LESAKA TECHNOLOGIES INC

OUR OPERATIONS

AND FINANCIAL

RESULTS

ARE SUBJECT

TO VARIOUS

RISKS AND

UNCERTAINTIES,

INCLUDING

THOSE

DESCRIBED

BELOW,

THAT

COULD

ADVERSELY

AFFECT

OUR

BUSINESS,

FINANCIAL

CONDITION, RESULTS

OF OPERATIONS,

CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOCK

Risks Relating to Our Business

To achieve our mission, our

strategy is to

build and operate

the leading South

African full service

fintech

platform offering cash

management, payment and

financial services. Our

future success, and

our ability to

return

to

profitability

and

positive

cash

flow

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 South

African

and

other

opportunities

in

South

Africa

and,

to

a

lesser

extent,

the

rest

of

the

African

continent.

The

restructuring

of

the

and

of

Connect

were

integral

parts

of

the

to

return

the

to

profitability and positive cash flow. We have made significant progress on both of these initiatives however we cannot assure you that

we will be able to complete our strategy successfully and return to profitability and

positive cash flow.

Even if we do return to profitability, achieving net income does not necessarily

ensure positive cash flows. Future periods of net

losses

from

could

result

in

negative

cash

flow

and

may

hamper

ongoing

or

prevent

us

from

sustaining

or

expanding our business. We cannot assure you that we will achieve, sustain or increase profitability in the future and if we do not, our

business will be materially and adversely affected.

In 2017

and 2018 we

suffered significant

reputational damage

of irregularities in

the awarding of

Social Security Agency (“SASSA”)

grant distribution contract in

2012 and allegations of abuse

of group companies’ access to social

grant recipients.

An entirely new

board and management

team were appointed

to develop and

execute the new

strategy however we

cannot provide assurance that issues related to those events will not resurface

and adversely affect the business.

We

have a

significant amount

of indebtedness that

requires us

to comply with

restrictive and financial

covenants. If we are unable to comply with these

covenants, we could default on this debt, which would have

a material adverse effect on our business and financial condition.

As

of

June

30,

2024,

we

had

of

ZAR

2.6

billion

($143.2

million

at

exchange rates

30, 2024). We

financed our acquisition

in April 2022

through South

African bank borrowings

of ZAR 1.1 billion

($71.7 million, translated at

closing date exchange

rate (as defined in the

Sale Agreement) of $1:ZAR

14.65165).

The borrowings

are secured

by a

pledge of

certain of

our bank

accounts, and

the cession

of Lesaka’s

shareholding

of its

subsidiaries. These borrowings contain customary covenants that require Lesaka Technologies

(Pty) Ltd (“Lesaka SA”) to maintain a

specified total asset

cover ratio and restrict

the ability of

Lesaka, Lesaka SA,

and certain of its

subsidiaries to make

certain distributions

with respect

to their

capital stock,

prepay other

debt, encumber

their assets,

incur additional

indebtedness, make

investment above

specified levels, engage in certain business combinations and engage

in other corporate activities.

The loan agreements also include a credit enhancement mechanism of ZAR

350 million ($23.9 million, translated at closing date

exchange rate), which has been provided by investment

funds managed by Lesaka’s

largest shareholder, Value

Capital Partners (Pty)

Ltd (“VCP”)

which includes

a contingent

subscription for

new shares.

There can

be no

assurance that

VCP will

perform under

the

commercially agreed

terms and failure

by it to

fulfil its obligation

under the credit

enhancement mechanism

may put our

funding or

future repayments at risk.

We also

have borrowings through

Connect. Connect’s

credit facilities include (i)

an overdraft facility (general

banking facility)

of ZAR 205.0

million (of which

ZAR 170.0 million

has been utilized);

(ii) Facility A

of ZAR 705.5

million; (iii) Facility

B of ZAR

550.0 million (both fully utilized and ZAR 512.5 million outstanding after scheduled repayments); and (iv) an asset-backed facility of

ZAR 200.0 million (of which ZAR

152.3 million has been utilized). These borrowings are secured

by a pledge of, among other things,

Cash Connect Management Solutions’(“CCMS”)

entire equity interests in

its subsidiaries and investments

and any claims

outstanding.

These

contain

covenants

that require

CCMS to

specified debt

service,

cover and

leverage

ratios.

Within our merchant lending

operations, we have

borrowing arrangements through

Cash Connect Capital

(Pty) Limited (“CCC”).

CCC has a

ZAR 300

million revolving

credit facility agreement

.

We

have utilized

approximately ZAR

215.3 million

30,

This

covenants

that

require

the

parties

to

collectively

a

specified

capital

adequacy ratio, restrict the ability of the entities to 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 that

may

be

beneficial

to

us.

If

we

are

unable

to

comply

with

the

covenants,

we

could

be

in

default

and

the

indebtedness

could

be

accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as

a result, our business, financial condition and stock price would suffer.

We

need to

significantly grow

operations in

ensure their

profitability and

long-

term sustainability.

Following the conclusion of our contract

with SASSA, we refocused our resources and technology

on the provision of financial

inclusion services

to our

target market

and currently

have an

established base

1.5 million

customers. Our

involves significantly expanding this base over

the coming years. While

we believe that our financial

services offerings are convenient

and cost-effective,

the success

of our

strategy will

depend on

the extent

to which

we successfully

market our

to grow

the

customer base.

Factors that may prevent us from successfully operating and expanding our

Consumer Division include, but are not limited to:

•

insufficient adoption and utilization of our products and

services;

•

inability to access sufficient funding for our ATM

infrastructure;

•

in

the

marketplace

and

imposed

by

SASSA

or

the

South

African

government

on

the

manner in which grant recipients may transact;

•

political interference and changes in the regulatory environment;

•

failure to comply with laws and regulations related to our Consumer lending

business;

•

failure to comply with anti-money laundering and anti-corruption laws and

regulations;

•

cyber-attacks, data breaches and data leaks;

•

further civil unrest similar to that experienced in July 2021;

•

loss of key technical and operations staff;

•

expired property leases disrupting business operations; and

•

logistical and communications challenges, including scheduled and unscheduled

power supply disruptions.

Failure

to

complete,

or

delays

in

completing,

the

Adumo

acquisition,

could

and

affect our results of operations and stock price.

The completion of

the Adumo

acquisition is subject

to a

number of conditions

precedent, including receipt

of regulatory approvals

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

various

governmental and regulatory authorities.

