LESAKA TECHNOLOGIES INC

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three and six months ended December 31, 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 Form

10-Q

and

include all of

the information and

disclosures required

for interim financial

reporting. The results

of operations

for the three

and six

months ended December 31, 2024 and

2023, are not necessarily indicative

of the results for the full year.

The Company 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

about

segment

expenses. In addition, the

guidance enhances interim disclosure

requirements, clarifies circumstances in

which an entity can disclose

multiple

segment

measures

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 December 31, 2024

In

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

applicable

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.

In

2024,

the

FASB

issued

guidance

regarding

Income

Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

Disclosures

(Subtopic

220-40)

which

of

income

statement

for

public

business entities. The guidance does not change the expense captions an

entity presents on the face of the income statement; rather,

it

disaggregation

of

certain

expense

captions

into

specified

categories

in

within

the

footnotes

to

the

statements. This guidance is effective for the

Company beginning July 1, 2027. Early

adoption is permitted. The Company is

currently

assessing the impact of this guidance on its financial statements and related disclosures.

The Company did not make

any acquisition during the six

months ended December 31, 2023.

The cash paid, net of

cash received

related to the Company’s acquisitions during

the six months ended December 31, 2024, is summarized in the table below:

Total

Total cash paid

$

13,392

Less: cash acquired

9,435

Total cash paid, net

of cash received

$

3,957

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)

Limited

(“Adumo”).

The

closed

on

October 1, 2024.

Adumo

is

an

independent

and

enablement

platform

in

Southern

Africa,

and

at

it

served

23,000

active

merchants

with

across

South

Africa,

Namibia,

Botswana

and

Kenya.

For

more

than

two

decades,

Adumo

has

facilitated

physical

and

online

between

retail

merchants

and

end-consumers

by

offering

a

unique

combination

of

payment

and

solutions,

which

currently

include

embedded

payments,

payments,

services,

lending,

engagement

tools,

card

issuing

program

and

data

analytics.

Adumo operates

across three businesses,

which provide

payment processing

and integrated software

solutions to different

end

markets:

●

The

Adumo

Payments

business

offers

payment

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

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

(SwitchPay)

to SME

merchants and corporate clients in South Africa and Namibia.

The acquisition

continues the

consolidation in

the Southern

African fintech

sector.

At acquisition,

ecosystem served approximately

1.7

million active consumers,

120,200

merchants, and processes over ZAR

billion in throughput

(cash,

card

and

VAS)

per

year.

The

of

Adumo

enhances

the

strength

in

both

the

consumer

and

markets in which it operates.

The total purchase

consideration was ZAR

1.67

96.2

million) and comprised

the issuance of 17,279,803

shares of the

(“Consideration Shares”)

with a

$

82.8

million (

multiplied by

$

4.79

per share)

and

cash of $

13.4

million. The purchase consideration was settled through

the combination of the Consideration Shares and a ZAR

232.2

13.4

million, translated 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

exchange rate).

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

Consideration

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

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

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

was

Crossfin,

concluding

share

purchase agreements to dispose

of an amount of Consideration

Shares (which ultimately was determined

as

3,587,332

Consideration

Shares).

The Company agreed to file a

resale registration statement with the United States

Securities and Exchange Commission (“SEC”)

covering the resale of the Consideration Shares by the Sellers. The resale registration statement

was declared effective by the SEC on

December 6, 2024.

October 2024 acquisition of Adumo (continued)

The Company incurred transaction-related expenditures of $

1.7

million during the six months ended December 31,

2024, related

to the acquisition

of Adumo. The

Company’s accruals presented in Note

10 of as

includes an accrual

of transaction

related

expenditures

of

$

0.6

million

and

the

Company

does

not

expect

to

incur

any

further

costs over

the

remainder of the 2025 fiscal year.

November 2024 acquisition of Innervation Value

Added Services Namibia Pty Ltd (continued)

Effective

1,

2024,

the

through

its

wholly

owned

subsidiary

Adumo

Technologies

Limited

(“Adumo AT”),

acquired the remaining

shares (representing

% of the issued and

outstanding shares) it did

not own in Innervation

Value

Added Services Namibia Pty Ltd

(“IVAS

Nam”) for $

0.4

6.0

million, translated at November 1, 2024

rates). IVAS

Nam was accounted for using the equity method prior to the acquisition of a controlling interest in the company. Adumo

paid ZAR

2.0

million of the purchase price

prior the acquisition of Adumo

by the Company and the

balance of ZAR

4.0

be

paid

in

two

equal

tranches,

one

in

March

and

the

other

in

The

Company

did

not

incur

any

transaction costs related to this acquisition.

The

preliminary

price

allocation

of

during

the

six

months

ended

31,

2024,

at

the

foreign exchange rates applicable on the date of acquisition, in provided

is the table below:

Acquisitions during fiscal 2025 through December

Adumo

IVAS

Nam

Total

$

9,219

$

$

9,435

Accounts receivable

6,800

7,430

Inventory

5,121

5,124

Property, plant and equipment

9,169

9,181

Operating lease right of use asset

1,024

1,024

Equity-accounted investment

Goodwill

72,299

72,731

Intangible assets

28,383

28,383

Deferred income taxes assets

1,060

1,115

2,809

2,809

Current portion of long-term borrowings

(1,178)

(1,178)

Accounts payable

(3,266)

(388)

(3,654)

Other payables

(28,045)

(226)

(28,271)

Operating lease liability - current

(1,019)

(1,019)

Income taxes payable

(150)

(42)

(192)

Deferred income taxes liabilities

(6,994)

(6,994)

Operating lease liability - long-term

(326)

(326)

Long-term borrowings

(7,308)

(7,308)

Other long-term liabilities

(141)

(141)

Settlement assets

8,610

8,610

Settlement liabilities

(8,530)

(8,530)

Fair value of assets and liabilities on acquisition

$

88,014

$

$

88,706

The

fair

value

of

the

non-controlling

interests

was $

7.6

The

fair

value

of

the

non-controlling

was

determined as

the non-controlling

interests respective

portion of

the equity value

of the entity

acquired by

and which

was adjusted for

a

% minority discount.

The allocation of the

purchase price is

preliminary and not

yet finalized. The preliminary

allocation of the purchase price

is based upon preliminary estimates which

used information that was available

to management at the

time

the

were

prepared

and

these estimates

and

are subject

to

change within the measurement period,

up to one year

from the acquisition date. Accordingly, the allocation may

change. We continue

to refine certain inputs to the calculation of acquired intangible assets and the valuation

of the non-controlling interest.

2025 Acquisitions (continued)

Intangible assets acquired

No

intangible assets were identified related

to the acquisition of IVAS

Nam. Summarized below is the

fair value of the Adumo

intangible assets acquired and the weighted-average amortization period:

Fair value as of

acquisition date

Weighted-average

period (in years)

Finite-lived intangible asset:

Acquired during the six months ended December 31, 2024:

Adumo – technology assets

$

13,949

Adumo – customer relationships

10,813

Adumo – brands

$

3,621

On acquisition, the

Company recognized a

deferred tax liability

of approximately $

7.7

million related to

Adumo

intangible assets during the six months ended December 31, 2024.

