ZAR1.1 billion ($66.0million) (the “GBF”, and collectively with Facility A, Facility B and Senior RCF, the “Facilities”), which are described in more detailbelow. On February 27, 2026, the Company, Lesaka SA and a number of other subsidiaries of Lesaka SA, the Lenders and the DebtGuarantor entered into a Amended and Restated Common Terms Agreement (“CTA”) which replaced the Original Common TermsAgreement (“Original CTA ”), and:● amended the reference rate from JIBAR to ZARONIA;● aligned the annual repayment dates for Facility B from February to March, with the final maturity date unchanged asFebruary 28, 2029; and● updated certain provisions to expressly permit the implementation of interest rate hedging. The CTA was further amended by a letter dated March 27, 2026, due to a change in the working capital facility discussed below. The Company, Lesaka SA and the majority of Lesaka SA’s directly and indirectly wholly-owned subsidiaries have agreed toguarantee the obligations of Lesaka SA and of the other borrowers under the Facilities to the Lenders. Lesaka has pledged its equity interests in Lesaka SA and the Company’s interests in a certain banking account to the DebtGuarantor as collateral securing Lesaka's guarantee obligations. The CTA governing the above contains customary covenants which include a requirement for Lesaka SA to maintain specifiedNet Debt to EBITDA and Interest Cover Ratios (as defined in the CTA) and restricts the ability of Lesaka SA, and certain of itssubsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additionalindebtedness, make investments above specified levels, engage in certain business combinations and engage in other corporateactivities. Lesaka SA paid non-refundable debt structuring fees of ZAR10.0 million ($0.5 million) to the Lenders on February 27, 2025.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-56 12. BORROWINGS (continued) South Africa (continued) Facilities obtained in February 2025 (continued) Long-term borrowings – Facility A and Facility B Agreements Lesaka SA may borrow up to an aggregate amount of ZAR2.2 billion for the sole purpose of refinancing the existing facilitiesof Lesaka SA and Lesaka Cash Management with RMB, funding transaction costs and for general corporate purposes. Lesaka SAutilized Facility A in full on February 28, 2025, to settle a portion of its existing facilities with RMB and to settle all of Lesaka CashManagement’s existing facilities with RMB, as well as to pay certain transaction costs. Lesaka SA may borrow up to an aggregate of ZAR1.0 billion for the sole purpose of refinancing the Lesaka SA existing facilities,including its general banking facilities, with RMB, and for general corporate purposes. Lesaka SA utilized Facility B in full onFebruary 28, 2025, to repay a portion of its existing facilities as well as to settle a portion of its existing general banking facility. Facility A is required to be repaid in full on February 28, 2029. Facility A is subject to customary mandatory prepayment terms.Lesaka SA is permitted to make voluntary prepayments of Facility A, and is permitted to subsequently utilize any voluntaryprepayments made under Facility A under the RCF Agreement. Amounts utilized under the RCF Agreement are required to be repaidin full on February 28, 2029. No drawdowns has occurred under the RCF. Facility B is required to be repaid infour annual installments, as follows: (i) ZAR150.0 million ($9.0 million) was paid on March31, 2026; (ii) ZAR200.0 million ($12.2 million) on March 31, 2027; (iii) ZAR300.0 million ($18.3 million) on March 31, 2028; and(iv) ZAR350.0 million ($21.3 million) on February 28, 2029. Facility B is subject to customary mandatory prepayment terms. LesakaSA is permitted to make voluntary prepayments of Facility B, however it is unable to subsequently utilize any amounts prepaid. Interest on Facility A and Facility B as well as any interest related to utilization under the RCF Agreement is payable quarterlyin arrears at end of March, June, September and December, with the first interest payment commencing on June 30, 2025. Short-term facility - General Banking Facility Lesaka SA and certain of its subsidiaries may borrow up to an aggregate of ZAR1.1 billion under a general banking facility(“GBF”) from RMB for general corporate expenditure (including capital expenditure) and working capital purposes of the Lesaka SAand certain of its subsidiaries. Lesaka SA utilized a portion of the GBF to refinance its existing general banking facility. As of June30, 2026, the Company had utilized ZAR339.2 million ($20.7 million) of this facility. Concurrent with the execution of the CTA, Lesaka SA and RMB entered into a General Banking Facility Agreement (the“Original GBF Agreement”), which was amended by an addendum dated on or about July 16, 2025. On March 27, 2026, Lesaka SAand RMB entered into an Amended and Restated General Banking Facility (“Restated GBF Agreement”) to amend and replace theOriginal GBF Agreement. Pursuant to the Restated GBF Agreement, Lesaka SA and certain of its subsidiaries have access to directfacilities of ZAR1.1 billion ($67.7 million), which include a general banking facility (a demand facility); short-term direct andcontingent facilities which cover forward exchange contracts and credit cards; an indirect facility of ZAR90.8 million ($5.5 million)for bank guarantees; and settlement lines of ZAR326.0 million ($19.9 million). The direct facilities may be reallocated as indirectfacilities, and indirect facilities may be reallocated as direct facilities. As of June 30, 2026, the Company had utilized ZAR33.1 million($1.9 million) of its other facilities to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer toNote 22). The facilities under the Restated GBF Agreement were available for utilization from March 30, 2026, and are subject to annualreview by RMB. Lesaka SA paid and capitalized an upfront fee paid to RMB and legal fees paid to legal advisors totaling ZAR4.2million ($0.3 million) related to this transaction. Interest on the GBF is payable monthly and is based on the South African prime rate in effect from time to time less0.50%. TheCompany pays a commitment fee of0.70% (seventy basis points) per annum (excluding VAT) of the unutilized GBF, where utilizationof the GBF is less than90% of available GBF. This fee is calculated daily and payable monthly in arrears. Wesbank Facilities The Company, through certain of its South African subsidiaries, has an asset-backed facility of ZAR214.5 million ($13.1 million)of which ZAR147.7 million ($9.0 million) has been utilized.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-57 12. BORROWINGS (continued) South Africa (continued) Refinanced Lesaka Capital Loan Document, comprising long-term borrowings On September 5, 2025, the Company, through its indirect South African subsidiaries Lesaka Capital Proprietary Limited (“LesakaCapital”) and Lesaka Fuel, entered into a ZAR400 million Revolving Credit Facility Agreement (“Lesaka Capital Loan Document”)of which ZAR316.8 million has been utilized as of June 30, 2026. The Lesaka Capital Loan Document contain customary covenants that require Lesaka Capital and Lesaka Fuel to collectivelymaintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capitalstock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage inother corporate activities. Pursuant to the Lesaka Capital Loan Document, Lesaka Capital and Lesaka Fuel collectively may borrow up to an aggregate ofZAR400.0 million for the sole purposes of funding Lesaka Capital’s and Lesaka Fuel’s lending business, settling up to ZAR20.0million related to an intercompany loan to Lesaka Capital’s direct parent, and paying structuring and execution fee and legal costs. Interest is payable on the last business day of each calendar month. The Company paid a non-refundable structuring and execution fee of ZAR0.5 million, excluding value added taxation, to theRMB on closing of the Lesaka Capital Loan Document in September 2025. Certain merchant finance loans receivable have been pledged as security for the revolving credit facility obtained from RMB. Nedbank facility, comprising short-term facilities As of June 30, 2026 and June 30, 2025, the Company had utilized ZAR2.1 million ($0.1 million) and ZAR2.1 million ($0.1million), respectively, of its indirect and derivative facilities of ZAR156.6 million (June 30, 2025: ZAR156.6 million) to enable thebank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 22). In terms of a commitment provided to the lender under the CTA, the Company has undertaken not to utilize more than ZAR5.0million ($0.3 million) of the Nedbank Facility. The Company has entered into cession and pledge agreements with Nedbank related to certain of its Nedbank credit facilities(the general banking facility and a portion of the indirect facility) and the Company has ceded and pledged certain bank accounts toNedbank and also provided a cession of Lesaka SA’s shareholding in Cell C. The funds included in these bank accounts are restrictedas they may not be withdrawn without the express permission of Nedbank. RMB Bridge Facilities, comprising a short-term facility obtained in September 2024 and amended in December 2024 (allrepaid) On September 30, 2024, Lesaka SA entered into a Facility Letter (the “F2024 Facility Letter”) with RMB to provide Lesaka SAa ZAR665.0 million funding facility (the “Bridge Facility”). The Bridge Facility was used by Lesaka SA to (i) settle an amount ofZAR232.2 due under the Adumo transaction (refer to Note 3); (ii) pay Crossfin Holdings (RF) Proprietary Limited (“CrossfinHoldings”) ZAR207.2 million under a share purchase agreement concluded between Lesaka SA and Crossfin Holdings (refer to Note14); (iii) pay an amount of ZAR147.5 million, which includes interest, notified by Investec to Adumo and Lesaka SA as a result ofthe transaction described in Note 3, and (iv) pay an origination fee of ZAR7.6 million to RMB. The Facility also provided Lesaka SAwith ZAR70.0 million for transaction-related expenses. On December 10, 2024, Lesaka SA and RMB entered into a First Addendum to the Facility Letter (the “F2024 AddendumLetter”). The F2024 Addendum Letter provided Lesaka SA with an additional ZAR250.0 million general banking facility (“2024GBF Facility”) which could be used for general corporate purposes. The Bridge Facility and 2024 GBF Facility were repaid in full onFebruary 28, 2025, utilizing funding obtained under the CTA and the agreements were cancelled. Interest on the Bridge Facility and the 2024 GBF Facility was calculated at the prime rate plus1.80%. The Bridge Facility andthe 2024 GBF Facility were unsecured and were repaid in full on February 28, 2025, the maturity date, pursuant to the refinancingprocess.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-58 12. BORROWINGS (continued) South Africa (continued) Cancelled RMB Facilities, as amended, comprising a short-term facility (Facility E) and long-term borrowings (all repaid) On July 21, 2017, Lesaka SA entered into a Common Terms Agreement, Subordination Agreement, Security Cession & Pledgeand certain ancillary loan documents (collectively, the “Original Loan Documents”) with RMB, a South African corporate andinvestment bank, and Nedbank Limited (acting through its Corporate and Investment Banking division), an African corporate andinvestment bank (collectively, the “Lenders”). Since 2017, these agreements have been amended to add additional facilities, includingFacilities G and H, which were obtained to finance the acquisition of Connect. Facilities E, G and H have been repaid and cancelledin February 2025 and there isno balance outstanding as of June 30, 2025. Short-term facility - Facility E The Company cancelled its Facility E facility agreement in November 2024. The overdraft facility could only be used to fundATMs and therefore the overdraft utilized and converted to cash to fund the Company’s ATMs was considered restricted cash. Interest on the overdraft facility was payable on the first day of the month following utilization of the facility and on the finalmaturity date based on the South African prime rate. The overdraft facility amount utilized was required to be repaid in full withinonemonth of utilization and at least90% of the amount utilized was to be repaid within25 days. The overdraft facility was secured by apledge by Lesaka SA of, among other things, cash and certain bank accounts utilized in the Company’s ATM funding process, thecession of Lesaka SA’s shareholding in Cell C, the cession of an insurance policy with Senate Transit Underwriters ManagersProprietary Limited, and any rights and claims Lesaka SA had against Grindrod Bank Limited. Long-term borrowings - Facility G and Facility H On March 16, 2023, the Company, through Lesaka SA, entered into a Fifth Amendment and Restatement Agreement, whichincluded, among other agreements, an Amended and Restated Common Terms Agreement (“Expired CTA”), an Amended andRestated Senior Facility G Agreement (“Facility G Agreement”) and an Amended and Restated Senior Facility H Agreement (“FacilityH Agreement”) (collectively, the “Loan Documents”) with RMB. Main Street 1692 (RF) Proprietary Limited (“Debt Guarantor”), aSouth African company incorporated for the sole purpose of holding collateral for the benefit of the Lenders and acting as debtguarantor is also a party to the Loan Documents. Pursuant to the Facility G Agreement, Lesaka SA was entitled to borrow up to anaggregate of approximately ZAR708.6 million. Facility G included a term loan of ZAR508.6 million and a revolving credit facilityof up to ZAR200 million. Pursuant to the Facility H Agreement, Lesaka SA was entitled to borrow up to an aggregate of approximatelyZAR357.4 million. On February 28, 2025, the Company used its new borrowings to settle Facility G and Facility H in full, including accumulatedinterest of ZAR201.7 million ($10.9 million). These facilities, excluding accrued interest, included (i) Facility G of ZAR492.1 million($26.6 million); (ii) Facility H of ZAR350.0 million ($18.9 million); and (iii) a Facility G revolver of ZAR200.0 million ($10.8million) (of which ZAR199 million ($10.8 million) had been utilized at February 28, 2025). These facilities were repaid in full onFebruary 28, 2025, utilizing funding obtained under the Expired CTA and the Facility G and Facility H agreements were cancelled.Amounts translated at rates prevailing on the repayment date. The interest rate on these facilities was JIBAR plus a margin of4.75%. Lesaka SA paid a quarterly commitment fee computed at a rate of35% of the Applicable Margin (as defined in the Expired CTA)on the amount of the revolving credit facility outstanding and such commitment fee was capitalized, subject to the cap discussed above. The Company used cash proceeds of ZAR64.2 million ($3.5 million) received from the sale of Finbond shares (refer to Note 9)during the year ended June 30, 2024, to repay capitalized interest under Facility G and Facility H. Cancelled Connect Facilities, comprising long-term borrowings and a short-term facility (all repaid) On March 22, 2023, the Company, through CCMS, entered into a First Amendment and Restatement Agreement, which included,among other agreements, an Amended and Restated Facilities Agreement (“CCMS Facilities Agreement”) with RMB. The CCMSFacilities Agreement was amended to increase the Facility B available under the CCMS Facilities Agreement by ZAR200.0 millionto ZAR550.0 million. The final maturity date was extended to December 31, 2027, and scheduled principal repayments were amended,with the first scheduled repayment commencing from March 31, 2026. These facilities were repaid in full on February 28, 2025,utilizing funding obtained under the CTA and the agreements cancelled. Prior to settlement and cancellation, the Connect Facilitiesincluded (i) an overdraft facility (general banking facility) of ZAR170.0 million ($9.2 million); (ii) CCMS Facility A of ZAR700.0million ($37.9 million); (iii) CCMS Facility B of ZAR550.0 million ($29.8 million) (both were fully utilized). Amounts translated atrates prevailing on the repayment date.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-59 12. BORROWINGS (continued) South Africa (continued) Cancelled Connect Facilities, comprising long-term borrowings and a short-term facility (all repaid) (continued) On October 29, 2024, the Company, through CCMS, entered into an addendum to a facility letter with RMB, to obtain a ZAR100.0 million temporary increase in its overdraft facility for a period of approximately four months to specifically fund the purchaseof prepaid airtime vouchers. This temporary increase was repayable in equal daily instalments which commenced at the end of October2024 with the final repayment made on February 15, 2025. In February 2023, the Company, through CCMS, obtained a ZAR175.0 million temporary increase in its overdraft facility for aperiod offour months to specifically fund the purchase of prepaid airtime vouchers. This temporary increase was repayable infourequal monthly instalments of ZAR43.8 million and which commenced in March 2023. In May 2023, the Company, through CCMS,obtained a ZAR155.0 million temporary increase in its overdraft facility for a period ofone month to specifically fund the purchaseof prepaid airtime vouchers. This temporary increase was repaid in full in June 2023. Interest at the South Africa prime rate less0.1%was payable on a monthly basis on both of these temporary facilities. Interest on CCMS Facility A and CCMS Facility B was payable quarterly in arrears based on JIBAR in effect from time to timeplus a margin.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-60 12. BORROWINGS (continued) Movement in short-term credit facilities Summarized below are the Company’s short-term facilities as of June 30, 2026, and the movement in the Company’s short-termfacilities from as of June 30, 2025 to as of June 30, 2026: RMB RMB Nedbank RMB RMB RMBGBF Other Facilities Connect Bridge Facility E TotalShort-term facilities available asof June 30, 2026 $ 67,702 $ 5,534 $ 9,542 $ - $ - $ - $ 82,778Overdraft 67,702 - - - - - 67,702Indirect and derivativefacilities - 5,534 9,542 - - - 15,076 Movement in utilized overdraftfacilities: Balance as of June 30, 2024 - - - 9,351 - 6,737 16,088Utilized 27,917 - - 5,655 41,150 23,894 98,616Repaid (4,311) - - (14,627) (39,205) (31,028) (89,171)Foreign currency adjustment(1) 863 - - (379) (1,945) 397 (1,064)Balance as of June 30, 2025 24,469 - - - - - 24,469No restrictions as to use 24,469 - - - - - 24,469Utilized 123,712 - - - - - 123,712Repaid (129,417) - - - - - (129,417)Facility fees paid (252) - - - - - (252)Facility fees amortized 64 - - - - - 64Foreign currencyadjustment(1) 2,095 - - - - - 2,095Balance as of June 30, 2026 20,671 - - - - - 20,671No restrictions as to use 20,671 - - - - - 20,671 Interest rate as of June 30,2026 (%)(2) 10.00 Interest rate as of June 30,2025 (%)(2) 10.25 Movement in utilized indirect andderivative facilities:Balance as of June 30, 2024 - 1,821 116 - - - 1,937Foreign currencyadjustment(1) - 43 3 - - - 46Balance as of June 30, 2025 - 1,864 119 - - - 1,983Guarantees cancelled - (1,543) - - - - (1,543)Utilized - 3,588 - - - - 3,588Foreign currencyadjustment(1) - 370 10 - - - 380Balance as of June 30, 2026 $ - $ 4,279 $ 129 $ - $ - $ - $ 4,408 (1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar.(2) RMB GBF interest is set at prime less0.50%. Interest expense incurred under the Company’s South African long-term borrowings and included in the caption interest expenseon the consolidated statement of operations during the years ended June 30, 2026 and 2025, was $2.5 million and $4.2 million,respectively. The Company cancelled Adumo’s overdraft arrangements on October 1, 2024, and settled Adumo’s outstanding overdraftbalance of ZAR20.0 million ($1.1 million) on the same day. The repayment is included in the caption repayment of bank overdraftincluded on the Company’s consolidated statements of cash flows for the year ended June 30, 2025.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-61 12. BORROWINGS (continued) Movement in long-term borrowings Summarized below is the movement in the Company’s long-term borrowing from as of June 30, 2025, to as of June 30, 2026: Facilities Lesaka A Lesaka B Assetbacked CCC LesakaG & H ConnectA&B TotalOpening balance as of June 30,2024 $ - $ - $ 8,379 $ 11,841 $ 56,151 $ 66,815 $ 143,186Facilities utilized 116,652 54,112 3,184 5,091 11,022 - 190,061Facilities repaid - - (4,513) (554) (60,245) (65,910) (131,222)Non-refundable fees paid 970 - - - - - 970 Non-refundable fees amortized 248 - - 21 116 32 417Capitalized interest - - - - 5,033 - 5,033Capitalized interest repaid - - - - (11,077) - (11,077)Foreign currency adjustment(1) 2,505 2,209 129 495 (1,000) (937) 3,401Included in current - 8,448 3,508 - - - 11,956Included in long-term 120,375 47,873 3,671 16,894 - - 188,813Opening balance as of June30, 2025 120,375 56,321 7,179 16,894 - - 200,769Facilities utilized - - 5,977 972 - - 6,949Facilities repaid - (8,953) (4,788) - - - (13,741)Non-refundable fees paid - - - (33) - - (33)Non-refundable feesamortized 314 - 5 29 - - 348Capitalized interest - - - - - - -Capitalized interest repaid - - - - - - -Foreign currencyadjustment(1) 9,902 4,439 632 1,446 - - 16,419Closing balance as ofJune 30, 2026 130,591 51,807 9,005 19,308 - - 210,711Included in current - 12,190 3,924 - - - 16,114Included in long-term 130,591 39,617 5,081 19,308 - - 194,597Unamortized fees (799) - - (6) - - (805)Due within 2 years - 18,285 3,085 19,314 - - 40,684Due within 3 years 131,390 21,332 1,694 - - - 154,416Due within 4 years - - 302 - - - 302Due within 5 years $ - $ - $ - $ - $ - $ - $ -Interest rates as of June 30, 2026(%): 10.14 10.04 10.75 10.40 - -Base rate (%) 6.73 6.73 10.50 10.50 - -Credit adjustment spread (%) 0.16 0.16 - - - -Margin (%) 3.25 3.15 0.25 (0.10) - -Footnote number (2)(3) (4)(5) (6) (7) Interest rates as of June 30, 2025(%): 10.54 10.44 11.50 11.70 - -Base rate (%) 7.29 7.29 10.75 10.75 - -Margin (%) 3.25 3.15 0.75 0.95 - -Footnote number (3) (5) (6) (8)(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar.(2) From April 1, 2026, interest on Facility A is based on ZARONIA in effect from time to time plus a margin. The margin onFacility A is determined with reference to the Net Debt to EBITDA Ratio, and the margin will be either (i)3.25%, if the Net Debt toEBITDA Ratio is greater than or equal to 2.5 times; or (ii)2.50%, if the Net Debt to EBITDA Ratio is less than 2.5 times.(3) Interest on Facility A was based on the JIBAR in effect from time to time plus an initial margin of3.25% per annum untilJune 30, 2025. From July 1, 2025, to March 31, 2026, the margin on Facility A was determined with reference to the Net Debt toEBITDA Ratio, and the margin would be either (i)3.25%, if the Net Debt to EBITDA Ratio was greater than or equal to 2.5 times; or(ii)2.50%, if the Net Debt to EBITDA Ratio was less than 2.5 times.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-62 12. BORROWINGS (continued) Movement in long-term borrowings (continued) (4) From April 1, 2026, interest on Facility B is calculated based on ZARONIA from time to time plus a margin. The margin onFacility B is determined with reference to the Net Debt to EBITDA Ratio, and the margin will be either (i)3.15%, if the Net Debt toEBITDA Ratio is greater than or equal to 2.5 times; or (ii)2.40%, if the Net Debt to EBITDA Ratio is less than 2.5 times.(5) Interest on Facility B was calculated based on JIBAR from time to time plus an initial margin of3.15% per annum until June30, 2025. From July 1, 2025, to March 31, 2026, the margin on Facility B was determined with reference to the Net Debt to EBITDARatio, and the margin would be either (i)3.15%, if the Net Debt to EBITDA Ratio was greater than or equal to 2.5 times; or (ii)2.40%,if the Net Debt to EBITDA Ratio was less than 2.5 times.(6) Interest is charged at prime plus0.75% per annum on the utilized balance.(7) Interest is charged at prime less0.10% per annum on the utilized balance.(8) Interest was charged at prime plus0.95% per annum on the utilized balance. Interest expense incurred under the Company’s South African long-term borrowings and included in the caption interest expenseon the consolidated statement of operations during the years ended June 30, 2026, 2025 and 2024, was $14.4 million, $16.9 millionand $16.1 million, respectively. Prepaid facility fees amortized included in interest expense during the years ended June 30, 2026,2025 and 2024, was $0.3 million, $0.4 million and $0.4 million, respectively. Interest expense incurred under the Company’s South African long-term borrowings to fund its Consumer lending book andLesaka Capital’s merchant finance loans receivable are included in the caption cost of goods sold, IT processing, servicing and supporton the consolidated statement of operations. Total interest expense incurred related to the Consumer lending book (for the year endedJune 30, 2026 and the four months ended June 30, 2025) and interest incurred under the Lesaka Capital’s merchant finance loansreceivable was $7.2 million, $2.9 million, and $1.4, for the years ended June 30, 2026, 2025 and 2024, respectively. The Company cancelled Adumo’s long-term borrowings arrangements on October 1, 2024, and settled Adumo’s outstandingbalances of ZAR126.7 million ($7.2 million) on the same day. The repayment is included in the caption repayment of long-termborrowings included on the Company’s consolidated statements of cash flows for the year ended June 30, 2025. 13. OTHER PAYABLES Summarized below is the breakdown of other payables as of June 30, 2026 and 2025: June 30, June 30,2026 2025Vendor wallet balances $ 35,154 $ 19,529Accruals 10,562 8,469Clearing accounts 9,682 6,766Provisions 12,076 8,497Value -added tax payable(A) 6,668 6,347Payroll-related payables 1,798 1,931Deferred consideration due to seller of Utilities (Note 3) - 13,837Other 7,322 10,659$ 83,262 $ 76,035 (A) Value-added tax payable and the total of Other payables as of June 30, 2025, have each increased by $4.0 million as a resultof the correction discussed in Note 1. Clearing accounts and vendor wallet balances may fluctuate due to the day (weekend or public holiday) on which the Company’squarter or year end falls because certain elements of transactions within these accounts are not settled over weekends or public holidays. Other includes deferred income, client deposits and other payables. In December 2025, the Company determined that the liquidation of CPS is at an advanced stage and released an accrual raisedat the time of deconsolidation. The release has been included in the caption “Other income” in the consolidated statement of operationsfor the year ended June 30, 2026.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-63 14. COMMON STOCK Common stock Holders of shares of Lesaka’s common stock are entitled to receive dividends and other distributions when declared by Lesaka’sboard of directors out of legally available funds. Payment of dividends and distributions is subject to certain restrictions under theFlorida Business Corporation Act, including the requirement that after making any distribution Lesaka must be able to meet its debtsas they become due in the usual course of its business. Upon voluntary or involuntary liquidation, dissolution or winding up of Lesaka,holders of common stock share ratably in the assets remaining after payments to creditors and provision for the preference of anypreferred stock according to its terms. There are no pre-emptive or other subscription rights, conversion rights or redemption orscheduled installment payment provisions relating to shares of common stock. All of the outstanding shares of common stock are fullypaid and non-assessable. Each holder of common stock is entitled to one vote per share for the election of directors and for all other matters to be votedon by shareholders. Holders of common stock may not cumulate their votes in the election of directors, and are entitled to share equallyand ratably in the dividends that may be declared by the board of directors, but only after payment of dividends required to be paid onoutstanding shares of preferred stock according to its terms. The shares of Lesaka common stock are not subject to redemption. Issue of shares to Lesaka Cash Management sellers pursuant to April 2022 transaction The total purchase consideration pursuant to the Lesaka Cash Management acquisition in April 2022 includes3,185,079 sharesof the Company’s common stock. These shares of common stock were issued inthree equal tranches on each of the first, second andthird anniversaries of the April 14, 2022 closing. The Company legally issued1,061,693 shares of its common stock, representing thethird and second tranche, to the Lesaka Cash Management sellers in each of April 2025 and 2024, respectively, and this had no impacton the number of shares, net of treasury, presented in the consolidated statement of changes in equity during the year ended June 30,2025 and 2024, respectively because these shares were included in the3,185,079 shares included in the number of shares, net oftreasury, as of June 30, 2025 and 2024. Impact of non-vested equity shares on number of shares, net of treasury The Company’s number of shares, net of treasury, presented in the consolidated balance sheets and consolidated statement ofchanges in equity includes participating non-vested equity shares (specifically contingently returnable shares) as described below inNote 17 “— Amended and Restated Stock Incentive Plan—Restricted Stock—General Terms of Awards”. The following tablepresents a reconciliation between the number of shares, net of treasury, presented in the consolidated statement of changes in equityand the number of shares, net of treasury, excluding non-vested equity shares that have not vested during the years ended June 30,2026, 2025 and 2024: 2026 2025 2024 Number of shares, net of treasury:Statement of changes in equity – common stock 83,306,794 81,249,097 64,272,243Less: Non-vested equity shares that have not vested as of end of year (Note 17) 2,462,188 2,169,900 2,084,946Number of shares, net of treasury excluding non-vested equity shares that havenot vested 80,844,606 79,079,197 62,187,297 Redeemable common stock issued pursuant to transaction with the IFC Investors Holders of redeemable common stock have all the rights enjoyed by holders of common stock, however, holders of redeemablecommon stock have additional contractual rights. On April 11, 2016, the Company entered into a Subscription Agreement (the“Subscription Agreement”) with International Finance Corporation (“IFC”), IFC African, Latin American and Caribbean Fund, LP(“ALAC”), IFC Financial Institutions Growth Fund, LP, and Africa Capitalization Fund, Ltd. (collectively, the “IFC Investors”).Under the Subscription Agreement, the IFC Investors purchased, and the Company sold in the aggregate, approximately9.98 millionshares of the Company’s common stock, par value $0.001 per share, at a price of $10.79 per share, for gross proceeds to the Companyof approximately $107.7 million. The Company accounted for these9.98 million shares as redeemable common stock as a result ofthe put option discussed below. On May 19, 2020, the Africa Capitalization Fund, Ltd sold its entire holding of2,103,169 shares of the Company’s commonstock and therefore the additional contractual rights, including the put option rights related to these2,103,169 shares, expired. TheCompany reclassified $22.7 million related to these2,103,169 shares sold from redeemable common stock to additional paid-in-capitalduring the year ended June 30, 2020.