LESAKA TECHNOLOGIES INC

ITEM 1.

BUSINESS

Overview

Lesaka is

a South

African Fintech

company that

utilizes its

proprietary banking

and payment

technologies to

deliver financial

services solutions and software to consumers and merchants in Southern Africa.

Our vision is to build and operate the leading full-service fintech platform

in Southern Africa.

Our

core

purpose

is

to

provide

to

underserviced

consumers

and

improving

people’s lives and increasing financial inclusion in the markets in which we operate. We

achieve this through our ability to efficiently

digitalize the last mile

of financial inclusion,

providing a full-service

fintech platform

offering both cash

and digital, and

facilitating

the secular shift from cash to digital that is currently taking place.

We

offer a wide

range of solutions

including transactional

accounts (banking), lending,

insurance, cash management

solutions,

card acceptance, supplier payments, software services

and bill payments. By providing

a full-service fintech platform in

our connected

ecosystem, we facilitate the digitization of commerce in our markets.

In May 2024

we announced the

acquisition of Adumo

RF (Pty)

Ltd (“Adumo”), an

acquisition subject to

satisfaction of customary

closing

to

close

in

October

The

continues

consolidation

in

the

African

fintech sector and enhances Lesaka's strengths in both the consumer and merchant

markets.

Reportable Segments

We

operate through

two divisions: Our

B2C Consumer Division

(“Consumer”) and

our B2B Merchant

Division (“Merchant”).

Within these two divisions, Lesaka has four

broad customer types: consumers, micro-merchants, merchants, and

enterprise clients.

While there are mutually

reinforcing dynamics and overlap

between our verticals,

within each vertical, we

offer distinct brands

with unique value propositions. Our platform addresses a wide range

of customers that are not generally serviced by our competitors,

an advantage that we use

to benefit from economies

of scale. We

believe that we deliver

high quality products that

provide excellent

value to our customers.

While we

operate in

competed markets,

that we

are unique

in offering

a comprehensive

product portfolio,

serving

both formal and informal consumers and merchants with omnichannel

financial services through physical and digital touchpoints.

Consumer (B2C)

Through Consumer we focus

on individuals who

have historically been excluded

from traditional financial services.

Our products

are designed for consumers at the lower socioeconomic

end of the market within Living Standards Measures

(“LSMs”) 1 to 6, which

comprises approximately

26 million

people as

of 2023

(according to

a report

by Genesis

Analytics). As

of the

date of

this Annual

Report, we have approximately 1.5 million active consumer customers.

Products

We offer

consumers transactional accounts (banking),

insurance, lending (short-term loans),

payments solutions (digital wallet)

and various

value-added services

to underserved

consumers in

Our value proposition

and products

are designed

to be

simple, relevant and cost effective for our target

market.

Merchant (B2B)

Through Merchant, we focus on micro-merchants, merchants and enterprises operating

in the informal and formal sectors of the

Southern African economy.

Micro-merchants, or informal sector merchants,

are often sole

proprietors, usually with lower

revenues, that operate in

rural areas

or in informal urban areas and do not always have access to a full-suite of

traditional banking products.

Merchants, or

formal sector

merchants, are

generally in

urban areas,

have higher

revenues and

have access

to multiple

service

providers.

Enterprises are large-scale corporate and government

organizations, including but not limited

to banks, mobile network

operators

(“MNOs”) and municipalities.

Including

micro-merchants

and

there

are

more

than

2.7

million

in

South

Africa,

of

which

more

than

890,000

are immediately

serviceable

for

Lesaka.

currently

has over

96,600

in

Africa, of

which more than

87,000 are in

South Africa (this

excludes the

impact of the

Adumo acquisition,

not effective

at June 30,

2024 and expected to close in October 2024).

Products

To

micro-merchant

and

(B2B),

we

offer

cash

and

through

our

proprietary vault

technology,

card acceptance,

supplier payments,

software services,

lending, prepaid

accounts and

bill payments

to

empower merchants to grow their businesses and transact more efficiently.

To

larger enterprise

customers (B2B), we offer

bill and supplier

payments and VAS

products through

our proprietary financial

switch, as well as point of sale device and maintenance, bank and SIM card production

and other specialized technology products.