Pro forma results related

to acquisitions

Pro forma results

of operations have

not been presented

for the acquisition

of IVAS

Nam because

the effect

of the IVAS

Nam

acquisition is not material to the Company. Since the closing of the IVAS

Nam acquisition, it has contributed revenue and net income

of $

0.9

0.2

million, respectively, for the

six months ended December 31, 2024.

The results

operations are

reflected in

statements from

October 1,

unaudited pro

forma revenue

and net

income information

has been prepared

as if the

Adumo had

occurred on

July 1,

2023 using the applicable average foreign exchange rates for the periods presented:

Three months

ended

Revenue

$

159,397

$

305,748

$

307,897

$

(3,040)

$

(35,024)

$

(15,088)

The unaudited pro forma financial

information presented above includes the

business combination accounting and

other effects

acquisition including

(1) amortization

expense related

to acquired

intangibles and

the related

deferred tax;

(2) the

loss of

interest income,

net of

taxation, as

a result

of funding

of the

purchase price

in cash;

and (3)

an adjustment

to exclude

all

applicable transaction-related costs recognized in

the Company’s consolidated statement of

operations for six months

31, 2024, and

include the applicable transaction

-related costs for the

year ended June 30,

2024. The unaudited pro

forma net income

presented above does not include any cost savings or other synergies

that may result from the acquisition.

The unaudited pro forma

information as presented above

is for information purposes

only and is not indicative

of the results of

operations that would have been achieved if the acquisition had occurred on

these dates.

Since the closing

of the acquisition,

Adumo has contributed

revenue of $

17.0

million and net

income attributable to

including intangible assets amortization related to assets acquired, net of deferred

taxes, of $

0.45

finance loans receivable, net

Accounts receivable, net and other receivables

The Company’s accounts receivable,

net, and other receivables as of December 31, 2024, and June 30, 2024, are presented in

the table below:

Accounts receivable, trade, net

$

21,407

$

13,262

Accounts receivable, trade, gross

23,258

14,503

Allowance for doubtful accounts receivable, end of period

1,851

1,241

1,241

(200)

(511)

1,385

1,305

(493)

(67)

(82)

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

net of

allowance: December 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

24,796

23,405

Total accounts receivable,

net and other receivables

$

46,203

$

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 December 31,

2024, and

June 30, 2024, respectively was $

(zero).

Other receivables include prepayments, deposits, income taxes receivable and

other receivables.

finance loans receivable, net (continued)

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of December 31, 2024, and June 30, 2024, is presented

in the table below:

Microlending finance loans receivable, net

$

35,196

$

28,184

Microlending finance loans receivable, gross

37,642

30,131

Allowance for doubtful finance loans receivable, end of period

2,446

1,947

1,947

1,432

(162)

(210)

1,927

2,454

(1,166)

(1,795)

(100)

Merchant finance loans receivable, net

14,333

15,874

Merchant finance loans receivable, gross

17,375

18,571

Allowance for doubtful finance loans receivable, end of period

3,042

2,697

2,697

2,150

(23)

(359)

1,093

2,479

(607)

(1,672)

(118)

Total finance

loans receivable, net

$

49,529

$

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 $

13.6

million as of December 31, 2024 have been pledged as

security for the Company’s

revolving credit facility (refer to Note 9).

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

nine months

, with the majority of loans

originated having

a tenor of

. 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 5 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 December 31,

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 June

30, 2024

and December

31,

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 5 related to the Company risk management

process related to these receivables.

finance loans receivable, net (continued)

Finance loans receivable, net (continued)

Allowance for credit losses (continued)

Merchant finance loans receivable (continued)

The Company 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,

and

31,

2024,

was

1.18

%.

The

performing

(that

is,

outstanding loan

payments not

in arrears),

under-performing

component (that

is, outstanding

loan payments

that are

in arrears)

and

non-performing

(that

is,

loans

for

which

appeared

to

have

ceased)

of

the

book

%,

% and

%, respectively,

of the

lending book

as of

The performing

component,

under-performing component and

non-performing component of the book represents

%,

% and

%, respectively,

of the outstanding lending book as of December 31, 2024.

Inventory

The Company’s inventory

comprised the following categories as of December 31, 2024, and June 30, 2024:

Raw materials

$

2,333

$

2,791

Work-in-progress

Finished goods

24,868

15,364

$

27,346

$

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

first two

months of the

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

reporting

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

through

regular

activities.

rates

in

South

Africa

remained

unchanged

for

the

majority

of

calendar 2024 however the South African Reserve Bank announced a 25-basis point reduction in the South African repurchase rate in

each of

September 2024

and November

2024, with

further reductions

expected in

the short-term.

Therefore, ignoring

the impact

of

changes

to

the

margin

on

its

(refer

to

Note

and

value

of

outstanding,

the

Company

expects

its

cost

of

borrowing to decline moderately in the foreseeable future, however,

the Company 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.

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

in

respect

of

its

counterparties

to

minimize

overall

credit

risk.

These

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.

allowances

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

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.

Fair value of financial instruments (continued)

Financial instruments (continued)

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

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

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

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.

Asset measured at fair value using significant observable inputs – investment in MobiKwik

owns

6,215,620

equity shares of

One MobiKwik Systems Limited

(“MobiKwik”). MobiKwik

listed on the

National Stock Exchange of India (“NSE”) on December 18, 2024. Up until its listing MobiKwik did not have a readily determinable

fair value and the

Company elected to measure

its investment in MobiKwik

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

(“cost plus

or minus changes

in observable prices equity

securities”). From the date

of MobiKwik’s

listing, the Company has

used MobiKwik’s

closing price reported

on the NSE

on the last

trading day related

to last day

reporting period to

determine the fair

value of the equity securities

owned by the Company.

The Company has determined

a fair value per MobiKwik

share of $

6.85

(INR

586.15

per share at the USD: INR exchange rates applicable as of December 31, 2024).

Refer to Note 6 for additional information.

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 December 31, 2024 and June 30, 2024, respectively,

and valued Cell C at $

0.0

(zero) and $

0.0

(zero) as

of December 31, 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 of

%. The Company utilized the latest business plan provided by

Cell C management for the

period ending December 31, 2027, for

the December 31, 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 December 31, 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 - December 31, 2024:

(1)

ZAR

7.4

0.4

billion), no lease liabilities included

Net adjusted external debt - June 30, 2024:

(2)

ZAR

7.9

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

2024, all

amounts

translated at exchange rates applicable as of December 31, 2024:

Sensitivity for fair value of Cell C investment

1.0% increase

1.0% decrease

WACC

rate

$

$

EBITDA margin

$

1,059

$

The aggregate

of the

MobiKwik and

Cell C’s

shares as

represented

6.6

% of

total assets,

these shares

.

expects that

there will

be short-term

equity price

volatility with

respect to

these

shares, and with respect to Cell C specifically,

particularly given that Cell C remains in a turnaround process.