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-64 14. COMMON STOCK (continued) Redeemable common stock issued pursuant to transaction with the IFC Investors (continued) During the year ended June 30, 2026, ALAC, made numerous filings on Form 4 Statement of Beneficial Ownership with theUnited States Securities and Exchange Commission reporting that ALAC had sold an aggregate of925,352 shares of the Company’scommon stock and therefore the additional contractual rights, including the put option rights related to these925,352 shares, expired.The Company reclassified $10.0 million related to these925,352 shares sold from redeemable common stock to additional paid-in-capital during the year ended June 30, 2026. On August 19, 202 2, the IFC Investors filed an amended Form 13D/A, amendment no. 2, with the United States Securities andExchange Commission reporting that in October 2017 and February 2018, the IFC sold an aggregate of514,376 shares of theCompany’s common stock and therefore the additional contractual rights, including the put option rights related to these514,376shares, expired. The Company reclassified $5.6 million related to these514,376 shares sold from redeemable common stock toadditional paid-in-capital during the year ended June 30, 2022. The Company has entered into a Policy Agreement with the IFC Investors (the “Policy Agreement”). The material terms of thePolicy Agreement are described below. Certain IFC Investors were investors in Adumo and the Company issued an aggregate of1,989,162 additional shares of itscommon stock at a price of $4.79 to these IFC Investors pursuant to the Purchase Agreement (refer to Note 3). The Company and theIFC Investors amended and restated the Policy Agreement (“Amended and Restated Policy Agreement”) to include these additionalshares issued to the IFC Investors to also be covered by the put right included in the Amended and Restated Policy Agreement. TheCompany also accounted for these1,989,162 shares as redeemable common stock as a result of the put option. Board Rights For so long as the IFC Investors in aggregate beneficially own shares representing at least5% of the Company’s common stock,the IFC Investors will have the right to nominate one director to the Company’s board of directors. For so long as the IFC Investors inaggregate beneficially own shares representing at least2.5% of the Company’s common stock, the IFC Investors will have the rightto appoint an observer to the Company’s board of directors at any time when they have not designated, or do not have the right todesignate, a director. Put Option Each IFC Investor will have the right, upon the occurrence of specified triggering events, to require the Company to repurchaseall of the shares of its common stock purchased by the IFC Investors pursuant to the Subscription Agreement (or upon exercise of theirpreemptive rights discussed below). Events triggering this put right relate to (1) the Company being the subject of a governmentalcomplaint alleging, a court judgment finding or an indictment alleging that the Company (a) engaged in specified corrupt, fraudulent,coercive, collusive or obstructive practices; (b) entered into transactions with targets of economic sanctions; or (c) failed to operate itsbusiness in compliance with anti-money laundering and anti-terrorism laws; or (2) the Company rejecting a bona fide offer to acquireall of its outstanding Common Stock at a time when it has in place or implements a shareholder rights plan, or adopting a shareholderrights plan triggered by a beneficial ownership threshold of less thantwenty percent. The put price per share will be the higher of theprice per share paid by the IFC Investors pursuant to the Subscription Agreement (or paid when exercising their preemptive rights)and the volume weighted average price per share prevailing for the60 trading days preceding the triggering event, except that withrespect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror.The Company believes that the put option has no value and, accordingly, has not recognized the put option in its consolidated financialstatements. Registration Rights The Company has agreed to grant certain registration rights to the IFC Investors for the resale of their shares of the Company’scommon stock, including filing a resale shelf registration statement and taking certain actions to facilitate resales thereunder.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-65 14. COMMON STOCK (continued) Redeemable common stock issued pursuant to transaction with the IFC Investors (continued) Preemptive Rights For so long as the IFC Investors hold in aggregate5% of the outstanding shares of common stock of the Company, each Investorwill have the right to purchase its pro-rata share of new issuances of securities by the Company, subject to certain exceptions. Common stock repurchases October 2024 repurchase of common stock and issue of shares in Utilities transaction On October 1, 2024, the Company, through Lesaka SA, and Crossfin Holdings entered into a share purchase agreement underwhich Lesaka SA purchased2,601,410 of the3,587,332 Consideration Shares for ZAR207.2 million ($12.0 million). The transactionwas settled in early October 2024, and the shares of the Company’s common stock repurchased have been included in the Company’streasury shares included in its consolidated statement of changes in equity for the year ended June 30, 2025, respectively. Therepurchase was made outside of the Company’s then $100 million share repurchase authorization. The Company, through Lesaka SA, issued1,092,361 of the2,601,410 shares of the Company’s common stock to the Seller underthe terms of Recharger Purchase Agreement described in Note 3 during the year ended June 30, 2025. The Company recognized again of $0.4 million on issuance of these which is included in the caption additional paid-in-capital in the consolidated statement ofchanges in equity for the year ended June 30, 2025. In March 2026, Lesaka SA delivered1,017,914 shares of the2,601,410 shares ofthe Company’s common stock to the Seller under the terms of Recharger Purchase Agreement. The Company recognized a loss inadditional paid-in-capital of $0.1 million during the year ended June 30, 2026, related to the difference between in the value on March3, 2026, and the price paid per share in October 2024. Acquisition of Lesaka Hospitality non-controlling interests During the year ended June 30, 2026, the Company acquired all of the issued share capital of Lesaka Hospitality that it did notpreviously own for approximately $6.5 million, which was settled utilizing cash of $3.5 million and the transfer of662,714 shares ofLesaka’s common stock with a fair value of $3.0 million on closing on March 6, 2026. The662,714 shares of the Company’s commonstock were sourced from the2,601,410 shares of the Company’s common stock referred to above and shares acquired in December2025. The Company recognized a gain in additional paid-in-capital of $0.1 million related to the difference between the value onMarch 6, 2026, and the price paid per share in October 2024 and December 2025, respectively. The acquisition of the non-controllinginterests was accounted for as an equity transaction with a non-controlling interest and accordinglyno gain or loss was recognized inthe Company’s consolidated statement of operations. The carrying amount of the non-controlling interest was adjusted to reflect thechange in ownership interest in Lesaka Hospitality. The difference between the fair value of the consideration paid and the amount bywhich the non-controlling interest was adjusted, of $0.4 million, was recognized in, and increased, total Lesaka equity. Executed under share repurchase authorizations On September 2, 2025, the Company’s Board of Directors approved a share repurchase authorization to repurchase up to anaggregate of $15 million of common stock. The authorization has no expiration date. This share repurchase authorization replaces our$100 million share repurchase authorization which was approved on February 5, 2020. The share repurchase authorization will beused at management’s discretion, subject to limitations imposed by SEC Rule 10b-18 and other legal requirements and subject to priceand other internal limitations established by the Board. Repurchases will be funded from the Company’s available cash. Sharerepurchases may be made through open-market purchases, privately negotiated transactions, or both. There can be no assurance thatthe Company will purchase any shares or any particular number of shares. The authorization may be suspended, terminated or modifiedat any time for any reason, including market conditions, the cost of repurchasing shares, liquidity and other factors that managementdeems appropriate. The Company didnot repurchase any of its shares during the years ended June 30, 2026, 2025, and 2024,respectively, under the share repurchase authorization, however, it did repurchase84,758,371,187 and319,522 shares of its commonstock from its employees during the years ended June 30, 2026, 2025, and 2024, respectively, refer to Note 17 for additionalinformation regarding these repurchases.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-66 15. ACCUMULATED OTHER COMPREHENSIVE LOSS The table below presents the change in accumulated other comprehensive (loss) income per component during the years endedJune 30, 2026, 2025 and 2024: Accumulatedforeigncurrencytranslationreserve TotalBalance as of July 1, 2023(A) $ (195,516) $ (195,516)Release of foreign currency translation reserve related to liquidation of subsidiaries (952) (952)Release of foreign currency translation reserve: disposal of Finbond equity securities(Note 9) 1,543 1,543Movement in foreign currency translation reserve related to equity-accountedinvestment 489 489Movement in foreign currency translation reserve(A) 6,209 6,209Balance as of June 30, 2024(A) (188,227) (188,227)Release of foreign currency translation reserve related to liquidation of subsidiaries 6 6Movement in foreign currency translation reserve(B) 2,595 2,595Balance as of June 30, 2025(B) (185,626) (185,626)Release of foreign currency translation reserve related to impairment of equity-accounted investment (Note 9) 550 550Release of foreign currency translation reserve related to liquidation of subsidiaries (516) (516)Movement in foreign currency translation reserve(C) 19,273 19,273Balance as of June 30, 2026(C) $ (166,319) $ (166,319)(A) Accumulated other comprehensive loss and Total as of July 1, 2023, have each decreased by $0.2 million as a result of thecorrection discussed in Note 1. Accumulated other comprehensive loss and Total for the year ended June 30, 2024, have each decreasedby $0.08 million as a result of the correction discussed in Note 1 to the amount included in the caption Movement in foreign currencytranslation reserve. Accumulated other comprehensive loss and Total as of June 30, 2024, have each decreased by $0.29 million as aresult of the correction discussed in Note 1. (B) Accumulated other comprehensive loss and Total for the year ended June 30, 2025, have each decreased by $0.09 million asa result of the correction discussed in Note 1 to the amount included in the caption Movement in foreign currency translation reserve.Accumulated other comprehensive loss and Total as of June 30, 2025, have each decreased by $0.22 million as a result of the correctiondiscussed in Note 1. (C) Accumulated other comprehensive loss and Total for the year ended June 30, 2026, have each increased by $0.1 million asa result of the correction, as discussed in Note 1, to the amount included in the caption Movement in foreign currency translationreserve for the three months ended September 30, 2025. Accumulated other comprehensive loss and Total as of June 30, 2026, haveeach increased by $0.1 million as a result of the correction discussed in Note 1. The movement in the foreign currency translation reserve represents the impact of translation of consolidated entities which havea functional currency (which is primarily ZAR) to the Company’s reporting currency, which is USD. During the year ended June 30, 2026, the Company reclassified losses of $0.6 million from accumulated other comprehensiveloss (accumulated foreign currency translation reserve) to net loss related to the impairment on liquidation of an equity-accountedinvestment. During the year ended June 30, 2026, the Company reclassified an aggregate gain of $0.5 million from accumulated othercomprehensive loss (accumulated foreign currency translation reserve) to net loss related to the disposal of a subsidiary and theliquidation of a subsidiary. During the year ended June 30, 2025, the Company reclassified a loss of $0.006 million from accumulatedother comprehensive loss (accumulated foreign currency translation reserve) to net loss related to the liquidation of subsidiaries.During the year ended June 30, 2024, the Company reclassified $1.5 million from accumulated other comprehensive loss (accumulatedforeign currency translation reserve) to net loss related to the disposal of shares in Finbond (refer to Note 9). The Company alsoreclassified a gain of $1.0 million from accumulated other comprehensive loss (accumulated foreign currency translation reserve) tonet loss related to the liquidation of subsidiaries during the year ended June 30, 2024.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-67 16. REVENUE The Company is a provider of digitized cash management solutions and merchant acquiring services, including an integratedplatform for the distribution of ADP (including value-added services such as prepaid airtime, prepaid electricity and bill payment);software solutions, transaction processing services; financial inclusion products and services, and secure payment technology. TheCompany operates as a payment processor in South Africa. The Company offers debit, credit and prepaid processing and issuingservices for all major payment networks. In South Africa, the Company provides innovative low-cost financial inclusion products,including banking, lending and insurance. The Company analyzes its business under a “product” view, for example, its acquiring activities in Merchant are allocated to anacquiring product view for Merchant. The Company has updated its disaggregation of revenue disclosures to align with this pro ductview. Comparative periods have been recast. Disaggregation of revenue The following table represents our revenue disaggregated by major revenue streams, including reconciliation to operatingsegments for the year ended June 30, 2026: Merchant Consumer Enterprise TotalADP $ 367,574 $ 205 $ 52,038 $ 419,817South Africa 325,696 205 52,038 377,939Rest of world 41,878 - - 41,878Transactional fees - 50,443 - 50,443Acquiring 46,776 - - 46,776South Africa 46,776 - - 46,776Rest of world - - - -Cash 41,604 - - 41,604Software 22,139 - - 22,139Utilities - - 15,002 15,002Other 18,350 802 5,878 25,030South Africa 17,757 802 5,878 24,437Rest of world 593 - - 593Total revenue under ASC 606, derived from thefollowing geographic location 496,443 51,450 72,918 620,811South Africa 453,972 51,450 72,918 578,340Rest of world 42,471 - - 42,471Lending 9,750 57,618 - 67,368South Africa 9,688 57,618 - 67,306Rest of world 62 - - 62Insurance - 33,375 - 33,375Total non-ASC 606 revenue, derived from thefollowing geographic location 9,750 90,993 - 100,743South Africa 9,688 90,993 - 100,681Rest of world 62 - - 62 Total revenue, derived from the followinggeographic locations 506,193 142,443 72,918 721,554South Africa 463,660 142,443 72,918 679,021Rest of world $ 42,533 $ - $ - $ 42,533
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-68 16. REVENUE (continued) The following table represents our revenue disaggregated by major revenue streams, including reconciliation to operatingsegments for the year ended June 30, 2025: Merchant Consumer Enterprise TotalADP $ 404,317 $ - $ 30,512 $ 434,829South Africa 370,009 - 30,512 400,521Rest of world 34,308 - - 34,308Transactional fees - 39,506 82 39,588Cash 43,723 - - 43,723Acquiring 32,507 - - 32,507South Africa 32,507 - - 32,507Rest of world - - - -Software 14,872 - - 14,872Utilities - - 4,027 4,027Other 19,663 530 4,820 25,013South Africa 19,173 530 4,820 24,523Rest of world 490 - - 490Total revenue under ASC 606, derived from thefollowing geographic location 515,082 40,036 39,441 594,559South Africa 480,284 40,036 39,441 559,761Rest of world 34,798 - - 34,798Lending 9,170 35,920 - 45,090South Africa 9,113 35,920 - 45,033Rest of world 57 - - 57Insurance - 20,052 - 20,052Total non-ASC 606 revenue, derived from thefollowing geographic location 9,170 55,972 - 65,142South Africa 9,113 55,972 - 65,085Rest of world 57 - - 57 Total revenue, derived from the followinggeographic locations 524,252 96,008 39,441 659,701South Africa 489,397 96,008 39,441 624,846Rest of world $ 34,855 $ - $ - $ 34,855
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-69 16. REVENUE (continued) The following table represents our revenue disaggregated by major revenue streams, including reconciliation to operatingsegments for the year ended June 30, 2024: Merchant Consumer Enterprise TotalADP $ 390,041 $ - $ 31,064 $ 421,105South Africa 363,879 - 31,064 394,943Rest of world 26,162 - - 26,162Cash 40,319 - - 40,319Transactional fees - 31,238 - 31,238Acquiring 12,642 - - 12,642Other 4,790 76 7,878 12,744South Africa 4,379 76 7,878 12,333Rest of world 411 - - 411Total revenue under ASC 606, derived from thefollowing geographic location 447,792 31,314 38,942 518,048South Africa 421,219 31,314 38,942 491,475Rest of world 26,573 - - 26,573 Lending 8,277 25,140 - 33,417South Africa 8,222 25,140 - 33,362Rest of world 55 - - 55Insurance - 12,757 - 12,757Total non-ASC 606 revenue, derived from thefollowing geographic location 8,277 37,897 - 46,174South Africa 8,222 37,897 - 46,119Rest of world 55 - - 55 Total revenue, derived from the followinggeographic locations 456,069 69,211 38,942 564,222South Africa 429,441 69,211 38,942 537,594Rest of world $ 26,628 $ - $ - $ 26,628 17. STOCK-BASED COMPENSATION Amended and Restated Stock Incentive Plan The Company’s Amended and Restated 2022 Stock Incentive Plan (“2022 Plan”) was most recently amended and restated onNovember 16, 2022. On each of April 11, 2024, and September 2, 2025, respectively, the Company’s Board amended the 2022 Planto increase the number of shares available for issuance by3,000,000 (for a total increase of6,000,000). On each of June 3, 2024, andDecember 8, 2025, respectively, the Company’s shareholders approved the amendment. No evergreen provisions are included in the 2022 Plan. This means that the maximum number of shares issuable under the 2022Plan is fixed and cannot be increased without shareholder approval, the 2022 Plan expires by its terms upon a specified date, and nonew stock options are awarded automatically upon exercise of an outstanding stock option. Shareholder approval is required for therepricing of awards or the implementation of any award exchange program. The Plan permits Lesaka to grant to its employees, directorsand consultants incentive stock options, nonqualified stock options, stock appreciation rights, restricted stock, performance-basedawards and other awards based on its common stock. The Remuneration Committee of the Company’s Board of Directors(“Remuneration Committee”) administers the 2022 Plan. The total number of shares of common stock issuable under the 2022 Plan is19,552,580. The maximum number of shares forwhich stock options, stock appreciation rights (other than performance-based awards that are not options) may be granted during acalendar year to any participant is600,000 shares. Shares covered by awards that expire, terminate or lapse without payment will againbe available for the grant of awards under the 2022 Plan, as well as shares that are delivered to us by the holder to pay withholdingtaxes or as payment for the exercise price of an award, if permitted by the Remuneration Committee. The shares deliverable inconnection with awards granted under the 2022 Plan may consist, in whole or in part, of authorized but unissued shares or treasuryshares. To account for stock splits, stock dividends, reorganizations, recapitalizations, mergers, consolidations, spin-offs and othercorporate events, the 2022 Plan requires the Remuneration Committee to equitably adjust the number and kind of shares of commonstock issued or reserved pursuant to the 2022 Plan or outstanding awards, the maximum number of shares issuable pursuant to awards,the exercise price for awards, and other affected terms of awards to reflect such event. No awards may be granted under the 2022 Planafter September 7, 2032, but awards granted on or before such date may extend to later dates.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-70 17. STOCK-BASED COMPENSATION (continued) Amended and Restated Stock Incentive Plan (continued) Options General Terms of Awards Option awards are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant,with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and expire10 years after the dateof grant. The options generally become exercisable in accordance with a vesting schedule ratably over a period ofthree years from thedate of grant. The Company issues new shares to satisfy stock option award exercises but may also use treasury shares. Valuation Assumptions The fair value of each option is estimated on the date of grant using the Cox Ross Rubinstein binomial model that uses theassumptions noted in the table below. The estimated expected volatility is calculated based on the Company’s730,1095 and1460-day volatility (as applicable). The estimated expected life of the option was determined based on the historical behavior of employeeswho were granted options with similar terms.No stock options were granted during the year ended June 30, 2026. The table belowpresents the range of assumptions used to value options granted during the years ended June 30, 2025 and 2024: 2025 2024Expected volatility 43% 56%Expected dividends 0% 0%Expected life (in years) 2.0 5.0Risk-free rate 4.32% 2.09% Restricted Stock General Terms of Awards Shares of restricted stock are considered to be participating non-vested equity shares (specifically contingently returnable shares)for the purposes of calculating earnings per share (refer to Note 19) because, as discussed in more detail below, the recipient is obligatedto transfer any unvested restricted stock back to the Company for no consideration and these shares of restricted stock are eligible toreceive non-forfeitable dividend equivalents at the same rate as common stock. Restricted stock generally vests ratably over athreeyear period, with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and under certaincircumstances, the achievement of certain performance targets, as described below. Recipients are entitled to all rights of a shareholder of the Company except as otherwise provided in the restricted stockagreements. These rights include the right to vote and receive dividends and/or other distributions, however, any or all dividends orother distributions paid related to restricted stock during the period of such restrictions shall be accumulated (without interest) orreinvested in additional shares of common stock, which in either case shall be subject to the same restrictions as the underlying awardor such other restrictions as the Remuneration Committee may determine. The restricted stock agreements generally prohibit transferof any nonvested and forfeitable restricted stock. If a recipient ceases to be a member of the Board of Directors or an employee forany reason, all shares of restricted stock that are not then vested and non-forfeitable will be immediately forfeited and transferred tothe Company for no consideration , except as otherwise agreed between the parties. Forfeited shares of restricted stock are availablefor future issuances by the Remuneration Committee. The Company issues new shares to satisfy restricted stock awards. Valuation Assumptions The fair value of restricted stock is generally based on the closing price of the Company’s stock quoted on The Nasdaq GlobalSelect Market on the date of grant.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-71 17. STOCK-BASED COMPENSATION (continued) Amended and Restated Stock Incentive Plan (continued) Restricted Stock (continued) Market Conditions - Restricted Stock Granted in November 2025 In November 2025, the Company awarded245,000 shares of restricted stock to a group comprising employees and which aresubject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditionsare satisfied: (1) a compounded annual15% appreciation in the Company’s stock price off a base price of $4.31 over the measurementperiod commencing on November 1, 2025 through October 31, 2028, and (2) the recipient is employed by the Company on a full-timebasis through to October 31, 2028. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest andthey will be forfeited. The Company’s closing price on October 31, 2025, was $4.30. The appreciation levels (times and price) and annual target percentages to earn the awards as of each period ended are as follows:● Prior to the first anniversary of the grant date:0%;● Fiscal 2027, the Company’s 30-day volume weighted-average stock price (“VWAP”) before October 31, 2026 isapproximately1.15 times higher (i.e. $4.96 or higher) than $4.31:33%;● Fiscal 2028, the Company’s VWAP before October 31, 2027 is1.32 times higher (i.e. $5.70 or higher) than $4.31:67%;● Fiscal 2029, the Company’s VWAP before October 31, 2028 is1.52 times higher (i.e. $6.55) than $4.31:100%. The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation. In scenarios where the sharesdo not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the shareprice on vesting date. In its calculation of the fair value of the restricted stock, the Company used an equally weighted volatility of41.2% for the closing price (of $4.35), a discounting based on U.S. dollar overnight indexed swap rates for the grant date, and nofuture dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of logprices for the three years preceding the grant date. Restricted Stock Units The Remuneration Committee may approve the grant of other stock-based awards. In April 2022, the Company granted1,250,486shares of restricted stock to employees of Connect pursuant to the terms of the acquisition. The award included an equalizationmechanism to maintain a return of $7.50 per share of restricted stock upon vesting through the issue of restricted stock units. Theconversion of restricted stock units to shares cannot exceed50% under the terms of the award and therefore no more than625,243 (or1,250,486 divided by two) would be issued upon vesting. During the years ended June 30, 2025 and 2024, respectively,380,775 and388,908 shares of restricted stock vested, and190,378 and194,454 restricted stock units vested, the maximum amount possible, andwere converted to shares of common stock. Employees elected for173,354 and166,087 shares to be withheld from173,468 and166,167 restricted stock units which vested, and which were converted to shares, in order to satisfy the withholding tax liability on thevesting of these and other shares. The173,354 and166,087 shares have been included as a reduction of the Company’s shares ofcommon stock (these shares were included in treasury shares prior to the recast discussed in Note 1). Stock Appreciation Rights The Remuneration Committee may also grant stock appreciation rights, either singly or in tandem with underlying stock options.Stock appreciation rights entitle the holder upon exercise to receive an amount in any combination of cash or shares of common stock(as determined by the Remuneration Committee) equal in value to the excess of the fair market value of the shares covered by the rightover the grant price.No stock appreciation rights have been granted.