Market Opportunity

Our primary

market is

currently South

Africa with

its approximately

62 million

population and

$381 billion

economy (GDP,

according to IMF World

Economic Outlook Database as

of October 2023). With

the acquisition of Adumo

(an acquisition subject to

regulatory approvals

and satisfaction of

customary closing conditions,

expected to close

in October 2024)

we augment our

presence

in South Africa,

Namibia, Botswana and

Zambia and expand

into Kenya. Together this represents

a 140 million

population addressable

market, larger than that of Mexico or Japan (GDP according to IMF

World Economic

Outlook Database as of October 2023).

Over

the

past

decade,

both

and

smartphone

penetration

throughout

the

region

have

grown

significantly.

According to a report

by Genesis Analytics, between 2015

and 2023, the proportion

of low-income workers in South

Africa that had

used a debit

card to transact

rose from 17%

to 50%. According

to the same

report, between 2015

and 2021, the

proportion of

South

Africans accessing online

banking services increased

from 31%

to 55%, and

between 2018 and

2024, smartphone penetration

from 55% to 76%.

These favorable tailwinds

have helped position

Africa as the fastest-growing

Fintech market globally,

according to a

report by

Boston Consulting Group that projects growth in the African Fintech revenue pool

to grow by 13 times between 2021 and 2030.

Given

the

challenges

in

in

Africa;

however,

many

service

providers

in

our

markets continue to rely on expensive and unreliable legacy systems and focus on narrow customer segments with mono-line (single-

line) products.

We

believe that this

presents a significant

opportunity for Lesaka

to build and

operate the leading

full-service Fintech platform

in Southern Africa, empowering underserviced consumers and merchants by delivering

innovative financial services focused on their

specific needs.

Competition

With our comprehensive offerings to

both consumers and merchants, we compete with a wide range of service providers. While

there are

competitors for

specific products

and services,

few offer

end-to-end solutions,

particularly in

the lower-income

market and the informal merchant market, where we have a significant footprint

and strong penetration.

In our

Consumer Division,

there are

a number

of traditional

and digital

providers of

low-cost transactional

and

micro financial services. These include South African banks such as

FNB, Standard Bank, Absa, Nedbank, African Bank and Capitec,

Post Bank, and digital

banks such as, Tyme

Bank and Bank

Zero. In the South

African ATM

network market, we

compete against the South African banks, ATM

Solutions and Spark ATM

Systems.

In the informal merchant sector, there

are no competitors which offer a comprehensive product

set of cash, card, payment, VAS

and capital

solutions, such

as ours.

In the

formal merchant

sector there

is significantly

more competition,

with banks

and non-bank

fintech companies targeting these merchants.

In card acquiring, competitors include

Yoco,

iKhokha, Sureswipe and the South African

banks; in VAS

and bill payments, they

include Flash, Blue Label, Shop2Shop, Pay@ and Ukeshe; in lending, they

include Lulalend, Merchant Capital, Retail Capital and the

South African banks; and in cash management, they include Fidelity,

G4S, Cashnet and the South African banks.

At an enterprise level, our financial switch and VAS and bill payments business competes with BankservAfrica, Pay@, eCentric

and Transaction Junction.

Human Capital Resources

Over

the

last

two

years

we

have

built

a

diverse

team

of

high-caliber

individuals,

from

organizations,

to

form

our

leadership group. This

leadership group is

deeply committed to

building a high-performance

culture that is

based on our core

values

and a commitment to the care and development of our people.

Lesaka’s Core Values:

•

Entrepreneurial spirit;

•

Integrity;

•

Collective wisdom;

•

Ownership; and

•

A bias 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.

Employee training and skills development

We strongly believe that learning

is an ongoing process and that the majority of learning is in the doing. As such, while we offer

a range of formal

programs (as listed further

below), more importantly,

we continue to encourage

a culture of learning

in everything

that we do.

Sustainable

training and

programs impact

retention,

and

that our

willingness to

invest

in

contributes

to

satisfaction

and

belonging.