The regulatory approval processes may

take a lengthy period of time to complete,

and there

can be no assurance

as to the outcome

of the approval processes,

including the undertakings

and conditions that

may be required for

approval, or whether the regulatory approvals will be obtained at all.

the completion

of the

acquisition is

conditional

on, among

other things,

no action

or circumstance

occurring that

would result in a material adverse effect on the Adumo’s

business operations or financial results.

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 our

relationships with our stakeholders

and could have a material

adverse effect on

our current and future operations,

financial condition

and prospects.

We may not realize some or all of the anticipated benefits from the Adumo acquisition.

Even if we complete the

Adumo acquisition, we may experience

unforeseen events, changes or

circumstances that may adversely

affect us. For example, we may incur unexpected costs, charges or

expenses resulting from the transaction, including charges to future

earnings if Adumo’s business

does not perform as expected. Our expectations regarding

Adumo’s business and prospects may not

be

realized,

as a

result

of

changes

in

the

of the

markets

that Adumo

serves.

In

there

are

risks

associated with

Adumo’s

product and

service offerings

or results

of operations,

risk of

failing to

certain

regulatory rules required to operate its business.

Further, there are

numerous challenges, risks

and costs

involved with integrating

of Adumo

with ours.

For example,

integrating Adumo into

our company will require

significant attention from our

senior management which

may divert their attention

from

our

day-to-day

The

difficulties

of

integration

may

also

be

by

cultural

between

our

two

organizations and the necessity of retaining and integrating personnel,

including Adumo’s key employees.

Our Sarbanes-Oxley

Act of

2002 (“Sarbanes”)

management certification

and auditor

attestation regarding

of

as of

2024, excludes

of Adumo,

as we

only expect

to close

the

transaction in fiscal 2025.

The requirement to evaluate

and report on our

internal controls also applies

to companies that we

acquire.

As a group of

South African private companies,

Adumo is not required

to comply with Sarbanes

prior to the time

we acquire it.

The

integration of

Adumo into

financial reporting would

be expected

to require

significant time

and resources

management and

other personnel

and is expected

to increase

our compliance

costs. If

we fail

to successfully

integrate the

operations of Adumo into our

internal control over financial reporting for

fiscal 2025, our internal

control over financial reporting may

not be effective.

If some or all

of the aforementioned or

other risks materialize, our

ability to realize the

anticipated benefits of Adumo

could be

materially impaired, and as a result, our financial condition, results of operations,

cash flows and stock price could suffer.

We may undertake acquisitions

increase our

costs or

liabilities or

be disruptive

to our

Acquisitions are

an integral part

of our new

growth strategy

as we seek

to expand our

business and deploy

our technologies

in

new markets

in Southern

Africa. However,

we may

not be

able to

locate suitable

candidates at

prices that

we consider

appropriate.

If

we

do

identify an

candidate,

we

may

not be

able to

successfully

negotiate

the

terms

of

the

transaction, finance it

or, if the

transaction occurs, integrate the

new business into

our existing business.

These transactions may

require

debt 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 require

significant attention

from members

of our senior

management team,

which may

divert their

attention from

our day-to-day

The difficulties

of integration

may be

the necessity

of integrating

personnel with

disparate business

backgrounds

and

combining

corporate cultures.

We

also may

not be

able to

retain key

employees or

of an

acquired business

or

realize

cost

efficiencies

or

synergies

or

other

benefits

that

we

anticipated

when

selecting

our

candidates.

Acquisition

candidates 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

our

future reported earnings.

Geopolitical conflicts,

conflict between

Russia and

Ukraine and

between Israel

and Hamas,

may adversely affect our business and results of operations.

The current

conflict between

Russia and

Ukraine and

between Israel

and Hamas

are creating

substantial uncertainty

about the

future of the

global economy.

Countries across the

globe are instituting

sanctions and other

penalties against

Russia. The retaliatory

measures that have been taken, and could be taken

in the future, by the U.S., NATO,

and other countries have created global security

concerns that could result in broader European military and political conflicts and otherwise have a substantial impact on regional and

global economies, any or all of which could adversely affect our business.

While the broader consequences are uncertain at this time, the continuation

and/or escalation of the Russian and Ukraine and Israel-

Hamas conflicts, along with any expansion of the conflict to surrounding areas,

create a number of risks that could adversely impact

our business, including:

•

increased inflation and significant volatility in the macroeconomic

environment;

•

disruptions to our technology infrastructure, including through cyberattacks,

ransom attacks or cyber-intrusion;

•

•

disruptions in global supply chains; and

•

All of these risks could materially

and adversely affect our business

and results of operations. We

are continuing to monitor the

situation in Ukraine and the Middle East and globally and assessing the potential

impact on our business.

A prolonged economic

slowdown or lengthy

or severe recession

or elsewhere could

harm

our operations.

A prolonged economic

downturn or recession

could materially

impact our results

from operations, particularly

in light of

on-going electricity disruptions

during calendar 2022

and 2023, a

significantly weak USD/

ZAR exchange rate

with previous periods, and our strategic decision to focus on our South African operations. Economic confidence in South Africa, our

main operating

environment, is

currently low

and, as

a result, the

risk of

a prolonged

economic downturn

is increased, which

could

have a negative impact on merchants and retailers; mobile phone operators; our account holders; the

level of transactions we process;

the take-up of

the financial services

we offer and

the ability of our

customers to repay

our loans or to

pay their insurance

premiums.

If

institutions

and

retailers experience

decreased

demand

for

their products

and services,

our

hardware,

software,

related

technology sales and processing revenue could decrease.

Our investment in MobiKwik

subjects us to certain

risks, including the possibility

of fluctuations in the

carrying value based on readily determinable fair values. In addition, our ability to dispose of our interest in

MobiKwik on acceptable terms, or at all, may be limited under certain circumstances.

We

have elected to

account for our

investment in MobiKwik

at cost minus impairment,

if any,

plus or minus changes

from observable

price changes

in orderly

transactions for

the identical

or similar

instrument of

the same

issuer because

it does

not

have a readily determinable fair value. The determination of the fair value of an investment requires us to make significant judgments

and estimates and we are required to

base our estimates on assumptions which

we believe to be reasonable, but

these assumptions may

be unpredictable and inherently uncertain. The value of our investment in MobiKwik as of

June 30, 2024 and 2023, was $76.3 million

and was determined

based on a

share issuance concluded

by MobiKwik in

June 2021, implying

a fair

value per equity

share of $12.275.