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-72 17. STOCK-BASED COMPENSATION (continued) Stock option and restricted stock activity Options The following table summarizes stock option activity for the years ended June 30, 2026, 2025 and 2024: Number ofshares Weightedaverageexerciseprice($) Weightedaverageremainingcontractualterm(in years) Aggregateintrinsicvalue($'000) Weightedaveragegrant datefair value($) Outstanding - July 1, 2023 673,274 4.37 5.14 239 1.67Granted – June 2024 500,000 3.50 5.17 880 1.76Granted – June 2024 1,000,000 6.00 4.60 1,690 1.69Granted – June 2024 1,000,000 8.00 4.60 1,300 1.30Granted – June 2024 1,000,000 11.00 4.60 920 0.92Granted – June 2024 1,000,000 14.00 4.60 685 0.69Exercised (54,287) 2.25 - 71 -Forfeited (200,739) 3.96 - 1.42Outstanding - June 30, 2024 4,918,248 8.70 4.51 889 1.77Granted – December 2024 350,000 6.00 2.00 433 1.24Granted – December 2024 250,000 8.00 2.00 177 0.71Granted – January 2025 100,000 8.00 2.00 71 0.71Granted – January 2025 150,000 11.00 2.00 107 0.71Granted – January 2025 150,000 14.00 2.00 123 0.82Exercised (38,011) 3.02 - 72 -Forfeited (13,333) 11.23 - 8.83Outstanding - June 30, 2025 5,866,904 8.71 3.55 703 1.20Exercised (21,196) 3.02 - 41 -Outstanding - June 30, 2026 5,845,708 8.73 2.29 979 1.20 These options have an exercise price range of $3.01 to $14.00. No stock options were awarded during the year ended June 30, 2026. The Company awarded1,000,000 and4,500,000 stockoptions to employees during the years ended June 30, 2025 and 2024, respectively. The Company awarded1,000,000 stock options during the year ended June 30, 2025 with strike prices ranging from $6 to $14.These stock options will vest on December 31, 2026, and vesting is subject to the executive officers continued employment with theCompany through to the vesting date. The1,000,000 stock options expire on January 31, 2029. The4,500,000 stock options awarded during the year ended June 30, 2024, were awarded to Mr. Mazanderani, the Company’sExecutive Chairman, and500,000 of these stock options were granted pursuant to the 2022 Plan and4,000,000 were granted pursuantto shareholder approval which was obtained on June 3, 2024. The500,000 options vested on December 3, 2024, the first anniversaryof the grant date, and were subject to Mr. Mazanderani’s continued services as Executive Chair through the vesting date. The500,000options were scheduled to vest immediately if Mr. Mazanderani’s employment was terminated by the Company without cause on orbefore the first anniversary of the grant date. In March 2025, the Company’s Remuneration Committee amended the exercise terms ofthe500,000 stock options from being exercisable during a period commencing from January 31, 2028 to January 31, 2029, to beingexercisable from March 2025, however, any stock options exercised may only be sold during a period commencing from January 31,2028 to January 31, 2029. The4,000,000 options vested on January 31, 2026, and were subject to Mr. Mazanderani’s ongoing servicethrough to this date. The4,000,000 stock options may only be exercised during a period commencing from January 31, 2028 to January31, 2029. On August 3, 2026, the Company awarded Mr. Mazanderani, an option to purchase1,000,000 shares of the Company’s commonstock at an exercise price of $5.00 per share. These stock options may only be exercised during the period commencing from April 1,2029 to April 1, 2030. Vesting of these stock options is subject to Mr. Mazanderani’s continuous employment with the Companythrough April 1, 2028.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-73 17. STOCK-BASED COMPENSATION (continued) Stock option and restricted stock activity (continued) Options (continued) During the year ended June 30, 2026,4,000,000 stock options vested and are exercisable during a period commencing fromJanuary 31, 2028 to January 31, 2029. During the years ended June 30, 2025 and 2024, an additional26,982 (which excludes the500,000 options discussed earlier), and116,063 stock options became exercisable, respectively. During the years ended June 30, 2026,2025 and 2024, the Company received approximately $0.06 million, $0.1 million, and $0.2 million from the exercise of21,196,38,011,and54,287 stock options, respectively. No stock options were forfeited during the year ended June 30, 2026. During the years ended June 30, 2025 and 2024, employeesforfeited13,333 and200,739 stock options, respectively. The stock options forfeited had strike prices ranging from $3.01 to $11.23. The following table presents stock options vested and expected to vest as of June 30, 2026: Number ofshares Weightedaverageexerciseprice($) Weightedaverageremainingcontractualterm(in years) Aggregateintrinsicvalue($’000)Vested and expected to vest - June 30, 2026 5,845,708 8.73 2.29 979 These options have an exercise price range of $3.01 to $14.00, and include the4,000,000 options awarded in June 2024. The following table presents stock options that are exercisable as of June 30, 2026: Number ofshares Weightedaverageexerciseprice($) Weightedaverageremainingcontractualterm(in years) Aggregateintrinsicvalue($’000)Exercisable - June 30, 2026 845,708 4.01 2.68 979
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-74 17. STOCK-BASED COMPENSATION (continued) Stock option and restricted stock activity (continued) Restricted stock The following table summarizes restricted stock activity for the years ended June 30, 2025 and 2024: Number of shares ofrestricted stock Weighted average grantdate fair value($’000)Non-vested – June 30, 2023 2,614,419 11,869Total granted 1,002,241 3,942Granted – October 2023 333,080 1,456Granted – October 2023, with performance conditions 310,916 955Granted – October 2023 225,000 983Granted – January 2024 56,330 197Granted – February 2024 9,195 31Granted - June 2024 67,720 320Total vested (1,232,251) 5,208Vested – July 2023 (78,800) 302Vested – November 2023 (109,833) 429Vested – December 2023 (67,073) 234Vested – February 2024 (14,811) 53Vested – March 2024 (69,286) 256Vested – April 2024 (394,932) 1,630Vested – May 2024 (88,617) 391Vested – June 2024 (350,247) 1,639Vested – June 2024, with performance conditions (58,652) 274Total forfeitures (299,463) 1,315Forfeitures - employee terminations (82,077) 298Forfeitures – May and July 2021 awards with market condition (217,386) 1,017Non-vested – June 30, 2024 2,084,946 8,736Total granted 1,433,610 5,381Granted – August 2024 32,800 154Granted – October 2024 100,000 490Granted – November 2024, with performance conditions 1,198,310 4,206Granted – January 2025 65,000 354Granted – April 2025 37,500 177Total vested (1,197,944) 5,742Vested – July 2024 (78,801) 394Vested – November 2024 (213,687) 1,134Vested – November 2024, with performance conditions (103,638) 524Vested – December 2024 (77,306) 417Vested – February 2025 (13,922) 68Vested – March 2025 (69,287) 328Vested – April 2025 (385,787) 1,737Vested – June 2025 (255,516) 1,140Total forfeitures (150,712) 728Forfeitures - employee terminations (121,591) 571Forfeitures – December 2021 awards with market condition (29,121) 157Non-vested – June 30, 2025 2,169,900 7,833
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-75 17. STOCK-BASED COMPENSATION (continued) Stock option and restricted stock activity (continued) Restricted stock (continued) The following table summarizes restricted stock activity for the year ended June 30, 2026: Number of shares ofrestricted stock Weighted average grantdate fair value($’000)Non-vested – June 30, 2025 2,169,900 7,833Total granted 1,054,095 4,228Granted – July 2025 3,772 17Granted – August 2025 5,323 25Granted – September 2025 200,000 922Granted – October 2025 215,000 905Granted – November 2025 160,000 708Granted – November 2025, with performance conditions 245,000 598Granted – February 2026 150,000 698Granted – March 2026 30,000 139Granted – May 2026 45,000 216Total vested (400,394) 1,691Vested – August 2025 (10,933) 50Vested – October 2025 (33,333) 139Vested – November 2025 (120,434) 465Vested – December 2025 (52,479) 196Vested – February 2026 (21,666) 99Vested – April 2026 (12,499) 61Vested – June 2026 (149,050) 681Total forfeitures (361,413) 1,437Forfeitures - employee terminations (103,545) 475Forfeitures - December 2022 award with market conditions (257,868) 962Non-vested – June 30, 2026 2,462,188 9,381 Awards granted In July, August, September, October and November 2025, and February, March and May 2026, respectively, the Companygranted3,772;5,323;200,000;215,000;160,000;150,000;30,000; and45,000 shares of restricted stock to employees which havetime-based vesting conditions and which are subject to the employees’ continued employment with the Company through theapplicable vesting dates. In November 2025, the Company awarded245,000 shares of restricted stock to employees which containedtime and performance-based (market conditions related to share price performance) vesting conditions. In August 2024, October 2024, January 2025 and April 2025, respectively, the Company granted32,800;100,000;65,000; and37,500 shares of restricted stock to employees which have time-based vesting conditions and which are subject to the employee’scontinued employment with the Company through the applicable vesting dates. In November 2024, the Company awarded1,198,310shares of restricted stock to executive officers and employees which contained time and performance-based (market conditions relatedto share price performance) vesting conditions. In October 2023, the Company awarded333,080 shares of restricted stock with time-based vesting conditions to approximately150 employees, which are subject to the employees continued employment with the Company through the applicable vesting dates. InOctober 2023, the Company awarded310,916 shares of restricted stock to executive officers which contained time and performance-based (market conditions related to share price performance) vesting conditions. The Company also awarded225,000 shares ofrestricted stock to an executive officer in October 2023, which vest on June 30, 2025, except if the executive officer is terminated forcause, in which case the award will be forfeited. In January 2024, February 2024 and June 2024, the Company awarded56,330;9,195;and67,720 shares of restricted stock with time-based vesting conditions to employees.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-76 17. STOCK-BASED COMPENSATION (continued) Stock option and restricted stock activity (continued) Restricted stock (continued) Awards granted (continued) The Company had previously agreed to grant an advisor5,500 shares per month in lieu of cash for ad hoc consulting servicesprovided to the Company. The Company and the advisor have agreed that the Company will issue the shares to the advisor, in arrears,on a quarterly basis. During the year ended June 30, 2026, the Company recorded a stock-based compensation charge of $0.1 millionand included the issuance of27,500 shares of common stock in its issued and outstanding share count. During the year ended June 30,2026, the Company and the consultant agreed that49,500 shares of the Company’s common stock that were previously issued wouldbe forfeited and a cash payment of $0.2 million was made in lieu of the forfeited shares. During the year ended June 30, 2025, theCompany recorded a stock-based compensation charge of $0.4 million and included the issuance of66,000 shares of common stockin its issued and outstanding share count. Overall, the Company issued a total of44,000 shares (27,500 plus66,000 less49,500) of theCompany’s common stock to the consultant during the year ended June 30, 2026. Awards vested During the years ended June 30, 2026, 2025 and 2024, respectively,400,394;1,197,944; and1,002,241 shares of restricted stockwith time-based and performance-based vesting conditions vested. The June 30, 2025, shares include78,801 shares of restricted stockgranted to Mr. Meyer, our former Group CEO, which vested in July 2024, and103,638 shares of restricted stock with performanceconditions (share price targets) which vested in November 2024, following the achievement of the agreed performance condition. TheJune 30, 2024, shares of stock vesting includes58,652 shares with a performance-based condition related to the achievement of the2021 to 2024 financial services plan. The fair value of restricted stock which vested during the years ended June 30, 2026, 2025 and2024, was $4.2 million, $5.9 million and $5.2 million, respectively. In August, November and December 2025 and January and April 2026, an aggregate of192,936 shares of restricted stock grantedto employees vested and they elected for84,758 shares to be withheld to satisfy the withholding tax liability on the vesting of theseshares. In November 2024,27,546 shares of restricted stock granted to Mr. Mali vested and he elected for12,396 shares to be withheldto satisfy the withholding tax liability on the vesting of these shares. In addition, in November and December 2024 and February,April, May and June 2025, an aggregate of556,889 shares of restricted stock granted to employees vested and they elected for185,437shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. In May 2024,55,598 shares of restricted stock granted to Mr. Mali vested and he elected for25,020 shares to be withheld tosatisfy the withholding tax liability on the vesting of these shares. In addition, in November and December 2023 and February, April,May and June 2024, an aggregate of556,889 shares of restricted stock granted to employees vested and they elected for128,415 sharesto be withheld to satisfy the withholding tax liability on the vesting of these shares. These84,758,197,833 (12,396 plus185,437) and153,435 (25,020 plus128,415) shares have been included in the Company’sshares of common stock (these shares were included in treasury shares prior to the recast discussed in Note 1) for the years ended June30, 2026, 2025 and 2024, respectively. Awards forfeited During the year ended June 30, 2026,257,868 shares of restricted stock were forfeited by executive officers (including a formerGroup CEO) as the market condition (related to share price performance) were not achieved. During the year ended June 30, 2026,employees forfeited103,545 shares of restricted stock following their termination of employment with the Company. During the year ended June 30, 2025,29,121 shares of restricted stock were forfeited by an employee as the market condition(related to share price performance) were not achieved. During the year ended June 30, 2025, employees forfeited121,591 shares ofrestricted stock following their termination of employment with the Company. During the year ended June 30, 2024,217,386 shares of restricted stock were forfeited by executive officers (including formerexecutive officers) as the market condition (related to share price performance) were not achieved. During the year ended June 30,2024, employees forfeited82,077 shares of restricted stock following their termination of employment with the Company.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-77 17. STOCK-BASED COMPENSATION (continued) Lesaka ESOP Trust On November 14, 2024, the Company announced that its shareholders voted on and approved the funding and issuance of sharesto the Lesaka ESOP Trust at its annual general meeting. The Lesaka Employee Share Ownership Plan (“ESOP”) is designed to createalignment with the Company's long-term growth objectives. The Lesaka ESOP Trust is also expected to advance the Company’stransformation initiatives and plays an important role in improving the company’s Broad-Based Black Economic Empowerment(“BBBEE”) rating. As of November 2024, when shareholders approved the plan, the Company’s employee base was comprised ofapproximately87% designated groups for BBBEE purposes. Through the creation of a broader base of employee ownership, theCompany is helping to promote economic inclusion and contribute to transformation in the broader South African economy. TheLesaka ESOP Trust is structured as an evergreen trust, ensuring the permanence of the plan and allowing for the inclusion of futureemployees as the Company continues to grow. The Lesaka ESOP Trust was required to have an effective holding of3% of the Company’s issued shares at the date ofimplementation, and in February 2025, the Company issued2,490,000 shares of its common stock to the Lesaka ESOP Trust. Thesubscription price payable by the Lesaka ESOP Trust for the shares was vendor funded by the Company through a notional vendorfunding (“NVF”) structure whereby the Company provided a notional loan to the Lesaka ESOP Trust representing the fair value ofthe shares, facilitating the acquisition by the Lesaka ESOP Trust of the shares without requiring any upfront payment by the LesakaESOP Trust except for the payment of a nominal value of $0.001 per share. The NVF structure will achieve the same economic effectas a traditional loan structure from the Company to the Lesaka ESOP Trust to enable the Lesaka ESOP Trust to subscribe for sharesin the Company, but without any actual flow of funds from the Company to the Trust. A notional amount on the date of issue was ascribed to each share that the Lesaka ESOP Trust subscribed for, which is equal tothe fair market value of one of the Company shares of common stock (which is the amount the Lesaka ESOP Trust would have paidfor one of the Company’s shares in an ordinary course cash transaction with the Company) less a10% discount. The principal amounton the NVF loan will accrue interest at a fixed rate of3% per annum. The NVF will have afive-year term. The notional amount wasnot recognized in the Company’s financial statements because it represents a formula to calculate the number of the Company’s sharesof common stock to be returned by the Lesaka ESOP Trust to the Company afterfive years. On or about the 5th anniversary of the implementation date of the ESOP (“Maturity Date”), the Company will have the option torepurchase a portion of the shares held by the Lesaka ESOP Trust at the nominal aggregate amount to settle the total NVF loanoutstanding. The number of shares to be repurchased will be determined by using a formula set out in the transaction documents thatconsiders the total NVF loan outstanding on the Maturity Date and the market value of one of the Company’s shares held by the LesakaESOP Trust. The purchase consideration that would have been payable for the shares the Company will repurchase (which is the fairmarket value the Company would have paid for the shares in an ordinary course cash transaction with the Lesaka ESOP Trust on theMaturity Date) will be set off against the total NVF loan outstanding. After settlement of the NVF loan,50% of the remaining sharesheld by the Lesaka ESOP Trust, if any, will be distributed to eligible employees. The Lesaka ESOP Trust will hold shares of the Company’s common stock. The Lesaka ESOP Trust will therefore be entitled toreceive its proportionate share of any dividends and other distributions declared by the Company to its shareholders and vote its sharesheld on matters requiring shareholder approval. The Lesaka ESOP Trust is administered by the board of trustees made up offive members nominated by the Company’s Boardand the participants in the ESOP. The Company’s Board has the right to nominatetwo members to the board of trustees. The balanceof the trustees,one of which must be an independent trustee, are nominated by the participants. The nominees appointed to the boardof trustees may not be members of the Company’s Board or an officer as contemplated in Rule 16a-(f) of the Securities and ExchangeAct of 1934. The nominees of the participants need to meet an election criteria to be eligible for nomination which requires participantnominees to have been employed by the Group for a continuous and uninterrupted period of at leastthree years. The trustees have thediscretion to determine how the Lesaka ESOP Trust should vote shares of the Company common stock held on matters requiring theCompany’s shareholders approval. The decisions by the trustees are decided by a majority vote. The Company is responsible for all reasonable operating expenses incurred by the Lesaka ESOP Trust until such time as theLesaka ESOP Trust has sufficient cash resources of its own to settle its operating expenses. The Company controls the LesakaESOPTrust because the Lesaka ESOP Trust is considered to be a variable interest entity (“VIE”) in which the Company has a controllingfinancial interest. Accordingly, the Lesaka ESOP Trust is consolidated by the Company. As the Lesaka ESOP Trust is consolidatedby the Company, the2,490,000 shares of the Company’s common stock held by Lesaka ESOP Trust are accounted for as treasuryshares at the nominal amount of $0.001 per share. Purchases and sales of the Company’s common stock between the Company andthe Lesaka ESOP Trust will be recognized within equity with no profit or loss being recognized in the statement of operations on suchacquisition or disposal.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-78 17. STOCK-BASED COMPENSATION (continued) Lesaka ESOP Trust (continued) Qualifying employees were allocated A and B units. An A unit represents an option for the employees to acquire shares of theCompany’s common stock in future. The A unit represents an equity-settled share-based payment, requiring the recognition of a stock-based compensation charge over afive year service period. The A units were measured at their grant date fair value using a BlackScholes valuation model. A B unit represent s an employees’ entitlement to cash payments based on dividends paid by the Companyto the Lesaka ESOP Trust, and consequently distributions that the Lesaka ESOP Trust makes to qualifying employees who arebeneficiaries of the Lesaka ESOP Trust. These payments represent an employee benefit, requiring that the Company to recognize anexpense to the value of the payment made when each payment is made. Initial qualifying employees are required to have a minimum oftwo year’s service with the Company, with criteria beingdetermined on December 31, 2024. Initial qualifying employees received invitation and allocation notices on or around April 1, 2025.As employees completetwo years’ service to any subsidiary of the Company they will become eligible for consideration as abeneficiary of the Lesaka ESOP Trust. Qualifying employees include employees of recent acquisitions, including Adumo. On April 1, 2025, the Lesaka ESOP Trust awarded2,030 qualifying employees1,989,400 A units and2,030 B units. Lesaka’sclosing price on the Nasdaq on April 1, 2025 was $5.00 per share and each A unit was issued with an initial strike price of $4.50 (theclosing price less a10% discount) and is expected to grow by3% per annum through to April 1, 2030. The Company estimated aforfeiture rate of8% per annum. The fair value of each A unit is estimated on the date of grant using Black-Scholes model that usesthe assumptions noted in the table below. The estimated expected volatility is generally calculated based on the Company’s1,251-dayvolatility. The estimated expected life of the option was determined as the period from grant date through to the vesting date inFebruary 2030. On April 1, 2026, the Lesaka ESOP Trust awarded348 qualifying employees278,400 A units and348 B units. Lesaka’s closingprice on the Nasdaq on April 1, 2026 was $4.92 per share and each A unit was issued with an initial strike price of $4.50 (the closingprice less a10% discount) and is expected to grow by3% per annum through to April 1, 2030. The Company estimated a forfeiturerate of8% per annum. The fair value of each A unit is estimated on the date of grant using Black-Scholes model that uses theassumptions noted in the table below. The estimated expected volatility is generally calculated based on the Company’s1,251-dayvolatility. The estimated expected life of the option was determined as the period from grant date through to the vesting date inFebruary 2030. The table below presents the range of assumptions used to value options granted during the years ended June 30, 2026 and 2025: 2026 2025Expected volatility 44% 46%Expected dividends 0% 0%Expected life (in years) 3.9 4.9Risk-free rate 4.18% 4.17%
