LESAKA TECHNOLOGIES INC

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three months ended September 30, 2024 and 2023

(All amounts in tables stated in thousands or thousands of U.S. dollars, unless otherwise stated)

Basis of Presentation and Summary of Significant Accounting

Policies

Unaudited Interim Financial Information

The accompanying

statements include

all majority-owned

subsidiaries over

which

the Company exercises

control and have been

prepared in accordance with

U.S. generally accepted accounting

principles (“GAAP”)

and

the rules

and

regulations

of the

United

States Securities

and

Commission

for

Quarterly

Reports on

and

include all of

the information and

disclosures required for

interim financial reporting.

The results of

operations for the

ended

2023, are

not necessarily

indicative of

the results

for

the full

year.

believes that

the

disclosures are adequate to make the information presented not misleading.

These

should

be

read

in

conjunction

with

the

statements,

accounting policies and financial notes thereto included in the

Company’s Annual Report on Form 10-K for the fiscal year ended June

30,

In

the

opinion

of

management,

the

accompanying

reflect

all

adjustments (consisting only of normal recurring adjustments), which are necessary for a fair

representation of financial results for the

interim periods presented.

References to “Lesaka” are references

solely to Lesaka Technologies,

Inc. References to the “Company” refer

to Lesaka and its

consolidated subsidiaries, collectively,

unless the context otherwise requires.

Recent accounting pronouncements adopted

In November 2023, the

Financial Accounting Standards

Board (“FASB”)

issued guidance regarding

Segment Reporting (Topic

to

improve

reportable

segment

requirements,

through

enhanced

disclosures

about

segment

expenses. In addition, the

guidance enhances interim disclosure

requirements, clarifies circumstances in

which an entity can disclose

multiple

segment

of

profit

or

loss,

provides

new

segment

requirements

for

entities

with

a

single

reportable

segment, and contains

other disclosure requirements.

This guidance is effective

for the Company

beginning July 1,

2024 for its

year

ended June 30, 2025, and for interim periods commencing from July 1, 2025 (i.e. for the

quarter ended September 30, 2025).

Recent accounting pronouncements not yet adopted

as of September 30, 2024

In

December

2023,

the

FASB

issued

guidance

regarding

Income

Taxes

(Topic

to

improve

income

tax

requirements. The guidance requires

entities, on an

annual basis, to

(1) disclose specific categories

in the income

tax rate reconciliation

and (2) provide additional information for reconciling items that meet a quantitative threshold (if

the effect of those reconciling items

is equal

to or

greater

than

five percent

of the

amount computed

by multiplying

pre-tax

income

or loss

by the

statutory

income tax rate). This guidance

is effective for the Company

beginning July 1, 2025. The Company

is currently assessing the impact

of this guidance on its financial statements and related disclosures.

Accounts receivable, net and other receivables and

finance loans receivable, net

Accounts receivable, net and other receivables

The Company’s accounts receivable, net, and other receivables as of September 30, 2024, and June 30, 2024, are presented in

the table below:

Accounts receivable, trade, net

$

11,083

$

13,262

Accounts receivable, trade, gross

12,569

14,503

Allowance for doubtful accounts receivable, end of period

1,486

1,241

1,241

(50)

(511)

1,305

(87)

(67)

Current portion of amount outstanding related to sale of interest in Carbon,

net of

allowance: September 2024: $

; June 2024: $

Current portion of total held to maturity investments

7.625

% of Cedar Cellular Investment 1 (RF) (Pty) Ltd

8.625

% notes

Other receivables

18,742

23,405

Total accounts receivable,

net and other receivables

$

29,825

$

36,667

Trade receivables include amounts

due from customers

which generally have

a very short-term

life from

date of invoice

or service

provided to settlement. The duration

is less than a year in all cases and

generally less than 30 days in many

instances. The short-term

nature

of

these

exposures

often

results

in

balances

at

month-end

that

are

disproportionately

small

to

the

total

invoiced

amounts.

The

month-end

balance

are

more

volatile

than

the

monthly

invoice

amounts

because

they

are

affected

by

operational timing issues and

the fact that a balance

is outstanding at month-end is

not necessarily an indication of

increased risk but

rather a matter of operational timing.

Credit risk in respect of trade receivables are generally not

significant and the Company has not developed a sophisticated model

for these basic

credit exposures. The

Company determined to

use a lifetime

loss rate by

expressing write-off experience as

a percentage

of corresponding

invoice amounts

(as opposed

to outstanding

balances). The

allowance for credit

losses related to

these receivables

has

been

by

multiplying

the

lifetime

loss

rate

with

recent

invoice/origination

amounts.

Management

actively

monitors

performance of these receivables over

short periods of time. Different

balances have different rules to

identify an account in distress.

Once balances

in distress are

identified, specific

allowances are immediately

created. Subsequent

recovery from distressed

is not significant.

Current portion

of amount

outstanding related

to sale

of interest

in Carbon

represents an

amount due

the sale

of the

loan in Carbon Tech

Limited (“Carbon”), with a face value of

$

3.0

million, which was sold in September

2022 for $

0.75

million, net

of an allowance

for doubtful loans

receivable of $

0.75

million. The Company has

not yet received

the outstanding $

0.75

million related

to the sale of the $

3.0

million loan, and continues to engage with the purchaser to recover the outstanding

balance.

7.625

% of Cedar Cellular

Investment 1 (RF) (Pty) Ltd

8.625

% notes represents the

investment in a note which was

due to mature in

August 2022 and forms

part of Cell C’s

capital structure. The carrying

value as of each of

and

June 30, 2024, respectively was $

(zero).

Other receivables include prepayments, deposits, income taxes receivable and

other receivables.

Accounts receivable, net and other receivables

and finance loans receivable, net (continued)

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of September 30, 2024, and June 30, 2024, is presented

in the table below:

Microlending finance loans receivable, net

$

30,732

$

28,184

Microlending finance loans receivable, gross

32,851

30,131

Allowance for doubtful finance loans receivable, end of period

2,119

1,947

1,947

1,432

(210)

2,454

(552)

(1,795)

Merchant finance loans receivable, net

16,285

15,874

Merchant finance loans receivable, gross

19,380

18,571

Allowance for doubtful finance loans receivable, end of period

3,095

2,697

2,697

2,150

(359)

2,479

(397)

(1,672)

Total finance

loans receivable, net

$

47,017

$

44,058

Total

finance

loans

receivable,

net,

comprises

microlending

finance

loans

receivable

related

to

the

microlending

Africa as

well as

its merchant

finance loans

receivable related

to Connect’s

lending activities

Africa.

Certain merchant finance loans receivable with an aggregate balance of $

15.6

million as of September 30, 2024 have been pledged as

security for the Company’s

revolving credit facility (refer to Note 8).

Allowance for credit losses

Microlending finance loans receivable

Microlending finance loans receivable is related to the Company’s

microlending operations in South Africa whereby it provides

unsecured short-term

loans to qualifying

customers. Loans to customers

have a tenor

of up to

six months

, with the majority

of loans

originated having

a tenor of

six months

. The Company

analyses this lending

book as a

single portfolio

because the

loans within the

portfolio have similar characteristics and management uses similar processes to monitor and assess

the credit risk of the lending book.

Refer to Note 4 related to the Company risk management process related to

these receivables.

The Company has operated this lending book for more than

five years

and uses historical default experience over the lifetime of

loans in order

to calculate a

lifetime loss rate

for the lending

book. The allowance

for credit losses

related to these

microlending finance

loans receivables

is calculated

by multiplying

the lifetime

loss rate

month end

outstanding lending

book. The

lifetime loss

rate as of each of June 30, 2024 and September 30, 2024,

was

6.50

%. The performing component (that is, outstanding loan payments

not in arrears)

of the book

exceeds more than

%, of the

outstanding lending

book as of

each of

Merchant finance loans receivable

Merchant finance loans

receivable is related

to the Company’s

Merchant lending activities

in South Africa

whereby it provides

unsecured

short-term loans

to qualifying

customers. Loans

to customers

have a

tenor of

up to

twelve months

, with

the majority

of

loans originated having a tenor of approximately

eight months

. The Company analyses this lending book as a single portfolio because

the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk

of the lending book. Refer to Note 4 related to the Company risk management

process related to these receivables.