We did not identify any observable price changes during either of fiscal 2024, 2023 and 2022 and therefore did not adjust the value of

our investment during the years ended June 30, 2024, 2023

MobiKwik originally intended to complete its initial public offering

in November 2021. However, MobiKwik

delayed its initial

public

given

prevailing

market

at

the

time

and

has

indicated

its

intention

to

pursue

an

initial

public

listing

in

calendar 2024. MobiKwik filed its draft red herring prospectus in January 2024.

We

may

need to

record a

write-down of

the carrying

in MobiKwik

in the

future (i)

if it

is unable

to

successfully complete its contemplated initial public offering, (ii) due to fluctuations in its market price upon listing, including during

the lock up

period after its

initial public

offering, or

(iii) if it

has not listed,

there is an

observable transaction

indicating a

lower than

our

2024 price

per share.

Furthermore,

it may

be difficult

to dispose

of some

or all

of our

investment on acceptable terms, if at all, if MobiKwik fails to list.

Our

ability

to

fund

our

ATM

network

that

we

to

have

access

to

lending

facilities, which requires compliance with restrictive and financial covenants.

The operational

of our

ATM

network,

along with

an increase

in our

banking

client base,

necessitates

access to large

amounts of cash

to stock the

ATMs

and maintain uninterrupted

service levels. We

have credit facilities

from a South

African

bank

which

as

well

as

restrictive

and

covenants.

The

and

covenants included in our lending facilities may reduce our operating flexibility or our ability to engage in other transactions that may

be beneficial to us. If we are unable to comply

with the covenants in South Africa, we could be in default

and the indebtedness could

be accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and

as a result, our business and financial condition would suffer.

We may not be able to extend the terms

of these debt facilities or

refinance them, in each case, on

commercially reasonable terms

or at all. Our

ability to continue the

uninterrupted operation of

our ATM

network will be adversely

impacted by our failure

to renew

our debt facilities, any adverse change to the terms

of our credit facilities, or a

significant reduction in the amounts available under our

credit facilities,

or our

failure to

increase our

facilities if

required. We

may also

suffer reputational

damage if

our service

levels are

negatively impacted due to the unavailability of cash.

Our

loan

book

and

lending

book

expose

us

to

credit

risk

and

our

allowance for doubtful finance loans receivable may not be sufficient to absorb future write-offs.

All of our microfinance loans made are for a period of six months or less and all of our merchant lending through Connect is for

a period

of less

than 12

months. We

have created

books. When

creating the allowance,

management considered

factors including the

period of the

finance loan outstanding,

creditworthiness of

the

customers and the past payment history of the borrower. We consider this policy to be appropriate as it takes into account factors such

as historical bad debts, current

economic trends and changes in our

customer payment patterns. However,

additional allowances may

be required should the ability

of our customers to

make payments when due

deteriorate in the future.

A significant amount of judgment

is required to assess the ultimate recoverability of these microfinance

loan receivables.

We may face competition from other

companies that offer innovative

payment technologies and payment

processing,

which

could

result

in

the

loss

of

our

and

impact

our

ability

to

successfully market additional products and services.

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

are

companies who

are larger

than we

are and

have greater

financial and

operational resources

than we

have. These

factors may

allow

them to offer better pricing

terms or incentives to customers, which

could result in a loss of our potential

or current customers and/or

force us to lower our prices. Either of these actions could have a significant effect

on our revenues and earnings.

Our

future

success

will

depend

in

part

on

our

ability

to

attract,

integrate,

retain

and

incentivize

key

and

a

number

of

skilled

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 in

our product

development and

marketing efforts,

we may

need to identify

and attract new

qualified technical

and sales personne

l, as

well as motivate and retain our

existing employees. As a result, an

inability to hire and retain such

employees would adversely affect

our ability to

achieve our strategic

goals and maintain

our technological relevance.

We may face difficulty in

assimilating, transitioning

and integrating

newly-hired

personnel or

management of

any future

acquisitions into

our existing

management team,

and this

may

our business. Competitors

may attempt

to recruit

our top

management and

employees. In

order to attract

and retain

personnel in

a competitive

marketplace, we

must provide

competitive pay

packages, including

cash and equity

-based compensation

and

the

in

our

stock

price

may

from

time

to

time

affect

our

ability

to

recruit

or retain

employees.

We

do

not

any

“key

person”

life

policies.

If

we

fail

to

attract,

integrate,

retain

and

incentivize

key

and

skilled

employees, our ability to manage and grow our

business could be harmed and our product

development and marketing activities could

be negatively affected.

System failures, including breaches in the security of our system, could harm our business.

We

may experience

system failures

to time,

and any

lengthy interruption

in the availability

of our

back-end system

computers could harm our business and severely affect our customer relationships. Frequent or persistent interruptions in our services

could cause current or potential

customers and users to

believe that our systems are

unreliable, leading them to

avoid our technology

altogether, and could permanently harm our reputation and brands. These interruptions would increase the burden on our staff, which,

in turn, could delay our

introduction of new applications and

services. Finally, because our customers may use our products

for critical

any

system

failures

could

result

in

damage

to

our

customers’

businesses.

These

could

seek

compensation from us for their losses. Even if unsuccessful, this type of

claim could be time-consuming and costly for us to address.

Although certain of our systems

have been designed to reduce

downtime in the event of

outages or catastrophic occurrences, they

remain 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 disaster

recovery 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

against fraud in

electronic

transactions and

to provide for

the privacy and

integrity of cardholder

data. Our solutions

may be vulnerable

to breaches in

due

to

defects

in

the

mechanisms,

the

system,

applications

or

the

hardware

as

well

as

through

risk

introduced

into

our

environment

through

third

party

supplies,

which

the

group

relies

heavily

on.

Security

vulnerabilities

could

jeopardize the security of

information transmitted using our solutions.

If the security of our

solutions is compromised, our

reputation

and marketplace acceptance of

our solutions may be

adversely affected, which would cause

our business to

suffer, and we may become

subject to damage claims. We

have not yet experienced any significant security breaches affecting

our business.

Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems with our

system could

result in lengthy interruptions

to our services. Our current

business interruption insurance may

not be sufficient to

compensate us for

losses that may result from interruptions in our service as a result of system failures.

Cash

Paymaster

Services,

or

CPS,

has

been

placed

into

liquidation.