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-79 17. STOCK-BASED COMPENSATION (continued) Stock-based compensation charge and unrecognized compensation cost The Company has recorded a net stock compensation charge of $7.0 million, $9.6 million and $7.9 million for the years endedJune 30, 2026, 2025 and 2024, respectively, which comprised: Total charge Allocated to ITprocessing,servicing andsupport Allocated toselling, generalandadministrationYear ended June 30, 2026Stock-based compensation charge $ 6,616 $ - $ 6,616Stock-based compensation charge related to ESOP 655 - 655Reversal of stock compensation charge related to stockoptions and restricted stock forfeited (302) - (302)Total - year ended June 30, 2026 $ 6,969 $ - $ 6,969Year ended June 30, 2025Stock-based compensation charge $ 9,482 $ - $ 9,482Stock-based compensation charge related to ESOP 157 - 157Reversal of stock compensation charge related to stockoptions and restricted stock forfeited (89) - (89)Total - year ended June 30, 2025 $ 9,550 $ - $ 9,550Year ended June 30, 2024Stock-based compensation charge $ 8,045 $ - $ 8,045Reversal of stock compensation charge related to stockoptions and restricted stock forfeited (134) - (134)Total - year ended June 30, 2024 $ 7,911 $ - $ 7,911 The stock-based compensation charges and reversal have been allocated to selling, general and administration based on theallocation of the cash compensation paid to the relevant employees. As of June 30, 2026, the total unrecognized compensation cost related to stock options was approximately $2.7 million, whichthe Company expects to recognize over approximatelytwo years. As of June 30, 2026, the total unrecognized compensation costrelated to restricted stock awards was approximately $5.3 million, which the Company expects to recognize over approximatelythreeyears. Income tax consequences During the years ended June 30, 2026, 2025 and 2024, the Company recorded a deferred tax benefit of $0.6 million, $1.0 millionand $0.7 million, respectively, related to the stock-based compensation charge recognized related to employees of Lesaka. Duringthese periods the Company recorded a valuation allowance related to the full deferred tax benefit recognized because it does not believethat the stock-based compensation deduction would be utilized as it does not anticipate generating sufficient taxable income in theUnited States. The Company deducts the difference between the market value on the date of exercise by the option recipient and theexercise price from income subject to taxation in the United States. Lesaka recharges its subsidiaries for stock-based compensationcharges related to service provided by employees of its subsidiaries. During the years ended June 30, 2026, 2025 and 2024, thesesubsidiaries deducted stock-based compensation charges of $3.6 million, $4.3 million, and $4.6 million, respectively.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-80 18. INCOME TAXES Income tax expense The table below presents the components of income (loss) before income tax expense (benefit) for the years ended June 30, 2026,2025 and 2024: 2026 2025 2024Domestic: South Africa(A) $ 11,233 $ (35,554) $ (5,480)Foreign: (7,507) (71,629) (8,393)United States (11,993) (12,322) (8,705)Other(1) 4,486 (59,307) 312Income (Loss) before income tax expense (benefit)(A) $ 3,726 $ (107,183) $ (13,873) (A) Income (loss) before income tax expense (benefit) to Net income (loss) attributable to Lesaka for the year ended June 30,2025 and 2024 decreased by $1.2 million and $1.1 million, respectively, in order to correct the error discussed in Note 1 to theconsolidated statement of operations. (1) Amount for the year ended June 30, 2025, includes the impact of the change in fair value of equity securities discussed inNote 6 related to MobiKwik. Presented below is income tax expense (benefit) by location of the taxing jurisdiction for the years ended June 30, 2026, 2025and 2024: 2026 2025 2024Current tax expense $ 10,880 $ 5,757 $ 5,766Domestic: South Africa 8,412 5,582 5,634Foreign: 2,468 175 132Other 2,468 175 132Deferred tax (benefit) expense(A) (9,451) (21,739) (2,712)Domestic: South Africa(A) (9,483) (11,601) (2,716)Foreign: 32 (10,138) 4United States - (10,120) -Other 32 (18) 4Foreign tax credits generated - United States - - 309Income tax expense (benefit) $ 1,429 $ (15,982) $ 3,363 (A) Deferred tax expense (benefit) and South Africa for the year ended June 30, 2025, have decreased by $2.2 million as a resultof the correction discussed in Note 1. There wereno changes to the enacted income tax rate in the years ended June 30, 2026, 2025 and 2024 in South Africa, thejurisdiction in which we incur the majority of our income tax expense . The Company’s current tax expense for the year ended June30, 2026, was higher than the previous year due to the higher taxable income generated by the Company’s subsidiaries during the yearended June 30, 2026, primarily due to continued improved profitability generated from the Consumer operating segment comparedwith the year ended June 30, 2025, as well as from the contribution to profitability from previous year’s acquisitions for the full yearduring the year ended June 30, 2026. The Company’s deferred tax benefit for the year ended June 30, 2026, was lower compared with the previous year primarily dueto the releases of valuations allowances in the previous year, which was partially offset by a higher benefit recorded in the current yeardue to (i) the higher deferred tax benefit recorded during the year ended June 30, 2026, related to the amortization of intangible assetsrecognized due to the acquisition of Adumo and Utilities in South Africa, (ii) the change in useful lives of certain brand intangibleassets which result in higher deferred tax benefits in South Africa , (iii) the release of a valuation allowance created related to netoperating losses in the United States following the utilization of net operating losses against taxable income, (iv) and the reversal of$12.3 million related to certain valuation allowances created in prior years following an improvement in profitability of certain of theCompany’s subsidiaries. During the year ended June 30, 2026, the Company recognized a benefit for operating loss carryforwardsgenerated of $3.9 million where the related deferred tax asset was not offset by a valuation allowance. During the year ended June 30,2026 the Company recognized a valuation allowance related to an operating loss carryforward and other deferred tax assets totalling$9.9 million following a determination by the management, after considering both positive and negative evidence, that these deferredtax assets would not be realized in future years.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-81 18. INCOME TAXES (continued) Income tax expense (continued) The Company’s deferred tax (benefit) expense for the year ended June 30, 2025, was higher compared with the previous yeardue to reversal of the deferred tax liability (a benefit) related to the change in the carrying amount of our entire investment inMobiKwik, the inclusion of the deferred tax benefit recorded during the year ended June 30, 2025, related to the amortization ofintangible assets recognized due to the acquisition of Adumo and Utilities and the reversal of $12.8 million related to certain valuationallowances created in prior years following (i) an improvement in profitability of certain of the Company’s subsidiaries and (ii) achange in judgment on the need for a valuation allowance of $11.4 million related to an entity which the Company believes hasachieved sustainable profitability. During the year the Company recognized a benefit for operating loss carryforwards generated of$6.8 million where the related deferred tax asset was not offset by a valuation allowance. During the year the Company recognized avaluation allowance related to an operating loss carryforward of $6.0 million following a determination by the management, afterconsidering both positive and negative evidence, that the operating loss carryforward would not be realized. During the years ended June 30, 2026, 2025 and 2024, the Company incurred net operating losses through certain of its SouthAfrican wholly-owned subsidiaries and recorded a deferred tax benefit related to these losses. However, the Company has created avaluation allowance for certain of these net operating losses which reduced the deferred tax benefit recorded. Net operating lossesincurred during the year ended June 30, 2026, were higher than in previous periods due to losses incurred by certain entities that exitedexisting businesses and higher operating costs incurred, but overall associated valuation allowance created during the year ended June30, 2026, were lower than in previous periods because the Company believes it is more likely than not that certain of these losses willbe utilized in subsequent periods. Net operating losses and associated valuation allowance created during the year ended June 30,2025, were lower than in previous periods due to the improvement in operating performance by the Company’s subsidiaries. Adoption of new accounting guidance impacting presentation of the income tax rate reconciliation and income taxes paid Following the adoption of guidance to enhance annual income tax disclosures the Company has amended its presentation toprovide additional disaggregation of information included in the income tax rate reconciliation and to provide additional disclosureregarding income taxes paid. The Company adopted the guidance on a prospective basis during the year ended June 30, 2026. On June 7, 2004, Lesaka and Aplitec implemented a transaction under which the former shareholders of Aplitec obtained amajority voting interest in Lesaka. Aplitec was a holding company established and existing under the laws of Republic of South Africaand was liquidated and deregistered following the closing of the transaction. GAAP requires that the company whose shareholdersretain a majority interest in a combined business be treated as the acquirer for accounting purposes. Consequently, this transaction wasaccounted for as a reverse acquisition. For the period from June 7, 2004, the financial information reported for the Company representsthe consolidated results of Lesaka and Aplitec with Lesaka as the acquired entity. Although Aplitec is deemed to be the acquiringcompany for financial and reporting purposes, the legal status of the Lesaka as the surviving corporation did not change. Therefore,the Company has used the South African income tax rate of27% for purposes of its income tax rate reconciliation and the country ofSouth Africa for other income tax disclosures.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-82 18. INCOME TAXES (continued) Incomes taxes rate reconciliation A reconciliation of income taxes, calculated at the South African income tax rate to the Company’s reported income tax expense,for the year ended June 30, 2026, is as follows: 2026Income taxes at the South African statutory income tax rate 1,007 27.00 %Foreign Tax EffectsUnited StatesStatutory income tax rate difference between the United States federal and South Africa rates 720 19.32 %Non-taxable other (95) (2.55)%Non-deductible other expenses 308 8.26%Changes in valuation allowances (5,847) (156.92)%Prior years under provision 281 7.54%Prior year global intangible low-taxed income ("GILTI") 3,565 95.68 %Current year GILTI 4,306 115.57 %BotswanaStatutory income tax rate difference between Botswana and South Africa (94) (2.52)%NamibiaStatutory income tax rate difference between Namibia and South Africa 60 1.61%Withholding taxes 124 3.33%ZambiaWithholding taxes 189 5.07%GermanyStatutory tax rate difference between other jurisdictions and South Africa (27) (0.72)%Non-taxable: Other (156) (4.19)%Prior years (over) under provision (242) (6.49)%NetherlandsNon-taxable income related to an allowance for doubtful loans receivable reversed(479) (12.86)%Other jurisdictionsOther 6 0.16%Changes in Valuation Allowances: South Africa 21,878 587.17%Nontaxable or Nondeductible Items: South AfricaNon-deductible goodwill impairment 103 2.76%Non-deductible interest expense paid on borrowings 924 24.80 %Non-deductible consulting fees 135 3.62%Non-deductible penalties 54 1.45%Non-deductible interest expense paid to taxing authorities 83 2.23%Non-deductible other expenses 143 3.84%Non-deductible rebrand costs 304 8.16%Non-deductible loss on disposal of business 204 5.48%Non-taxable gain on consolidation (286) (7.68)%Non-taxable other income (320) (8.59)%Deferred tax asset related to capital loss generated (25,026) (671.66)%Other: South AfricaPrior years (over) under provision (545) (14.63)%Withholding taxes 280 7.51%Other (128) (3.44)%Income tax expense / Effective tax rate 1,429 38.33 %
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-83 18. INCOME TAXES (continued) Income tax rate reconciliation (continued) For reconciling items equal to or greater than 5% of the amount computed by applying the South African statutory income taxrate to income (loss) before income tax expense (benefit), additional qualitative information is provided below:● Foreign tax rate effects: United States: primarily relates to the (i) taxes related to prior period GILTI from earnings andlosses from foreign jurisdiction, mainly South Africa, (ii) taxes related to current year GILTI, (iii) release of the valuationallowance related to certain net operating loss carryforwards as a result of utilization of net operating loss carryforwardsagainst these taxes, and (iv) non-deductible expenses. ● Foreign tax effects: Botswana, Namibia, Zambia, Germany, Netherlands and other jurisdictions: primarily relates tothe (i) effect of earnings generated in jurisdictions with statutory tax rates different from the South African s statutory rate,including Botswana, Namibia , Germany and other jurisdictions in which the Company operates, (ii) withholding taxes paidin foreign jurisdictions, (iii) non-taxable income related an allowance for doubtful loans receivable reversed, and (iv)inclusion of prior period tax entries in the current year.● Changes in valuation allowance: relates to the (i) release of valuation allowances following an improved operatingperformance by certain of the Company’s South African subsidiaries, and (ii) recognition of a valuation allowances followingmanagement assessment of the utilization of deferred tax assets in South Africa.● Nontaxable or nondeductible items: primarily consist of expenses in South Africa that are not deductible for income taxpurposes under applicable tax laws, including (i) related to goodwill impaired, (ii) interest expense incurred on certain of theCompany’s borrowings, (iii) consulting fees incurred that are not in the production of taxable income (iv) penalties andinterest incurred related the taxing authority, (v) a loss on deconsolidation of a business and (vi) a deferred tax asset relatedto capital loss generated on disposal of Cell C (the Company has created a full valuation allowance for this capital loss). As previously disclosed, a reconciliation of income tax expense (benefit), calculated at the fully-distributed South African incometax rate to the Company’s effective tax rate, for the years ended June 30, 2025 and 2024, is as follows: 2025 2024Income taxes at South African income tax rates 27.00% 27.00%Non-deductible interest expense (1.29)% (24.55)%Movement in valuation allowance(A) 3.55% (22.15)%Non-deductible transaction costs (4.19)% (5.91)%Goodwill impairment (4.22)% - - Capital gains tax rate differential - - 1.62%Prior year adjustments 0.22% (1.37)%Non-deductible items(A) (3.42)% 0.93%Foreign tax credits 0.03% 0.19%Foreign tax rate differential (2.77)% -Effective tax rate 14.91% (24.24)% (A) Movement in valuation allowance decreased from5.62% to3.55%, and non-deductible items increased from (3.23%) to(3.42%) as a result of the correction discussed in Note 1. Percentages included in the 2024 column in the reconciliation of income tax expense (benefit), presented above are specificallyimpacted by the loss incurred by the Company during the years ended June 30, 2024. For instance, for the year ended June 30, 2024,income tax expense of $3.4 million represents (24.24%) multiplied by the loss before tax (benefit) expense of $(13,873). Movement in the valuation allowance for the year ended June 30, 2025, includes the impact of the reversal of the allowancescreated in previous periods related to certain net operating loss carryforwards which the Company believes are no longer requiredfollowing improved and sustained profitability generated by certain of the Company’s subsidiaries. Non-deductible items for the yearended June 30, 2025, includes transactions costs and interest expense incurred which the Company cannot deduct for income taxpurposes. Movement in the valuation allowance for the year ended June 30, 2024, includes allowances created related to certain netoperating loss carryforwards generated during the year. Non-deductible items for the year ended June 30, 2024, includes transactionscosts and interest expense incurred which the Company cannot deduct for income tax purposes.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-84 18. INCOME TAXES (continued) Income tax paid The Company is required to separately disclose income taxes paid, net of refunds received, to an individual jurisdiction whenthe amount paid to that jurisdiction equals or exceeds 5% of total income taxes paid, net of refunds received. Income taxes paid, netof refunds received, to the jurisdictions that met the threshold for the year ended June 30, 2026, was as follows: 2026JurisdictionDomestic: South Africa $ 9,332Foreign: 1,100Namibia 780All other 320Total income taxes paid, net of refunds received $ 10,432 Deferred tax assets and liabilities Deferred taxes reflect the temporary differences between the financial statement carrying amount and tax bases of assets andliabilities and carryforwards measured using enacted tax rates in effect for the year in which the items are expected to reverse. Theprimary components of the temporary differences and carryforwards that gave rise to the Company’s deferred tax assets and liabilitiesas of June 30, and their classification, were as follows: June 30, June 30,2026 2025Total deferred tax assetsNet operating loss carryforwards $ 57,083 $ 63,740Capital loss carryforwards 32,104 7,094Provisions and accruals 8,630 6,648Equity investments 5,567 29,475Operating lease liability 6,010 -Foreign tax credit carryforwards - 12,300Other 4,642 4,604Total deferred tax assets before valuation allowance 114,036 123,861Valuation allowances(A) (92,143) (109,468)Total deferred tax assets, net of valuation allowance 21,893 14,393 Total deferred tax liabilities:Intangible assets 31,215 36,403Operating lease right-of-use 4,735 -Other 1,852 1,573Total deferred tax liabilities 37,802 37,976 Reported asLong-term deferred tax assets, net 12,470 10,338Long-term deferred tax liabilities, net 28,379 33,921Net deferred tax liabilities $ 15,909 $ 23,583 (A) Valuation allowances as of June 30, 2025, has increased by $2.2 million as a result of the correction discussed in Note 1. Decrease in total net deferred tax liabilities Net operating loss carryforwards Net operating loss carryforwards have decreased primarily due to the utilization of net operating loss carryforwards in currentyear, which was partially offset by the generation of net operating loss carryforwards in the current year from losses incurred by certainof the Company’s subsidiaries. Net operating loss carryforwards are also impacted by the currency changes between the South AfricanRand against the United States dollar. During the year ended June 30, 2026, net operating loss carryforwards related to a South Africansubsidiary of $1.5 million expired because the subsidiary is no longer trading. The Company had previously created a valuationallowance of $1.5 million related to this net operating loss carryforward and utilized the valuation allowance against the net operatingloss deferred tax asset.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-85 18. INCOME TAX (continued) Deferred tax assets and liabilities (continued) Decrease in total net deferred tax liabilities (continued) Capital loss carryforwards Capital loss carryforwards as of June 30, 2026, comprised the losses arising from the disposal of Finbond and Cell C whichresulted in the generation of capital loss carryforwards in South Africa of $138.0 million and capital loss carryforwards in the UnitedStates of $10.9 million. Capital loss carryforwards as of June 30, 2025, comprises the losses arising from the disposal of Finbondwhich resulted in the generation of capital loss carryforwards in South Africa of $17.7 million and capital loss carryforwards in theUnited States of $15.5 million. Capital loss carryforwards in South Africa do not expire, and capital loss carryforward in the UnitedStates will expire after five years, between 2029 and 2031. The change in Capital loss carryforwards also includes the impact ofcurrency changes between the South African Rand against the United States dollar. Equity investments Equity investments as of June 30, 2026, comprised the temporary differences arising from the difference between the amountpaid for CPS in 2004 and the financial statement carrying amount as of the respective year end, of $0.0 million (nil). Equity investmentsas of June 30, 2025, comprises the temporary differences arising from the difference between the amount paid for Cell C in August2017 and the financial statements carrying amount as of the respective year end, of $0.0 million (nil), and the difference between theamount paid for CPS in 2004 and the financial statement carrying amount as of the respective year end, of $0.0 million (nil). Thechange in Equity investments relates to the derecognition of Cell C following the disposal of the investment (and creation of a capitalloss carryforward – refer above) and the impact of currency changes between the South African Rand against the United States dollar. Operating lease liability Operating lease liability as of June 30, 2026, has been presented due to the significant increase in the Company’s operating leaseliabilities during the year ended June 30, 2026 (refer to Note 8 for additional information). Foreign tax credit carryforwards There areno foreign tax credit carryforwards as of June 30, 2026. Foreign tax credit carryforwards as of June 30, 2025, comprisedforeign tax credits generated from distributions from Lesaka’s subsidiaries. The tax credits as of June 30, 2025, expired during theyear ended June 30, 2026. During the year ended June 30, 2025, foreign tax credits of $20.2 million expired. Intangibles assets Intangible assets have decreased due to the amortization of the intangible assets. Operating lease right-of-use Operating lease right-of-use as of June 30, 2026, has been presented due to the significant increase in the Company’s operatinglease right-of-use assets during the year ended June 30, 2026 (refer to Note 8 for additional information). Decrease in valuation allowance At June 30, 2026, the Company had deferred tax assets of $21.9 million (2025: $14.4 million), net of the valuation allowance.Management believes, based on the weight of available positive and negative evidence it is more likely than not that the Companywill realize the benefits of these deductible temporary differences and carryforwards, net of the valuation allowance. However, theamount of the deferred tax asset considered realizable could be adjusted in the near term if estimates of taxable income are revised.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-86 18. INCOME TAX (continued) Deferred tax assets and liabilities (continued) Decrease in valuation allowance (continued) At June 30, 2026, the Company had a valuation allowance of $92.1 million (2025: $109.5 million) to reduce its deferred taxassets to the estimated realizable value. The movement in the valuation allowance for the years ended June 30, 2026, 2025 and 2024,is presented below: Total Equityinvestments Capital losscarry-forwards Netoperatingloss carry-forwards Foreign taxcreditcarry-forwards OtherJuly 1, 2023 $ 109,120 $ 27,782 $ 8,485 $ 38,381 $ 32,599 $ 1,873Charged to statement of operations 5,061 - 665 3,163 - 1,233Reversed to statement of operations (1,865) - - (1,793) (72) -Foreign currency adjustment 2,371 1,004 103 1,215 - 49Net change in the valuation allowance 5,567 1,004 768 2,585 (72) 1,282July 1, 2024 $ 114,687 $ 28,786 $ 9,253 $ 40,966 $ 32,527 $ 3,155Charged to statement of operations 6,241 - 977 4,063 - 1,201Reversed to statement of operations(A) (10,630) - - (8,469) - (2,161)Utilized (25,528) - (3,226) (2,002) (20,227) (73)Acquired in business combinations 22,976 - - 20,354 - 2,622Foreign currency adjustment 1,722 690 90 887 - 55Net change in the valuation allowance (5,219) 690 (2,159) 14,833 (20,227) 1,644June 30, 2025 109,468 29,476 7,094 55,799 12,300 4,799Charged to statement of operations 28,374 - 25,026 1,645 - 1,703Reversed to statement of operations (12,340) (631) - (11,361) - (348)Utilized (40,243) (25,026) (977) (1,537) (12,300) (403)Foreign currency adjustment 6,884 1,748 961 3,850 - 325Net change in the valuation allowance (17,325) (23,909) 25,010 (7,403) (12,300) 1,277June 30, 2026 $ 92,143 $ 5,567 $ 32,104 $ 48,396 $ - $ 6,076 (A) Reversed to statement of operations during the year ended June 30, 2025, has decreased by $2.2 million as a result of thecorrection discussed in Note 1. Net operating loss carryforwards and foreign tax credit carryforwards South Africa Net operating loss carryforwards generated in South Africa of $211.4 million as of June 30, 2026, are carried forward indefinitely,but the loss carryforward that may be used against future taxable income is limited to 80% of taxable income before the net operatingloss deduction. United States Net operating loss carryforwards generated in the United States are carried forward indefinitely, but the loss carryforward thatmay be used against future taxable income is limited to 80% of taxable income before the net operating loss deduction. The Companyhad utilized all of its net operating loss carryforwards as of June 30, 2026. Lesaka had no net unused foreign tax credits that are morelikely than not to be realized as of June 30, 2026 and 2025, respectively. Unrecognized tax benefits As of June 30, 2026 and 2025, the Company hadno unrecognized tax benefits. The Company files income tax returns mainly inSouth Africa, Botswana, Namibia and in the U.S. federal jurisdiction. As of June 30, 2026, the Company’s South African subsidiariesare no longer subject to income tax examination by the South African Revenue Service for periods before June 30, 2020. The Companyis subject to income tax in other jurisdictions outside South Africa, none of which are individually material to its financial position,statement of cash flows, or results of operations.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-87 19. EARNINGS (LOSS) PER SHARE The Company has issued redeemable common stock (refer to Note 14) which is redeemable at an amount other than fair value.Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable commonstock and is reflected in basic earnings per share using the two-class method. There were no redemptions of common stock, oradjustments to the carrying value of the redeemable common stock during the years ended June 30, 2026, 2025 and 2024. Accordingly,the two-class method presented below does not include the impact of any redemption. Basic earnings (loss) per share includes shares of restricted stock that meet the definition of a participating security because theseshares are eligible to receive non -forfeitable dividend equivalents at the same rate as common stock. Basic earnings (loss) per sharehas been calculated using the two-class method and basic earnings (loss) per share for the years ended June 30, 2026, 2025 and 2024,reflects only undistributed earnings. The computation below of basic earnings (loss) per share excludes the net loss attributable toshares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact ofthese unvested shares of restricted stock from the denominator. Diluted earnings (loss) per share have been calculated to give effect to the number of shares of additional common stock thatwould have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in thecalculation of diluted earnings (loss) per share utilizing the treasury stock method and are not considered to be participating securities,as the stock options do not contain non-forfeitable dividend rights. The calculation of diluted earnings (loss) per share includes thedilutive effect of a portion of the restricted stock granted to employees during the current and previous fiscal periods as these sharesof restricted stock are considered contingently returnable shares for the purposes of the diluted earnings (loss) per share calculationand the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions are discussed inNote 17. The Company has excluded employee stock options to purchase188,632 and46,777 shares of common stock from thecalculation of diluted loss per share during the years ended June 30, 2025 and 2024, respectively, because the effect would beantidilutive.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-88 19. EARNINGS (LOSS) PER SHARE (continued) The following table presents net loss attributable to Lesaka and the share data used in the basic and diluted earnings (loss) pershare computations using the two-class method for the years ended June 30, 2026, 2025 and 2024: 2026 2025 2024(in thousands except percent and per share data)Numerator:Net income (loss) attributable to Lesaka(A) $ 2,758 $ (90,957) $ (18,515)Undistributed income (loss)(A) 2,758 (90,957) (18,515) Percent allocated to common shareholders(Calculation 1) 97% 97% 95% Numerator for earnings (loss) per share: basic and diluted $ 2,672 $ (87,894) $ (17,678) DenominatorDenominator for basic earnings (loss) per share:weighted-average common shares outstanding 79,516 73,891 61,276Effect of dilutive securities:Stock options 161 - -Denominator for diluted earnings (loss) per share: adjusted weightedaverage common shares outstanding and assumed conversion 79,677 73,891 61,276 Earnings (Loss) per share:Basic(A) $ 0.03 $ (1.19) $ (0.29)Diluted(A) $ 0.03 $ (1.19) $ (0.29) (Calculation 1)Basic weighted-average common shares outstanding (A) 79,516 73,891 61,276Basic weighted-average common shares outstanding and unvestedrestricted shares expected to vest (B) 82,088 76,466 64,179Percent allocated to common shareholders (A) / (B) 97% 97% 95% (A) Net income (loss) attributable to Lesaka and Undistributed earnings (loss) for the year ended June 30, 2026, has decreasedby $0.4 million, as a result of the correction, as discussed in Note 1, to the amount included in the captions Net income (loss)attributable to Lesaka and Undistributed earnings (loss) for the three months ended September 30, 2025. Net income (loss) attributableto Lesaka and Undistributed earnings (loss) for years ended June 30, 2025 and 2024, have decreased by $3.4 million and $1.1 million,respectively, as a result of the correction discussed in Note 1. The correction of the error did not impact Basic and Diluted earnings per share for the year ended June 30, 2026. Basic andDiluted loss per share for the years ended June 30, 2025 and 2024, decreased by $0.05 (five U.S. cents) and $0.02 (two U.S. cents),respectively. Options to purchase6,412,973,6,493,683 and4,737,543 shares of the Company’s common stock at prices ranging from $5.22to $14.00 (2026) and $4.87 to $14.00 (2025 and 2024) per share were outstanding during the year ended June 30, 2026, 2025 and2024, respectively, but were not included in the computation of diluted earnings (loss) per share because the options’ exercise priceswere greater than the average market price of the Company’s common shares. The options, which expire at various dates throughFebruary 3, 2032, were still outstanding as of June 30, 2026. 20. SUPPLEMENTAL CASH FLOW INFORMATION The following table presents supplemental cash flow disclosures for the years ended June 30, 2026, 2025 and 2024: 2026 2025 2024Cash received from interest $ 2,331 $ 2,576 $ 2,277Cash paid for interest $ 21,812 $ 18,077 $ 17,381Cash paid for income taxes, net of refunds received $ 10,432 $ 6,481 $ 6,506