This

loyalty,

which

will

in

turn

contribute

to employee retention. We

offer the following development programs to enhance employee

performance and skills:

•

unemployed and employed learnerships;

•

internships;

•

leadership development programs;

•

training programs;

•

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

Having an inclusive

and diverse workforce

which reflects our

economically active population

and society in

general, is crucial

for helping the organization attract and retain talent and is important for long-term organizational success. Our

human resources team

emphasizes recruiting

and retaining

a talented

and diverse

workforce with

special focus

on hiring

previously disadvantaged

groups

whenever possible. We

are committed to hiring qualified candidates without regard

to their personal status, while taking into account

the

unique

circumstances

affecting

our

in

South

Africa

and

the

need

to

uplift

previously

disadvantaged

groups.

This

commitment extends to all levels of our organization,

including within senior management and our board of directors.

As of June 30, 2024, the composition of our workforce was:

•

55% female and 45% male;

•

40% between 18 and 34 years old, 55% between 35 and 54 years old, and 5% over

55 years old; and

•

69% Black, 11% two or more races, 8% Indian and 12%

White.

We have no

female named executive officer.

We

to strive

to build

a more

inclusive workforce

and to

enhance our

pay structures

by taking

measures to

eliminate

potential remuneration discrimination

and to help close gender pay gaps

to progress towards gender equality

at work. We

have taken

positive strides towards a rewards philosophy that rewards high performance, is externally benchmarked and focuses on equal pay for

work of equal value.

Employee compensation programs

We

are committed

to

ensuring

that

all

our

are

paid

fair

and

competitive

remuneration. To

that

end,

we

offer the

following 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;

•

Paid sick, study, annual

and family responsibility leave;

•

Maternity benefits;

•

Life and disability insurance coverage;

•

Financial aid to fund tertiary education for children of employees;

•

Employee assistance programs; and

•

Product discounts.

Annual

and

incentive

are

based

on

merit,

which

is

to

at

onboarding

and

documented as part of our annual remuneration review process.

Our number

of employees

on a

segmental

and

group

basis as

of the

2024,

2023 and

2022,

is

presented in the table below:

Number of employees

(1)

1,333

1,306

1,826

(1)

1,189

Total segments

2,522

2,296

2,650

Group

(1)

Total

2,531

2,303

2,657

(1) Consumer includes one executive officer for each of fiscal 2024, 2023 and 2022. Merchant includes one executive officer

for

each of fiscal 2024, 2023 and 2022. Group includes two executive officers

for fiscal 2024 and 2023 and three for fiscal 2022.

On a functional basis, four of our employees are our named

executive officers, 1,350 were employed in sales and marketing, 500

were employed in finance and administration, 266 were employed in information

technology and 411 were employed in operations.

Health and safety laws and regulations

We

are

subject

to various

South

African

that

regulate

the health

and

safety of

our

South

African-based

workforce, including

those laws monitored

by the

Department of

Employment and

Labour which

stipulates the

legal

framework within

which we

need to

function. This

framework comprises

the Occupational

Health and

Safety Act,

Act 85

of 1993

(“OHSA”),

the

Compensation

for

Occupational

Injuries

and

Diseases

Act,

Act

of

(“COIDA”),

the

Basic

Conditions

of

Employment Act,

Act 75

of 1997

(“BCEA”) and

the Labour

Relations Act,

Act 66

of 1995

(“LRA”). Compliance

with COVID-19

regulations remains

regulated by the

National Institute of

Occupational Health (“NIOH”),

and the Occupational

Health Surveillance

System

(“OHSS”),

the

Centre

for

Scientific

Industrial

Research

(“CSIR”)

and

the

Institute

for

Communicable

Diseases

(“NICD”).

We

have

implemented

and regularly

update human

capital-related

policies that

are designed

to ensure compliance

with

applicable South African laws and regulations.

Our Executive Officers

The table below presents our executive officers, their

ages and their titles:

Name

Age

Title

Executive Chairman and Director

Naeem E. Kola

Group Chief Financial Officer and Director

Lincoln C. Mali

Chief Executive Officer: Southern Africa and Director

Executive and Director

has been our Executive

Chairman since February

1, 2024. He is

a fintech investor and

entrepreneur. He

is the

co-founder

and

chairman

of Teya,

a pan-European

fintech. He

is also

a non-executive

director

on the

several companies

including Thunes (Singapore based

private fintech), Kushki (Latin

American payments company) and

is the president

of The European

Digital Payments Industry Alliance

(EDPIA). He was previously

on the board of

several other leading payments

companies globally

StoneCo

(Nasdaq:

STNE)

in

Brazil

and

Network

International

Holdings

Plc

(LSE:NETW)

in

the

Middle

East.