While

no

claim

has

been

made

against Lesaka for CPS’ obligations, we cannot provide assurance that no such claim will be made.

CPS has significant obligations and ongoing litigation related to its SASSA contract and has been placed into liquidation. While

no claim has been made against Lesaka to be held liable for CPS’ current

obligations or any future obligations under any future court

judgments, and while we do not believe that there would be a legitimate legal basis for any such claims, we cannot assure you that no

such claim

will be

made against

us. If

SASSA or

another

third party

were to

seek and

ultimately succeed

in obtaining

a judgment

against us in respect of CPS’ liabilities, any such judgment would have a material

adverse effect on our financial condition, results of

operations and cash flows.

Defending

our

property

rights

or

defending

ourselves

in

infringement

suits

that

may

be

brought against us is expensive and time-consuming and may not be successful.

Litigation to

enforce our

patents, trademarks

or other

rights or

our trade

secrets could

substantial costs and may not be successful. Any loss of, or inability to protect, intellectual property in our technology could diminish

our competitive advantage and also seriously harm our business. In addition, the laws of certain foreign countries may not protect our

rights to

the same

extent as

do the

laws in

countries where

we currently

have patent

protection. Our

means of

protecting our intellectual property rights in countries where we currently have patent or trademark protection, or any other country in

which we operate, may not be

adequate to fully protect our intellectual

property rights. Similarly, if third parties claim that we infringe

their intellectual property rights, we may be required to incur significant costs and

devote substantial resources to the defense of such

claims,

to

discontinue

using

and

selling

any

infringing

and

services,

to

expend

to

develop

non-infringing

technology or

to purchase

licenses or

pay royalties

for other

technology.

if we

are unsuccessful

in defending

any such

third-party

claims, we

could

suffer

costly judgments

and

injunctions

affect

our business,

operations or financial condition.

We

may incur

material losses

in connection

with our

movement of

cash through

our infrastructure

in

In our merchant

business we collect

and process large

volumes of cash

from our customers,

assuming the

risk of loss

moment that cash is

deposited into our vaults.

We are then responsible for its

collection and transportation to

processing centers, which

we outsource to various cash in transit service providers. These services extend

across all areas of South Africa.

suffers from

high levels of

crime and in

particular cash in

transit heists. We

cannot insure

against certain risks

of

loss or

theft of

cash from

our delivery

and collection

vehicles and

we will

therefore bear

the full

cost of

certain uninsured

losses or

theft in connection with the cash handling process, and such losses could materially and adversely affect our financial condition, cash

flows and results of operations. We

have not incurred any material losses

resulting from cash distribution in

recent years, but there is

no 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 harm our business.

We obtain

our smart cards, ATMs,

POS devices, components for our

safe assets, and the other hardware

we use in our business

from a limited number of

suppliers, and do not

manufacture this equipment ourselves. We generally do not have long-term

agreements

with our manufacturers

or component suppliers.

If our suppliers become

unwilling or unable to

provide us with adequate

supplies of

parts or products when we need

them, or if they increase their

prices, we may not be

able to find alternative sources in

a timely manner

and could be faced

with a critical shortage.

This could harm our

ability to meet customer

demand and cause our

revenues to decline.

Even

if we

are able

to secure

alternative

sources in

a timely

manner,

our costs

could increase

as a

result of

supply or

geopolitical

shocks, which may lead to an increase in the prices of goods and

services from third parties. A supply interruption, such as the recent

global shortage of semiconductors, or an increase in

demand beyond current suppliers’ capabilities could harm our ability

to distribute

our equipment and thus

to acquire new customers

who use our technology.

Any interruption in the supply

of the hardware necessary

our technology,

or our

inability to

obtain substitute

equipment at

acceptable prices

in a

timely manner,

could impair

our

ability to meet the demand of our customers, which would have an adverse

effect on our business.

Our EasyPay Insurance business exposes us to risks typically experienced by life assurance companies.

EasyPay Insurance is a life insurance company and exposes us to risks typically experienced by life assurance companies. Some

of these risks include the extent

to which we are able to continue

to reinsure our risks at acceptable costs,

reinsurer counterparty risk,

maintaining regulatory capital adequacy, solvency and

liquidity requirements, 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 are unable to maintain our desired level of reinsurance

at prices that we

consider acceptable, we would have to either

accept an increase in 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

returns,

mortality,

morbidity,

persistency

and

costs

and

of

the

Using

the

wrong

to

price

our

could

and

adversely 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 industry

is

highly

competitive.

Many

of

our

competitors

are

well-established,

nationally

and

market

similar

and

we

therefore may not be able to effectively penetrate the South

African insurance market.

Risks Relating to Operating in South Africa and Other Foreign Markets

Operating in Southern Africa,

an emerging market, subjects

us to greater risks

than those we would

face

if we operated in more developed markets.

Emerging markets such as

Southern Africa are subject

to greater risks

than more developed markets.

While we focus

on

markets

because

that

is

where

we

perceive

the

greatest

opportunities

to

market

our

and

successfully, the

political, economic and market conditions

in these markets present risks that

could make it more difficult

our 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

property

and

contractual rights;

•

logistical, utilities (including electricity and water supply) and communications

challenges;

•

adverse

changes

in

laws

and

practices,

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,

Foreign Corrupt

Practices Act,

or FCPA,

and regulations established by the U.S. Department of Treasury’s

Office of Foreign Assets Control, or OFAC.

If

we

do

not

achieve

Broad-Based

Black

Economic

Empowerment

objectives in

our

South

African businesses, we

may be subject

to fines and

we risk losing

our government and/or

private contracts.

it is

possible that

we may

to increase

the Black

shareholding of

our company

in a

manner that

could dilute

your ownership

and/or change

the companies

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 been

established through

the Broad-Based

Black Economic

Empowerment

Act, No.

53 of

2003, as

amended from

time to

time, and

the

Amended

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 Sector

Code has been

published. Achievement

of BEE objectives

is measured by

a scorecard which

establishes a weighting

for the various

elements. Scorecards

are independently

reviewed by

accredited BEE

verification agencies

which issue

a verification

certificate that

presents an

entity’s

BEE Status

Level. This

BEE verification

process must

be conducted

on an

annual basis,

and the

resultant BEE

verification certificate is only

valid for a period

of 12 months from the

date of issue of the verification

certificate.

We currently

have

a level 4 BEE rating for our South African business.