The following table

presents the

Company’s assets measured at

fair value on

a recurring

basis as

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

$

$

$

$

Investment in MobiKwik

42,566

42,566

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)

4,532

4,532

Total assets at fair value

$

47,315

$

$

$

47,315

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

(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 six months ended December 31, 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 six months ended December 31, 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 six months ended December 31, 2024:

Carrying value

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 six months ended December 31, 2023:

Carrying value

Assets

Balance as of June 30, 2023

$

(1)

$

(1) The

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

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

determined

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

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

ownership percentage in its equity-accounted

investments as of December 31,

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

%

Sale and impairment of Finbond shares during

the three and six months ended December 31, 2023

On

August

10,

2023,

the

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

3.5

million), or

ZAR

0.2911

per share. The transaction was subject to certain conditions, including regulatory and shareholder approvals, which were

finalized in

December 2023.

The cash

proceeds received

of ZAR

64.2

3.5

million) were

used to

repay capitalized

under the Company’s borrowing

As noted

above, the

Company

an agreement

to exit

its position

in Finbond

and

considered this

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 of September

30,

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

interest in Finbond and

carrying value, including

the

translation 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.

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

Equity-accounted investments (continued)

Sale and impairment of Finbond shares during

the three and six months ended December 31, 2023

The Company sold

7,379,656

shares in Finbond for

cash during the three

and six months ended

December 31, 2023, respectively.

The

Company

did

no

t

record

a

gain

or

loss

on

the

because

the

sale

proceeds

were

equivalent

to

the

net

value,

including accumulated reserves,

of the investment

in Finbond as of

the disposal date. The

following table presents

the calculation of

the disposal of Finbond shares during the three and six months ended December

31, 2023:

Loss on disposal of Finbond shares:

Consideration received in cash

$

3,508

Less: carrying value of Finbond shares sold

(2,112)

Less: release of foreign currency translation reserve from

accumulated other comprehensive loss

(1,543)

Add: release of stock-based compensation charge related

to

equity-accounted investment

Loss on sale of Finbond shares

$

Carbon

In September

2022, the

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

$

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 December 31, 2024 (refer to Note 3)).

Summarized below is the

movement in equity-accounted investments and

loans provided to equity-accounted

investments during

the six months ended December 31, 2024:

Total

(1)

Investment in equity

$

Comprehensive income:

Other comprehensive income

Equity accounted (loss) earnings

Share of net (loss) earnings

Impairment

Dividends received

(65)

Equity-accounted investment acquired in business combination (Note

Disposal of equity accounted investment (Note 2)

(507)

(2)

(7)

$

(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)

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

31, 2024, and June 30, 2024:

Total equity investments

$

42,566

$

76,297

% of Cell C (June 30, 2024:

%) at fair value (Note 5)

% of MobiKwik (June 30, 2024:

%)

(1)

42,566

76,297

87.5

% of CPS (June 30, 2024:

87.5

%) at fair value

(1)(2)

Policy holder assets under investment contracts (Note 8)

Reinsurance assets under insurance contracts (Note 8)

1,692

1,469

1,607

Total other long-term

assets

$

46,082

$

77,982

(1) The

Company determined

that MobiKwik

(up until

December 2024)

and CPS do

not have

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.

Refer to Note 5 for additional information regarding

the determination of the fair value of Company’s

investment in MobiKwik

as

of

31,

The

Company

used

this

valuation

as

the

basis

for

its

to

decrease

the

value

of

its

investment in MobiKwik by $

33.7

million from $

76.3

million to $

42.6

million as of December 31, 2024. The change in the fair value

of MobiKwik for the three and

six months ended December 31, 2024,

of $

33.7

million, is included in the

caption “Change in fair value

of equity securities” in the consolidated statement of operations for

the three and six months ended December 31, 2024.

Summarized below

are the components

equity securities without

fair value and

held to

maturity investments as of December 31, 2024:

Cost basis

holding

holding

gains

losses

value

Equity securities:

Investment in CPS

$

$

$

$

Held to maturity:

Investment in Cedar Cellular notes (Note 3)

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 December 31, 2024:

Gross value

value

$

157,899

$

(19,348)

$

138,551

Acquisitions (Note 2)

(1)

72,731

72,731

(2)

(10,989)

(10,522)

$

219,641

$

(18,881)

$

200,760

(1) – Represents goodwill arising from the acquisition of Adumo

and IVAS Namibia and translated at the foreign exchange rates

applicable on the date

the transactions became

effective. This goodwill

has been allocated to

the Merchant and

Consumer reportable

operating segments.

(2) – 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 associated with the acquisitions

represents the excess of cost over the fair value of acquired net assets. Goodwill

arising from these acquisitions is not deductible for tax purposes. See Note 2 for

the allocation of the purchase price to the fair value

of acquired net assets.

Refer to Note 7 for additional information regarding changes

to the Company’s reportable segments during the six months ended

December 31, 2024. Goodwill has been allocated to the Company’s

reportable segments as follows:

value

$

123,396

$

$

15,155

$

138,551

Acquisitions (Note 2)

64,241

8,490

72,731

(1)

(9,327)

(674)

(521)

(10,522)

$

178,310

$

7,816

$

14,634

$

200,760

(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

2024, and June

30, 2024:

As of June 30, 2024

Gross

value

Net

value

Gross

value

Net

value

Finite-lived intangible assets:

Customer relationships

(1)

$

34,945

$

(14,941)

$

20,004

$

25,880

$

(14,030)

$

11,850

Software, integrated

platform and unpatented

(1)

124,690

(31,056)

93,634

115,213

(25,763)

89,450

FTS patent

2,035

(2,035)

2,107

(2,107)

Brands and trademarks

(1)

17,191

(4,865)

12,326

14,353

(4,300)

10,053

Total finite-lived

assets

$

178,861

$

(52,897)

$

125,964

$

157,553

$

(46,200)

$

111,353

(1) December 31, 2024 balances include the intangible assets acquired as part of

the Adumo acquisition in October 2024.