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-89 20. SUPPLEMENTAL CASH FLOW INFORMATION (continued) Disaggregation of cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash included on the Company’s consolidated statement of cash flows includes restrictedcash related to cash withdrawn from one of the Company’s debt facilities to fund ATMs. This facility was cancelled in November2024. The Company was only permitted to use this cash to fund ATMs and this cash was considered restricted as to use and thereforewas classified as restricted cash. Cash, cash equivalents and restricted cash also includes cash in certain bank accounts that has beenceded to Nedbank. As this cash has been pledged and ceded it may not be drawn and is considered restricted as to use and therefore isclassified as restricted cash as well. Refer to Note 12 for additional information regarding the Company’s facilities. The followingtable presents the disaggregation of cash, cash equivalents and restricted cash as of June 30, 2026, 2025 and 2024: 2026 2025 2024 Cash and cash equivalents $ 81,409 $ 76,520 $ 59,065Restricted cash 129 119 6,853Cash, cash equivalents and restricted cash $ 81,538 $ 76,639 $ 65,918 Leases The following table presents supplemental cash flow disclosure related to leases for the years ended June 30, 2026, 2025 and2024: 2026 2025 2024 Cash paid related to lease liabilitiesOperating cash flows from operating leases $ 5,942 $ 4,834 $ 3,238 Right-of-use assets obtained in exchange for lease obligationsOperating leases $ 19,017 $ 5,707 $ 4,800 21. OPERATING SEGMENTS Operating segments The Company discloses segment information as reflected in the management information systems reports that its chief operatingdecision maker (“CODM”) uses in making decisions and to report certain entity-wide disclosures about products and services, and thecountries in which the entity holds material assets or reports material revenues. The Company currently hasthree reportable segments:Merchant, Consumer and Enterprise. The Company’s CODM is the Company’s Executive Chairman. The CODM analyzes the Company’s operating performance primarily based on these three operational lines, namely, (i) Merchant, which focuses on both formal and informal sector merchants. Formal sector merchants are generally in urban areas,have higher revenues and have access to multiple service providers. Informal sector merchants, which are often sole proprietors andusually have lower revenues compared with formal section merchants, operate in rural areas or in informal urban areas and do notalways have access to a full-suite of traditional banking products; (ii) Consumer, which primarily focuses on individuals who have historically been excluded from traditional financial servicesand to whom we offer transactional accounts (banking), insurance, lending (short-term loans), payments solutions (digital wallet) andvarious value-added services; and(iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobilenetwork operators (“MNOs”) and municipalities, and, through Recharger, landlords utilizing Recharger’s prepaid electricity meteringsolution.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-90 21. OPERATING SEGMENTS (continued) The Merchant segment includes revenue generated from the sale of ADP (select prepaid solutions, supplier-enabled payments,international money transfer and other) and card-acquiring services to informal sector merchants. It also includes activities related tothe provision of goods and services provided to corporate and other juristic entities. The Company earns fees from processing activitiesperformed (including card acquiring and the provision of a payment gateway services) for its customers, and rental and license feesfrom the provision of POS hardware and software to the hospitality industry. The Company also provides cash management andpayment services to merchant customers through a digital vault which is located at the customer’s premises and through which theCompany is able to provide the services which generate processing fee revenue. The Merchant segment includes interest earned fromthe provision of loans to its customers. The Consumer segment includes activities related to the provision of financial services to customers, including a bank account,loans and insurance products. The Company charges monthly administration fees for all bank accounts. Customers that have a bankaccount managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant POS.The Company earns processing fees from transactions processed for these customers. The Company provides short-term loans tocustomers in South Africa for which it earns initiation and monthly service fees, and interest revenue from the second quarter of fiscal2025. The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthlyinsurance premium. The Company also earns fees from the provision of physical and digital prepaid and secure payout solutions forSouth African businesses. The Enterprise segment provides its business and government-related customers with transaction processing services that involvethe collection, transmittal and retrieval of transaction data. The Company offers landlords access to Utilities prepaid electricity meteringsolution through which Enterprise earns commission revenue from prepaid electricity voucher sales to tenants recharging prepaidmeters. This segment also includes sales of hardware and licenses to customers. Hardware includes the sale of POS devices, SIM cardsand other consumables which can occur on an ad hoc basis. Licenses include the right to use certain technology developed by theCompany. Segment measure of profit or loss The Company evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization(“EBITDA”), adjusted for items mentioned in the sentences below (“Segment Adjusted EBITDA”), the Company’s reportablesegments’ measure of profit or loss. The Company obtained a general lending facility in February 2025, which has been partially used to fund a portion of itsConsumer lending during the year ended June 30, 2026, and interest related to these borrowings have been allocated to Consumer.The Company also included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for the year ended June30, 2025. The Company does not allocate once-off items, stock-based compensation charges, impairment of other intangible assets, otheritems (including gains or losses on disposal of investments, fair value adjustments to equity securities), interest income, certain interestexpense, income tax expense or loss from equity -accounted investments to its reportable segments. Group costs generally include:employee related costs in relation to employees specifically hired for group roles and related directly to managing the US-listed entity;expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non-employee directors’ fees; legal fees; group and US-listed related audit fees; and directors and officer’s insurance premiums. Once-off items represent non-recurring expense items,including costs related to acquisitions and transactions consummated or ultimately not pursued. Unrealized (loss) gain for currencyadjustments represents foreign currency mark-to-market adjustments on certain intercompany accounts. Interest adjustment representsthe intercompany interest expense included in the Consumer Segment Adjusted EBITDA during fiscal 2025. The Stock-basedcompensation adjustments reflect stock-based compensation expense and are excluded from the calculation of Segment AdjustedEBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to theCompany’s loss before income tax expense.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-91 21. OPERATING SEGMENTS (continued) Segment measure of profit or loss (continued) Our CODM does not review the components of segment selling, general and administration expenses and is presented withreports which include revenue and segment adjusted EBITDA. The table below presents the reconciliation of revenue from external customers to the reportable segment’s revenue, significantexpenditures, the Company’s reportable segment’s measure of profit or loss, and certain other segment information for the years endedJune 30, 2026 and 2025, respectively, is as follows: Year ended June 30,2026Merchant Consumer Enterprise Unallocated Total Revenue from external customers $ 506,193 $ 142,443 $ 72,918 $ - $ 721,554Intersegment revenues 3,142 188 1,812 - 5,142Segment revenue(z) 509,335 142,631 74,730 - 726,696Less segment-related expenses:Cost of goods sold, IT processing, servicing andsupport(y) 395,124 47,606 53,246 - 495,976Selling, general and administration(1)(2) 78,678 48,832 13,365 - 140,875Segment adjusted EBITDA $ 35,533 $ 46,193 $ 8,119 $ - $ 89,845(z) includes interest revenue of: 9,750 27,419 - - 37,169(y) includes interest expense of: 1,945 5,257 - - 7,202 Merchant Consumer Enterprise Group costs Total Depreciation and amortization $ 14,734 $ 1,742 $ 430 $ 30,440 $ 47,346Expenditures for long-lived assets $ 19,581 $ 2,890 $ 2,578 $ - $ 25,049 Year ended June 30,2025Merchant Consumer Enterprise Unallocated Total Revenue from external customers $ 524,252 $ 96,008 $ 39,441 $ - $ 659,701Intersegment revenues 2,348 - 3,113 - 5,461Segment revenue(z) 526,600 96,008 42,554 - 665,162Less segment-related expenses:Cost of goods sold, IT processing, servicing andsupport(y)(A) 426,427 35,603 32,549 - 494,579Selling, general and administration(A)(1)(3) 64,844 36,456 8,718 - 110,018Segment adjusted EBITDA(A) $ 35,329 $ 23,949 $ 1,287 $ - $ 60,565(z) includes interest revenue of: 7,231 5,038 - - 12,269(y) includes interest expense of: 1,671 3,394 - - 5,065 Merchant Consumer Enterprise Group costs Total Depreciation and amortization $ 10,997 $ 968 $ 371 $ 21,385 $ 33,721Expenditures for long-lived assets $ 18,117 $ 1,500 $ 1,482 $ - $ 21,099
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-92 21. OPERATING SEGMENTS (continued) The table below presents the reconciliation of revenue from external customers to the reportable segment’s revenue, significantexpenditures, the Company’s reportable segment’s measure of profit or loss, and certain other segment information for the year endedJune 30, 2024, respectively, is as follows: Year ended June 30,2024Merchant Consumer Enterprise Unallocated Total Revenue from external customers $ 456,069 $ 69,211 $ 38,942 $ - $ 564,222Intersegment revenues 3,721 - 7,955 - 11,676Segment revenue(z) 459,790 69,211 46,897 - 575,898Less segment-related expenses:Cost of goods sold, IT processing, servicing andsupport(y)(A) 394,238 23,165 37,424 - 454,827Selling, general and administration(A)(1)(4) 37,218 33,367 6,542 - 77,127Segment adjusted EBITDA(A) $ 28,334 $ 12,679 $ 2,931 $ - $ 43,944(z) includes interest revenue of: 6,096 - - - 6,096(y) includes interest expense of: 1,448 - - - 1,448 Merchant Consumer Enterprise Group costs Total Depreciation and amortization $ 8,141 $ 734 $ 402 $ 14,388 $ 23,665 Expenditures for long-lived assets $ 11,202 $ 1,317 $ 146 $ - $ 12,665(A) Cost of goods sold, IT processing, servicing and support and Selling, general and administration for Merchant and Total forthe year ended June 30, 2026 have each increased by $0.2 million and $0.06 million, respectively, as a result of the correction, asdiscussed in Note 1, to the amount included in the captions Cost of goods sold, IT processing, servicing and support and Selling, generaland administration for the three months ended September 30, 2025. Segment Adjusted EBITDA for Merchant and Total for the yearended June 30, 2026 have each decreased by $0.2 million as a result of the correction, as discussed in Note 1, to the amount includedin the caption Segment Adjusted EBITDA for the three months ended September 30, 2025. Cost of goods sold, IT processing, servicing and support and Selling, general and administration for Merchant and Total for theyear ended June 30, 2025 have each increased by $0.6 million and $0.2 million, respectively, as a result of the correction discussed inNote 1. Segment Adjusted EBITDA for Merchant and Total for the year ended June 30, 2025 have each decreased by $0.9 million asa result of the correction discussed in Note 1. Cost of goods sold, IT processing, servicing and support and Selling, general and administration for Merchant and Total for theyear ended June 30, 2024 have each increased by $0.6 million and $0.2 million, respectively, as a result of the correction discussed inNote 1. Segment Adjusted EBITDA for Merchant and Total for the year ended June 30, 2024 have each decreased by $0.8 million asa result of the correction discussed in Note 1. (1) Selling, general and administration includes human capital-related expenses (including base salary and bonus), IT-relatedexpenses (including software licenses, hardware maintenance, hosting, and communication expenses), professional fees (includingaudit, legal, consulting and other fees), lease and utilities expenses, the allowance for credit losses and other operating and supportexpenses. (2) Segment Adjusted EBITDA for the year ended June 30, 2026, includes retrenchment and reorganization costs for Merchantof $0.8 million (ZAR14.0 million), Consumer of $0.4 million (ZAR7.1 million) and Enterprise of $0.1 million (ZAR1.1 million). (3) Segment Adjusted EBITDA for the year ended June 30, 2025, includes retrenchment and reorganization costs for Merchantof $0.8 million (ZAR15.7 million), Consumer of $0.1 million (ZAR1.5 million) and Enterprise of $0.8 million (ZAR13.6 million). (4) Segment Adjusted EBITDA for the year ended June 30, 2024, includes retrenchment costs for Merchant of $0.3 million (ZAR4.9 million) and Consumer of $0.2 million (ZAR3.5 million).
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-93 21. OPERATING SEGMENTS (continued) The reconciliation of the reportable segments’ measures of profit or loss to income (loss) before income taxes for the years endedJune 30, 2026, 2025 and 2024, respectively, is as follows: 2026 2025 2024Reportable segments measure of profit or loss(A) $ 89,845 $ 60,565 $ 43,944Operating loss: Group costs (14,103) (10,743) (7,844)Once-off costs (5,452) (17,826) (1,853)Interest adjustment - 2,195 -Unrealized gain (loss) for currency adjustments 53 (23) 83Stock-based compensation charge adjustments (6,969) (9,550) (7,911)Depreciation and amortization (47,346) (33,721) (23,665)Loss on disposal of equity-accounted investment (Note 9) (584) (161) -Impairment loss(1) (3,347) (18,863) -Change in fair value of equity securities (Note 3) 2,593 (59,828) -Gain on disposal of equity securities (730) - -Other income 3,883 - -Reversal of doubtful loan receivable 1,500 - 250Interest income 2,889 2,596 2,294Interest expense(A) (18,506) (21,824) (19,171)Income (Loss) before income taxes(A) $ 3,726 $ (107,183) $ (13,873) (A) Reportable segments’ measure of profit or loss and net loss before taxes for the year ended June 30, 2026, have decreased by$0.2 million and $0.4 million, respectively, as a result of the correction, as discussed in Note 1, to the amount included in the captionsReportable segments’ measure of profit or loss and net loss before taxes for the three months ended September 30, 2025. Interestexpense for the year ended June 30, 2026, has increased by $0.1 million, as a result of the correction, as discussed in Note 1, to theamount included in the caption Interest expense for the three months ended September 30, 2025. Reportable segments’ measure of profit or loss and net loss before taxes for the year ended June 30, 2025, have decreased by$0.9 million, and $1.2 million, respectively, as a result of the correction discussed in Note 1. Interest expense for the June 30, 2025,has increased by $0.4 million as a result of the correction discussed in Note 1. Reportable segments’ measure of profit or loss and net loss before taxes for the year ended June 30, 2024, have decreased by$0.8 million, and $1.1 million, respectively, as a result of the correction discussed in Note 1. Interest expense for the June 30, 2024,has increased by $0.2 million as a result of the correction discussed in Note 1. (1) Impairment loss excludes an amount of $0.7 million which is included in the caption Once-off costs related to the exit of theATM business. The segment information as reviewed by the chief operating decision maker does not include a measure of segment assets persegment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does nothave dedicated assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocationand segment asset allocation is therefore not presented. Long-lived assets based on their geographic location as of June 30, 2026, 2025 and 2024, are presented in the table below: Long-lived assets2026 2025 2024South Africa $ 403,085 $ 392,098 $ 286,700India - Investment in MobiKwik (Note 9) - - 76,297Rest of world 8,609 3,055 2,548Total $ 411,694 $ 395,153 $ 365,545
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-94 22. COMMITMENTS AND CONTINGENCIES Capital commitments As of June 30, 2026 and 2025, the Company had outstanding capital commitments of approximately $0.6 million and $0.2million, respectively. Purchase obligations As of June 30, 2026 and 2025, the Company had purchase obligations totaling $5.7 million and $2.9 million, respectively. Thepurchase obligations as of June 30, 2026, primarily relate to POS devices, components for safe assets and inventory that will bedelivered to the Company and sold to customers in fiscal 2027. Guarantees The South African Revenue Service and certain of the Company’s customers, suppliers and other business partners have askedthe Company to provide them with guarantees, including standby letters of credit, issued by South African banks. The Company isrequired to procure these guarantees for these third parties to operate its business. Nedbank has issued guarantees to these third parties amounting to ZAR2.1 million ($0.1 million, translated at exchange ratesapplicable as of June 30, 2026) thereby utilizing part of the Company’s short-term facilities. The Company pays commission ofbetween0.47% per annum to1.84% per annum of the face value of these guarantees and does not recover any of the commission fromthird parties. RMB has issued guarantees to these third parties amounting to ZAR70.2 million ($4.3 million, translated at exchange ratesapplicable as of June 30, 2026) thereby utilizing part of the Company’s short-term facilities. The Company has not recognized any obligation related to these guarantees in its consolidated balance sheet as of June 30, 2026.The maximum potential amount that the Company could pay under these guarantees is ZAR72.3 million ($4.4 million, translated atexchange rates applicable as of June 30, 2026). As discussed in Note 12, the Company has ceded and pledged certain bank accountsto Nedbank as security for these guarantees with an aggregate value of ZAR2.1 million ($0.1 million translated at exchange ratesapplicable as of June 30, 2026). The guarantees have reduced the amount available under its indirect and derivative facilities in theCompany’s short-term credit facility described in Note 12. Contingencies The Company is subject to a variety of insignificant claims and suits that arise from time to time in the ordinary course ofbusiness. Management currently believes that the resolution of these other matters, individually or in the aggregate, will not have amaterial adverse impact on the Company’s financial position, results of operations or cash flows. 23. RELATED PARTY TRANSACTIONS Related parties of the Executive Chairman The Company's Executive Chairman also serves as Chairman of a Teya Holdings Ltd. (“Teya”), a group of privately held entities.Certain entities within the Teya group engage in transactions with the Company in the ordinary course of business. The Company hasevaluated these arrangements and determined that the related transactions were immaterial, individually and in the aggregate, to theCompany's consolidated financial statements for the periods presented . Related parties of a non-employee director One of the Company's non-employee directors (Mr. Dean Sparrow) also serves as director and chief executive officer of CrossfinHoldings. Crossfin Holdings has an indirect shareholding in VantagePay and Mr. Sparrow is a director of VantagePay. The Companyand VantagePay have engaged in a transaction in the ordinary course of business, refer to Note 4 for additional information.
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LESAKA TECHNOLOGIES, INC.Notes to the consolidated financial statementsfor the years ended June 30, 2026 and 2025 and 2024(All amounts stated in thousands of United States Dollars, unless otherwise stated) F-95 ***************************** 24. SUBSEQUENT EVENTS New lease obtained In August 2026, the Company, through Lesaka SA, entered into a binding offer to lease for a new regional office in Umhlanga,Durban, KwaZulu-Natal, South Africa with SA Sugar Distributors Proprietary Limited, a subsidiary of ABFS, a private companyincorporated in South Africa. The lease commences on November 1, 2026 and is for a period of5 years, with an option to renew fora furtherfive years. The Company secured beneficial occupation from September 1, 2026, and is expected to record a ROU asset andan operating lease liability related from the date of taking beneficial occupation. The Company was required to provide a cash depositof two month’s rent to the lessor. The Company expects to pay an annual basic lease expense of $0.3 million (ZAR5.1 million,translated at exchange rates applicable as of June 30, 2026), which increases by7.00% per annum. Guarantee issued to supplier In July and August 2026, RMB issued guarantees of ZAR22.0 million and ZAR7.3 million, respectively, ($1.3 million and $0.4million, respectively, translated at exchange rates applicable as of June 30, 2026), to third parties thereby utilizing part of theCompany’s short-term facilities.
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Exhibit 4.2 DESCRIPTION OF THE REGISTRANT’S SECURITIESREGISTERED PURSUANT TO SECTION 12 OF THESECURITIES EXCHANGE ACT OF 1934 As of September 9, 2026, Lesaka Technologies, Inc. (“Lesaka” or the “Company”) had one class of securities(“common stock”)registered under Section 12 of the Securities Exchange Act of 1934, as amended. DESCRIPTION OF COMMON STOCK The following description of the Company’s common stock is a summary and does not purport to be complete. It is subject to and qualified in its entirety by reference to the Company’s Amended and Restated Articles of Incorporation (“Articles ofIncorporation”) and its Amended and Restated By-laws (“Bylaws”), each of which are incorporated by reference as an exhibit to the Company’s most recent Annual Report on Form 10-K. Lesaka encourages you to read its Articles of Incorporation, Bylaws andthe applicable provisions of the Florida Business Corporation Act (“FBCA”) for additional information. General Lesaka’s Articles of Incorporation currently authorizes the issuance of two hundred million shares of its common stock, with $0.001par value. Lesaka’s common stock is listed and principally traded on the Nasdaq Stock Exchange, Global Select Market, under the symbol “LSAK.” Lesaka’s common stock is also listed on the Johannesburg Stock Exchange, under the symbol “LSK”. All outstanding shares of common stock are fully paid and nonassessable Dividend rights Holders of shares of Lesaka’s common stock are entitled to receive dividends and other distributions when declared by Lesaka’sboard of directors out of legally available funds. Payment of dividends and distributions is subject to certain restrictions under the FBCA, including the requirement that after making any distribution Lesaka must be able to meet its debts as they become due in theusual course of its business. Voting rights Each holder of common stock is entitled to one vote per share for the election of directors and for all other matters to be voted on by shareholders. Holders of common stock may not cumulate their votes in the election of directors. Liquidation and other rights Upon voluntary or involuntary liquidation, dissolution or winding up of Lesaka, holders of common stock share ratably in the assetsremaining after payments to creditors and provision for the preference of any preferred stock according to its terms. There are no pre-emptive or other subscription rights, conversion rights or redemption or scheduled installment payment provisions relating toshares of common stock. The shares of Lesaka common stock are not subject to redemption. Transfer Agent The Company’s transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, New Jersey, 07310, and the Company’s transfer agent in South Africa is JSE Investor Services South Africa (Pty) Ltd.
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LESAKA TECHNOLOGIES, INC. CODE OF ETHICS Exhibit 14
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CONTENTS CONTENTS ............................................................................................................................................. 2 1. EXECUTIVE SUMMARY .............................................................................................................. 3 INTRODUCTION ........................................................................................................................... 3 2. COMPLIANCE, WAIVERS OR AMENDMENTS ........................................................................... 4 COMPLIANCE WITH THIS CODE................................................................................................ 4 3. COMPLIANCE WITH LAWS, RULES AND REGULATIONS ....................................................... 5 4. CONFLICT OF INTEREST ........................................................................................................... 6 OUTSIDE ACTIVITIES, EMPLOYMENT AND DIRECTORSHIP ................................................. 6 RELATIONSHIPS WITH CLIENTS, CUSTOMERS AND SUPPLIERS ........................................ 7 GIFTS, HOSPITALITY AND FAVOURS ....................................................................................... 7 PERSONAL INVESTMENTS ........................................................................................................ 7 INSIDER INFORMATION AND INSIDER TRADING .................................................................... 8 REMUNERATION ......................................................................................................................... 8 5. EMPLOYMENT EQUITY, ENVIRONMENTAL RESPONSIBILITY AND POLITICAL SUPPORT 8 6. LESAKA’S FUNDS, PROPERTY AND RECORDS ...................................................................... 9 7. EMPLOYMENT MATTERS ......................................................................................................... 10 8. DEALING WITH OUTSIDE PERSONS AND ORGANISATIONS ............................................... 10 9. PRIVACY AND CONFIDENTIALITY ........................................................................................... 11 10. EMPLOYEE OBLIGATIONS ....................................................................................................... 11 11. REVISION AND ACKNOWLEDGEMENT OF THE POLICY ...................................................... 12 12. POLICY REVIEW ........................................................................................................................ 12
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1. EXECUTIVE SUMMARY INTRODUCTION Lesaka Technologies, Inc. and its subsidiaries (hereinafter referred to as “Lesaka”) are committed to a policy of fairness and integrity in the conducting of their businesses. This commitment, endorsed by the Board of Directors of Lesaka (hereinafter referred to as the “Board”), is based on the fundamental belief that business should be conducted to the highest ethical standards of honesty, fairness and legality. Lesaka’s Value Statement An insurgent entrepreneurial spirit is at our core. It drives our innovative thinking and relentless search for disruptive solutions. It is a spirit that is carried with a bone-deep integrity, a non- negotiable commitment to doing the right thing and always doing what we say we will do. This is the bedrock of our environment where we relish open and safe debate, embracing all ideas, recognising that ourcollective wisdom will find the answers and allow the best ideas to succeed. Our environment is driven by a belief in shared ownership, based on a commitment to performance and accountability, and an energisedbias to action. These are our values that underpin our mission to enable Merchants to compete and grow, and Grant Beneficiaries to improve their lives, by providing innovative financial technology and value- creating solutions. This Code of Ethics (hereinafter referred to as this “Code”) is Lesaka’s promise that our Values Statement and ethical standards will form the basis for all endeavours of Lesaka. Lesaka has established this Code as part of its overall policies and procedures. To the extent that other Lesaka policies and procedures conflict with this Code, this Code will prevail. This Code will apply equally to all employees and other representatives of Lesaka. The term “Employees” has been used in the broadest sense and includes: ● All staff with whom a service contract exists; ● Management and non-management; ● Directors including non-executive Directors; and ● Contractors, consultants and temporary staff. This Code is designed to inform Employees of policies in various areas. Therefore, Lesaka expects all Employees and other representatives to share its commitment to high moral, ethical and legal standards. The most current version of this Code will be distributed to all Employees, posted and maintained on Lesaka’s website, and filed as an exhibit to Lesaka’s Annual Report on Form 10-K. Lesaka’s Annual Report on Form 10-K shall disclose that this Code is maintained on its website and shall disclose that substantive amendments and waivers will also be posted on Lesaka’s website. Please study this Code carefully so that you understand Lesaka’s expectations and your obligations.