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Finance loans receivable, net (continued)

Allowance for credit losses (continued)

Merchant finance loans receivable (continued)

The

Company

has

recently

(in

the

past

three years

)

commenced

lending

to

and

uses

historical

default

experience over

the lifetime of

loans generated thus

far in order

to calculate a

lifetime loss rate

for the lending

book. The allowance

for credit losses related to these merchant finance loans receivables

is calculated by adding together actual receivables in

default plus

multiplying the lifetime loss rate with the month-end outstanding lending book. The lifetime loss rate as of each of June 30, 2024 and

September 30, 2024, was approximately

1.18

%. The performing component (that is, outstanding loan payments not in arrears), under-

performing

component (that

is, outstanding

loan payments

that are

in arrears)

and non-performing

component (that

is, outstanding

loans

for

which

appeared

to have

ceased)

of the

book represents

%,

% and

%,

of the

lending

book

as

of

June

30,

The

performing

component,

under-performing

component

and

non-performing

component of

the book represents

%,

% and

%, respectively,

of the outstanding

lending book

as of September

30, 2024.

Inventory

The Company’s inventory

comprised the following categories as of September 30, 2024, and June 30, 2024:

Raw materials

$

2,784

$

2,791

Work-in-progress

Finished goods

16,666

15,364

$

20,194

$

18,226

Finished goods as

of June 30, 2024,

includes $

1.8

million of Cell C

airtime inventory that was

previously classified as

finished

goods subject to sale restrictions. The Company sold all of this inventory during

the three months ended September 30, 2024.

Fair value of financial instruments

Initial recognition and measurement

Financial instruments

are recognized

when the

Company becomes

a party

to the

transaction. Initial

measurements are

at cost,

which includes transaction costs.

Risk management

The Company manages its exposure

to currency exchange, translation, interest rate,

credit, microlending credit and equity price

and liquidity risks as discussed below.

Currency exchange risk

The

Company

is

subject

to

risk

because

it

purchases

components

for

its

safe

assets,

that

the

Company

assembles, and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar.

has

used forward

in order

to limit

its exposure

in these

to fluctuations

in exchange

rates

between

the South

African rand (“ZAR”), on the one hand, and the U.S. dollar and the euro, on

the other hand.

Translation risk

Translation risk relates to

the risk that

the Company’s results of operations

will vary significantly

as the U.S.

dollar is its

currency,

but it earns a

significant amount of its

revenues and incurs a

significant amount of its

expenses in ZAR. The

U.S. dollar to

the ZAR

exchange rate

has fluctuated

significantly over

the past

three years.

As exchange

rates are

outside the

control,

there can be no

assurance that future fluctuations will

not adversely affect the Company’s results of operations and

financial condition.

Fair value of financial instruments (continued)

Risk management (continued)

Interest rate risk

As a result of its

normal borrowing activities, the Company’s operating results are exposed to fluctuations in

interest rates, which

it manages

primarily through

regular financing

activities. Interest rates

Africa have

remained unchanged

in recent quarters

and in September

2024, the South African

Reserve Bank announced

a 25-basis point reduction

in the South African

repurchase rate,

with further reductions expected in the short-term. Therefore, ignoring the impact of changes to the margin on its borrowings (refer to

Note 8),

expects its

cost of

borrowing to

decline moderately

in the

foreseeable future,

however,

would

expect a

higher cost

of borrowing

if interest

rates were

to increase

in the

future. The

Company periodically

evaluates the

cost and

effectiveness of interest rate hedging strategies

to manage this risk.

The Company generally maintains surplus cash

in cash equivalents

and held to maturity investments and has occasionally invested in marketable securities.

Credit risk

Credit

risk

relates

to

the

risk

of

loss

that

the

Company

would

incur

as

a

result

of

non-performance

by

counterparties.

The

Company

maintains

credit

risk

policies

in

respect

of

its

counterparties

to

minimize

overall

credit

risk.

These

policies

include

an

evaluation

of

a

potential

counterparty’s

condition,

credit

rating,

and

other

credit

criteria

and

risk

mitigation

tools

as

the

management deems appropriate.

With respect

to credit risk on

financial instruments, the

Company maintains a

policy of

entering

into such

transactions only

with South

African

and European

financial institutions

that

have

a credit

rating of

“B” (or

its

equivalent) or better, as determined by credit

rating agencies such as Standard & Poor’s, Moody’s

and Fitch Ratings.

Consumer microlending credit

risk

is exposed

to credit

risk in

its Consumer

microlending activities,

which provides

unsecured short-term

loans to

qualifying customers.

Credit bureau

checks as

well as

an affordability

test are

conducted as

part of

the origination

process, both

of

which are in line with local regulations. The Company considers this

policy to be appropriate because the affordability test it

performs

takes into account

a variety of

factors such

as other debts

and total expenditures

on normal household

and lifestyle expenses.

may

be required

should the

ability of

its customers

to make

payments when

due

deteriorate

in the

future. Judgment

is

required to assess

the ultimate recoverability

of these finance

loan receivables, including

ongoing evaluation

of the creditworthiness

of each customer.

Merchant lending

The Company maintains an allowance for

doubtful finance loans receivable related to

its Merchant services segment with

respect

to short-term loans to qualifying merchant customers. The

Company’s risk management procedures include adhering to its proprietary

lending criteria which uses

an online-system loan application

process, obtaining necessary customer transaction-history

data and credit

bureau checks.

The Company considers

these procedures

to be appropriate

because it takes

into account

a variety of

factors such

as

the customer’s credit capacity and customer-specific

risk factors when originating a loan.

Equity price and liquidity risk

Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded price

of equity

securities that

it holds.

The market

price of

these securities

may fluctuate

for a

variety of

reasons and,

consequently,

the

amount that the Company may obtain in a subsequent sale of these securities may significantly differ

from the reported market value.

Equity liquidity risk

relates to the risk

of loss that the

Company would incur as

a result of the lack

of liquidity on the

on

which

those

securities

are

listed.

The

Company

may

not be

able

to

sell some

or

all

of

these

securities

at

one

time,

or

over

an

extended period of time without influencing the exchange-traded price,

or at all.

Financial instruments

The following

section describes

the valuation

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

In general, and where applicable, the Company uses quoted prices in

active markets for identical assets or liabilities

to determine

fair value.

This pricing

methodology would

apply to

Level 1

investments. If quoted

prices in

active markets

for identical

assets or

liabilities are

not available

to determine

fair value,

then the

Company uses

quoted

prices for

similar assets

and

liabilities or

inputs

other

than

the

quoted

prices

that

are

observable

either

or

indirectly. These

investments

would

be included

in

Level

investments. In

circumstances

in

which

inputs

are

generally

unobservable,

values

typically

reflect

management’s

of

assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-

based techniques that include

option pricing models,

discounted cash flow models,

and similar techniques. Investments

valued using

such techniques are included in Level 3 investments.

Fair value of financial instruments (continued)

Financial instruments (continued)

Asset measured at fair value using significant unobservable inputs – investment

in Cell C

Level 3 asset represents

an investment of

75,000,000

class “A” shares in Cell

C, a significant

mobile telecoms

provider in South Africa.

The Company used a discounted cash flow model developed by the Company to determine

the fair value of

its investment in Cell C as of September 30, 2024 and June 30, 2024, respectively,

and valued Cell C at $

0.0

(zero) and $

0.0

(zero) as

of September 30, 2024, and June 30, 2024, respectively.

The Company incorporates the payments under Cell C’s

lease liabilities into

the cash

flow forecasts

and assumes

that Cell

C’s

deferred tax

assets would

be utilized

over the

forecast period.

has

assumed a marketability

discount of

% and a

minority discount from

of

%. The Company

utilized the latest

business plan provided

by

Cell

C

for

the

period

ending

December

31,

2027,

for

the

30,

2024,

and

June

30,

2024,

valuations.

Adjustments have been made to the WACC

rate to reflect the Company’s

assessment of risk to Cell C achieving its business plan.

The following key valuation inputs were used as of September 30, 2024

and June 30, 2024:

Weighted Average

Cost of Capital ("WACC"):

Between

% and

% over the period of the forecast

Long term growth rate:

4.5

% (

4.5

Marketability discount:

% (

Minority discount:

% (

Net adjusted external debt - September 30, 2024:

(1)

ZAR

7.4

0.4

billion), no lease liabilities included

Net adjusted external debt - June 30, 2024:

(2)

ZAR

0.4

billion), no lease liabilities included

(1) translated from ZAR to U.S. dollars at exchange rates applicable as of

(2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30,

The following table presents the impact on the carrying value of the Company’s

Cell C investment of a

1.0

% decrease and

1.0

%

increase in the

WACC

rate and

the EBITDA margins

respectively used

in the Cell

C valuation

on September

30, 2024, all

amounts

translated at exchange rates applicable as of September 30, 2024:

Sensitivity for fair value of Cell C investment

1.0% increase

1.0% decrease

WACC

rate

$

$

EBITDA margin

$

$

The fair

value of

the Cell

C shares

as of

2024, represented

% of

total assets,

these

shares.