Goodwill and intangible assets, net (continued)

Intangible assets, net (continued)

Aggregate amortization

expense on the

finite-lived intangible

assets for the

three months

31, 2024 and

2023,

was $

4.9

3.6

million, respectively. Aggregate amortization expense on the

finite-lived intangible assets for

31, 2024 and

2023, was $

8.8

7.2

Future estimated

annual amortization

expense

for the next

five fiscal years

and thereafter,

assuming exchange

rates that prevailed

on December

31, 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 six months ended December 31, 2024)

$

9,291

Fiscal 2026

18,581

Fiscal 2027

18,286

Fiscal 2028

18,061

Fiscal 2029

17,699

Thereafter

44,046

Total future

estimated annual amortization expense

$

125,964

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

six

months ended December 31, 2024:

Reinsurance

Assets

(1)

Insurance

(2)

$

1,469

$

(2,241)

Increase in policy holder benefits under insurance contracts

(5,028)

Claims and decrease in policyholders’ benefits under insurance

(260)

4,582

(3)

(67)

$

1,692

$

(2,585)

(1) Included in other long-term assets (refer to Note 6);

(2) Included in other long-term liabilities;

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

The Company has agreements with reinsurance companies in order to limit its losses from 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 during

the six months ended

Assets

(1)

Investment

(2)

$

$

(216)

Increase in policy holder benefits under investment contracts

(8)

(3)

(7)

$

$

(217)

(1) Included in other long-term assets (refer to Note 6);

(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

Note 12

to the

audited consolidated

financial statements

its Annual

for

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

its borrowings.

Reference rate reform

After the

transition

away from

certain

interbank

offered

rates in

foreign

jurisdictions

(“IBOR reform

”), the

reforms to

South

Africa’s

reference interest

rate are now

accelerating rapidly.

The Johannesburg

Interbank Average

Rate (“JIBAR”)

will be replaced

by the new South African Overnight Index Average (“ZARONIA”). Certain of the Company’s

borrowings reference JIBAR as a base

interest rate. ZARONIA

reflects the

interest rate at

which rand-denominated

overnight wholesale

funds are

obtained by commercial

banks. There

is uncertainty

surrounding the

timing and

manner in

transition would

occur and

how this

would affect

our

borrowings. The

Company is engag

ing with its

borrowers to

negotiate changes

to its existing

borrowing agreements

or to introduce

language to cater for the transition to ZARONIA in its future borrowing agreements.

The Company is currently renegotiating its borrowing facilities and expects the process to be concluded before

March 31, 2025.

The amounts

below have

been translated

rates applicable

as of

the dates

specified. The

JIBAR, an

average of

3 month

negotiable

certificates of

deposit (“NCD”)

rates, on

7.75

%. The

prime rate,

the benchmark

rate at

which

private sector

banks lend to

the public in

South Africa, on

11.25

%, and reduced

to

11.00

% on January

31,

2025, following a 0.25% reduction in the South African repo rate, the rate at which private sector banks borrow funds from

the South

African Reserve Bank.

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

Long-term borrowings - Facility G and Facility H

As of December 31, 2024, Lesaka SA’s

facilities included (i) Facility G of ZAR

627.0

33.3

million); (ii) Facility H of

ZAR

390.1

20.8

million) (both

fully utilized);

and (iii)

the Facility

G revolver

of ZAR

200.0

10.6

million) (of

which ZAR

10.6

million) has been

utilized). The interest rate

on these facilities as

2024, was JIBAR

plus

4.75

%.

Available short-term facility -

cancelled its

facility agreement

in November

overdraft facility

could only

be used

to fund

ATMs

and therefore

the overdraft utilized

and converted

to cash to

fund the Company’s

ATMs

was considered

restricted cash.

The

interest rate on this facility was equal to the prime rate.

RMB Bridge Facilities, comprising a short-term facility obtained

in October 2024 and amended in December 2024

On September

30, 2024,

Lesaka SA

a Facility

Letter (the

“F2024 Facility

Letter”) with

RMB to

provided Lesaka

SA a

ZAR

665.0

million funding

facility (the

“Facility”). As

had utilized

all of

the ZAR

million bridge facility. The Facility has

been used by Lesaka

SA to (i) settle

an amount of ZAR

232.2

due under the Adumo

(refer to Note

2); (ii) pay

Crossfin Holdings (RF)

Proprietary Limited (“Crossfin Holdings”)

ZAR

207.2

million under a

share purchase

agreement concluded between Lesaka SA and Crossfin Holdings (refer

to Note 11); (iii) pay an amount of ZAR

147.5

million, which

includes interest, notified

by Investec Bank Limited

to Adumo and Lesaka

SA as a result

of the transaction

described in Note 2,

and

(iv) pay

fee of

ZAR

7.6

million to

RMB. The

Facility also

provides Lesaka

with ZAR

70.0

million for

transaction -

related expenses.

On

10,

2024,

Lesaka

SA

and

RMB

entered

into

a

First

to

the

Letter

(the

“F2024

Letter”).

The F2024

Letter provides

Lesaka

SA with

an additional

ZAR

250.0

million

general

banking

facility (“GBF

Facility”) which may be used for general corporate

purposes. As of December 31, 2024, the Company

had utilized ZAR

98.2

million

of the bridge facility.

Interest on

the Facility

and the

GBF Facility

is calculated

at the

prime rate

plus

1.80

%. The

Facility and

the GBF

Facility are

unsecured and are required to be repaid in full on or before February

28, 2025.

Borrowings (borrowings) (continued)

South Africa (continued)

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

As of December 31, 2024, the Connect Facilities include (i) an overdraft facility (general banking facility) of

ZAR

170.0

million

(of which ZAR

170.0

9.0

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

700.0

37.2

million); (iii) Facility B of

ZAR

550.0

29.2

million) (both

fully utilized);

and (iv)

an asset-backed

facility of

ZAR

200.0

10.6

million) (of

which ZAR

151.6

8.1

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 with the final repayment due on February 15, 2025.

CCC Revolving Credit Facility, comprising

As of

31,

2024,

the amount

of

the

CCC Revolving

Credit

was ZAR

300.0

million

(of

which

ZAR

215.7

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

0.9

0% per annum.

RMB facility, comprising indirect facilities

As of December

31, 2024, the

aggregate amount

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

and June

30, 2024, the

Company had utilized

ZAR

33.1

1.8

million) and ZAR

33.1

1.8

million),

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 20).

Nedbank facility, comprising short-term facilities

As of December

31, 2024, the

aggregate amount of the

Company’s short-term South African credit

facility with Nedbank

Limited

was ZAR

156.6

8.3

million). The credit facility represents indirect and derivative facilities

of up to ZAR

156.6

8.3

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

contracts.

As of

2024 and

2024, the

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 20).

Borrowings (borrowings) (continued)

South Africa (continued)

Movement in short-term credit facilities (continued)

Summarized below are the Company’s short-term facilities as

of December 31, 2024, and

the movement in the Company’s short-

term facilities from as of June 30, 2024 to as of December 31, 2024:

RMB

RMB

RMB

RMB

Nedbank

Bridge

Indirect

Connect

Facilities

Total

Short-term facilities available as of

$

$

48,594

$

7,170

$

14,339

$

8,314

$

78,417

Overdraft

48,594

14,339

62,933

Indirect and derivative facilities

7,170

8,314

15,484

Movement in utilized overdraft

facilities:

Restricted as to use for ATM

funding only

6,737

6,737

No restrictions as to use

9,351

9,351

6,737

9,351

16,088

23,893

43,200

5,655

72,748

Repaid

(31,028)

(3,374)

(34,402)

Guarantee fee paid

(431)

(431)

Foreign currency

(1)

(2,683)

(566)

(2,851)

40,086

11,066

51,152

No restrictions as to use

$

$

40,086

$

$

11,066

$

$

51,152

Interest rate as of December 31,

2024 (%)

(2)

N/A

13.05

N/A

11.15

N/A

Movement in utilized indirect and

derivative facilities:

$

$

$

1,821

$

$

$

1,937

(1)

(63)

(4)

(67)

$

$

$

1,758

$

$

$

1,870

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

(2) Facility E interest was set at prime, RMB Bridge at prime plus

1.8

% and the Connect facility at prime less

0.10

%.