Certain of our South African

businesses are subject to either

the Amended Information and

Communication Technology

Sector

Code, or ICT Sector Code, or the

Amended Financial Services Sector Code,

or the FS Sector Code. The ICT

Sector Code and the FS

Sector Code have been amended and aligned with the new

BEE Codes and were promulgated in November 2016 and December

2017,

Licensing

and/

or

regulation

authorities

overseeing

these

South

African

may

set

minimum

adherence

requirements to BEE standards as a condition for an operating license to

trade.

The BEE scorecard includes

a component relating to management

control, which serves to determine

the participation of Black

people

within

the

board,

as

well

as

at

various

levels

of

within

a

measured

entity

(including,

inter

alia

,

Management, Senior

Management, Middle

Management and

Junior Management).

The BEE

Codes and/or

Sector Codes

define the

terms

"

Senior

",

"

Middle

"

and

"

Junior

"

as

those

occupational

categories

as

in

accordance

with

the

Employment

Equity

Regulations,

with

specific

emphasis

on

improving

participation

in

proportion

to

the

demographics

of the

Economically Active

Population

Africa,

as published

by Statistics

South

Africa,

to time.

Employment Equity legislation

seeks to drive the

alignment of the workforce

with the racial composition

of the economically active

population

of

South

Africa

and

accelerate

the

achievement

of

employment

equity

targets,

introducing

monetary

fines

for

non-

with

the Employment

Equity

legislation

and misrepresented

submissions.

Annexure

EEA9

to the

Employment

Equity

Regulations sets out the various occupational levels which are determined in accordance with the relevant grading systems applied by

the measured entity and referred to in said Annexure.

We

have taken a

number of actions

as a company

to increase empowerment

of Black (as

defined under applicable

regulations)

South Africans.

For instance,

African competition

authorities approved

the Connect

transaction subject

to certain

public

interest conditions

relating to

employment, increasing

the spread

of ownership

by historically

disadvantaged people

(“HDPs”), and

investing

in both

enterprise and

supplier development.

Further to

increasing the

spread of

ownership

by HDPs,

we are

to

establish

an

Employee

Share

Ownership

Plan

scheme

(“ESOP”)

within

months

of

the

of

the

that

complies with certain design principles. This will benefit the workers of the merged entity and result in them receiving a shareholding

in our

company equal

in value

to at

least 3%

of the

issued shares

in our

company as

of April

14, 2022.

If within

24 months

of the

implementation date of the transaction, we generate a positive net profit for three consecutive quarters, the ESOP shall increase to 5%

of the issued

shares in our company

as of April 14,

2022. The final structure

of the ESOP is

contingent on shareholder

approval and

relevant regulatory and governance approvals. The ESOP had not been

established as of the date of this Annual Report.

During fiscal 2024, we made cash contributions to 31 community-based organizations and enterprises to enable them to

promote

growth

and

strengthen

their

capacity

to

develop

innovative

platforms

or

provide

to

the

markets

they

serve.

We

funding

to build

necessary

infrastructure

to a

high

school

based

in

a rural

community

and

also

contributed

800 mobile

devices

to

disadvantages South

African scholars.

We

have also

established a

fund to

aid vulnerable

communities affected

by fires

and floods.

Our donations to

this fund included

food, blankets, and

replacements for personal

belongings and household

goods, helping community

members recover and regain economic stability. However,

it is possible that these and other actions may not be sufficient to enable us

to achieve the

applicable BEE objectives

set out for

specific financial years.

In that event, in

order to maintain

competitiveness with

both government and private sector clients, we may have to seek to increase

compliance through other means, including by selling or

placing additional

shares of Lesaka

or of our

South African subsidiaries

to Black

South Africans

(either directly

or indirectly),

over

and above what

has already been

approved. Such sales

or placements of

shares could have

a dilutive impact

on your ownership

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

and we continually

seek ways to

improve our BEE

Status Level, especially

the ownership element

(so-called “equity element”)

thereof.

We

may not be

able to effectively

and efficiently

manage the disruption

to our operations

of

erratic electricity supply 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 order

to operate, and Eskom has been unable to generate and

supply the amount of electricity required by the South African economy which

has resulted in significant and

often unpredictable electricity supply disruptions. Eskom has

implemented a number of short- and

long-

term mitigation

plans to correct

these issues but

supply disruptions

continued

to occur

regularly and

with no predictability

in recent

years,

although

consistency

of

electricity

supply

has

improved

significantly

since

April

As

part

of

our

continuity

programs, we have

installed back-up diesel

generators in order

for us to continue

to operate our core

data processing facilities in

the

event of intermittent disruptions to our electricity supply. We have to perform regular monitoring and maintenance of these generators

and also source

and manage

diesel fuel levels.

We

may also

to replace these

generators on

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 raise

sufficient funding to operate

and/or commission new electricity-generating

power stations in accordance with its

plans, or at all, or if

we are unable to effectively and efficiently test, maintain,

source fuel for, and replace, our generators.

Fluctuations in

the value

of the

rand have

had, and

will continue

to have,

impact

on

our

results

of

which

may

make

it

difficult

to

our

performance between reporting periods and may also adversely affect our stock price.

The South

African rand,

or ZAR,

is the

primary operating

currency for

operations while

our financial

results are

reported in U.S. dollars. Therefore, any depreciation in

the ZAR against the U.S. dollar, would negatively impact

our reported revenue

and net

income. The

U.S. dollar/ZAR

exchange rate

has historically

been volatile

and we

expect this

volatility to

continue (refer

to

Item

7—“Management’s

Discussion

and

Analysis

of

Condition

and

Results

of

Operations—Currency

Rate

Information.”).

Due

to

the

fluctuation

in

the

value

of

the

ZAR

and

its

impact

on

our

results,

you

may

find

it

difficult to

compare our results

of operations between

financial reporting periods

even though we

provide supplemental information

about our

operations determined

on a

ZAR basis.

Similarly,

depreciation in

the ZAR

may negatively

impact the

prices at

which our stock trades.

We generally do not engage in any currency hedging

transactions intended to reduce the

effect of fluctuations in foreign currency

exchange rates on our results of

operations, other than economic hedging

using forward contracts relating to

our inventory purchases

which 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.

high levels of

poverty, unemployment

and crime may

increase our costs

and impair our

ability to maintain a qualified 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 and

social development among its people,

with large parts of the population,

particularly in rural areas, having limited

access to adequate

education, healthcare, housing and other

basic services, including water

and electricity. In addition, South Africa has

a high prevalence

of HIV/AIDS and tuberculosis. Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of

citizens

under

previous

governments

may

our

costs and

reduce

our

profitability,

all of

which

could

negatively

affect

our

These

problems

may

prompt

emigration

of

skilled

workers,

hinder

into

South

Africa

and

impede

growth. As a result, we may have difficulties attracting and retaining

qualified employees.