The Company expects

to hold these

shares for an

extended period of

time and that

there will

be short-term equity

price volatility

with respect to these shares particularly given that Cell C remains in a turnaround

process.

The

table

the

assets

measured

at

fair

value

on

a

recurring

basis

as

of

30,

2024,

according to the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Assets

(Level 1)

Other

Observable

Inputs

(Level 2)

Unobservable

Inputs

(Level 3)

Total

Assets

Investment in Cell C

$

$

$

$

Related to insurance

business:

Cash, cash equivalents and

restricted cash (included

in other long-term assets)

Fixed maturity

investments (included in

cash and cash equivalents)

5,523

5,523

Total assets at fair value

$

5,758

$

$

$

5,758

Fair value of financial instruments

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2024, according to

the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Assets

(Level 1)

Other

Observable

Inputs

(Level 2)

Unobservable

Inputs

(Level 3)

Total

Assets

Investment in Cell C

$

$

$

$

Related to insurance business

Cash and cash equivalents

(included in other long-term

assets)

Fixed maturity investments

(included in cash and cash

equivalents)

4,635

4,635

Total assets at fair value

$

4,851

$

$

$

4,851

There have been

no

transfers in or out of Level 3 during the three months ended September 30, 2024 and 2023,

respectively.

There was

no

movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level

3, during the three months ended September 30, 2024 and 2023.

Summarized below is the movement in the carrying value of

assets and liabilities measured at fair value on a recurring

basis, and

categorized within Level 3, during the three months ended September

Assets

$

(1)

$

(1) The foreign currency adjustment represents the effects of the fluctuations of the

South African rand against the U.S. dollar on

the carrying value.

Summarized below is the movement in the carrying value

of assets and liabilities measured at fair value on

a recurring basis, and

categorized within Level 3, during the three months ended September

30, 2023:

Assets

Balance as of June 30, 2023

$

(1)

Balance as of September 30, 2023

$

(1) The

foreign currency

adjustment represents the

effects of

the fluctuations

of the South

African rand

against the U.S.

dollar

on the carrying value.

Assets measured at fair value on a nonrecurring basis

measures equity

investments without

readily determinable

fair values

at fair value

on a

nonrecurring basis.

The

fair values of

these investments

are determined

valuation techniques

using the best

information available

and may include

quoted market prices, market comparables, and discounted cash flow

projections. An impairment charge is recorded when the cost

of

the

asset

exceeds

its

fair

value

and

the

excess

is

to

be

other-than-temporary.

Refer

to

Note

for

charges

recorded during the

reporting periods presented

herein. The Company

has

no

liabilities that

are measured at

fair value

on a

nonrecurring

basis.

Equity-accounted investments and other long-term assets

Refer to Note 9 to the Company’s audited consolidated

financial statements included in its Annual Report on Form 10-K for the

year ended June 30, 2024, for additional information regarding its equity-accounted

investments and other long-term assets.

Equity-accounted investments

The Company’s ownership

percentage in its equity-accounted investments as of September 30, 2024,

and June 30, 2024, was as

follows:

Sandulela Technology

(Pty) Ltd ("Sandulela")

49.0

%

49.0

%

SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”)

50.0

%

50.0

%

Finbond impairments recorded

during the three months ended September 30, 2023

On

August

10,

2023,

the

Company,

through

its

wholly

owned

subsidiary

Net1

Finance

Holdings

(Pty)

Ltd,

entered

into

an

agreement with Finbond to

sell its remaining

shareholding to Finbond for

a cash consideration of

ZAR

64.2

3.4

million using

exchange rates

applicable as

of September

30, 2023),

or ZAR

0.2911

per share.

Closed transaction

closed in

December 2023.

The

Company considered the August 10, 2023, agreement to be an impairment indicator.

The Company is required to include any foreign

currency translation

reserve and

other equity

account amounts in

its impairment

assessment if

it considers exiting

an equity

method

investment. The Company performed

an impairment assessment of

its holding in Finbond, including

the foreign currency translation

reserve and other equity

account amounts, as

2023. The Company

recorded an impairment loss

of $

1.2

million during

the quarter ended September 30, 2023, which represented

the difference between the determined fair value of

the Company’s interest

in

Finbond

and

the

value,

the

foreign

reserve

(before

the

impairment).

The

Company used

the price of

ZAR

0.2911

referenced in

the August 2023

agreement referred to

above to calculate

the determined fair

value for Finbond.

Carbon

In September

2022, the

Company,

through its

wholly-owned subsidiary,

Net1 Applied

Technologies

Netherlands B.V.

(“Net1

BV”),

entered

into

a binding

term

sheet

Etobicoke

Limited

(“Etobicoke”)

to sell

its entire

interest, or

%,

in Carbon

to

Etobicoke for

$

0.5

a loan

due from

Carbon, with

a face

value of

$

3.0

million, to

Etobicoke for

$

0.75

million. Both

the

equity interest

and the loan

had a carrying

value of $

(zero) at June

30, 2022.

The parties agreed

that Etobicoke pledge

the Carbon

shares purchased as

security for the

amounts outstanding under

the binding term

sheet. The

Company received $

0.25

million on closing

and the outstanding balance

due by Etobicoke

was expected to be

paid as follows:

(i) $

0.25

million on September 30,

2023 (the amount

was received in October

2023), and (ii) the

remaining amount, of

$

0.75

million in March 2024

(the amount has not

been received as

of September 30, 2024 (refer to Note 2)).

Summarized below is the

movement in equity-accounted investments and

loans provided to equity-accounted

investments during

the three months ended September 30, 2024:

Total

(1)

Investment in equity

$

Comprehensive income:

Other comprehensive income

Equity accounted (loss) earnings

Share of net (loss) earnings

Impairment

(2)

$

(1) Includes Sandulela,

and SmartSwitch Namibia;

(2) The foreign currency

adjustment represents the effects

of the fluctuations

of the ZAR and Namibian

dollar, against the

U.S.

dollar on the carrying value.

Equity-accounted investments and other long-term assets (continued)

Other long-term assets

Summarized below is the breakdown of other long-term assets as of September

30, 2024, and June 30, 2024:

Total equity investments

$

76,297

$

76,297

% of Cell C (June 30, 2024:

%) at fair value (Note 4)

% of MobiKwik (June 30, 2024:

%)

(1)

76,297

76,297

87.5

% of CPS (June 30, 2024:

87.5

%) at fair value

(1)(2)

Policy holder assets under investment contracts (Note 7)

Reinsurance assets under insurance contracts (Note 7)

1,543

1,469

Total other long-term

assets

$

78,075

$

77,982

(1)

that

MobiKwik

and CPS

do not

have

readily

determinable

fair

values and

therefore

elected to

record these investments

at cost minus impairment,

if any,

plus or minus changes

resulting from observable

price changes in orderly

transactions for the identical or a similar investment of the same issuer.

(2) On October 16, 2020,

the High Court of

South Africa, Gauteng Division, Pretoria

ordered that CPS be

placed into liquidation.

Summarized below

are the components

of the Company’s

equity securities without

readily determinable

fair value and

held to

maturity investments as of September 30, 2024:

Cost basis

holding

holding

gains

losses

value

Equity securities:

Investment in MobiKwik

$

26,993

$

49,304

$

$

76,297

Investment in CPS

Held to maturity:

Investment in Cedar Cellular notes (Note 2)

Total

$

26,993

$

49,304

$

$

76,297

Summarized below are the components of the Company’s

equity securities without readily determinable fair value and held to

maturity investments as of June 30, 2024:

Cost basis

holding

holding

gains

losses

value

Equity securities:

Investment in MobiKwik

$

26,993

$

49,304

$

$

76,297

Investment in CPS

Held to maturity:

Investment in Cedar Cellular notes

Total

$

26,993

$

49,304

$

$

76,297

Goodwill and intangible assets, net

Goodwill

Summarized below is the movement in the carrying value of goodwill

for the three months ended September 30, 2024:

Gross value

value

$

157,899

$

(19,348)

$

138,551

(1)

8,816

(790)

8,026

$

166,715

$

(20,138)

$

146,577

(1) – The foreign currency adjustment represents the effects

of the fluctuations of the South African rand against the U.S.

dollar on the carrying value.