Interest expense incurred under

the Company’s South African short-term borrowings

and included in

the caption interest

expense

on the condensed consolidated statement of operations during the three months ended December 31, 2024 and 2023, was $

1.8

million

and $

0.6

incurred under

South African long-term

borrowings and included

in

the caption interest

expense on the condensed

consolidated statement of

operations during the

and 2023, was $

2.4

1.3

The

Company

cancelled

overdraft

on

October

1,

2024,

and

settled

overdraft

balance of ZAR

20.0

1.1

million) on the

same day.

The repayment is

included in the

caption repayment

of bank overdraft

included on the Company’s unaudited condensed consolidated statements of cash flows for the three and six months ended December

Borrowings (continued)

Movement in long-term borrowings

Summarized below is

the movement in

long-term borrowing from

as of as of

June 30, 2024

to as of December

31, 2024:

Facilities

Lesaka

RMB

G & H

Connect

RMB

A&B

CCC

RMB

Connect

Wesbank

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

11,022

2,096

13,677

Facilities repaid

(3,911)

(554)

(2,117)

(6,582)

Non-refundable fees amortized

Capitalized interest

3,735

3,735

Capitalized interest repaid

(95)

(95)

(1)

(2,374)

(2,302)

(414)

(307)

(5,397)

Closing balance as of December 31, 2024

64,616

64,537

11,453

8,051

148,657

Included in current

64,616

3,684

68,300

Included in long-term

64,537

11,453

4,367

80,357

Unamortized fees

(149)

(149)

Due within 2 years

4,978

2,873

7,851

Due within 3 years

7,634

11,453

1,119

20,206

Due within 4 years

52,074

52,407

Due within 5 years

$

$

$

$

$

Interest rates as of December 31, 2024 (%):

12.50

11.50

12.15

12.00

Base rate (%)

7.75

7.75

11.25

11.25

Margin (%)

4.75

3.75

0.90

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

G

and

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

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, which

margin is calculated

as (i)

4.00

% if

the Leverage Ratio (“LR”) is

greater than 3.50x; (ii)

3.75

% if the LR is less than

3.50x but greater than 2.50x;

(iii)

3.40

% if the LTL

ratio is less than 2.50x.

(4) Interest is charged at prime plus

0.90

% 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 December 31, 2024 and 2023, was $

4.3

million

and $

4.1

Prepaid facility fees

amortized included

in interest expense

during the three

months ended December

and 2023,

were $

0.1

$

0.1

incurred under

K2020 and

CCC facilities

relates to

borrowings utilized

to fund

of the

merchant finance

loans receivable

and

this

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 December 31, 2024 and

Borrowings (continued)

Movement in long-term borrowings (continued)

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

and 2023, was

$

8.5

million

and $

8.1

million, respectively. Prepaid facility fees amortized included in interest expense during the six months ended December

31,

2024 and 2023,

were $

0.1

0.3

Interest expense incurred

under the Company’s

CCC

facilities relates to borrowings utilized to fund a portion of

the Company’s merchant finance loans receivable and this interest expense

of $

0.8

0.7

is included

in the caption

cost of goods

sold, IT processing,

servicing and support

on

the condensed consolidated statement of operations for the six months

ended December 31, 2024 and 2023.

cancelled Adumo’s

arrangements on

October 1,

2024, and

settled Adumo’s

balances

of ZAR

126.7

million

($

7.2

million) on

the same

day.

The repayment

is included

in the

caption

repayment of

borrowings included on the Company’s unaudited condensed consolidated

statements of cash flows

for the three and

Other payables

Summarized below is the breakdown of other payables as of December

31, 2024, and June 30, 2024:

Clearing accounts

$

8,093

$

17,124

Vendor

wallet balances

18,657

14,635

Accruals

12,522

7,173

Provisions

5,873

7,442

Value

-added tax payable

2,088

1,191

Payroll-related payables

1,942

Participating merchants' settlement obligation

Other

10,239

7,563

$

59,416

$

56,051

Other includes deferred income, client deposits and other payables.

Capital structure

October 2024 repurchase of common stock

On October

1, 2024,

through Lesaka

SA, and

Crossfin Holdings

a share

purchase agreement

under

which Lesaka SA purchased

of the

3,587,332

Consideration Shares for ZAR

207.2

12.0

million). The transaction

was settled

in early

October 2024,

and the

repurchased have

been included

in the

treasury shares

its unaudited

condensed consolidated

statement of

equity for

ended

December 31, 2024. The repurchase was made outside of the Company’s

$

million share repurchase authorization.

Redeemable common stock issued pursuant to transaction with the IFC Investors

Put Option

Note 14

to the

audited consolidated

financial statements

its Annual

for

June 30, 2024, for

additional information regarding

its redeemable common

stock issued pursuant to

transaction with

the IFC Investors.

Certain IFC Investors were

investors in Adumo

and the Company

issued an aggregate

of

1,989,162

additional shares

of its common

stock at a

$

4.79

to these

IFC Investors pursuant

to the

Purchase Agreement. The

Company and the

IFC Investors

amended and restated the Policy Agreement (“Amended and Restated Policy Agreement”) to include these additional shares issued to

the IFC

Investors to also

be covered by

the put

right included

in the

Amended and Restated

Policy Agreement. The

Company accounted

for these

1,989,162

shares as redeemable

common stock as

a result of

the put option.

The Company believes

that the put

option has

no value and, accordingly,

has not recognized the put option in its consolidated financial statements.