The

economy

of

South

Africa

is

exposed

to

high

rates

of

inflation,

and

tax,

which

could

our

costs

and

thereby

reduce

our

profitability.

Furthermore,

the

South

African

government requires additional

income to fund

future government

expenditures and may

be required,

among

other things, to

increase existing income

tax rates, including

the 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

and

interest that

are substantially

higher than

those prevailing

in the United

States and

other highly-developed

economies. High

rates of

inflation could increase our South African-based costs and decrease our operating margins. High interest rates increase the cost of our

debt financing, though conversely, they also

increase the amount

of income we

earn on any

cash balances. The

South African corporate

income tax rate, of 27%, is higher than the

U.S. federal income tax rate, of 21%. Any increase

in the effective South African corporate

income tax rate would adversely impact our profitability and cash flow generation.

Risks Relating to Government Regulation

We

are required to

certain laws

and regulations, including

economic and trade

sanctions,

which could adversely impact our future growth.

We

are

subject

to U.S.

and

other

trade

controls,

economic sanctions

and

similar

those in

the

jurisdictions

where

we

operate.

Our

failure

to

comply

with

these

laws

and

could

subject

us

to

civil,

criminal

and

administrative

penalties

and

harm

our

reputation.

These

place

on

our

trade

practices,

and

decisions.

In particular,

our operations

are subject

to U.S.

and

foreign

trade

control laws

and

including various export controls and economic sanctions programs, such as those administered by OFAC. We monitor compliance in

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

certain of the items to be

monitored. As a result of doing business

in foreign countries and with foreign

partners, we are exposed to a

heightened risk of violating trade control laws as well as sanctions regulations.

Violations

of

trade

control

sanctions

are

punishable

by civil

penalties,

fines,

denial

of export

privileges,

injunctions,

asset seizures,

debarment

from

government

and revocations

or restrictions

of licenses,

as

well

as

criminal fines and imprisonment.

We have

developed policies and procedures as

part of a company-wide compliance

program that is

designed to

assist our compliance

with applicable

U.S. and international

trade control laws

and regulations,

including trade controls

and sanctions programs administered

by OFAC,

and provide regular training

to our employees to create awareness

about the risks of

violations of trade

control laws and

sanctions regulations and

to ensure compliance

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 act in violation

of our

policies and these laws and regulations, or that our policies and

procedures will effectively prevent us from violating these regulations

in every transaction

in which we

may engage, or

provide a defense

to any alleged

violation. In particular,

we may be

held liable for

the actions that our

local, strategic or joint venture

partners take inside or outside

of the United States, even

though our partners may

not be

these laws.

Such a

violation, even

if our

policies prohibit

it, could

materially and

our reputation,

results

of

and

condition.

Any

expansion

into

developing

countries,

and

our

of

new

partnerships and joint venture relationships, could increase the risk

of OFAC violations in the

future.

our payment

processing and

activities are

extensive regulation.

Compliance with

the

requirements under the various

regulatory regimes may cause

us to incur significant

additional costs and failure

to comply with such

requirements could result in the shutdown of

the non-complying facility, the imposition of liens, fines and/or civil or

criminal liability.

We

are

to

comply

with

anti-corruption

laws

and

the

FCPA

and

UK

Bribery Act, in the

jurisdictions 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

advantage,

and

us

to

keep

books

and

records

that

accurately

and

fairly

reflect

our

transactions.

As part

of

our

we

may

deal

with

state-owned

enterprises,

the

of

which

are

considered

foreign

officials

for

the FCPA.

The UK

Bribery

Act includes

provisions

that extend

beyond bribery

of foreign

public

officials and also apply to

transactions with individuals not employed

by a government and

the act is also

more onerous than the FCPA

in a number of other respects, including

jurisdiction, non-exemption of facilitation

payments and penalties. Some of the international

locations 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

and

ensure

that

our

agents

and

the anti-corruption

regulations could

subject us

to substantial

penalties, and

the requirement

that we

comply

with these laws could

put us at a

competitive disadvantage against

companies that are not

required to comply.

For example, in many

markets,

there

may be

levels

of official

corruption,

and

thus, bribery

of public

officials

may

be

a comm

only

accepted cost

of doing

business. Our

refusal to

engage in

illegal behavior,

such as

paying bribes,

may result

in us not

being able

to

obtain business that we

might otherwise have been able

to secure or possibly

even result in unlawful,

selective or arbitrary action being

taken against us.

Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, as well as criminal fines and

imprisonment. We

have developed policies

and procedures as part

of a company-wide

compliance program that

is designed to assist

our compliance with applicable U.S.,

South African and other international

anti-corruption laws and regulations,

and provide regular

training to our

employees to comply

with these laws

and regulations. However,

there can be

no assurance that

all of our

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 may

engage, or

provide a defense

to any alleged

violation. In

particular,

we may be

held liable for

the actions

that our

local, strategic

or

joint venture

partners take inside

or outside

of the United

States, even though

our partners may

not be subject

laws. Such a

violation,

even

if

our

prohibit

it,

could

and

affect

our

reputation,

results

of

and

We

do not

have a South

African banking license

and, therefore, we

provide our EPE

solution through

an arrangement with

a third-party bank,

which limits our

control over this

business and the

economic benefit

we derive from it.

If this arrangement were

to terminate, we would

not be able to operate

our EPE business

without alternate means of access to a banking license.

The

South

African

retail

banking

market

is

highly

regulated.

Under

current

law

and

our

EasyPay

Everywhere

(“EPE”) business activities require

us to be registered as

a bank in South Africa

or to have access to an

existing banking license.

We

are not currently so registered,

but we have an agreement

with Grindrod Bank, a subsidiary

of African Bank Limited, that

enables us

to implement

our EPE

program in

relevant laws

and regulations.

If this

agreement

were to

be terminated,

we

would

not

be

able

to

operate

these

unless

we

were

able

to

obtain

access

to

a

banking

license

through

alternate

means.