Goodwill and intangible assets, net (continued)

Goodwill (continued)

Goodwill has been allocated to the Company’s

reportable segments as follows:

$

$

138,551

$

138,551

(1)

8,026

8,026

$

$

146,577

$

146,577

(1) The foreign

currency adjustment represents

the effects

of the fluctuations

of the South

African rand

against the U.S.

dollar

on the carrying value.

Intangible assets, net

Carrying value and amortization of intangible assets

Summarized below is

the carrying value and

accumulated amortization of

intangible assets as of

September 30, 2024, and

June

As of September 30, 2024

As of June 30, 2024

Gross

value

Net

value

Gross

value

Net

value

Finite-lived intangible assets:

Customer relationships

$

27,388

$

(15,390)

$

11,998

$

25,880

$

(14,030)

$

11,850

Software, integrated

platform and unpatented

technology

122,099

(30,331)

91,768

115,213

(25,763)

89,450

FTS patent

2,230

(2,230)

2,107

(2,107)

Brands and trademarks

15,188

(4,902)

10,286

14,353

(4,300)

10,053

Total finite-lived

intangible

assets

$

166,905

$

(52,853)

$

114,052

$

157,553

$

(46,200)

$

111,353

Aggregate amortization

expense on the

finite-lived intangible assets

for the three

2023,

was

$

3.8

million

and

$

3.6

respectively.

Future

estimated

annual

expense

for

the

next

five

fiscal

years

and

thereafter, assuming exchange rates that

prevailed on September 30,

2024,

is presented in

the table below. Actual amortization expense

in future periods could differ from

this estimate as a

result of acquisitions, changes in useful

lives, exchange rate fluctuations and other

relevant factors.

Fiscal 2025 (excluding three months ended September 30, 2024)

$

11,888

Fiscal 2026

15,850

Fiscal 2027

15,790

Fiscal 2028

15,790

Fiscal 2029

15,602

Thereafter

39,132

Total future

estimated annual amortization expense

$

114,052

Assets and policyholder liabilities under insurance and investment

Reinsurance assets and policyholder liabilities under insurance contracts

Summarized below is the movement in reinsurance

assets and policyholder liabilities under insurance contracts

during the three

months ended September 30, 2024:

Reinsurance

Assets

(1)

Insurance

(2)

$

1,469

$

(2,241)

Increase in policy holder benefits under insurance contracts

(2,500)

Claims and decrease in policyholders’ benefits under insurance contracts

(190)

2,463

(3)

(131)

$

1,543

$

(2,409)

(1) Included in other long-term assets (refer to Note 5);

(2) Included in other long-term liabilities;

(3) Represents the effects of the fluctuations of the ZAR against

the U.S. dollar.

Assets and policyholder liabilities under insurance and investment

contracts (continued)

Reinsurance assets and policyholder liabilities under insurance contracts

(continued)

The Company has agreements with reinsurance companies in order to limit its losses from various insurance contracts, however,

if the reinsurer is unable

to meet its obligations, the

Company retains the liability.

The value of insurance

contract liabilities is based

on the best estimate assumptions of future experience plus prescribed

margins, as required in the markets in which these

products are

offered,

namely South

Africa. The

process of

deriving the

best estimate

assumptions plus

prescribed margins

includes assumptions

related to claim reporting delays (based on average industry experience).

Assets and policyholder liabilities under investment contracts

Summarized

below is

the movement

in assets

and policyholder

liabilities under

investment contracts

ended September 30, 2024:

Assets

(1)

Investment

(2)

$

$

(216)

Increase in policy holder benefits under investment contracts

(6)

(3)

(13)

$

$

(235)

(1) Included in other long-term assets (refer to Note 5);

(2) Included in other long-term liabilities;

(3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar.

The Company does not offer any investment products with guarantees

related to capital or returns.

Borrowings

Refer to

Note 12

to the

audited consolidated

financial statements

its Annual

Form 10-K

for

the year ended June 30, 2024, for additional information regarding

its borrowings.

The

amounts

below

have

been

at

rates

as

of

the

dates

specified.

The

3-month

Johannesburg

Interbank

Agreed Rate

(“JIBAR”),

the

rate at

which

private sector

banks borrow

funds from

the

South

African Reserve

Bank,

on

September 30, 2024, was

8.35

%. The prime rate, the benchmark rate at which private sector banks

lend to the public in South Africa,

on September 30, 2024, was

11.50

%.

RMB Facilities, as amended, comprising a short-term facility (Facility E) and long-term

Long-term borrowings - Facility G and Facility H

As of

Company

had not

utilized any

of its

ZAR

million Facility

G revolving

credit facility.

The

interest rate on this facility as of September 30, 2024, was JIBAR plus

4.75

%.

Available short-term facility -

Facility E

As of

aggregate amount

of the

short-term South

African overdraft

facility with

RMB was

ZAR

0.9

52.4

million). As of September 30,

2024, the Company had not

utilized this overdraft facility. This overdraft facility

may only be used to fund

ATMs and therefore the overdraft utilized and converted to cash to

fund the Company’s ATMs is considered

restricted cash. The interest rate on this facility is equal to the prime rate.

Borrowings (borrowings) (continued)

South Africa (continued)

RMB Bridge Facilities, comprising a short-term facility obtained

in October 2024

On September 30, 2024, Lesaka SA entered into

a Facility Letter (the "F2024 Facility Letter") with

RMB to provided Lesaka SA

a ZAR

665.0

million funding facility (the “Facility”).

The Facility has been used

by Lesaka SA to (i) settle an

amount of ZAR

232.2

due

Adumo transaction

(refer to

Note 20);

(ii) pay

Crossfin Holdings

(RF) Proprietary

Limited (“Crossfin”)

ZAR

207.2

million under a share purchase agreement concluded

between Lesaka SA and Crossfin Holdings ((refer also to

Note 20)); (iii) pay an

amount of ZAR

147.5

million notified by Investec Bank

Limited to Adumo and Lesaka SA

as a result of the transaction

described in

Note 20,

and (iv)

pay an

origination fee

of ZAR

7.6

million to

RMB. The

Facility also

provides Lesaka

with ZAR

70.0

million for

transaction -related expenses. Interest on the Facility is calculated at the

prime rate plus

1.80

%. The Facility is unsecured and required

to be repaid in full on or before December 13, 2024.

Connect Facilities, comprising long-term borrowings and a short-term facility

As of September 30, 2024, the

Connect Facilities include (i) an overdraft facility (general

banking facility) of ZAR

170.0

million

(of which ZAR

170.0

9.9

million) has been utilized); (ii) Facility A of ZAR

700.0

40.7

million); (iii) Facility B of

ZAR

550.0

32.0

million) (both

fully utilized);

and (iv)

an asset-backed

facility of

ZAR

200.0

11.6

million) (of

which ZAR

138.1

8.0

million) has been utilized).

On October 29,

2024, the Company, through its

wholly owned subsidiary

Cash Connect Management

Solutions (Pty) Ltd,

entered

into an addendum to a facility letter with RMB, to obtain a ZAR

100.0

million temporary increase in its overdraft facility for a period

of approximately four

months to specifically

fund the purchase

of prepaid airtime

vouchers. This temporary

increase is repayable

in

equal daily instalments which commenced at the end of October

2024 and end of February 15, 2025.

CCC Revolving Credit Facility, comprising

long-term borrowings

As of

30,

2024,

the amount

of the

CCC Revolving

Credit Facility

was ZAR

300.0

million (of

which

ZAR

215.5

million has been utilized).

Interest on the Revolving Credit Facility

is payable on the last business

day of each calendar month

and is

based on the South African prime rate in effect from time to time plus

a margin of

0.95

% per annum.

RMB facility, comprising indirect facilities

As of September

30, 2024, the aggregate

amount of the Company’s

short-term South African

indirect credit facility

with RMB

was ZAR

135.0

7.1

million), which includes facilities for guarantees, letters of credit and forward exchange contracts. As

of

30,

and

June

30,

2024,

the

Company

had

ZAR

33.1

million

($

1.9

and

ZAR

33.1

million

($

1.8

million), respectively,

of its indirect and derivative

facilities of ZAR

135.0

million (June 30, 2024: ZAR

135.0

million) to enable the

bank to issue guarantees, letters of credit and forward exchange contracts (refer

to Note 19).