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2. COMPLIANCE, WAIVERS OR AMENDMENTS COMPLIANCE WITH THIS CODE Compliance with this Code by all Employees is mandatory. If any Employee becomes aware of, or suspects, a contravention of this Code, such Employee must promptly and confidentially advise their line manager, a member of the Head of Human Capital department or a member of Group Risk (provided such person was not involved in the alleged violation). Lesaka’s efforts to ensure observance of, and adherence to, the goals and policies outlined in this Code mandate that you must promptly bring to the attention of your line manager, a member of the Head of Human Capital department or a member of the Risk and Compliance or Fraud Risk Departments (provided such person was not involved in the alleged violation) any material transaction, relationship, act, failure to act, occurrence or practice that you believe, in good faith, is inconsistent with, in violation of, or reasonably could be expected to give rise to a violation of, this Code. In the event that an Employee feels unable to report such matters via the aforementioned channels, then the Lesaka Whistleblowing Hotline is available for safe and anonymous reporting of any potential breaches of this Code. The matter will be investigated and dealt with according to the Lesaka’s Whistleblowing Policy. Failure to report violations of this Code will itself be considered a serious violation of this Code. It is Lesaka’s policy that no retaliation or other adverse action will be taken against any Employee for good-faith reports of Code violations. Persons who discriminate, retaliate or harass may be subject to civil, criminal and administrative penalties, as well as disciplinary action, up to and including termination of employment for cause. Managers set an example for other Employees and are often responsible for directing the actions of others. Every manager and supervisor is expected to take necessary actions to ensure compliance with this Code, to provide guidance and assist Employees in resolving questions concerning this Code and to permit Employees to express any concerns regarding compliance with this Code. No one has the authority to order another Employee to act in a manner that is contrary to this Code. 2.1. WAIVERS OF OR AMENDMENTS TO THIS CODE Any waivers of or amendments to this Code must be in writing and must be approved in advance by the Board. Waivers and amendments, and the reason, therefore, shall be disclosed as required under applicable law and regulations. If Employees are in doubt about the application of this Code, they should discuss the matter with their line manager, a member of the Head of Human Capital department, or Group Risk.
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3. COMPLIANCE WITH LAWS, RULES AND REGULATIONS Employees must comply with all applicable laws, rules and regulations which relate to their activities for and on behalf of Lesaka. Lesaka will not tolerate any violation of the law or unethical business dealing by any Employee, including any payment for, or other participation in, an illegal act, such as bribery. Lesaka is committed to full compliance with the laws, rules and regulations of the cities, states and countries in which it operates. You must comply with all applicable laws, rules and regulations in performing your duties for Lesaka. Numerous federal, state and local laws, rules and regulations define and establish obligations with which Lesaka, its Employees and agents must comply. Under certain circumstances, local country law may establish requirements that differ from this Code. You are expected to comply with all local country laws in conducting Lesaka’s business. If you violate these laws or regulations in performing your duties for Lesaka, you not only risk individual indictment, prosecution and penalties, as well as civil actions and penalties, but also subject Lesaka to the same risks and penalties. If you violate these laws in performing duties for Lesaka, you will be subjected to immediate disciplinary action, including possible termination of your employment or affiliation with Lesaka. Employees must ensure that their conduct cannot be interpreted as being in any way in contravention of applicable laws, rules and regulations governing the operations ofLesaka. 3.1. FOREIGN CORRUPT PRACTICES ACT Lesaka Employees are expressly prohibited from, directly or indirectly, offering payment, promising to pay, or authorizing the payment of any money, or offering any gift or non-monetary offer or benefit, promising to give a gift or non-monetary offer or benefit, or authorizing the giving of anything of value to any foreign and/or local official or any foreign political party, official of any foreign political party, or candidate for governmental or political office for purposes of: ● Influencing any act or decision of that foreign and/or local official, political party or candidate in his/ her/ its official capacity; ● Inducing that foreign and/or local official, candidate or political party to do or omit to do any act in violation of thelawful duty of that official, candidate or party, or ● Securing any improper advantage; or ● Inducing that foreign and/or local official, candidate or political party to use his/ her/ its influence with local and/orforeign government or instrumentality to affect or influence any act or decision of that government or instrumentality,in order to assist Lesaka or its Employee in obtaining or retaining business for or with, or directing business to, Lesaka. Various countries also have laws that prohibit commercial bribery. Accordingly, these laws are not limited in scope to bribery of foreign and/or local officials and typically prohibit bribes or inducements to an individual or business to improperly influence decision-making. As such, it is Lesaka’s policy that nothing of value should be provided to any person for the purpose of improperly obtaining or retaining business or otherwise gaining an improper business advantage. Violations of this policy are taken very seriously, as they can subject both Lesaka and the individual to criminal and civil penalties, up to and including imprisonment. Therefore, any contravention of such laws and regulations will result in disciplinary action as detailed in the Code of Conduct. 3.2. COPYRIGHTED OR LICENSED MATERIAL It is both illegal and unethical to engage in practices that violate copyright laws or licensing agreements. Lesaka requires that all Employees respect the rights conferred by such laws and agreements and refrain from making unauthorized copies of protected materials, including but not limited to printed matter, musical recordings, and computer software. Any Employee who is found to have violated copyright laws will be subject to a disciplinary action.
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3.3. COMPETITIVE RELATIONSHIPS It is unethical and unlawful to collaborate with competitors or their agents or representatives for the purpose of establishing or maintaining rates or prices at any particular level, or to collaborate in any way in the restraint of trade. It is prohibited and unlawful to collaborate or collude with competitors that are in a horizontal relationship with Lesaka for the purposes of substantially preventing or lessening competition in a market. Any Employee of Lesaka who is found to have violated the Competition laws in any of the jurisdictions in which Lesaka operates, will be subject to disciplinary action. 4. CONFLICT OF INTEREST Employees are expected to perform their duties conscientiously, honestly and in accordance with the best interests of Lesaka to optimize business objectives. Employees must not use their positions, or knowledge gained through their employment with Lesaka, for private or personal advantage or in such a manner that a conflict or an appearance of conflict arises between Lesaka’s interest and their personal interests. A conflict could arise where an Employee’s family, or a business with which an Employee or his or her family is associated obtains a gain, advantage or profit, or there is the appearance of a gain, advantage or profit, by virtue of the Employee’s position with Lesaka or knowledge gained through that position. Every Employee must promptly inform Lesaka of any business opportunities that come to his or her attention through the use of Lesaka assets, property or information or that relate to the existing or prospective business of Lesaka. If Employees feel that a course of action which they have pursued, are pursuing or are contemplating pursuing, may involve them in a conflict of interest situation or a perceived conflict of interest situation, they should immediately make all the facts known to the person to whom they report and the Head of Human Capital, or Group Risk, or, in the case of any director or officer of Lesaka, to the Audit Committee of Lesaka. Where any member of the Head of Human Capital, Group Risk, or the Audit Committee determines that a conflict of interest exists, Lesaka reserves the right to require the Employee/Director to withdraw from the conflicting activity and/or to terminate the employment/director relationship based on the conflict of interest, as applicable. Additionally, directors of Lesaka should recuse themselves from participation in any decision of the Board in which there is a conflict between their private interests and the interests of Lesaka.Any proposed related party transaction, as such term is described in Item 404 of Regulation S-K, involving Lesaka and an Employee, in which an Employee has a direct or indirect material interest, shall be analyzed and reviewed by the Audit Committee of Lesaka, for potential conflicts of interest. OUTSIDE ACTIVITIES, EMPLOYMENT AND DIRECTORSHIP We all share a very real responsibility to contribute to our local communities, and Lesaka encourages Employees to participate in religious, charitable, educational and civic activities. Employees should, however, avoid acquiring any business interest or participating in any activity outside Lesaka which would create, or appear to create: ● An excessive demand upon their time, attention and energy which would deprive Lesaka of their best efforts on thejob; or ● A conflict of interest - that is, an obligation, interest or distraction which would interfere or appear to interfere with their independent exercise of judgment in Lesaka’s best interest. Employees other than outside directors may not take up outside employment without the prior written approval of the Head of Human Capital. Employees who hold, or have been invited to hold, outside directorships should take particular care to ensure compliance with all provisions of this Code. When outside business directorships are being considered by Employees other than
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outside directors, prior written approval must be obtained from the Chief Executive Officer of Lesaka or Executive Director responsible for the division. RELATIONSHIPS WITH CLIENTS, CUSTOMERS AND SUPPLIERS Lesaka recognizes that relationships with clients, customers and suppliers give rise to many potential situations where conflicts of interest, real or perceived, may arise. Employees should ensure that they are independent, and are seen to be independent, from any business organization having a contractual relationship with Lesaka or providing goods or services to Lesaka, if such a relationship might influence or create the impression of influencing their decisions in the performance of their duties on behalf of Lesaka. In such circumstances, Employees should not invest in, or acquire a financial interest, directly or indirectly, in such an organization. GIFTS, HOSPITALITY AND FAVOURS Conflicts of interest can arise where Employees are offered gifts, hospitality or other favours which might, or could be perceived to, influence their judgment in relation to business transactions such as the placing of orders and contracts. An Employee should not accept gifts, hospitality or other favours from suppliers of goods or services to Lesaka. However, the acceptance of the following would not be considered contrary to such policy: ● Promotional matter of limited commercial value; ● Occasional business entertaining such as lunches, cocktail parties or dinners; and ● Occasional personal hospitality such as tickets to sporting events or theatres. Any bribe or attempted bribe must be reported to the Employee’s line manager as soon as possible. It is the intention that dealings with any supplier that offers bribes will be terminated. Certain functions or operating areas may have more detailed rules governing the receipt of gifts, hospitality or other favours. In addition, no bribes of any kind should be made by any Lesaka Employee to any customer or potential customer to secure business. Providing the occasional gifts to customers, as set out below, would not be considered contrary to such a policy: ● Advertising matter of limited commercial value; ● Occasional business entertaining such as lunches, cocktail parties or dinners; and ● Occasional personal hospitality such as tickets to sporting events or theatres. Employees of the Lesaka Group may accept gifts from Third Parties (other than Government Officials) that are of modest value ($100 USD or less), provided the gift and entertainment guidelines stated in the Gifts and Entertainment policy, are satisfied. PERSONAL INVESTMENTS Lesaka respects the right of all Employees to make personal investment decisions as they see fit, as long as these decisions do not contravene any provisions of this Code, any applicable legislation, or any policies or procedures established by the various operating areas of Lesaka, and provided these decisions are not made on the basis of material non-public information acquired by reason of an Employee’s connection with Lesaka. Employees should not permit their personal investment transactions to have priority over transactions for Lesaka and its clients. When considering the application of this section, Employees should ensure that no investment decision made for their own account could reasonably be expected to adversely influence their judgment or decisions in the performance of their duties on behalf of Lesaka. Employees involved in performing investment activities on behalf of Lesaka and those who by the nature of their duties or positions are exposed to price-sensitive information relating to Lesaka are subject to additional rules governing personal investments. These may be imposed by the Companies Act, the Stock Exchange of Johannesburg, Banks Act, Financial Sector Conduct Authority, Securities Regulation Panel, the Securities and Exchange Commission, NASDAQ and other regulatory bodies, industry associations and management.
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The additional rules include requirements for all such Employees to: ● Obtain prior written approval from their line manager and the Compliance Officer for, and to report on, their personal investment activity and the investment activity of those persons with whom they have a close relationship; and ● Refrain from dealing in the shares of entities that Lesaka deals with during certain restricted/closed periods, as well as Lesaka subsidiaries and associates. INSIDER INFORMATION AND INSIDER TRADING Employees may receive information concerning Lesaka or one of its affiliates, business partners, clients, or customers that is confidential and not generally known by the public. If that information is “material” (i.e., publication of that information is likely to affect the market price of the stock of the entity to which the information relates), then the Employee has an ethical and legal obligation not to: ● Act on that information (i.e., buy or sell stock based on that information); ● Disclose that information to others; or ● Advise others to buy or sell the stock of the entity to which that information relates, until such information becomespublic. An Employee’s direct or indirect use of or sharing of such confidential, privileged, or otherwise proprietary business information of Lesaka or its partners, clients, or customers for financial gain, including investment by the Employee or the transmission of this information to others so that they can use this information for their financial gain, constitutes insider trading, which is a criminal offense. Please refer to Lesaka’s Insider Trading Policy for more information. REMUNERATION No Employee may receive commissions or other remuneration related to the sale of any product or service of Lesaka except as specifically provided under an individual’s terms of employment or as specifically agreed with the Lesaka CEO/Group CFO or relevant Executive. No employee, director or any committee member of Lesaka shall receive any compensation not permitted by the rules of the Securities and Exchange Commission (hereinafter referred to as the “SEC”), The NASDAQ Stock Market, and other applicable law. Employees may not receive any money or anything of value (other than Lesaka’s regular remuneration or other incentives), either directly or indirectly, for negotiating, procuring, recommending or aiding in any transaction made on behalf of Lesaka, nor have any direct or indirect financial interest in such a transaction. 5. EMPLOYMENT EQUITY, ENVIRONMENTAL RESPONSIBILITY AND POLITICAL SUPPORT 5.1. EMPLOYMENT EQUITY Lesaka supports employment equity in the workplace and seeks to identify, develop and reward each employee who demonstrates the qualities of individual initiative, enterprise, hard work and loyalty in their job. Lesaka supports and complies with the Basic Conditions of Employment Act and the Employment Equity Act. All Employees have the right to work in an environment which is free from any form of discrimination, directly or indirectly, on any arbitrary ground, including, but not limited to race, gender, sex, ethnic or social origin, colour, sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or family responsibility. Employees should report any cases of actual or suspected discrimination to their line managers or a member of the Human Capital department. Employees with illnesses or disabilities may continue to work, provided that they are able to continue to perform satisfactorily the essential duties of their jobs and do not present a safety or health hazard to themselves or others. 5.2. HEALTH AND SAFETY Lesaka is committed to taking every reasonable precaution to ensure a safe work environment for all Employees .
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Employees who become aware of circumstances relating to Lesaka’s operations or activities which pose a real or potential health or safety risk should report the matter to their line manager and a member of the Human Capital department. It is Lesaka’s policy that no retaliation or other adverse action will be taken against any Employee for good-faith reports. 5.3. ENVIRONMENTAL MANAGEMENT Lesaka is committed to developing operating policies to address the environmental impact of its business activities by integrating pollution control, waste management and rehabilitation activities into operating procedures. Employees should give appropriate and timely attention to environmental issues. 5.4. POLITICAL SUPPORT Lesaka accepts the personal participation of its Employees in the political process and respects their right to absolute privacy with regard to personal political activity. Lesaka will not attempt to influence any such activity provided there is no disruption to workplace activities, and it does not contribute to industrial unrest. Lesaka funds, goods or services, however, may not be used as contributions to political parties or their candidates. 6. LESAKA’S FUNDS, PROPERTY AND RECORDS 6.1. FUNDS AND PROPERTY Lesaka has developed a number of internal controls to safeguard its assets and imposes strict standards to prevent fraud and dishonesty. It is every Employee’s responsibility to implement, maintain and enhance the effectiveness of the control environment in which they operate. All Employees who have access to Lesaka’s funds in any form must at all times follow prescribed procedures for recording, handling and protecting such funds. Operating areas may implement policies and procedures relating to the safeguarding of Lesaka property, including computer software and intellectual property. Employees must at all times ensure that Lesaka’s funds and property are used only for legitimate Lesaka business purposes. Where an Employee requires Lesaka funds to be spent, it is the Employee’s responsibility to use good judgment on Lesaka’s behalf and to ensure that appropriate value and authorization is received for such expenditure. All payments made by or on behalf of Lesaka for any purpose must be fully and accurately described in the documents and records supporting the payment. No false, improper, or misleading entries shall be made in the books and records of Lesaka. Complete and accurate information is to be given in response to inquiries from Group Risk and, independent auditors . If Employees become aware of any evidence that Lesaka funds or property may have been or are likely to be used in a fraudulent or improper manner they should immediately and confidentially advise Lesaka as set out in the compliance with this Code section of this document. It is Lesaka’s policy that no retaliation or other adverse action will be taken against any Employee for good-faith reports. 6.2. RECORDS Accurate and reliable records of many kinds are necessary to meet Lesaka’s legal and financial obligations and to manage the affairs of Lesaka. Lesaka’s books and records should reflect all business transactions in an accurate and timely manner. Undisclosed or unrecorded revenues, expenses, assets or liabilities are not permissible, and the Employees responsible for accounting and record-keeping functions are expected to be diligent in enforcing proper practices.
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7. EMPLOYMENT MATTERS 7.1. SUPERVISION OF RELATIVES AND OTHERS Close relatives and domestic partners shall not work directly or indirectly under the supervision of one another without prior written approval from the Head of Human Capital. The aforementioned may be allowed on an exceptional basis. ● “Close relative” means, but is not limited to, a spouse, sister, brother, father, mother-, father-, sister-, brother- son, daughter-in-law step-parent, aunt, uncle, first cousin, child, step-child, foster child, or grandparent. ● “Domestic partner” means, but is not limited to, husband, wife, or a person the Employee currently resides with in an intimate, romantic or sexual relationship. If such a situation should arise, it should be immediately brought to the attention of a direct manager or Head of Human Capital. Lesaka also requires that Employees disclose to the Human Capital department the existence of an intimate, romantic or sexual relationship between Employees where there exists a direct chain of command and/ or supervisor/ subordinate relationship. Decisions concerning such Employees will be made on a case-by-case basis by the Head of Human Capital. 7.2. RESTRICTIONS ON FORMER GOVERNMENT EMPLOYEES Former U.S. Government employees or U.S. military officers are generally prohibited from representing Lesaka in matters in which the government has substantial interest and where the employee had prior responsibility. Retired senior U.S. Government officials and regular military officers are further restricted from selling to, or in some instances, contacting their former agency or military service. The duration of these prohibitions and the matters to which they apply depend on the type of previous government employment. Lesaka’s legal department should be contacted to help identify which restrictions apply. 8. DEALING WITH OUTSIDE PERSONS AND ORGANISATIONS 8.1. PROMPT COMMUNICATIONS Lesaka strives to achieve complete, accurate, fair, understandable and timely communications with all parties with whom it conducts business, as well as government authorities and the public. All Employees must take all steps necessary to assist Lesaka in fulfilling these disclosure responsibilities. In addition, prompt and effective internal communication is encouraged. A prompt, courteous and accurate response should be made to all reasonable requests for information and other clientcommunications. Any complaints should be dealt with in accordance with internal procedures established by variousoperating areas of Lesaka and applicable laws. 8.2. MEDIA RELATIONS In addition to everyday communications with outside persons and organizations, Lesaka will, on occasion, be asked to express its views to the media on certain issues. Unless specifically designated to do so, no Employee may provide advice or comment on/respond to customer/media/public queries or any business/product related queries as a representative of the organisation/operate in any official capacity via social or other public platforms/media spaces. Employees approached by the media should immediately contact the department or individual responsible for corporate communications. An Employee, when dealing with anyone outside Lesaka, including public officials, must take care not to compromise the integrity or damage the reputation of any outside individual, business, or government body, or that of Lesaka. As a general rule, Lesaka’s position on public policy or industry issues will be dealt with by the Board of Lesaka and existing policies in this regard must be adhered to. The text of the articles for publication, public speeches and addresses about Lesaka and its business should be reviewed in advance with the individual responsible for public relations.