Furthermore, we have

to comply with the

South African Financial

Intelligence Centre Act,

2001 and money

laundering and terrorist

financing

control

when

we

open

new

bank

for

our

and

when

they

transact.

Failure

to

effectively

implement and

monitor responses

to the

legislation and

regulations may

significant fines

or prosecution

of Grindrod

Bank

and ourselves.

In

the

South

African

Advisory

and

Intermediary

Services

Act,

2002,

persons

who

act

as

intermediaries between financial product

suppliers and consumers in

South Africa to register

as financial service providers.

EasyPay

Insurance was

granted a Financial

Service Provider,

or FSP,

license on June

9, 2015, and

EasyPay Financial

Services (Pty) Ltd

was

granted

a FSP

license on

July 11,

2017. If

our FSP

licenses are

withdrawn or

suspended, we

may be

stopped from

continuing our

services businesses in South Africa unless we are able to enter into a representative arrangement

with a third party FSP.

proposed Conduct

of Financial

Institutions Bill

will make

significant changes

to the

current licensing

regime

however, the current proposal is that existing licences will be converted. The second draft of the Conduct of Financial

Institutions Bill

was published for public comment on September 29, 2020.

We

may

be

subject

to

privacy,

data

use

and/or

security,

which

could

affect our business.

We are

subject to regulations in

a number of the countries

in which we operate

relating to the processing

(which includes,

inter

alia

, the collection, use, retention, security and transfer) of

personal information about the people (whether natural or juristic)

who use

our products

and services.

The interpretation

and application

of user

data protection

laws are

in a

state of

flux. These

laws may

be

interpreted

and

applied

inconsistently

from

country

to

country

and

our

current

data

protection

and

practices

may

not

be

consistent with those interpretations and applications. Complying

with these varying requirements could cause us to incur

substantial

costs or

require us

to change

practices in

a manner

adverse to

our business.

Any failure,

or perceived

failure, by

us to

comply with any regulatory requirements or international

privacy or consumer protection-related laws and regulations could

proceedings

or

actions

against

us

by

governmental

entities

or

others,

subject

us

to

penalties

and

negative

publicity.

In

addition, as

noted above,

we are

the possibility

of security

breaches, which

themselves may

a violation

laws.

Amendments to

the NCA

were signed into

law in

in August 2019.

Compliance with

these

amendments may adversely 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 date

of the debt-relief

bill has not

yet been announced

and has been

significantly delayed.

We

believe that the

debt-relief bill will

restrict

the ability of financial services providers to provide lending

products to certain low-income earners and will increase

the cost of credit

to

these

consumers.

As a

result,

with

-relief

bill

may

impact

our

micro-lending

in

South

Africa. Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement

this new legislation

in our lending processes

and practices. Non-compliance

with the provisions of

this new legislation may

financial loss and penalties, reputational loss or other administrative punishment.

Risks Relating to our Common Stock

Our stock price has periodically experienced significant volatility. During the 2024

fiscal year, our stock price ranged from a

low

of $3.00 to a high of $5.33. We

expect that the trading price of our common stock may

continue to be volatile as a result of a number

of 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

BEE

especially

one

involving

the

or

of

equity

securities or 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,

stock can

be expected

to be

volatility resulting

from purely

market forces

over

which 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

stock to

the IFC Investors,

of which,

as of

2024,

the

IFC

Investors

held

7,366,866

shares.

We

granted

the

IFC

Investors

certain

rights,

the

right

to

require

us

to

any

share held

by the

IFC Investors

to

the

May

2016 transaction

upon

the occurrence

of specified

triggering

events,

which

we refer

to as

a

“put

right.”

The put

price

will be

the higher

of the

price

paid

to us

by

the IFC

Investors and

the volume-weighted

average price

per share prevailing

for the 60

trading days preceding

the triggering

event, except

that with respect

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.

If a put triggering event occurs, it could adversely impact

our liquidity and capital resources. In addition,

the existence of

the put right could also affect whether or on what terms 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

35%

of

our

common

stock

is

owned by

two shareholders.

The

interests of

these shareholders may conflict with those of our other shareholders.

There is a concentration of ownership

of our outstanding common stock because

approximately 35% of our outstanding common

stock 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 24% and 11%

of our outstanding common stock as of June 30,

2024,

The interests of

VCP and the

IFC Investors may

be different

from or conflict

with the interests

of our other

shareholders. As a

result of

the significant

combined ownership

by VCP

and the

IFC Investors,

they may

be able,

if they

act together,

to significantly

influence the

voting outcome

of all

matters requiring

shareholder approval.

This concentration

of ownership

may have

the effect

of

delaying or preventing

a change of control of

our company,

thus depriving shareholders

of a premium for

their shares, or facilitating

a 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 our common 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, programming

development and acquisition,

capital costs and

the costs of any

necessary implementation of

technological innovations or

alternative

technologies, or to fund acquisitions. We may also wish to raise additional equity funding to

reduce the amount of debt funding on our

balance sheet. Because of the exposure to market risks associated

with economies in emerging markets, we may not

be able to obtain

financing on favorable terms or at all.

If we raise additional funds by

issuing equity securities, the percentage ownership of our

current

shareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of

common stock,

which could

the market

price and

voting power

of common

stock. If

we raise

funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior

to those of the holders of

shares of common stock, and the terms of these debt securities could impose restrictions on operations and

create a significant interest

expense for us.

Issuances

of significant

amounts of

stock in

the future

could potentially

dilute

your equity

ownership

and adversely affect the price of our common stock.

We

it is necessary

to maintain

a sufficient

available authorized

shares of our

to

provide

us

with

the flexibility

to

issue shares

for

purposes

that

may

arise

to

time.

For example,

we

could

sell

additional 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 additional

shares of common stock without notice to, or further

action by, our shareholders, unless shareholder approval is required by law or the

rules of the NASDAQ Stock

Market. The issuance of

additional shares could dilute the

equity ownership of our current

and any such additional shares would likely be freely tradable, which could

adversely affect the trading price of our common

stock.

We

have

in

our

control

which, if

not

timely

remediated,

may

affect

the

accuracy

and

reliability

of

our

statements,

and

our

reputation, business and stock price, as well as lead 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

not

as of

that we

had, as

of such

date, material

weaknesses in

related

to

general

and

our

annual

assessment.