Nedbank facility, comprising short-term facilities

As of

the aggregate amount

of the Company’s short-term

credit facility with

Nedbank Limited

was ZAR

156.6

9.1

million). The credit facility represents indirect and derivative facilities

of up to ZAR

156.6

9.1

million), which include guarantees, letters of credit and forward exchange

contracts.

As of

Company had

utilized ZAR

2.1

0.1

million) and

ZAR

2.1

million

($

0.1

million), respectively, of its indirect and derivative facilities of ZAR

156.6

million (June 30, 2024: ZAR

156.6

million) to enable

the bank to issue guarantees, letters of credit and forward exchange contracts

(refer to Note 19).

Borrowings (borrowings) (continued)

South Africa (continued)

Movement in short-term credit facilities (continued)

Summarized below are the

Company’s short-term facilities as of

September 30, 2024, and

the movement in

the Company’s short-

term facilities from as of June 30, 2024 to as of September 30, 2024:

RMB

RMB

RMB

Nedbank

Facility E

Indirect

Connect

Facilities

Total

Short-term facilities available as of

September 30, 2023

$

52,384

$

7,858

$

9,895

$

9,112

$

79,249

9,895

9,895

Overdraft restricted as to use for

ATM

52,384

52,384

Indirect and derivative facilities

7,858

9,112

16,970

Movement in utilized overdraft

facilities:

Restricted as to use for ATM

6,737

6,737

No restrictions as to use

9,351

9,351

6,737

9,351

16,088

23,893

23,893

Repaid

Foreign currency

adjustment

(1)

9,895

9,895

Restricted as to use for ATM

No restrictions as to use

$

$

$

9,895

$

$

9,895

Interest rate as of September 30,

2024 (%)

(2)

11.50

11.40

Movement in utilized indirect and

derivative facilities:

$

$

1,821

$

$

$

1,937

(1)

$

$

1,927

$

$

$

2,050

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

(2) Facility E interest set at prime and the Connect facility at prime less

0.10

%.

Borrowings (continued)

Movement in long-term borrowings

Summarized below is

the movement in the

Company’s long-term

borrowing from as of

as of June 30, 2024

to as of September

Facilities

G & H

A&B

CCC

Asset backed

Total

Included in current

$

$

$

$

3,878

$

3,878

Included in long-term

56,151

66,815

11,841

4,501

139,308

Opening balance as of June 30, 2024

56,151

66,815

11,841

8,379

143,186

Facilities utilized

Facilities repaid

(3,911)

(554)

(1,007)

(5,472)

Non-refundable fees paid

Non-refundable fees amortized

Capitalized interest

1,845

1,845

Capitalized interest repaid

(95)

(95)

(1)

3,188

3,890

8,213

Closing balance as of September 30,

57,222

70,717

12,543

8,038

148,520

Included in current

3,841

3,841

Included in long-term

57,222

70,717

12,543

4,197

144,679

Unamortized fees

(229)

(176)

(9)

(414)

Due within 2 years

57,451

5,456

2,987

65,894

Due within 3 years

8,367

12,552

21,755

Due within 4 years

57,070

57,364

Due within 5 years

$

$

$

$

$

Interest rates as of September 30, 2024

(%):

13.10

12.10

12.45

12.25

Base rate (%)

8.35

8.35

11.50

11.50

Margin (%)

4.75

3.75

0.95

0.75

Footnote number

(2)

(3)

(4)

(5)

(1) Represents the effects of the fluctuations between the ZAR and the

U.S. dollar.

(2)

on

Facility

G

and

Facility

H

is

based

on

the

JIBAR in

effect

from

time

to

time

plus

a

margin,

which

margin

is

calculated as:

(i)

5.50

% if

the Look

Through Leverage

(“LTL”)

greater than

3.50x; (ii)

4.75

% if

the LTL

less than

3.50x but greater than 2.75x; (iii)

3.75

% if the LTL ratio is less than 2.75x but greater than 1.75x; or (iv)

2.50

% if the LTL ratio is less

than 1.75x.

The LTL

expressed as

times (“x”),

and was

introduced to

calculate the

margin

used in

the determination

of the

interest

rate.

The

LTL

ratio

is

as

the

Total

Attributable

Net

Debt

to

the

Total

Attributable

EBITDA,

as

defined

in

the

Company’s borrowing arrangements

with RMB, for the measurement period ending on a specified date.

(3) Interest on Facility A and Facility B is calculated based on JIBAR plus a margin,

of

3.75

%, in effect from time to time.

(4) Interest is charged at prime plus

0.95

% per annum on the utilized balance.

(5) Interest is charged at prime plus

0.75

% per annum on the utilized balance.

Interest expense incurred under the Company’s South African long-term borrowings and included in the

caption interest expense

on the condensed consolidated statement of operations during the three months ended September 30, 2024 and

2023, was $

4.2

million

and $

4.0

Prepaid facility fees amortized

included in interest expense

during the three months

were $

0.1

$

0.2

incurred under

K2020 and

CCC facilities

relates to

borrowings utilized

to fund

of the

merchant finance

loans receivable

and

this

interest

expense

of

$

0.4

million

and

$

0.4

is

in

the

caption

cost

of

goods

sold,

IT

servicing and support on

the condensed consolidated statement

of operations for the

three months ended September

Other payables

Summarized below is the breakdown of other payables as of September

30, 2024, and June 30, 2024:

Clearing accounts

$

7,239

$

17,124

Vendor

wallet balances

13,397

14,635

Accruals

9,959

7,173

Provisions

3,414

7,442

Value

-added tax payable

1,456

1,191

Payroll-related payables

2,929

Participating merchants' settlement obligation

Other

7,527

7,563

$

45,923

$

56,051

Other includes deferred income, client deposits and other payables.

Capital structure

The following table presents a

reconciliation between the number of

shares, net of treasury, presented in the

consolidated statement of changes in equity as of September 30, 2024

and 2023, respectively:

Number of shares, net of treasury:

Statement of changes in equity

63,638,912

Non-vested equity shares that have not vested as of end of period

2,035,845

2,527,492

Number of shares, net of treasury,

excluding non-vested equity shares that have not

vested

62,266,098

61,111,420

Accumulated other comprehensive loss

below presents

the change

in accumulated

other comprehensive

component

ended

September 30, 2024

foreign

reserve

Total

Balance as of July 1, 2024

$

$

10,525

10,525

$

$

below presents

the change

in accumulated

other comprehensive

component during

September 30, 2023:

September 30, 2023

Accumulated foreign currency

translation reserve

Total

Balance as of July 1, 2023

$

$

Movement in foreign currency translation reserve related to equity-

accounted investment

(844)

(844)

Balance as of September 30, 2023

$

$

There were

no

reclassifications from accumulated other

comprehensive loss to net (loss) income

during the three months ended

September 30, 2024 and 2023.

Amended and Restated

2022 Stock

Incentive Plan (“20

22 Plan”)

and the vesting

terms of certain

awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on

Form 10-K for the year ended June 30, 2024.

Stock option and restricted stock activity

Options

The following table summarizes stock option activity for the three months

ended September 30, 2024 and 2023:

shares

average

price

($)

average

term

value

($'000)

average

grant date

fair value

($)

Outstanding - June 30, 2024

4,918,248

8.70

4.51

1.77

Forfeited

(13,333)

11.23

8.83

Outstanding - September 30, 2024

4,904,915

8.67

4.33

1,117

1.76

Outstanding - June 30, 2023

673,274

4.37

5.14

1.67

Exercised

(6,793)

3.07

Forfeited

(175,776)

3.58

1.22

Outstanding - September 30, 2023

490,705

4.68

6.30

1.82

No

were awarded

during each

of the

and 2023.

No

were

exercised

during

the

three

months

ended

30,

During

the

three

30,

2023,

received

$

0.02

million

from

the exercise

of

6,793

stock options.

Employees forfeited

an aggregate

of

13,333

stock

options during the three months

ended September 30, 2024. Employees and

a non-employee director forfeited an

aggregate of

175,776

stock options during the three months ended September 30, 2023.

Options

The following table presents stock options vested and expected to vest as of

shares

average

price

($)

average

term

value

Vested

and expecting to vest - September 30, 2024

4,904,915

8.67

4.33

1,117

These options have an exercise price range of $

3.01

to $

14.00

.

The following table presents stock options that are exercisable as of September

shares

average

price

($)

average

term

value

Exercisable - September 30, 2024

378,009

4.49

5.32

No

stock options became exercisable during each of the three months ended September 30, 2024 and 2023. The Company issues

new shares to satisfy stock option exercises.

Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Restricted stock

The following table summarizes restricted stock activity for the three

months ended September 30, 2024 and 2023:

shares of

restricted stock

average grant

date fair value

Non-vested – June 30, 2024

2,084,946

8,736

Total granted

32,800

Granted – August 2024

32,800

Total vested

(78,801)

Vested

– July 2024

(78,801)

(3,100)

Non-vested – September 30, 2024

2,035,845

8,449

Non-vested – June 30, 2023

2,614,419

11,869

Total vested

(78,800)

Vested

– July 2023

(78,800)

(8,127)

Non-vested – September 30, 2023

2,527,492

11,475

Grants

In August 2024, the Company granted

32,800

shares of restricted stock to employees which have

time -based vesting conditions.

No

restricted stock was awarded during the three months ended September 30, 2023.

Vesting

In July 2024 and 2023, respectively,

78,801

and

78,800

shares of restricted stock granted to our former Group CEO vested.

During

the

three

months

ended

30,

and

2023,

employees

forfeited

3,100

and

8,127

shares

of

restricted stock following their termination of employment with the Company.

Stock-based compensation charge and unrecognized compensation

cost

The Company recorded a stock-based compensation charge, net during the three months ended September 30, 2024 and 2023, of

$

2.4

million and $

1.8

million, respectively,

which comprised:

Total

charge

Allocated to cost

of goods sold, IT

servicing and

support

Allocated to

selling, general

and

administration

Three months ended September 30, 2024

$

2,377

$

$

2,377

Total - three months

ended September 30, 2024

$

2,377

$

$

2,377

Three months ended September 30, 2023

$

1,768

$

$

1,768

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(9)

(9)

Total - three months

ended September 30, 2023

$

1,759

$

$

1,759

The stock-based compensation charges

have been allocated to selling,

general and administration based

on the allocation of the

cash compensation paid to the relevant employees.

Stock-based compensation (continued)

Stock-based compensation charge and unrecognized compensation

cost (continued)

As

of

30,

2024,

the

total

unrecognized

cost

related

to

stock

options

was

$

3.9

which

the

Company expects to

recognize over

two years

. As

2024, the total

unrecognized compensation cost

stock awards was $

3.6

million, which the Company expects to recognize over

two years

.

During the three months ended

September 30, 2024 and 2023,

the Company recorded a deferred

tax benefit of $

0.3

$

0.05

million, respectively,

the stock-based

compensation charge

recognized related

to employees

of Lesaka.

and 2023

recorded a

valuation allowance

of $

0.3

$

0.05

tax benefit

recognized because

it does

not believe

that the

deduction

would

be

as

it

does

not

anticipate

generating

sufficient

taxable

income

in

the

United

States.

The

Company

deducts

the

difference

between

the market

value

on the

date of

exercise by

the option

recipient and

the exercise

price

from income

subject

to

taxation in the United States.

(Loss) Earnings per share

has issued redeemable

which is redeemable

at an amount

other than

fair value.

Redemption of

a

class of

at other

than fair

value increases

or decreases

the carrying

amount of

the redeemable

and is

reflected in basic earnings

per share using the two-class

method. There were

no

redemptions of common stock, or

adjustments to the

carrying value of the redeemable common stock during

the three months ended September 30, 2024 and 2023. Accordingly,

the two-

class method presented below does not include the impact of

any redemption. The Company’s redeemable common stock is described

in Note 14 to the Company’s audited consolidated financial statements included in

its Annual Report on Form 10-K for

the year ended

Basic (loss) earnings per share

includes shares of restricted stock that

meet the definition of a

participating security because these

shares are eligible

to receive non

-forfeitable dividend

equivalents at the

same rate as

common stock.

Basic (loss) earnings

has been calculated using the two-class

method and basic (loss) earnings per share

for the three months ended September

2023,

reflects only undistributed earnings. The computation below of basic (loss) earnings per

share excludes the net loss attributable

to shares of unvested

restricted stock (participating

non-vested restricted stock)

from the numerator

and excludes the dilutive

impact

of these unvested shares of restricted stock from the denominator.

Diluted (loss)

has been

to give

effect

to the

number

of shares

of additional

common

stock that

would have

been outstanding

if the

potential dilutive

instruments had

been issued

in each

period. Stock

options are

the

calculation of diluted (loss) earnings per share utilizing the treasury

stock method and are not considered to be

participating securities,

as the

do not

contain non-forfeitable

dividend rights.

has excluded

employee stock

options to

65,173

and

41,809

shares of common

stock from

the calculation

share during

30, 2024 and 2023, because the effect would be antidilutive.

The

calculation

(loss) earnings

per

share

includes the

dilutive

effect

of

of the

stock granted

to

employees

as

these

shares

of

stock

are

considered

contingently

returnable

shares

for

the

purposes

of

the

diluted

(loss)

earnings per share calculation and the vesting conditions in respect of

a portion of the restricted stock had been satisfied.

(Loss) Earnings per share (continued)

The vesting conditions for all awards made are discussed in Note 17 to the Company’s audited consolidated financial statements

included in its Annual Report on Form 10-K for the year ended June

30, 2024.

The

table

net

loss

attributable

to

Lesaka

and

the

share

data

used

in

the

basic

and

diluted

loss

per

share

computations using the two-class method:

(in thousands except

percent and

per share data)

Numerator:

Net loss attributable to Lesaka

$

(4,542)

$

(5,651)

Undistributed (loss) earnings

$

(4,542)

$

(5,651)

Percent allocated to common shareholders (Calculation 1)

Numerator for (loss) earnings per share: basic and diluted

(4,399)

(5,402)

Continuing

(4,399)

(5,402)

Denominator

Denominator for basic (loss) earnings per share:

Weighted-average

common shares outstanding

62,265

60,990

Denominator for diluted (loss) earnings per share: adjusted weighted

average

common shares outstanding and assuming conversion

62,265

60,990

(Loss) Earnings per share:

Basic

$

(0.07)

$

(0.09)

Diluted

$

(0.07)

$

(0.09)

(Calculation 1)

Basic weighted-average common shares outstanding (A)

62,265

60,990

Basic weighted-average common shares outstanding and unvested restricted

shares

expected to vest (B)

64,293

63,805

Percent allocated to common shareholders

(A) / (B)

Options to

4,224,210

shares of

at prices

ranging from

$

4.87

to $

14.00

were

outstanding during

the three months

30, 2024, but

were not included

in the computation

(loss) earnings

per share because the

options’ exercise price was

greater than the average

market price of the Company’s

common stock. Options to

262,506

shares of the Company’s

common stock at prices

ranging from $

4.87

to $

11.23

per share were outstanding

during

the three months ended September

30, 2023, respectively, but were not included in

the computation of diluted (loss)

earnings per share

because the

options’ exercise

price was greater

than the average

market price of

common stock.

The options, which

expire at various dates through February 3, 2032, were still outstanding

as of September 30, 2024.

Supplemental cash flow information

The following table presents supplemental cash flow disclosures for

the three months ended September 30, 2024 and 2023:

Cash received from interest

$

$

Cash paid for interest

$

3,271

$

2,925

Cash (refund) paid for income taxes

$

(45)

$

Supplemental cash flow information (continued)

Leases

The following table presents supplemental cash flow disclosure related to leases for the three months ended September 30, 2024

and 2023:

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

$

1,004

$

Right-of-use assets obtained in exchange for lease obligations

Operating leases

$

$

Revenue recognition

Disaggregation of revenue

The

table

the

revenue

disaggregated

by

major

revenue

streams,

a

to

reportable segments for the three months ended September 30, 2024:

Total

Processing fees

$

31,583

$

7,530

$

39,113

29,781

7,530

37,311

1,802

1,802

Technology

products

3,136

3,138

3,063

3,065

Telecom products

and services

86,731

86,748

80,851

80,868

5,880

5,880

Lending revenue

6,956

6,956

Interest from customers

1,676

1,676

Insurance revenue

4,340

4,340

Account holder fees

1,699

1,699

Other

1,348

1,876

1,291

1,819

Total revenue, derived

from the following geographic locations

124,474

21,072

145,546

116,662

21,072

137,734

$

7,812

$

$

7,812

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

table

the

revenue

disaggregated

by

major

revenue

streams,

a

to

reportable segments for the three months ended September 30, 2023:

Total

Processing fees

$

28,760

$

5,733

$

34,493

27,400

5,733

33,133

1,360

1,360

Technology

products

2,037

2,056

1,986

2,005

Telecom products

and services

87,313

87,354

82,559

82,600

4,754

4,754

Lending revenue

5,373

5,373

Interest from customers

1,520

1,520

Insurance revenue

2,611

2,611

Account holder fees

1,368

1,368

Other

1,314

1,265

Total revenue, derived

from the following geographic locations

120,509

15,580

136,089

114,295

15,580

129,875

$

6,214

$

$

6,214

Leases

The

Company

has

entered

into leasing

arrangements

classified

as operating

leases under

guidance.