He

was

formerly a Partner at Actis, a London-based emerging market private equity firm, where

he led multiple landmark fintech investments

globally. Prior to his career at Actis, Mr.

Mazanderani advised private equity and corporate clients for OC&C Strategy Consultants in

London

and

served

as

lead

consultant

for

First

Bank

based

in

Johannesburg.

He

holds

postgraduate

degrees

in

Economics from

the University of

Pretoria, Oxford University

and the London

School of Economics,

an MBA from

INSEAD and a

Masters in Business Law from the University of St Gallen.

Naeem E. Kol

a has been our Group Chief Financial Officer since March 1, 2022. Mr. Kola has progressively held senior finance

roles in

Dubai, most

notably as

Chief Financial

Officer of

the Emerging

Markets Payments

Group (“EMP”),

a high-growth

fintech

business that grew

materially and successfully

concluded and integrated

five acquisitions during

Mr. Kola’s

six-year tenure as Chief

Officer.

Prior

to

becoming

Chief

Mr.

Kola

was

Senior

Vice

President

for

Investments,

Strategy

and

Business Planning at EMP. Since the acquisition of EMP by Network International in 2017, Mr. Kola has been an

Operations Director

and Strategic Advisor to the emerging market private

equity firm Actis, where he again focused on fintech businesses.

Lincoln

C.

Mali

has

been

our

Chief

Officer:

Africa

since

May

1,

Mr.

Mali

is

a

executive with over 25 years in the

industry. Until April 2021, he was the Head of Group

Card and Payments at Standard Bank

Group,

having

served

in many

roles within

that organization

since 2001.

Mr.

Mali chaired

the board

of directors

of Diners

Club

until April

2021, and

was a

member of

the Central

and Eastern

Europe, Middle

East and

Africa Business

Council for

Visa.

Mr.

Mali holds

Bachelor of

Arts (BA)

and Bachelor

of Laws

(LLB) degrees

from Rhodes

University,

an MBA

from Henley

Management College, various diplomas and attended an Advanced

Management Program at Harvard Business School.

has been the Chief

Executive Officer of the Connect Group since

2013 and joined us

following the acquisition

in the

same capacity.

Mr.

Heilbron has

two decades

of financial

services experience,

having spent

19 years

working for

Investec in South Africa

and the UK,

where he served as

Global Head of Private

Banking and Joint Chief

Executive Officer of Investec

Bank plc. He led a private consortium that acquired Cash Connect Management Solutions (Pty) Ltd (“CCMS”) in 2013. Mr. Heilbron

has presided over significant

organic growth in the

rebranded Connect Group, as

well as spearheading the

successful acquisition and

integration of Kazang and EFTpos acquired from the Paycorp Group in February 2020. He is a member of the South African Institute

of Chartered Accountants.

Financial Information about Geographical Areas and Operating

Segments

Refer

to

Note

to

our

audited

in

this

Annual

Report

detailed

information about our operating segments for fiscal 2024, 2023 and 2022. Revenues based on the geographic location from which the

sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in the table below:

Revenue

(1)

Long lived assets

$'000

$'000

$'000

$'000

$'000

$'000

537,594

505,558

215,046

286,700

300,104

359,725

India (MobiKwik)

76,297

76,297

76,297

Rest of the world

26,628

22,413

7,563

2,548

2,197

2,811

Total

564,222

527,971

222,609

365,545

378,598

438,833

(1)

Note 16

to our

in this

Annual Report

which contains

detailed

financial information about our revenue for fiscal 2024, 2023

and 2022.

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 on

the Johannesburg

Stock Exchange

(“JSE”). In

2005, Lesaka

completed an

initial public

and listed

on the

NASDAQ Stock

Market. In

2008, Lesaka

listed on

the JSE

in a

secondary listing,

which enabled

the former

Aplitec shareholders

(as well

as South

African residents generally) to hold Lesaka common stock directly.

Available information

We maintain a website at www.

lesakatech.com. 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

of our 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 information

regarding issuers that file electronically with the SEC.

ITEM 1A. RISK FACTORS