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Employees should separate their personal roles from Lesaka’s position when communicating on matters not involving Lesaka business. They should be especially careful to ensure that they are not identified with Lesaka when pursuing personal or political activities, unless this identification has been specifically authorized in advance by Lesaka. If your social media activity is/can be linked in any way or could be deemed related to Lesaka (or our related business entities and brands), we may have a legitimate interest in the content being published by you. This includes but is not limited to posting any confidential or sensitive information (either as text, video, audio or image content), discriminatory or offensive comments, critical comments about Lesaka, our Employees, our customers or competitors or any other information that may put Lesaka and its associated brands and entities at risk. 9. PRIVACY AND CONFIDENTIALITY In the regular course of business, Lesaka accumulates a considerable amount of information. The following principles are to be observed: 9.1. OBTAINING AND SAFEGUARDING INFORMATION Information necessary for Lesaka’s business should be reliable, accurate and its confidentiality maintained. When personal information is needed, wherever possible, it should be obtained directly from the person concerned. Only reputable and reliable sources should be used to supplement this information. Information should only be retained as long as it is needed or as required by law, and it is every Employee’s responsibility to ensure that such information is physically secured and protected. 9.2. ACCESS TO INFORMATION Any information with respect to any product, plan or business transaction of Lesaka, or personal information regarding Employees, including their salaries, must be kept strictly confidential (hereinafter referred to as “Confidential Information”) and must not be disclosed or used for improper purposes by any Employee unless and until proper authorization for such disclosure has been obtained. Once authorization has been obtained, all information required by stakeholders either on request or due to statutory requirements must be accurately disclosed. In addition, operating areas may implement policies and procedures to prevent improper transmission within Lesaka of material non-public information. 9.3. TERMINATION OF EMPLOYMENT The obligation to preserve the confidentiality of Confidential Information acquired in the course of employment with Lesaka does not end upon termination of employment. The obligation continues indefinitely until Lesaka authorizes disclosure, or until the Confidential Information legally enters the public domain. Immediately upon the termination of employment for any reason, or when otherwise requested by Lesaka, Employees are required to return to Lesaka all above -mentioned Confidential Information, including documents, information and other property. 9.4. FORMER EMPLOYMENT New Employees will not be assigned to work where they might be required to use or disclose trade secrets or confidential information belonging to their former employers. New Employees should not take away from their former place of employment any information that might be considered proprietary or confidential. 10. EMPLOYEE OBLIGATIONS It is of paramount importance to Lesaka that all disclosure in reports and documents that Lesaka files with, or submits to, the SEC, and in other public communications made by Lesaka is full, fair, accurate, timely and understandable. You must take all steps available to assist Lesaka in fulfilling these responsibilities consistent with your role within Lesaka. In particular, you are required to provide prompt and accurate answers to all inquiries made to you in connection with Lesaka’s preparation of its public reports and disclosure. All Employees must perform their duties diligently, effectively and efficiently, and in particular:
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● Support and assist Lesaka to fulfil its commercial and ethical obligations and objectives as set out in this Code; ● Avoid any waste of resources, including time; ● Be committed to improving productivity, achieving the maximum quality standards, reducing ineffectiveness, and avoiding unreasonable disruption of activities at work; ● Commit to honouring their agreed terms and conditions of employment; ● Not act in any way that may jeopardize the shareholders’ rights to a reasonable return on investment; ● Act honestly and in good faith at all times and report any harmful activity they observe in the workplace; ● Recognize fellow Employees’ rights to freedom of association and not intimidate fellow Employees; ● Pay due regard to environmental, public health and safety conditions in and around the workplace; and ● Act within their powers and not carry on the business of Lesaka recklessly. Each Employee who contributes in any way to the preparation or verification of Lesaka's financial statements and other financial information must: ● Ensure that Lesaka's books, records and accounts are accurately maintained; ● Be familiar with and comply with Lesaka's disclosure controls and procedures and its internal control over financial reporting; and ● Take all necessary steps to ensure that all filings with the SEC and all other public communications about the financial and business condition of Lesaka provide full, fair, accurate, timely and understandable disclosure. Each Employee must cooperate fully with Lesaka's accounting and internal audit departments, as well as Lesaka's independent auditors and counsel. Each Employee acknowledges that Lesaka shall be the owner of the copyright in any work which is eligible for copyright, and which is created or executed by such Employee, whether alone or with others, in the course and scope of employment. All work created or executed by the Employee and for which copyright exists shall unless the Employee established the contrary, be deemed to have been created or executed in the course and scope of employment with Lesaka. Non-compliance with the guidelines set herein, may result in the institution of disciplinary action and potential dismissal. 11. REVISION AND ACKNOWLEDGEMENT OF THE POLICY THE POLICY IS SUBJECT TO REVISION Lesaka may change the terms of the Code from time to time to respond to developments in law and practice. Lesaka will take steps to inform all affected persons of any material change to the Code. ALL EMPLOYEES MUST ACKNOWLEDGE THEIR AGREEMENT TO COMPLY WITH THE CODE The Code will be delivered to all Employees upon its adoption by Lesaka, and to all other new Employees at the start of their employment or relationship with Lesaka. Upon first receiving a copy of the Code Employees must sign an acknowledgment that he or she has received a copy and agrees to comply with the Code. All revisions to the Code will be communicated to Employees and this communication will be deemed acceptance of the same. This acknowledgment and agreement will constitute consent for Lesaka to impose sanctions for violation of this Code and to issue any necessary stop-transfer orders to Lesaka’s transfer agent to enforce compliance with this Code. INQUIRIES If you have any questions regarding any of the provisions of this Code, please contact the Compliance Officer or Human Capital at +27 11 343 2000. 12. POLICY REVIEW The Audit Committee of Lesaka will periodically (preferably annually) review the policy and may recommend changes from time to time for the consideration of the Board. Any proposed changes to this Code where indicated, shall be referred to the Board for appropriate action. BOARD APPROVAL RECEIVED: SEPTEMBER 2025
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Exhibit 19 LESAKA TECHNOLOGIES, INC. INSIDER TRADING POLICY
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CONTENTS CONTENTS ............................................................................................................................................. 2 1. EXECUTIVE SUMMARY ................................................................................................................. 4 1.1. INTRODUCTION...................................................................................................................... 4 2. TRADING IN COMPANY SECURITIES .......................................................................................... 4 2.1. TRADING IN COMPANY SECURITIES WHILE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION IS PROHIBITED ....................................................................................................................... 4 2.2. SPECIAL GUIDELINES FOR 10B5-1 TRADING PLANS ....................................................... 4 3. APPLICATION AND RESTRICTION OF THE POLICY .................................................................. 5 3.1. ALL EMPLOYEES, OFFICERS, DIRECTORS, CONSULTANTS AND THEIR FAMILY MEMBERS AND AFFILIATES ARE SUBJECT TO THIS POLICY ..................................................................... 5 3.2. EXECUTIVE OFFICERS AND DIRECTORS ARE SUBJECT TO ADDITIONAL RESTRICTIONS 6 ● SECTION 16 INSIDERS .......................................................................................................... 6 ● ADDITIONAL RESTRICTIONS ................................................................................................ 6 3.3. APPLICABILITY OF THE POLICY TO TRANSACTIONS IN COMPANY SECURITIES ........ 6 ● GENERAL RULE ..................................................................................................................... 6 ● EMPLOYEE BENEFIT PLANS ................................................................................................ 6 3.4. EMPLOYEES MAY NOT PARTICIPATE IN CHAT ROOMS .................................................. 6 3.5. EVERY INDIVIDUAL IS RESPONSIBLE ................................................................................. 6 3.6. THE POLICY CONTINUES TO APPLY FOLLOWING TERMINATION OF EMPLOYMENT .. 6 4. COMPLIANCE OFFICER ................................................................................................................ 7 4.1. INSIDER TRADING COMPLIANCE OFFICER ....................................................................... 7 4.2. THE COMPLIANCE OFFICER IS AVAILABLE TO ANSWER QUESTIONS ABOUT THIS POLICY 7 5. MATERIAL NON-PUBLIC INFORMATION ..................................................................................... 7 5.1. DEFINITION OF MATERIAL NON-PUBLIC INFORMATION .................................................. 7 ● MATERIAL ............................................................................................................................... 7 ● NON-PUBLIC ........................................................................................................................... 8 ● CONSULT THE COMPLIANCE OFFICER WHEN IN DOUBT ............................................... 8 5.2. ONLY DESIGNATED COMPANY SPOKESPERSONS ARE AUTHORIZED TO DISCLOSE MATERIAL NON- PUBLIC INFORMATION .......................................................................................................... 8 6. PROHIBITED TRANSACTIONS ..................................................................................................... 8 6.1. SHORT SALES ........................................................................................................................ 8 6.2. PUBLICLY TRADED OPTIONS ............................................................................................... 9 6.3. HEDGING TRANSACTIONS ................................................................................................... 9 6.4. MARGIN ACCOUNTS AND PLEDGES ................................................................................... 9 7. TRADING ACTIVITIES BY EMPLOYEES ....................................................................................... 9 7.1. TRADING ACTIVITIES BY EMPLOYEES ARE PERMITTED ONLY DURING CERTAIN TRADING WINDOWS ................................................................................................................................................. 9 8. VIOLATIONS OF THE POLICY ..................................................................................................... 10 8.1. VIOLATIONS OF INSIDER TRADING LAWS OR THE POLICY CAN RESULT IN SEVERE CONSEQUENCES ............................................................................................................................................... 10 ● CIVIL AND CRIMINAL PENALTIES ...................................................................................... 10
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● COMPANY DISCIPLINE ........................................................................................................ 10 ● REPORTING VIOLATIONS ................................................................................................... 10 9. REVISION AND ACKNOWLEDGEMENT OF THE POLICY ......................................................... 10 9.1. THE POLICY IS SUBJECT TO REVISION ........................................................................... 10 9.2. ALL EMPLOYEES MUST ACKNOWLEDGE THEIR AGREEMENT TO COMPLY WITH THE POLICY 10 9.3. INQUIRIES ............................................................................................................................. 11 10. POLICY REVIEW .......................................................................................................................... 11 11. APPENDIX A – SPECIAL RESTRICTION ON TRANSACTIONS IN COMPANY SECURITIES BY SECTION 16 INSIDERS ...................................................................................................................................... 12
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1. EXECUTIVE SUMMARY 1.1. INTRODUCTION The Insider Trading Policy (hereinafter referred to as the “Policy”) provides guidelines to all employees, officers and directors of Lesaka Technologies , Inc. and its subsidiaries (hereinafter referred to as the “Company”) with respect to transactions in the Company’s securities. The nature of operations of a listed company includes that its management and other insiders may possess information influencing the value of a security issued by the listed company, meant to be used to promote the business operations of the listed company. The information shall be confidential until published or otherwise made available in the market. The information may not be used in securities transactions or disclosed to others without an acceptable reason. Holdings in a listed company by the management of the listed company and by other insiders are in essence beneficial for both the company and its shareholders. The publicity of holdings of the insiders provides the investors a possibility to monitor the holdings of the insiders and simultaneously supports confidence in the securities markets. The trading practices of the insiders shall be such that they do not undermine confidence in the securities markets. 2. TRADING IN COMPANY SECURITIES 2.1. TRADING IN COMPANY SECURITIES WHILE IN POSSESSION OF MATERIAL NON-PUBLIC INFORMATION IS PROHIBITED The purchase or sale of securities by any person who possesses material non-public information (hereinafter referred to “MNPI”) is a violation of federal and state securities laws. Furthermore, it is important that the appearance, as well as the fact, of trading on the basis of MNPI be avoided. Therefore, any person subject to the Policy who possesses MNPI pertaining to the Company may not trade in the Company’s securities, advise anyone else to do so, or communicate the information to anyone else until he or she knows that the information has been disseminated to the public. The Policy applies to all trading or other transactions in the Company’s securities, including common stock, options, and any other securities that the Company may issue, such as preferred stock, notes, bonds and convertible securities, as well as to derivative securities relating to any of the Company’s securities, whether or not issued by the Company. No director, officer, employee, or consultant of the Company who is aware of MNPI relating to the Company may: ● directly or through family members or other persons or entities, purchase, sell or otherwise transfer or trade, or offerto purchase, sell, or otherwise transfer or trade, any securities of the Company, other than pursuant to a trading plan that complies with Rule 10b5-1 promulgated by the U.S. Securities and Exchange Commission (“SEC”); or ● engage in any other action to take personal advantage of that information, communicate that information on to othersoutside the Company, including: ◾ friends and family (a practice referred to as “tipping”); or ◾ make recommendations or express opinions as to trading in the Company’s securities while in possession ofMNPI, except such person may advise others not to trade in the Company’s securities if doing so might violate the law or this Policy. In addition, it is the policy of the Company that no officer, director, employee, or consultant who, in the course of working for the Company, learns of MNPI of another company with which the Company does business, such as a customer or supplier, may trade in that company’s securities until that information becomes public or is no longer material. No officer, director, employee, or consultant who knows of any such MNPI may communicate that information to, or tip, any other person, including family members and friends, or otherwise disclose such information without the Company’s authorization. 2.2. SPECIAL GUIDELINES FOR 10B5-1 TRADING PLANS Notwithstanding the foregoing, an employee will not be deemed to have violated the Policy if he or she effects a transaction that meets all of the enumerated criteria below: ● The transaction must be made pursuant to a documented plan (the “Plan”) entered into in good faith that complies with all provisions of Rule 10b5-1 (the “Rule”), including, without limitation: ◾ Each Plan must:
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a) specify the amount of securities to be purchased or sold and the price at which and the date on which the securities are to be purchased or sold, or b) include a written formula or algorithm, or computer program, for determining the amount of securities to be purchased or sold and the price at which and the date on which the securities were to be purchased or sold. ◾ Such Plan must prohibit the employee and any other person who possesses MNPI from exercising any subsequent influence over how, when, or whether to effect trades. ◾ Such Plan must provide that no trades may occur thereunder until expiration of the applicable cooling-off period specified in Rule 10b5-1(c)(ii)(B), and no trades may occur until after that time. The appropriate cooling-off period will vary based on the status of the covered person. For directors and officers, the cooling-off period ends on the later of (x) ninety (90) days after adoption or certain modifications of the Plan; or (y) two (2) business days following disclosure of the Company's financial results in a Form 10-Q or Form 10-K for the quarter in which the Plan was adopted or modified. However, the cooling-off period cannot exceed one hundred and twenty (120) days from adoption or modification of the Plan as specified in the Rule. For all other persons, the cooling -off period ends thirty (30) days after adoption or modification of the Plan. This required cooling-off period will apply to the entry into a new Plan and any revision or modification of a Plan. ● Each Plan must be approved prior to the effective time of any transactions under such Plan by the Company’s Compliance Officer (as hereinafter defined). The Company reserves the right to withhold approval of any Plan that the Compliance Officer determines, in his or her sole discretion: ◾ fails to comply with the Rule; or ◾ exposes the Company or the employee to liability under any other applicable state or federal rule, regulation or law; or ◾ creates any appearance of impropriety; or ◾ fails to meet the guidelines established by the Company; or ◾ otherwise fails to satisfy review by the Compliance Officer for any reason, such failure to be determined in the sole discretion of the Compliance Officer. ● Any modifications to the Plan or deviations from the Plan without prior approval of the Compliance Officer will result in a failure to comply with the Policy. Any such modifications or deviations are subject to the approval of the Compliance Officer. ● Each Plan must be established at a time when the trading window is open. ● Each Plan must provide appropriate mechanisms to ensure that the employee complies with all rules and regulations, including Rule 144 promulgated under the Securities Act of 1933 and Section 16(b) of the Securities Exchange Act of 1934 (hereinafter referred to as the “Exchange Act”), applicable to securities transactions under the Plan by the employee. ● Each Plan must provide for the suspension of all transactions under such Plan in the event that the Company, in its sole discretion, deems such suspension necessary and advisable, including suspensions necessary to comply with trading restrictions imposed in connection with any lock-up agreement required in connection with a securities issuance transaction or other similar events. ● None of the Company, the Audit Committee nor any of the Company’s officers, employees or other representatives shall be deemed, solely by their approval of the Plan, to have represented that any Plan complies with the Rule or to have assumed any liability or responsibility to the employee or any other party if such Plan fails to comply with the Rule. 3. APPLICATION AND RESTRICTION OF THE POLICY 3.1. ALL EMPLOYEES, OFFICERS, DIRECTORS, CONSULTANTS AND THEIR FAMILY MEMBERS AND AFFILIATES ARE SUBJECT TO THIS POLICY The Policy applies to all directors, officers, employees, and consultants of the Company as well as to entities (such as trusts, limited partnerships and corporations) over which such individuals have or share voting or investment control. For the purposes of this Policy, officers, outside directors and consultants are included within the term “employee.” The Policy also applies to any other persons whom the Company’s insider trading Compliance Officer may designate because they have access to MNPI concerning the Company, as well as any person who receives MNPI from any Company insider.
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Persons subject to the Policy are responsible for ensuring compliance by family members and members of their households and by entities over which they exercise voting or investment control. Employees should provide each of these persons or entities with a copy of this Policy. 3.2. EXECUTIVE OFFICERS AND DIRECTORS ARE SUBJECT TO ADDITIONAL RESTRICTIONS ● SECTION 16 INSIDERS The Company’s directors and executive officers are subject to the reporting provisions and trading restrictions of Section 16 of the Exchange Act and the underlying rules and regulations promulgated by the SEC. Each of these persons is referred to herein as a “Section 16 Insider.” An executive officer is generally defined as the president, principal financial officer, principal accounting officer or controller, any vice president in charge of a principal business unit, division or function or any other officer or person who performs a policy making function. ● ADDITIONAL RESTRICTIONS All Section 16 Insiders are subject to the additional restrictio ns set forth inAppendix A hereto. 3.3. APPLICABILITY OF THE POLICY TO TRANSACTIONS IN COMPANY SECURITIES ● GENERAL RULE The Policy applies to all transactions in the Company’s securities, including common stock and any other securities the Company may issue from time to time, such as preferred stock, warrants and convertible debentures, as well as to derivative securities relating to the Company’s stock, whether or not issued by the Company, such as exchange-traded options. For purposes of this Policy, the term “trade” includes any transaction in the Company’s securities, including gifts and pledges. ● EMPLOYEE BENEFIT PLANS ● Stock Option Plans The trading prohibitions and restrictions set forth in the Policy do not apply to the exercise of stock options for cash, a promissory note, or by having the Company withhold common stock in payment of the exercise price but do apply to all sales of securities acquired through the exercise of stock options. Thus, the Policy does apply to the “same-day sale” or cashless exercise of Company stock options. ● Employee Stock Purchase Plans The trading prohibitions and restrictions set forth in the Policy do not apply to periodic contributions by the Company or employees to employee stock purchase plans or employee benefit plans (e.g., a pension or 401(k) plan) which are used to purchase Company securities pursuant to the employee’s advance instructions. However, no officers or employees may alter their instructions regarding the level of withholding or the purchase of Company securities in such plans while in the possession of MNPI. Any sale of securities acquired under such plans is subject to the prohibitions and restrictions of this Policy. 3.4. EMPLOYEES MAY NOT PARTICIPATE IN CHAT ROOMS Employees are prohibited from participating in chat room discussions or other Internet forums regarding the Company’s securities or business. 3.5. EVERY INDIVIDUAL IS RESPONSIBLE Every employee has the individual responsibility to comply with the policy against illegal insider trading. An employee may, from time to time, have to forego a proposed transaction in the Company’s securities even if he or she planned to make the transaction before learning of the MNPI and even though the employee believes that he or she may suffer an economic loss or forego anticipated profit by waiting. 3.6. THE POLICY CONTINUES TO APPLY FOLLOWING TERMINATION OF EMPLOYMENT
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The Policy continues to apply to transactions in the Company’s securities even after termination of employment. If an employee is in possession of MNPI when his or her employment terminates, he or she may not trade in the Company’s securities until that information has become public or is no longer material, regardless of whether the Company is in an open or closed trading period. 4. COMPLIANCE OFFICER 4.1. INSIDER TRADING COMPLIANCE OFFICER The Company has a designated Insider Trading Compliance Officer (hereinafter referred to as the “Compliance Officer”). The duties of the Compliance Officer include, but are not limited to, the following: ● Administering the Policy and monitoring and enforcing compliance with all Policy provisions and procedures; ● Responding to all inquiries relating to the Policy and its procedures; ● Designating and announcing special trading blackout periods during which no employees may trade in Company securities; ● Providing copies of the Policy and other appropriate materials to all current and new directors, officers and employees, and such other persons as the Compliance Officer determines have access to MNPI concerning the Company; ● Administering, monitoring and enforcing compliance with federal and state insider trading laws and regulations; and assisting in the preparation and filing of all required SEC reports relating to trading in Company securities, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G; ● Pre-clearing all trading in securities of the Company by Section 16 Insiders; ● Providing approval of any Rule 10b5-1 plans; ● Selecting designated brokers through which employees are authorized to trade Company securities; ● Revising the Policy as necessary to reflect changes in federal or state insider trading laws and regulations; ● Maintaining as Company records originals or copies of all documents required by the provisions of the Policy or the procedures set forth herein, and copies of all required SEC reports relating to insider trading, including without limitation Forms 3, 4, 5 and 144 and Schedules 13D and 13G; ● Maintaining an accurate list of Section 16 Insiders; and ● Providing a reporting system with an effective whistleblower mechanism. The Compliance Officer may designate one or more individuals to perform the Compliance Officer’s duties in the event that the Compliance Officer is unable or unavailable to perform such duties. In fulfilling his or her duties under this Policy, the Compliance Officer shall be authorized to consult with the Company’s outside legal counsel. 4.2. THE COMPLIANCE OFFICER IS AVAILABLE TO ANSWER QUESTIONS ABOUT THIS POLICY Please direct all inquiries regarding any of the provisions or procedures of the policy to the Compliance Officer via e- mail at compliance@lesakatech.com or by calling +27 11 343 2000, or in person. 5. MATERIAL NON-PUBLIC INFORMATION 5.1. DEFINITION OF MATERIAL NON-PUBLIC INFORMATION ● MATERIAL Information about the Company is “material” if it would be expected to affect the investment or voting decisions of a reasonable shareholder or investor, or if the disclosure of the information would be expected to significantly alter the total mix of the information in the marketplace about the Company. In simple terms, materiality is a relatively low threshold and material information is any type of information which could reasonably be expected to affect the market price of the Company’s securities. Both positive and negative information may be material.
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While it is not possible to identify all information that would be deemed material, the following types of information ordinarily would be considered material: ● Financial performance, especially quarterly and year-end earnings, and significant changes in financial performance or liquidity; ● Company projections and strategic plans; ● Offerings of Company securities; ● Potential mergers or acquisitions, the sale of Company assets or subsidiaries or major partnering agreements; ● New major contracts, orders, suppliers, customers or finance sources or the loss thereof; ● Major discoveries or significant changes or developments in products or product lines, research or technologies; ● Significant changes or developments in supplies or inventory, including significant product defects or recalls; ● Significant pricing changes; ● Significant changes in senior management or membership of the Board of Directors; ● Significant changes in accounting methods or policies; ● Significant labour disputes or negotiations; ● Cybersecurity risks, including vulnerability and breaches, and other institutional risks; ● Actual or threatened major litigation, or the resolution of such litigation; and ● Receipt or denial of regulatory approval for products. Material information is not limited to historical facts but may also include projections and forecasts. ● NON-PUBLIC Material information is “non-public” if it has not been widely disseminated to the general public through a report filed with the SEC or through major newswire services, national news services or financial news services. For the purpose of this Policy, information will be considered public after the close of trading on the second full trading day following the Company’s widespread public release of the information. ● CONSULT THE COMPLIANCE OFFICER WHEN IN DOUBT Any employees who are unsure whether the information that they possess is material or non-public must consult the Compliance Officer for guidance before trading in any Company securities. When any securities transaction becomes the subject of legal scrutiny, it may be viewed after the fact with the benefit of 20/20 hindsight. As a result, before engaging in any securities transaction, carefully consider how regulators or others may view the transaction. 5.2. ONLY DESIGNATED COMPANY SPOKESPERSONS ARE AUTHORIZED TO DISCLOSE MATERIAL NON-PUBLIC INFORMATION The Company is required under the federal securities laws to avoid the selective disclosure of MNPI. The Company has established procedures for releasing material information in a manner that is designed to achieve broad dissemination of the information immediately upon its release. Employees may not, therefore, disclose material information to anyone outside the Company, including family members and friends, other than in accordance with those established procedures. Any inquiries from outsiders regarding MNPI about the Company should be forwarded to the Compliance Officer, the Chief Risk Officer, Chief Executive Officer, or the Group Chief Financial Officer. 6. PROHIBITED TRANSACTIONS Certain types of transactions are prohibited: 6.1. SHORT SALES Short sales of the Company’s securities evidence an expectation on the part of the seller that the securi ties will decline in value, and therefore signal to the market that the seller has no confidence in the Company or its short-term prospects.
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In addition, short sales may reduce the seller’s incentive to improve the Company’s performance. For these reasons, short sales of the Company’s securities are prohibited by this Policy. In addition, Section 16(c) of the Exchange Act expressly prohibits executive officers and directors from engaging in short sales. 6.2. PUBLICLY TRADED OPTIONS A transaction in options is, in effect, a bet on the short-term movement of the Company’s stock and therefore creates the appearance that the director or employee is trading based on inside information. Transactions in options also may focus the director’s or employee’s attention on short-term performance at the expense of the Company’s long-term objectives. Accordingly, transactio ns in puts, calls or other derivative securities involving the Company’s stock, on an exchange or in any other organized market, are prohibited by this Policy. (Option positions arising from certain types of hedging transactions are governed by the section below captioned “Hedging Transactions”) 6.3. HEDGING TRANSACTIONS Certain forms of hedging or monetization transactions, such as zero-cost collars and forward sale contracts, allow an employee to lock in much of the value of his or her stock holdings, often in exchange for all or part of the potential for upside appreciation in the stock. These transactions allow the employee to continue to own the covered securities, but without the full risks and rewards of ownership. When that occurs, the employee may no longer have the same objectives as the Company’s other shareholders. Therefore, such transactions involving the Com pany’s securities are prohibited by this Policy. 6.4. MARGIN ACCOUNTS AND PLEDGES Securities held in a margin account may be sold by the broker without the customer’s consent if the customer fails to meeta margin call. Because a margin sale may occur at a time when the customer is aware of MNPI or otherwise is not permitted to trade in Company securities, directors, officers and other employees are prohibited from holding Companysecurities in a margin account. A directors, officer or other employee is permitted to pledge the shares which they hold in the Company, provided that thecapital amount of the loan may not exceed an amount equal to 40% of the value of the shares at the time of the pledge. In this regard, the value of the shares will be equal to: (i) the volume-weighted average price (VWAP) per share traded onthe JSE over the trading days falling within the 30-day period terminating on the day prior to the date on which the pledgeis given, in the case of shares held on the JSE; or (ii) the volume-weighted average price (VWAP) per share traded on NASDAQ over the trading days falling within the 30-day period terminating on the day prior to the date on which the pledgeis given, in the case of shares held on NASDAQ, in each case as derived from the Bloomberg database. 7. TRADING ACTIVITIES BY EMPLOYEES 7.1. TRADING ACTIVITIES BY EMPLOYEES ARE PERMITTED ONLY DURING CERTAIN TRADING WINDOWS In order to avoid any questions and to protect both employees and the Company from any potential liability, any trade by any employee will be permitted only during an “opentrading window.” The trading window generally opens 48 hours following the public issuance of the Company’s earnings release for the most recent fiscal quarter and closes at the close of trading on the last day of the last month of a fiscal quarter. The Company's Compliance Officer will communicate to employees and the Board of Directors the relevant open and closed trading periods. In addition to the times when the trading window is scheduled to be closed, the Company may impose a special blackout period at its discretion due to the existence of MNPI, such as a pending acquisition, that is likely to be widely known among employees. The Company’s Compliance Officer will advise employees when any special blackout period is applicable. The Compliance Officer will impose such a blackout period if, in his/her judgment, there exists non-public information that would make trades by the Company’s employees (or certain of the Company’s employees) inappropriate in light of the risk that such trades could be viewed as violating applicable securities laws. Even when a trading window is open, employees are prohibited from trading in the Company’s securities while in possession of MNPI.