These leasing

arrangements relate primarily

to the lease of

its corporate head office,

administration offices and

branch locations through

which the

Company operates

its consumer

business in

South Africa.

operating leases

have remaining

lease terms

of between

one and

five years

. The Company also operates parts

of its consumer business from

locations which it leases for a period

of less than

one year

. The Company’s operating lease expense during the three months ended September 30, 2024 and 2023 was $

1.0

$

0.7

The

Company

has

also

entered

into

leasing

arrangements,

for

the

lease

of

branch

locations

and

other

locations,

to operate its consumer

business in South Africa.

short-term lease expense during

the three months ended

September 30, 2024 and 2023, was $

1.0

million and $

0.9

The following table presents supplemental balance

sheet disclosure related to the

Company’s right-of-use assets and its operating

lease liabilities as of September 30, 2024 and June 30, 2024:

Right of use assets obtained in exchange for lease obligations:

Weighted average

remaining lease term (years)

2.7

3.1

Weighted average

discount rate (percent)

10.7

10.5

Leases (continued)

The maturities of the Company’s

operating lease liabilities as of September 30, 2024, are presented below:

Maturities of operating lease liabilities

Year

ended June 30,

2025 (excluding three months to September 30, 2024)

$

2,581

2,840

2,011

1,298

Thereafter

Total undiscounted

operating lease liabilities

8,895

Less imputed interest

1,327

Total operating lease liabilities,

7,568

Operating lease liability - current

2,600

Operating lease liability - long-term

$

4,968

Operating segments

Operating segments

The Company discloses segment information as reflected in the management

information systems reports that its chief operating

decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in

which the entity holds material assets or reports material revenues. A description of the Company’s operating segments is contained in

Note 21

to the Company’s

audited consolidated

financial statements

its Annual Report

on Form 10-K

for the year

ended

The

Company

analyzes

its

and

in

terms

of

two

inter-related

but

independent

segments:

(1) Consumer Division (“Consumer”) and (2) Merchant Division (“Merchant

”).

The reconciliation of the

reportable segment’s revenue to revenue from external

customers for the three

30, 2024 and 2023, is as follows:

Revenue

Reportable

Segment

Inter-

segment

From

$

125,261

$

$

124,474

21,072

21,072

Total for the three

months ended September 30, 2024

$

146,333

$

$

145,546

$

121,361

$

$

120,509

15,580

15,580

Total for the three

months ended September 30, 2023

$

136,941

$

$

136,089

The

Company

evaluates

segment

based

on

segment

before

tax,

and

(“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”), the Company’s reportable segments’

measure of profit or

loss. The Company intends

to obtain a separate

lending facility to fund

a portion of its

Consumer lending during

the twelve months ended June

30, 2025. The Company expected

to have this facility in place on

July 1, 2024, however,

has been unable to finalize

terms as the separate

lending facility will form part

of a broader financing

package. Therefore, the Company

has included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for the three months ended September 30,

2024. The Company

does not allocate

once-off items,

charges, depreciation

and amortization, impairment

of goodwill or other intangible

assets, other items (including gains

or losses on disposal

of investments, fair value adjustments

to equity

securities), interest

income, certain

interest expense,

income tax

expense or

loss from

equity-accounted investments

to its reportable

segments. Group costs generally include: employee related costs in relation to employees specifically hired for group roles and related

to managing

the US-listed

entity; expenditures

related

to compliance

Sarbanes-Oxley

Act of

2002; non-employee

directors’

fees;

legal

fees;

group

and

US-listed

related

audit

fees;

and

directors

and

officer’s

insurance

premiums.

Once-off

items

represents non-recurring expense items,

including costs related

to acquisitions and

transactions consummated or

ultimately not pursued.

loss

FV

for

foreign

mark-to-market

on

certain

intercompany

accounts. Interest adjustment represents the intercompany interest expense included in

the Consumer Segment Adjusted EBITDA. The

adjustments reflect

expense and

are excluded

from the

calculation of

Segment

and are

therefore reported

as reconciling items

to reconcile

the reportable

segments’ Segment

to the

Company’s loss before income

tax expense. Effective

from fiscal

2025, all lease

charges are allocated

to the Company’s operating

segments, whereas

in fiscal

2024 the

Company presented

certain lease

charges on

a separate

line outside

of its

operating segments.

Prior period

information has

been re-presented

to include

the lease charges

which were

previously reported

on a

separate line

in the

Company’s Consumer

and Merchant operating segments.

The reconciliation of

the reportable segments’

measures of profit or

loss to loss before

income tax expense for

the three months

ended September 30, 2024 and 2023, is as follows:

Reportable segments measure of profit or loss

$

12,312

$

9,845

Operating loss: Group costs

(2,949)

(1,822)

Once-off costs

(1,805)

(78)

Unrealized Loss FV for currency adjustments

(102)

Interest adjustment

Stock-based compensation charge adjustments

(2,377)

(1,759)

(6,276)

(5,856)

Reversal of allowance of EMI doubtful debt

(5,032)

(4,909)

$

(4,491)

$

(3,982)

The following

tables summarize

segment

that is

prepared

in accordance

with GAAP

for

months

ended

September 30, 2024 and 2023:

Revenues

$

125,261

$

121,361

21,072

15,580

Total reportable segment

revenue

146,333

136,941

Segment Adjusted EBITDA

(1)

7,916

7,725

(1)

4,396

2,120

Total Segment Adjusted

EBITDA

12,312

9,845

2,327

2,078

2,529

2,247

3,747

3,609

Total

6,276

5,856

Expenditures for long-lived assets

3,908

2,763

3,965

2,809

Total

$

3,965

$

2,809

(1) Segment Adjusted EBITDA

for the three months

ended September 30, 2024,

includes retrenchments costs for

Consumer of

$

0.06

1.1

million) and for Merchant, costs of

$

0.01

0.2

million). Segment Adjusted EBITDA for the three

30, 2023, includes

retrenchments costs for

Merchant of $

0.2

4.6

million) and for Consumer,

costs of $

0.1

1.5

million).

The segment

information as

reviewed by

the chief operating

decision maker

does not include

a measure of

segment assets per

segment as all of

the significant assets are

used in the operations

of all, rather than

any one, of the segments.

The Company does

not

have dedicated assets

assigned to a

particular operating segment.

Accordingly,

it is not meaningful

to attempt an

arbitrary allocation

and segment asset allocation is therefore not presented.

Income tax

Income tax in interim periods

For the purposes of interim

financial reporting, the Company

determines the appropriate income

tax provision by first

applying

the effective

tax rate

expected to

be applicable

for the

full fiscal

year to

ordinary income.

This amount

is then

adjusted for

the tax

effect

of

unusual

items,

for

instance,

changes

in

tax

law,

valuation

and

expenses that

are reported

separately,

and have an

impact on the

tax charge.

The cumulative effect

of any change

in the enacted

tax

rate, if and when applicable, on the opening balance of deferred tax assets

and liabilities is also included in the tax charge as a discrete

event in the interim period in which the enactment date occurs.

For the three months ended September 30, 2024, the Company’s

effective tax rate was impacted by the tax expense recorded

by

the

profitable

South

African

(including

expenditures),

the

on-

going losses incurred

by certain of

South African businesses

and the associated

valuation allowances created

related

to the deferred tax assets recognized regarding net operating losses incurred

by these entities.

For the three months ended September 30, 2023, the Company’s

effective tax rate was impacted by the tax expense recorded

by

the

profitable

South

African

expenses,

the

on-going

losses

by

certain

of

the

businesses and

the associated

valuation

allowances created

tax assets

recognized

regarding net operating losses incurred by these entities.

Uncertain tax positions

As of three months ended September 30, 2024 and

June 30, 2023, the Company had

no

unrecognized tax benefits. The Company

files income tax

returns mainly

in South Africa,

Botswana, Namibia and

in the U.S.

federal jurisdiction.