A

is

a

deficiency, or a combination

of deficiencies, in internal control over financial reporting such that there

is a reasonable possibility that

a material

misstatement of

our annual

or interim

statements would

not be

prevented or

detected on

a timely

basis. The material weaknesses

identified in Item 9A—“Controls

and Procedures.”, did

not result in any adjustments

or restatements

of our audited and unaudited consolidated financial statements or disclosures

for any prior period previously reported by us.

We

intend to remediate

these material weaknesses.

While we believe

the steps we

take to remediate

these material weaknesses

will improve

of our

and will

remediate the

identified deficiencies,

if our

efforts

are

to

address the

or

we identify

weaknesses in

our

control over financial reporting in the future, our ability

to analyze, record and report financial information

accurately, to prepare

our

financial statements within

the time periods

specified by the rules

and forms of the

SEC and to otherwise

comply with our

under

the federal

laws may

be

affected.

The occurrence

of,

or failure

to

remediate,

these material

weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect

the accuracy and

reliability of our financial

statements and have other

consequences that could

materially and adversely affect

our business, including

an

adverse

impact

on

the

market

price

of

our

common

stock,

actions

or

investigations

by

the

SEC

or

other

authorities, 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-Oxley Act, especially

over companies that we may

acquire, could have a material

adverse effect

on our business and stock price.

Under

Section

of

Sarbanes,

we

are

to

furnish

a

certification

and

auditor

attestation

the

effectiveness of our

internal control over

financial reporting. We

are required to

report, among other things,

control deficiencies that

constitute

a

“material

weakness”

or

changes

in internal

control

that materially

affect,

or are

reasonably

likely to

affect,

over financial reporting.

A “material weakness”

is a deficiency,

or a combination

of deficiencies, in

over financial reporting such that

there is a reasonable

possibility that a material misstatement

of annual or interim

will not be prevented or detected on a timely basis.

The

requirement

to

and

report

on

our

also

applies

to

companies

that

we

acquire.

Some

of

these

such as Adumo, may not be required to comply with Sarbanes prior

to the time we acquire them. The integration of these

acquired companies into

reporting could require

significant time

and resources

and

other

and

may

our

costs.

If

we

fail

to

successfully

integrate

the

of

these

companies into our internal control over financial reporting, our

internal control over financial reporting may not be effective.

While

we

to

dedicate

and

time

to

ensuring

that

we

have

over

reporting, failure to

achieve and maintain

an effective internal

control environment could

have a material

adverse effect on

the market’s

perception of our business and our stock price.

You

may

experience

difficulties

in

effecting

service

of

legal

process,

enforcing

foreign

judgments

or

bringing

original

actions

based

upon

U.S.

laws,

federal

laws

or

other

foreign

laws,

against us or certain of our directors and officers and experts.

While Lesaka is incorporated in the state of Florida, United States, the company is headquartered in Johannesburg, South Africa

and substantially all of the company’s

assets are located outside the United

States. In addition, the majority of

Lesaka’s directors and

all

its

reside

outside

of

the

United

States

and

the

majority

of

our

experts,

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 civil

liability

provisions

of

U.S.

federal

laws,

because

substantially

all

of

our

assets

are

located

outside

the

United

States.

Moreover, it may not be possible for

you to effect service of legal process upon the majority of

our directors and officers or upon our

experts within

States or

elsewhere outside

and any

judgment obtained

against any

of our

foreign directors,

officers and experts in

the United States, including

one based on the

civil liability provisions of the

U.S. federal securities laws,

may

not be collectible in the United States and may not be enforced by a South African

court.

is not

a party

to any

treaties regarding

the enforcement

of foreign

commercial judgments,

as opposed

to foreign

arbitral awards. Accordingly, a foreign judgment that

is not recognized in

South Africa has

no extra territorial effect, and

is not directly

enforceable in South Africa, but

constitutes a cause of action

which may be recognized and enforced

by South African courts provided

that:

•

the court which

pronounced the judgment

had international jurisdiction

and competence to entertain

the case according to

the principles recognized by South African law with reference to the jurisdiction

of foreign courts;

•

the judgment is final and conclusive (that is, it cannot be altered by the court which

pronounced it);

•

the judgment has not lapsed;

•

the recognition and

enforcement of the

judgment by South African

courts would not

be contrary to public

policy in South

Africa, including observance of the rules of natural justice which require

that no award is enforceable unless the defendant

was duly served with documents

initiating proceedings, that he

or she was given a

fair opportunity to be

heard and that he

or she enjoyed the right to be legally represented in a free and fair trial before an impartial

tribunal;

•

the judgment was not obtained by improper or fraudulent means;

•

the

judgment

does

not involve

the

enforcement

of a

penal

or

foreign

revenue

law or

any

award

of multiple

or punitive

damages; and

•

the enforcement of the judgment is not otherwise precluded by the provisions of

the Protection of Business Act 99 of 1978

(as amended), of the Republic of South Africa.

It has been the policy

of South African courts to award

compensation for the loss or damage

actually sustained by the person

to

whom the compensation is awarded. South African courts have awarded compensation to shareholders who have suffered damages as

of a

diminution in

the value

of their

shares based

on various

actions by

the corporation

and its

management. Although

the

award

of punitive

damages

is generally

unenforceable

in the

South

African legal

system, that

mean

that such

awards are

necessarily

contrary

to

public

policy.

The

award

of

punitive

damages

is

governed

by

the

South

African

legislation,

the

Conventional Penalties Act 15 of 1962 (as amended).

Whether a judgment

was contrary to

public policy

depends on the

facts of each

case. Exorbitant,

unconscionable, or

excessive

awards will generally be contrary to public policy. South African courts cannot enter into the merits of a foreign judgment and cannot

act as a court of appeal or review over the foreign court. Further, if a foreign judgment is enforced by a South African court,

it will be

payable in South African currency unless approval is obtained from SARB or an Authorised Dealer of SARB, to settle the judgement

in another

currency.

Also, under

exchange control

laws, the

approval of

SARB or

an Authorised

Dealer is

before a defendant

resident in South Africa

may pay money to

a non-resident plaintiff

in satisfaction of a

foreign judgment enforced

by a court in South Africa.

It is

whether an

original action

federal

securities laws

may

be brought

before South

African

courts. A plaintiff who

is not resident in South Africa may

be required to provide security for

costs in the event of proceedings being

initiated in

Rules of

the High

Court of

require that

documents executed

outside South

Africa must be authenticated for the purpose of use in South African courts. In reaching the foregoing conclusions in respect of South

Africa, we consulted with our South African legal counsel, Werksmans

Inc.