Capital structure (continued)

Impact of non-vested equity shares on number of shares,

net of treasury

The following table presents a

reconciliation between the number of

shares, net of treasury, presented in the

consolidated statement of changes in

equity during the six months ended

December 31, 2024 and 2023, respectively,

and the number

of shares, net of treasury,

excluding non-vested equity shares that have not vested as of December

31, 2024 and 2023, respectively:

Number of shares, net of treasury:

Statement of changes in equity

80,203,148

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

2,902,303

3,205,580

Number of shares, net of treasury,

excluding non-vested equity shares that have not

vested

77,300,845

61,237,943

Accumulated other comprehensive loss

the change

in accumulated

other comprehensive

loss per

three months

ended

foreign

reserve

Total

Balance as of October 1, 2024

$

$

Release of foreign currency translation reserve related to liquidation of subsidiaries

(22,145)

(22,145)

$

$

the change

in accumulated

other comprehensive

loss per

component during

months ended

December 31, 2023:

foreign

reserve

Total

Balance as of October 1, 2023

$

$

Release of foreign currency translation reserve related to disposal of

Finbond equity securities

1,543

1,543

Movement in foreign currency translation reserve related to liquidation

(952)

(952)

6,112

6,112

$

$

Accumulated other comprehensive loss (continued)

The

table

below

the

change

in

accumulated

other

loss

per

during

the

six

months

ended

foreign

reserve

Total

Balance as of July 1, 2024

$

$

Release of foreign currency translation reserve related to liquidation

(11,620)

(11,620)

$

$

The

table

below

the

change

in

accumulated

other

loss

per

during

the

six

months

ended

December 31, 2023:

a

foreign

reserve

Total

Balance as of July 1, 2023

$

$

Release of foreign currency translation reserve related to disposal of Finbond

equity securities

1,543

1,543

Movement in foreign currency translation reserve related to equity-accounted

investment

Movement in foreign currency translation reserve related to liquidation

(952)

(952)

5,268

5,268

$

$

The movement in the

foreign currency translation reserve represents

the impact of translation of

consolidated entities which have

a functional currency (which is primarily ZAR) to the Company’s

reporting currency, which is USD.

During

each

of

the

three

and

six

months

ended

31,

2024,

the

Company

reclassified

a

loss

of

$

0.006

respectively, from

accumulated other comprehensive loss (accumulated foreign currency

translation reserve) to net loss related to the

liquidation of subsidiaries During each of the three and

six months ended December 31, 2023, the

Company reclassified losses of $

1.5

million, respectively, from accumulated other

comprehensive loss

(accumulated foreign currency translation

reserve) to net

loss related

to the disposal

of shares in

Finbond (refer

to Note 6).

The Company also

reclassified a gain

of $

1.0

million from accumulated

other

comprehensive loss (accumulated foreign currency translation reserve)

to net loss related to the liquidation of subsidiaries.

Stock-based compensation

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 six months

ended December 31, 2024 and 2023:

shares

average

price

($)

average

term

value

($'000)

average

grant date

($)

Outstanding - June 30, 2024

4,918,248

8.70

4.51

1.77

Granted - December 2024

350,000

6.00

1.24

Granted - December 2024

250,000

8.00

0.71

Exercised

(17,014)

3.02

Forfeited

(13,333)

11.23

8.83

Outstanding - December 31, 2024

5,487,901

8.48

4.04

1,418

1.76

Outstanding - June 30, 2023

673,274

4.37

5.14

1.67

Granted – December 2023

500,000

3.50

5.17

1.76

Exercised

(7,385)

3.07

Forfeited

(186,846)

3.71

1.28

Outstanding - December 31, 2023

979,043

4.07

5.50

1.80

The Company awarded

600,000

stock options to an executive officer during the three and six months ended December 31,

The Company awarded a further

400,000

to the same executive officer in January 2025 with strike prices ranging from $

to $

. The

1,000,000

stock options will vest on

December 31, 2026, and

vesting is subject to the

executive officers continued

employment with

through to the

vesting date. The

1,000,000

stock options expire

on January 31,

2029. The Company

awarded

500,000

stock options

to Ali

Mazanderani, the

Executive Chairman,

31, 2023.

These options

vested in December

2024, but may

only be exercised

during a period

commencing from

January 31,

2028 to January

31, 2029.

During each

of the

received $

0.05

the exercise of

17,014

stock options, respectively. During the three and six months ended December

31, 2023, the Company received $

0.002

million

and $

0.02

the exercise of

and

7,385

stock options, respectively.

Employees forfeited

an aggregate of

13,333

stock

options

during

each

of

the

three

and

six

months

ended

31,

Employees

and

a

non-employee

director

forfeited

an

aggregate of

11,070

and

186,846

stock options during the three and six months ended December 31, 2023.

The

fair

value

of

each

option

is

estimated

on

the

date

of

grant

using the

Cox

Ross

Rubinstein

binomial

model

that

uses the

assumptions noted in the following table. The estimated expected

volatility is calculated based on the Company’s

• day volatility.

The estimated

expected life

of the

option was

determined based

on the

historical behavior

of employees

who were

granted options

with similar terms.

The table below

presents the range

of assumptions used

to value stock

options granted during

31, 2024 and 2023:

Expected volatility

%

%

Expected dividends

%

%

Expected life (in years)

Risk-free rate

4.3

%

2.1

%

Amended and

Restated 2022

Stock Incentive

Plan (“2022

Plan”) and

the vesting

terms of

certain stock-based

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 (continued)

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

shares

average

price

($)

average

term

value

Vested

and expecting to vest - December 31, 2024

5,487,901

8.48

4.04

1,418

These options have an exercise price range of $

3.01

to $

14.00

.

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

31, 2024:

shares

average

price

($)

average

term

value

Exercisable - December 31, 2024

360,995

4.56

5.03

No

stock options became exercisable during each

of the three and six

months ended December 31, 2024 and

2023. The Company

issues new shares to satisfy stock option exercises.

Stock option and restricted stock activity (continued)

Restricted stock

The following table summarizes restricted stock activity for the six

months ended December 31, 2024 and 2023:

restricted stock

average grant

date fair value

Non-vested – June 30, 2024

2,084,946

8,736

Total granted

1,331,110

4,850

Granted – August 2024

32,800

Granted – October 2024

100,000

Granted – November 2024, with performance conditions

1,198,310

4,206

Total vested

(473,432)

2,469

Vested

– July 2024

(78,801)

Vested

– November 2024

(213,687)

1,134

Vested

– November 2024, with performance conditions

(103,638)

Vested

– December 2024

(77,306)

Non-vested – December 31, 2024

2,902,303

11,348

Non-vested – June 30, 2023

2,614,419

11,869

Total Granted

868,996

3,394

Granted – October 2023

333,080

1,456

Granted – October 2023, with performance awards

310,916

Granted – October 2023

225,000

Total vested

(255,706)

Vested

– July 2023

(78,800)

Vested

– November 2023

(109,833)

Vested

– December 2023

(67,073)

Non-vested – December 31, 2023

3,205,580

13,880

Grants

In August 2024 and

October 2024, respectively, the Company granted

32,800

and

100,000

stock to employees

which have time -based vesting conditions and which are subject to the employees continued employment with the Company through

the applicable vesting dates.

In

2024,

the

Company

awarded

1,198,310

shares

of

stock

to

a

group

comprising

and

three

executive officers and which

are subject to a time-based

vesting condition and a market

condition and vest in full only

on the date, if

any,

that the following

conditions are

satisfied: (1) a

compounded annual

% appreciation in

stock price off

a base

price of $

5.00

over the measurement period commencing on September 30, 2024 through September 30, 2027, and (2) the recipient is

employed by the Company on a full-time basis through to September 30, 2027. If either of these conditions is not satisfied,

then none

of the shares of restricted stock will vest and they will be forfeited. The Company’s

closing price on September 30, 2024, was $

5.00

.