As of September

30, 2024,

the Company’s South African subsidiaries are no longer subject to income tax examination by the South African Revenue Service

for

periods before

2020. The

Company is

subject to

income tax

in other

jurisdictions outside

South Africa,

none of

which are

individually material to its financial position, statement of cash flows, or results of operations.

Commitments and contingencies

Guarantees

The South African

Revenue Service and

certain of the

Company’s customers,

suppliers and other

business partners have

asked

to provide

them with

guarantees, including

standby letters

of credit,

issued by

banks. The

Company is

required to procure these guarantees for these third parties to operate

its business.

RMB has

issued

guarantees

to

these

third

parties

amounting

to

ZAR

33.1

million

($

1.9

at

rates

applicable as of September 30, 2024) thereby utilizing part of the Company’s short-term facilities. The Company pays commission of

between

3.42

% per annum to

3.44

% per annum of the face

value of these guarantees and does

not recover any of the commission

from

third parties.

Nedbank has

issued guarantees

to these

third parties

amounting to

ZAR

2.1

0.1

at exchange

rates

applicable as of September 30, 2024) thereby utilizing part of the Company’s short-term facilities. The Company pays commission of

between

0.47

% per annum to

1.84

% per annum of the face

value of these guarantees and does

not recover any of the commission

from

third parties.

The Company has not recognized any obligation related to these

guarantees in its consolidated balance sheet as of September 30,

2024. The maximum

potential amount that

the Company could

pay under these

guarantees is ZAR

35.2

1.9

at exchange

rates applicable

as of

2024). As

discussed in

Note 8,

has ceded

and pledged

certain bank

accounts to Nedbank as

security for the guarantees

issued by them

with an aggregate value

of ZAR

2.1

0.1

at

rates

as of

30,

2024).

The guarantees

have

reduced

the amount

available

under

its indirect

and

derivative facilities in the Company’s

short-term credit facilities described in Note 8.

Contingencies

The

Company

is

subject

to

a

variety

of

insignificant

claims

and

suits

that

arise

from

time

to

time

in

the

ordinary

course

of

business. Management

currently believes

that the

resolution of

these other

matters, individually

or in

the aggregate,

will not

have a

material adverse impact on the Company’s

financial position, results of operations or cash flows.

Acquisitions

Acquisitions

October 2024 acquisition of Adumo

On May 7,

2024, the Company

entered into a

Sale and Purchase

Agreement (the “Purchase

Agreement”) with Lesaka

SA, and

Crossfin Apis Transactional

Solutions (Pty) Ltd

and Adumo ESS

(Pty) Ltd (“the

Sellers”). Pursuant to

the Purchase Agreement

and

subject to its terms and

conditions, Lesaka, through its

subsidiary,

Lesaka SA, agreed to

acquire, and the Sellers agreed

to sell, all of

the

equity

interests

and

certain

claims

in

the

Adumo

(RF)

Proprietary

Limited

(“Adumo”).

The

closed

on

October 1, 2024.

Adumo is an

independent payments and commerce

enablement platform in Southern

Africa, serving approximately

23,000

active

merchants with

operations across

South Africa,

Namibia, Botswana

and Kenya.

For more

than two

decades, Adumo

has facilitated

physical and online commerce between retail merchants and end-consumers by offering

a unique combination of payment processing

and integrated software

solutions, which currently

include embedded payments,

integrated payments, reconciliation services,

lending, customer engagement tools, card issuing program management

and data analytics.

Adumo operates

across three businesses,

which provide

payment processing

and integrated software

solutions to different

end

markets:

●

The

Adumo

Payments

offers

payment

integrated

and

to

small-and-

medium (“SME”) merchants in

South Africa, Namibia and

Botswana, and also provides

card issuing program management

to

corporate clients such as Anglo American and Coca-Cola;

●

The Adumo ISV business, also known as GAAP,

has operations in South Africa, Botswana and Kenya, and clients in a further

countries,

and

is

the

leading

provider

of

integrated

point-of-sales

and

hardware

to

the

hospitality

industry

in

Southern Africa, serving clients such as KFC, McDonald’s,

Pizza Hut, Nando’s and Krispy

Kreme; and,

●

The Adumo

Ventures

business offers

online commerce

solutions (Adumo

Online), cloud-based,

multi-channel point-of-sales

(Humble)

and

an

aggregated

payment

and

credit platform

for

in-store

and

online

commerce

(SwitchPay)

to SME

merchants and corporate clients in South Africa and Namibia.

The acquisition continues the Company’s

consolidation in the Southern African

fintech sector.

ecosystem now

serves approximately

1.7

million active consumers,

120,200

merchants, and processes over ZAR

billion in throughput (cash, card

and VAS)

per year. The acquisition of Adumo enhances the Company’s strength in both the consumer and merchant markets in which

it operates.

The purchase consideration was settled through the combination of an issuance of

17,279,803

shares of the Company’s common

stock (“Consideration

Shares”) and

a ZAR

232.2

13.4

at the

prevailing rate

of $1:

ZAR

17.3354

as of

October 1, 2024) payment in cash. The Company’s

closing price on the Johannesburg Stock Exchange on October 1, 2024, was ZAR

83.05

($

4.79

using

the

October

1,

2024,

$1:

ZAR

rate).

The

total

consideration

was

ZAR

1.67

billion

($

96.2

million).

The

closing

of

the

was

subject

to

customary

closing

conditions,

(i)

approval

from

the

competition

authorities of South

Africa and

Namibia; (ii) exchange

control approval from

the financial surveillance

department of the

Reserve

Bank;

(iii)

approval

from

all necessary

regulatory

bodies

and

from

shareholders

to

issue

the

Shares

to

the

Sellers; (iv) obtaining

certain third-party

consents; (v) the

Company obtained confirmation

from RMB that

it has sufficient

funds to

settle the

cash portion

of the purchase

consideration; (vi)

approval of

Adumo shareholders

(including preference

shareholders) with

respect to entering into and implementation of the Purchase Agreement, and

all other agreements and transactions contemplated in the

Purchase Agreement;

(vii) obtained

the consent

of Adumo’s

lender regarding

Adumo entering

into and

implementing the

Purchase

Agreement, and

all other

agreements and

transactions contemplated

in the

Purchase Agreement;

(viii) the

release of

certain Seller’s

shares held

as security

by such

bank; (ix)

consent of

the lender

of one

of Adumo’s

shareholders regarding

Adumo entering

into the

transaction;

(x)

the

Company

signing

a

written

addendum

to

the

Policy

Agreement

with

International

Finance

Corporation

that

provides for the inclusion

of the Consideration

Shares attributable to certain

Seller shareholders

in the definition of

“Put Shares” under

the

Policy

Agreement,

and

related

change;

and

(xi)

a

Seller

(or

their

nominee),

which

ultimately

was

Crossfin,

concluding

share

purchase agreements to dispose

of an amount of Consideration

Shares (which ultimately was determined

as

3,587,332

Shares).

The

Company

has

agreed

to file

a

resale

registration

statement

with

the United

States Securities

and

Commission

(“SEC”)

covering

the

resale

of

the

Shares

by

the

Sellers.

The

Company

has

undertaken

to

use

its

commercially

reasonable efforts to have the resale registration statement declared

effective by the SEC following its filing.

The

Company

of $

1.7

million

during

the

three

months

ended

30,

2024,

related

to

acquisition

of

Adumo.

The

accruals

in

Note

of

as

30,

2024,

includes

an

accrual

of

transaction related

expenditures of

$

2.2

does not

expect to

incur any

further significant

transaction costs

over the remainder of the 2025 fiscal year.

Acquisitions (continued)

Acquisitions (continued)

October 2024 acquisition of Adumo (continued)

On

October

1,

2024,

Lesaka

SA

and

Crossfin

entered

into

a

share

agreement

under

which

Lesaka

SA

purchased

2,601,410

of the

3,587,332

Consideration Shares for ZAR

207.2

12.0

million). The transaction was settled in early October

2024,

and the shares of Company’s common

stock repurchased will be included in the Company’s

treasury shares.

The

Company

has

commenced

the

price

allocation

related

to

this

transaction.

However,

the

process

had

not

been

completed

as of

the date

of filing

this Quarterly

on November

6, 2024.

expects to

include its

preliminary allocation

of the purchase consideration

related to this acquisition

in its unaudited

financial statements to

be included

in

its Quarterly Report on Form 10-Q for the quarterly period ended

December 31, 2024.