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An employee or former employee, other than a current or former Section 16 Insider of the Company, may submit a request to the Compliance Officer to transact outside of an open trading window, subject to the determination of the Compliance Officer that, based on the individual’s knowledge, position, responsibilities, or actual or potential access to material information, such individual is permitted to trade notwithstanding the restrictions set forth in this Section 7.1. To obtain such determination, the employee or former employee, as applicable, must submit a written request to the Compliance Officer, confirming that the employee or former employee, as applicable, is not in possession of MNPI and providing any additional information reasonably requested by the Compliance Officer. The Compliance Officer will review the request and may approve or deny trading by the employee or former employee during the period prior to the next open trading window. 8. VIOLATIONS OF THE POLICY 8.1. VIOLATIONS OF INSIDER TRADING LAWS OR THE POLICY CAN RESULT IN SEVERE CONSEQUENCES ● CIVIL AND CRIMINAL PENALTIES The consequences of prohibited insider trading or tipping can be severe. Persons violating insider trading or tipping rules may be required to disgorge the profit made or the loss avoided by the trading, pay civil penalties up to three times the profit made, or loss avoided, face private action for damages, as well as being subject to criminal penalties, including up to 20 years in prison and fines of up to $5 million. The Company and/ or the supervisors of the person violating the rules may also be required to pay major civil or criminal penalties. In addition, a person who tips others may also be liable for transactions by the tippees to whom he or she has disclosed MNPI. Tippers can be subject to the same penalties and sanctions as the tippees, and the SEC has imposed large penalties even when the tipper did not profit from the transaction. ● COMPANY DISCIPLINE Violation of the Policy or federal or state insider trading laws by any director, officer or employee may subject the director to removal proceedings and the officer or employee to disciplinary action by the Company, including termination for cause. ● REPORTING VIOLATIONS Any person who violates the Policy or any federal or state laws governing insider trading or knows of any such violation by any other person, must report the violation immediately to the Compliance Officer and/or the Audit Committee of the Company’s Board of Directors. Upon learning of any such violation, the Compliance Officer or Audit Committee, in consultation with the Company’s legal counsel, will determine whether the Company should release any MNPI or whether the Company should report the violation to the SEC or other appropriate governmental authority. 9. REVISION AND ACKNOWLEDGEMENT OF THE POLICY 9.1. THE POLICY IS SUBJECT TO REVISION The Company may change the terms of the Policy from time to time to respond to developments in law and practice. The Company will take reasonable steps to inform all affected persons of any material change to the Policy. The Audit Committee will be responsible for monitoring and recommending any modification to the Policy, if necessary or advisable, to the Board of Directors. 9.2. ALL EMPLOYEES MUST ACKNOWLEDGE THEIR AGREEMENT TO COMPLY WITH THE POLICY The Policy will be delivered to all employees upon its adoption by the Company, and to all other new employees at the start of their employment or relationship with the Company. Upon first receiving a copy of the Policy employees must sign an acknowledgment that he or she has received a copy and agrees to comply with the Policy’s terms. All revisions to the Policy will be communicated to the employees and this communication will be deemed acceptance of the same. This acknowledgment and agreement will constitute consent for the Company to impose sanctions for violation of this Policy and to issue any necessary stop-transfer orders to the Company’s transfer agent to enforce compliance with this Policy.
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9.3. INQUIRIES If you have any questions regarding any of the provisions of this Policy, please contact the Compliance Officer via e-email at compliance@lesaktech.com or by calling +27 11 343 2000. 10. POLICY REVIEW The Audit Committee of the Company will periodically (preferably annually) review the Policy and may recommend changes from time to time for the consideration of the Board. Any proposed changes to this Policy where indicated, shall be referred to the Board for appropriate action. BOARD APPROVAL RECEIVED: [September 8, 2027] [TBC]
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11. APPENDIX A – SPECIAL RESTRICTION ON TRANSACTIONS IN COMPANY SECURITIES BY SECTION 16 INSIDERS PRE-CLEARANCE OF TRADES BY SECTION 16 INSIDERS All purchases, sales and trades of equity securities of the Company by Section 16 Insiders, other than transactions pursuant to a Rule 10b5-1 trading plan approved by Compliance Officer, must be pre-cleared by the Compliance Officer. The intent of this requirement is to prevent inadvertent violations of the Policy, avoid trades involving the appearance of improper insider trading, facilitate timely Form 4 reporting and avoid transactions that are subject to disgorgement under Section 16(b) of the Exchange Act. Requests for pre-clearance must be submitted to the Compliance Officer at least two (2) business days in advance of each proposed transaction. All requests should be made in writing and sent to the Compliance Officer via email. If the Section 16 Insider submits the request by email and does not receive a response from the Compliance Officer within 24 hours, the Section 16 Insider will be responsible for following up to ensure that the message was received. A request for pre-clearance should provide the following information: ● The nature of proposed transaction and the expected date of the transaction; ● Number of shares involved; ● If the transaction involves a stock option exercise, the specific option to be exercised; and ● Contact information for the broker who will execute the transaction. Once the proposed transaction is pre-cleared, the Section 16 Insider may proceed with it on the approved terms, provided that he or she complies with all other securities law requirements, such as Rule 144 and prohibitions regarding trading on the basis of inside information, and with any special trading blackout imposed by the Company prior to the completion of the trade. The Section 16 Insider and his or her broker will be responsible for immediately reporting the results of the transaction as further described below. In addition, pre-clearance is required for the establishment of a Rule 10b5-1 trading plan. However, pre-clearance will not be required for individual transactions effected pursuant to a Rule 10b5-1 trading plan that specifies or establishes a formula for determining the dates, prices and amounts of planned trades once the applicable cooling-off period has expired. No trades may be made under an approved 10b5-1 trading plan until expiration of the applicable cooling-off period. Of course, the results of transactions effected under a trading plan must be reported immediately to the Company since they will be reportable on Form 4 within two (2) business days following the execution of the trade, subject to an extension of not more than two (2) additional business days where the Section 16 Insider is not immediately aware of the execution of the trade. Notwithstanding the foregoing, any transactions by the Compliance Officer shall be subject to pre-clearance by the Chief Executive Officer or, in the event of his unavailability, the Chief Financial Officer. DESIGNATED BROKERS Each market transaction in the Company’s stock by a Section 16 Insider, or any person whose trades must be reported by that Section 16 Insider on Form 4 (such as a member of the Section 16 Insider’s immediate family who lives in the Section 16 Insider’s household), must be executed by a broker designated by the Company unless the Section 16 Insider has received authorization from the Compliance Officer to use a different broker. A Section 16 Insider and any broker that handles the Section 16 Insider’s transactions in the Company’s stock will be required to enter into an agreement whereby: ● The Section 16 Insider authorizes the broker to immediately report directly to the Company the details of all transactions in Company equity securities executed by the broker in the Section 16 Insider’s account and the accounts of all others designated by the Section 16 Insider whose transactions may be attributed to the Section 16 Insider; ● The broker agrees not to execute any transaction for the Section 16 Insider or any of the foregoing designated persons (other than under a pre-approved Rule 10b5-1 trading plan) until the broker has verified with the Company that the transaction has been pre-cleared; and ● The broker agrees to immediately report the transaction details (including transactions under Rule 10b5-1 trading plans) directly to the Company and to the Section 16 Insider by telephone and in writing (by email).
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Should a Section 16 Insider wish to use a broker other than one of the Company’s designated brokers, the Section 16 Insider should submit a request to use that broker to the Compliance Officer. REPORTING OF TRANSACTIONS Under Section 16 of the Exchange Act, most trades by Section 16 Insiders are subject to reporting on Form 4 within two (2) business days following the trade date (which in the case of an open market trade is the date when the broker places the buy or sell order, not the date when the trade is settled). To facilitate timely reporting under Section 16 of the Exchange Act of Insider transactions in Company stock, Section 16 Insiders are required to: ● report the details of each transaction immediately after it is executed (on the same day as the trade date, or with respect to transactions effected under a Rule 10b5-1 plan, on the date the Section 16 Insider is advised of the terms of the transaction); and ● arrange with persons whose trades must be reported by the Section 16 Insider (such as immediate family members living in the Section 16 Insider’s household) to immediately report directly to the Company and to the Section 16 Insider the details of any transactions they have in the Company’s stock. Transaction details to be reported include: ● Transaction date (trade date); ● Number of shares involved; ● Price per share at which the transaction was executed (before addition or deduction of brokerage commission and other transaction fees); ● If the transaction was a stock option exercise, the specific option exercised; and ● Contact information for the broker who executed the transaction. The transaction details must be reported to the Compliance Officer or designee, with copies to the Company personnel who will assist the Section 16 Insider in preparing his or her Form 4. INDIVIDUAL ACCOUNT PLAN BLACKOUT PERIODS Certain trading restrictions apply during a blackout period applicable to any Company individual account plan in which participants may hold Company stock. For the purpose of such restrictions, a “blackout period” is a period in which the plan participants are temporarily restricted from making trades in Company stock. During any blackout period, Section 16 Insiders are prohibited from trading in shares of the Company’s stock that were acquired in connection with such director’s or officer's service or employment with the Company. Such trading restriction is required by law, and no hardship exemptions are available. The Company will notify Section 16 Insiders in the event of any blackout period.
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Exhibit 21 SUBSIDIARIES OF REGISTRANT The following is a list of subsidiaries of the Company as of June 30, 2026, omitting subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary. NAME WHERE ORGANIZED Adumo Management Company Proprietary Limited Republic of South AfricaAdumo Receipts Proprietary Limited Republic of South Africa Adumo RF Proprietary Limited Republic of South AfricaAtom Operations Proprietary Limited Republic of South Africa Evertrade 187 Proprietary Limited Republic of South AfricaFlickpay Proprietary Limited Republic of South AfricaGAAP Botswana Pty Ltd Republic of BotswanaGAAP Point of Sale East of Africa Ltd Republic of Kenya Humble Software Proprietary Limited Republic of South AfricaK2021477132 (South Africa) Proprietary Limited Republic of South Africa Kwande Group Proprietary Limited Republic of South AfricaLesaka Alternative Digital Products Proprietary Limited Republic of South AfricaLesaka ATM Proprietary Limited Republic of South AfricaLesaka Cash Devices Proprietary Limited Republic of South Africa Lesaka Capital Proprietary Limited Republic of South AfricaLesaka Cash Management Proprietary Limited Republic of South Africa Lesaka Cash Rentals Proprietary Limited Republic of South AfricaLesaka Digital Risk Proprietary Limited Republic of South AfricaLesaka Finance Holdings Proprietary Limited Republic of South AfricaLesaka Financial Services Proprietary Limited Republic of South Africa Lesaka Fuel Proprietary Limited Republic of South AfricaLesaka Fuel Software Proprietary Limited Republic of South Africa Lesaka Hospitality Proprietary Limited Republic of South AfricaLesaka Insights Proprietary Limited Republic of South AfricaLesaka Life Limited Republic of South AfricaLesaka Merchant Solutions Proprietary Limited Republic of South Africa Lesaka Merchant Solutions Botswana Proprietary Limited Republic of BotswanaLesaka Merchant Solutions Namibia (Proprietary) Limited Republic of Namibia Lesaka Merchant Technologies Proprietary Limited Republic of South AfricaLesaka Merchant Technologies Botswana Proprietary Limited Republic of BotswanaLesaka Merchant Technologies Namibia (Proprietary) Limited Republic of NamibiaLesaka Mobile Solutions Proprietary Limited Republic of South Africa Lesaka Online Proprietary Limited Republic of South AfricaLesaka Online Namibia Proprietary Limited Republic of Namibia Lesaka Payouts Proprietary Limited Republic of South AfricaLesaka Payments Proprietary Limited Republic of South AfricaLesaka Payment Services Botswana Proprietary Limited Republic of BotswanaLesaka Technologies Proprietary Limited Republic of South Africa Lesaka Transact Proprietary Limited Republic of South AfricaLesaka Universal Electronic Technological Solutions Proprietary Limited Republic of South Africa Lesaka Utilities Proprietary Limited Republic of South AfricaManje Mobile Electronic Payment Services Proprietary Limited Republic of South Africa Mobilemart Proprietary Limited Republic of South AfricaNet1 Applied Technologies Netherlands BV NetherlandsNUEP Holdings S.a.r.l. Luxembourg Prism Holdings Proprietary Limited Republic of South AfricaSwitchPay Proprietary Limited Republic of South Africa SmartSwitch Netherlands Holdings BV Netherlands
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Exhibit 23.1 CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the incorporation by reference in the Registration Statement Nos. 333-268414, 333-208324, 333-126958, 333-140042, 333-170395, 333-283476 and 333-295595 on Form S-8 and in the Registration Statement Nos. 333-211968 and 333-283473 on Form S-3 of our reports dated September 9, 2026, with respect to the consolidated financial statements of LesakaTechnologies, Inc. and the effectiveness of internal control over financial reporting. /s/ KPMG Inc Johannesburg, Republic of South Africa September 9, 2026
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Exhibit 31.1 CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED I, Ali Mazanderani, certify that: 1. I have reviewed this annual report on Form 10-K of Lesaka Technologies, Inc. (“Lesaka”) for the year ended June 30, 2026; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of Lesaka as of, and for, the periods presented in thisreport; 4. Lesaka’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for Lesaka and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Lesaka, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting tobe designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of Lesaka’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and (d) Disclosed in this report any change in Lesaka’s internal control over financial reporting that occurred duringLesaka’s most recent fiscal quarter (Lesaka’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Lesaka’s internal control over financial reporting; and 5. Lesaka’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to Lesaka’s auditors and the Audit Committee of Lesaka’s Board of Directors (or persons performing the equivalentfunctions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect Lesaka’s ability to record, process, summarize and report financialinformation; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Lesaka’s internal control over financial reporting. Date: September 9, 2026 /s/ Ali Mazanderani Ali Mazanderani Executive Chairman
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Exhibit 31.2 CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO RULES 13A-14(A) AND 15D-14(A) UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED I, Dan Smith, certify that: 1. I have reviewed this annual report on Form 10-K of Lesaka Technologies, Inc. (“Lesaka”) for the year ended June 30, 2026; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of Lesaka as of, and for, the periods presented in thisreport; 4. Lesaka’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (asdefined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange ActRules 13a-15(f) and 15d-15(f)) for Lesaka and have: (a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Lesaka, including its consolidated subsidiaries, ismade known to us by others within those entities, particularly during the period in which this report is being prepared; (b) Designed such internal control over financial reporting, or caused such internal control over financial reporting tobe designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) Evaluated the effectiveness of Lesaka’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; and (d) Disclosed in this report any change in Lesaka’s internal control over financial reporting that occurred duringLesaka’s most recent fiscal quarter (Lesaka’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Lesaka’s internal control over financial reporting; and 5. Lesaka’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financialreporting, to Lesaka’s auditors and the Audit Committee of Lesaka’s Board of Directors (or persons performing the equivalentfunctions): (a) All significant deficiencies and material weaknesses in the design or operation of internal control over financialreporting which are reasonably likely to adversely affect Lesaka’s ability to record, process, summarize and report financialinformation; and (b) Any fraud, whether or not material, that involves management or other employees who have a significant role in Lesaka’s internal control over financial reporting. Date: September 9, 2026 /s/ Dan Smith Dan Smith Group Chief Financial Officer
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Exhibit 32 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Lesaka Technologies, Inc. (“Lesaka”) on Form 10-K for the year ended June 30,2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Ali Mazanderani and Dan Smith, Executive Chairman and Group Chief Financial Officer, respectively, of Lesaka, certify, pursuant to 18 U.S.C. § 1350, that to theirknowledge: 1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of1934, as amended; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and resultsof operations of Lesaka. Date: September 9, 2026 / s/: Ali Mazanderani Name: Ali Mazanderani Executive Chairman Date: September 9, 2026 /s/: Dan Smith Name: Dan Smith Group Chief Financial Officer
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Exhibit 97 LESAKA TECHNOLOGIES, INC. the “Company” COMPENSATION CLAWBACK POLICY
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CONTENTS CONTENTS ............................................................................................................................................. 2 1. PURPOSE ..................................................................................................................................... 3 2. ADMINISTRATION ....................................................................................................................... 3 3. DEFINITIONS................................................................................................................................ 4 4. EFFECTIVE DATE ........................................................................................................................ 4 5. SCOPE .......................................................................................................................................... 4 6. RECOVERY .................................................................................................................................. 5 7. IMPRACTABILITY ......................................................................................................................... 5 8. NO INDEMNIFICATION ................................................................................................................ 5 9. ACKNOWLEDGEMENT ................................................................................................................ 5 10. AMENDMENT AND INTERPRETATION ...................................................................................... 5 11. OTHER RECOUPMENT RIGHTS ................................................................................................ 6 12. SUCCESORS................................................................................................................................ 6 13. GOVERNING LAW ....................................................................................................................... 6 14. POLICY REVIEW .......................................................................................................................... 6 ANNEXURE A: ACKNOWLEDGEMENT FORM ..................................................................................... 6
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1. PURPOSE The Company has adopted this Policy to comply with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, as codified by Section 10D of the Exchange Act, and Nasdaq Listing Rule 5608, which require the recovery of certain forms of executive compensation in the case of accounting restatements resulting from a material error in an issuer’s financial statements or material noncompliance with financial reporting requirements under the federal securities laws. 2. ADMINISTRATION This Policy shall be administered by the Board or, if so, designated by the Board to the Remuneration Committee, in which case references herein to the Board shall be deemed references to the Remuneration Committee.
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3. DEFINITIONS For purposes of this Policy, the following capitalized terms shall have the meanings set forth below. a. “Acknowledgement Form” shall mean the acknowledgment form attached hereto as Annex A. (a) “Board” shall mean the Board of Directors of the Company. b. “Commission” shall mean the U.S. Securities and Exchange Commission. c. “Covered Executive” shall mean the Company’s current and former executive officers, and such other employees who may from time to time be deemed subject to this Policy by the Board. For purposes of this Policy, an executive officer means an officer as defined in Rule 16a-1(f) under the Exchange Act. d. “Erroneously Awarded Compensation” shall mean, with respect to each Covered Executive in connection with a Restatement, the amount of Incentive-based Compensation that exceeds the amount of Incentive-based Compensation that would have been received by the Covered Executive had it been determined based on the restated amounts, without regard to any taxes paid by the Covered Executive. e. “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. f. “Financial Reporting Measures” shall mean measures that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, and any measures that are derived wholly or in part from such measures. Stock price and total shareholder return shall also constitute “Financial Reporting Measures.” A Financial Reporting Measure need not be presented within the Company’s financial statements or included in a filing with the Commission. g. “Incentive-based Compensation” shall mean any compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure. Incentive -based Compensation shall be deemed to have been received during the fiscal period in which the Financial Reporting Measure specified in the Incentive-based Compensation award is attained, even if such Incentive-based Compensation is paid or granted after the end of such fiscal period. For the avoidance of doubt, Incentive-based Compensation does not include annual salary, compensation awarded based on completion of a specified period of service, or compensation awarded based on subjective standards, strategic measures, or operational measures. h. “Nasdaq” shall mean the Nasdaq Stock Market LLC. i. “Policy” shall mean this compensation clawback policy, as may be amended or restated from time to time. j. “Restatement” shall mean an accounting restatement due to material noncompliance by the Company with any financial reporting requirement under the federal securities laws, including any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. k. “Restatement Date” shall be the earlier of (i) the date the Board, a committee of the Board, or officer(s) are authorized to take such action if Board action is not required, concludes, or reasonably should have concluded, that the Company is required to prepare a Restatement or (ii) the date a court, regulator, or other legally authorized body directs the Company to prepare a Restatement. 4. EFFECTIVE DATE This Policy shall be effective as of the date it is adopted by the Board and shall apply to Incentive-based Compensation that is approved, awarded, or granted to Covered Executives on or after that date. 5. SCOPE 5.1. This Policy applies to all Incentive-based Compensation received by the Covered Executives i. after beginning service as an executive officer, ii. who served as an executive officer at any time during the performance period for such Incentive-based Compensation, and iii. during the three (3) completed fiscal years immediately preceding a Restatement Date.
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5.2. In addition to these last three (3) completed fiscal years, the Policy applies to any transition period that results from a change in the Company’s fiscal year within or immediately following those three (3) completed fiscal years, provided, however, that a transition period between the last day of the Company’s previous fiscal year end and the first day of its new fiscal year that comprises a period of nine (9) to twelve (12) months would be deemed a completed fiscal year for purposes of this Policy. For the avoidance of doubt, the Company’s obligation to recover Erroneously Awarded Compensation is not dependent on if or when the restated financial statements are filed. 6. RECOVERY 6.1. In the event the Company is required to prepare a Restatement, the Company shall, as promptly as reasonably possible, recover any Erroneously Awarded Compensation received by a Covered Executive during the three (3) completed fiscal years immediately preceding the Restatement Date. For Incentive-based Compensation based on stock price or total shareholder return, the Board shall determine the amount of Erroneously Awarded Compensation based on a reasonable estimate of the effect of the Restatement on the stock price or total shareholder return upon which the Incentive-based Compensation was received and the Company shall document such reasonable estimate and provide such documentation to Nasdaq. 6.2. Subsequent changes in a Covered Executive’s employment status, including retirement or termination of employment, do not affect the Company’s rights to recover Incentive-based Compensation pursuant to this Policy. 6.3. The Board shall determine, in its sole discretion, the method of recovering any Incentive-based Compensation pursuant to this Policy. Such methods may include, but are not limited to: i. direct recovery by reimbursement; ii. set-off against future compensation; iii. forfeiture of equity awards; iv. set-off or cancelation against planned future awards; v. forfeiture of deferred compensation (subject to compliance with the Internal Revenue Code and related regulations); and/or vi. any other recovery action approved by the Board and permitted under applicable law. 7. IMPRACTABILITY The Board shall recover any Erroneously Awarded Compensation in accordance with this Policy unless such recovery would be impracticable, as determined by the Board in accordance with Rule 10D-1 under the Exchange Act and the listing standards of Nasdaq. 8. NO INDEMNIFICATION The Company shall not indemnify any current or former Covered Executive against the loss of Erroneously Awarded Compensation, and shall not pay, or reimburse any Covered Executives, for any insurance policy to fund such executive’s potential recovery obligations. 9. ACKNOWLEDGEMENT 9.1. Each Covered Executive shall sign and return to the Company, within 30 calendar days following the later of i. the effective date of this Policy first set forth above or ii. the date the individual becomes a Covered Executive, the Acknowledgement Form, pursuant to which the Covered Executive agrees to be bound by, and to comply with, the terms and conditions of this Policy. 10. AMENDMENT AND INTERPRETATION The Board may amend this Policy from time to time in its discretion and shall amend this Policy as it deems necessary to reflect the regulations adopted by the Commission and to comply with any rules or standards adopted by Nasdaq or such other national securities exchange on which the Company’s securities are then listed. It is intended that this Policy be interpreted in a manner that is consistent with the requirements of Section 10D of the Exchange Act and any applicable rules or standards adopted by the Commission and Nasdaq, or such other national securities exchange on which the Company’s securities are then listed.
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11. OTHER RECOUPMENT RIGHTS The Board may require that any employment agreement, equity award agreement, or similar agreement entered into on or after the effective date shall require a Covered Executive to agree to abide by the terms of this Policy as a condition to the grant of any benefit. Any right of recoupment under this Policy is in addition to, and not in lieu of, any other rights of recoupment or remedies that may be available to the Company pursuant to the terms of any employment agreement, equity award agreement, similar agreement, or policy and any other legal remedies available to the Company. 12. SUCCESORS This Policy shall be binding and enforceable against all Covered Executives and their administrators, beneficiaries, executors, heirs, or other legal representatives. 13. GOVERNING LAW This Policy shall be governed by and construed in accordance with the internal laws of the State of Florida, without giving effect to any choice or conflict of law provision or rule (whether of the State of Florida or any other jurisdiction). 14. POLICY REVIEW 14.1. THE POLICY IS SUBJECT TO REVISION a. The Remuneration Committee of the Company will review this policy annually and may recommend changes from time to time for the consideration of the Board. LESAKA BOARD APPROVAL RECEIVED: SEPTEMBER 2024 ANNEXURE A: ACKNOWLEDGEMENT FORM By signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of the Lesaka Technologies, Inc. (the “Company”) Compensation Clawback Policy (the “Policy”). Capitalized terms used but not defined in this Acknowledgement Form (this “Acknowledgement Form”) shall have the meanings set forth in the Policy. By signing this Acknowledgement Form, the undersigned acknowledges and agrees that the undersigned is and will continue to be subject to the Policy and that the Policy will apply both during and after the undersigned’s employment with the Company. Further, by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Incentive -based Compensation subject to recovery under the Policy to the Company to the extent required by, and in a manner consistent with, the Policy. _____________________________Signature _____________________________ Print Name _____________________________Date