The appreciation levels (times and price) and

annual target percentages to earn the

awards as of each period

ended are as follows:

●

Prior to the first anniversary of the grant date:

%;

●

Fiscal

2026,

the

30-day

volume

weighted-average

stock

price

(“VWAP”)

before

30,

is

1.15

5.75

5.00

:

%;

●

Fiscal 2027, the Company’s

September 30, 2026 is

1.32

6.61

5.00

:

%;

●

Fiscal 2028, the Company’s

November 1, 2027 is

1.52

7.60

) than $

5.00

:

%.

The fair value

of these shares

of restricted

stock was calculated

using a Monte

Carlo simulation. In

scenarios where

the shares

do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share

price on

vesting date.

In its calculation

of the

of the

restricted stock,

used an

equally weighted

volatility of

47.7

% for

the closing

price (of

$

5.50

), a

discounting based

on U.S.

dollar overnight

indexed swap

rates for

the grant

date, and

no

future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log

prices for the three years preceding the grant date.

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Grants (continued)

In October 2023, the Company

awarded

333,080

shares of restricted stock with time-based

vesting conditions to approximately

employees, which

are subject to

the employees

continued employment

Company through

the applicable

vesting dates.

The Company also awarded

225,000

shares of restricted stock

to an executive officer

in October 2023, which

vest on June 30, 2025,

except if the executive officer is terminated for cause, in

which case the award will be forfeited.

In October 2023, the Company

awarded

310,916

shares of restricted stock to three

of its executive officers

which are subject to

a

time-based

vesting

condition

and

a

market

condition

and

vest

in

full

only

on

the

date,

if

any,

that

the

conditions

are

satisfied: (1)

a compounded

annual

% appreciation

in the

stock price

off a

base price

of $

4.00

over the

measurement

period commencing on September 30, 2023 through November 17, 2026, and (2) the recipient is employed by the Company on a full-

time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will

vest and they will be forfeited. The Company’s

closing price on September 30, 2023, was $

3.90

.

The appreciation levels (times and price) and vesting percentages as of each

period ended are as follows:

●

Prior to the first anniversary of the grant date:

%;

●

Fiscal

2025,

the

30-day

volume

weighted-average

stock

price

(“VWAP”)

before

17,

is

1.10

4.40

4.00

:

%;

●

Fiscal 2026, the Company’s

November 17, 2025 is

1.21

4.84

4.00

:

%;

●

Fiscal 2027, the Company’s

November 1, 2026 is

1.33

5.32

) than $

4.00

:

%.

The fair value

of these shares

of restricted

stock was calculated

using a Monte

Carlo simulation. In

scenarios where

the shares

do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share

price on

vesting date.

In its calculation

of the

of the

restricted stock,

used an

equally weighted

volatility of

48.3

% for

the closing

price (of

$

4.37

), a

discounting based

on U.S.

dollar overnight

indexed swap

rates for

the grant

date, and

no

future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log

prices for the three years preceding the grant date.

The Company has agreed

to grant an advisor

5,500

shares per month in

lieu of cash for services

provided to the Company.

The

Company and

the advisor have

agreed that the

Company will issue

the shares to

the advisor,

in arrears, on

a quarterly basis.

During

recorded a

stock-based compensation

charge of

$

0.2

included the issuance of

33,000

shares of common stock in its issued and outstanding share count.

Vesting

In July 2024,

78,801

stock granted to Mr. Meyer, our former

Group CEO, vested.

In November and December

2024, an

aggregate of

290,993

stock granted to

employees vested.

Certain employees elected

for

132,147

shares

to be withheld

to satisfy the

withholding tax

liability on the

vesting of

their shares. These

132,147

shares have

been included

in the

treasury shares. In

November 2024,

103,638

stock with performance

conditions (share price

targets)

vested following the achievement of the agreed performance condition.

In July 2023,

78,800

shares of restricted stock granted

to Mr. Meyer

vested. In November and

December 2023, an aggregate

of

176,906

shares of restricted stock granted

to employees vested. Certain employees

elected for

50,975

shares to be withheld to

satisfy

the withholding tax liability on the vesting of their shares. These

50,975

shares have been included in the Company’s treasury

shares.

During

the

three

and

six

months

ended

31,

2024,

forfeited

37,221

and

40,321

shares

of

restricted stock following their

termination of employment with

the Company or the

failure to achieved agreed

performance conditions

(

29,121

shares were

forfeited following

the failure

to achieved

agreed share

performance targets).

ended December 31, 2023, respectively,

employees forfeited

14,002

and

22,129

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 December 31, 2024 and 2023, of

$

2.6

1.8

which comprised:

Total

charge

Allocated to cost

of goods sold, IT

support

Allocated to

selling, general

and

administration

Three months ended December 31, 2024

$

2,655

$

$

2,655

(11)

(11)

Total - three months

ended December 31, 2024

$

2,644

$

$

2,644

Three months ended December 31, 2023

$

1,812

$

$

1,812

(8)

(8)

Total - three months

ended December 31, 2023

$

1,804

$

$

1,804

recorded a stock-based

compensation charge,

net during

2024 and 2023,

of

$

5.0

3.6

million respectively, which

comprised:

a

Total

charge

Allocated to cost

of goods sold, IT

support

Allocated to

selling, general

and

administration

Six months ended December 31, 2024

$

5,032

$

$

5,032

(11)

(11)

Total - six months ended

$

5,021

$

$

5,021

Six months ended December 31, 2023

$

3,580

$

$

3,580

(17)

(17)

Total - six months ended

$

3,563

$

$

3,563

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.

As

of

31,

2024,

the

total

unrecognized

cost

related

to

stock

options

was

$

3.5

which

the

Company expects to

recognize over

two years

. As of

the total unrecognized

compensation cost related

to restricted

stock awards was $

6.3

million, which the Company expects to recognize over

two years

.

During the three months

2024 and 2023, the

Company recorded a deferred

tax benefit of $

0.5

$

0.3

related to the stock-based compensation charge

recognized related to employees of Lesaka.

During the six

months

ended

31,

and

2023,

the

Company

a

deferred

tax

benefit

of

$

0.8

million

and

$

0.3

related

to the

charge

related

of Lesaka.

During

these periods

the

Company recorded a valuation allowance related to the full deferred tax benefit recognized

because it does not believe that the stock-

based compensation

deduction would

be utilized

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

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

during the three

2024 and 2023.

Accordingly,

the two-class method

presented below does

not include the impact

of any redemption.

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 June 30, 2024.

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

Basic (loss) earnings

has been calculated using

the two-class method and

basic (loss) earnings per

share for the three

and six months ended

2024 and

2023, reflects

only undistributed

earnings. The

computation below

of basic

(loss) earnings

excludes the

net loss

attributable

to

shares

of

unvested

stock

(participating

non-vested

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 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

stock options

do not

contain non-forfeitable

dividend rights.

has excluded

employee stock

options to

257,445

and

51,704

shares of common

stock from the calculation

of diluted loss per

share during the

31, 2024 and 2023 because the effect would be antidilutive.

The Company has excluded employee stock options to

338,725

and

46,756

calculation of

diluted loss

and 2023, because the effect would be antidilutive.

The

calculation

of diluted

(loss) earnings

per

share

includes the

dilutive

effect

of

of the

stock granted

to

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

(in thousands except

percent and

percent and

per share data)

per share data)

Numerator:

Net loss attributable to Lesaka

$

$

(2,707)

$

$

(8,358)

Undistributed loss

(2,707)

(8,358)

Percent allocated to common shareholders

(Calculation 1)

97%

96%

97%

95%

Numerator for loss per share: basic and diluted

$

(31,034)

$

(2,588)

$

(35,430)

$

(7,961)

Denominator

Denominator for basic (loss) earnings per share:

weighted-average common shares outstanding

77,024

60,990

69,589

60,134

Effect of dilutive securities:

Denominator for diluted (loss) earnings

per share: adjusted weighted average

common shares outstanding and assuming

conversion

77,024

60,990

69,589

60,134

Loss per share:

Basic

$

(0.40)

$

(0.04)

$

(0.51)

$

(0.13)

Diluted

$

(0.40)

$

(0.04)

$

(0.51)

$

(0.13)

(Calculation 1)

Basic weighted-average common shares

outstanding (A)

77,024

60,990

69,589

60,134

Basic weighted-average common shares

outstanding and unvested restricted shares

expected to vest (B)

79,753

63,805

72,037

63,134

Percent allocated to common shareholders

(A) / (B)

97%

96%

97%

95%

Options to

4,743,500

at prices

ranging from

$

6.00

to $

14.00

were

but were

not included

in the

computation of

diluted (loss)

earnings per

share because

the options’

was greater

than the

average market

Options to purchase

755,006

shares of the

Company’s common stock at

prices ranging from

$

4.87

to $

11.23

per share were

31, 2023,

but were

not included

in the

computation of

diluted (loss)

earnings per

share because

the options’

was greater

than the

average market

The options, which expire at various dates through February 3, 2032,

were still outstanding as of December 31, 2024.

Supplemental cash flow information

table presents

supplemental

cash flow

for the

and

2023:

Cash received from interest

$

$

$

1,297

$

Cash paid for interest

$

4,242

$

6,308

$

7,513

$

9,233

Cash paid for income taxes

$

3,253

$

2,806

$

3,208

$

3,410

Supplemental cash flow information (continued)

Disaggregation of cash, cash equivalents and restricted

cash

Cash, cash equivalents and restricted

cash included on the Company’s unaudited condensed consolidated statement of

cash flows

includes restricted cash

related to cash

withdrawn from the

debt facilities to

fund ATMs.

This cash may

only be used

to

fund ATMs

and is

considered restricted

as to

use and

therefore is

classified as

restricted cash.

Cash, cash

equivalents and

cash also includes cash in certain bank accounts that has

been ceded to Nedbank. As this cash has been pledged

and ceded it may not

be drawn

and is

considered

restricted as

to use

and therefore

is classified

as restricted

cash as

well. Refer

to Note

9 for

additional

information regarding the

Company’s facilities. The following

table presents the

disaggregation of cash,

cash equivalents and

cash as of December 31, 2024 and 2023, and June 30, 2024:

June 30, 2024

$

60,625

$

44,316

$

59,065

Restricted cash

23,522

6,853

Cash, cash equivalents and restricted cash

$

60,737

$

67,838

$

65,918

Leases

The following table presents supplemental

cash flow disclosure related to leases

for the three and nine months

31, 2024 and 2023:

Cash paid for amounts included in the measurement of

lease liabilities

Operating cash flows from operating leases

$

1,212

$

$

2,216

$

1,372

Right-of-use assets obtained in exchange for lease

obligations

Operating leases

$

$

$

1,218

$

Revenue recognition

Disaggregation of revenue

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the three months ended December 31, 2024:

Total

$

37,931

$

7,862

$

5,825

$

51,618

36,068

7,862

5,825

49,755

1,863

1,863

8,121

1,187

9,373

8,057

1,187

9,309

66,653

1,660

68,336

59,874

1,660

61,557

6,779

6,779

7,376

7,376

1,610

1,730

4,868

4,868

1,765

1,765

Other

1,752

1,695

115,217

22,929

8,672

146,818

106,454

22,929

8,672

138,055

$

8,763

$

$

$

8,763

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the three months ended December 31, 2023:

Total

$

22,984

$

6,175

$

6,820

$

35,979

21,528

6,175

6,820

34,523

1,456

1,456

2,646

3,215

2,646

3,176

90,620

1,339

92,011

85,618

1,339

87,009

5,002

5,002

5,586

5,586

1,453

1,453

2,897

2,897

1,502

1,502

Other

1,250

1,200

116,268

16,707

10,918

143,893

109,721

16,707

10,918

137,346

$

6,547

$

$

$

6,547

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the six months ended December 31, 2024:

Total

$

63,002

$

15,392

$

12,337

$

90,731

59,337

15,392

12,337

87,066

3,665

3,665

9,966

2,478

12,511

9,829

2,478

12,374

151,806

3,238

155,084

139,147

3,238

142,425

12,659

12,659

14,332

14,332

3,286

3,406

9,208

9,208

3,464

3,464

Other

2,199

1,378

3,628

2,085

1,378

3,514

230,259

44,001

18,104

292,364

213,684

44,001

18,104

275,789

$

16,575

$

$

$

16,575

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the six months ended December 31, 2023:

Total

$

45,310

$

11,908

$

13,254

$

70,472

42,494

11,908

13,254

67,656

2,816

2,816

1,068

4,172

5,271

4,172

5,181

176,856

2,416

179,365

167,100

2,416

169,609

9,756

9,756

10,959

10,959

2,973

2,973

5,508

5,508

2,870

2,870

Other

1,424

2,564

1,325

2,465

227,631

32,287

20,064

279,982

214,870

32,287

20,064

267,221

$

12,761

$

$

$

12,761

Leases

The

Company

has

entered

into leasing

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

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

December 31, 2024 and 2023 was $

1.2

$

0.7

The Company’s operating lease expense during the

six months ended December 31, 2024 and 2023 was $

2.2

1.4

The

Company

has

also

entered

into

short-term

leasing

arrangements,

for

the

lease

of

branch

and

other

locations,

to operate its consumer

business in South Africa.

short-term lease expense during

the three months ended

and 2023, was $

1.2

1.0

short-term lease expense

six months ended December 31, 2024 and 2023, was $

2.3

1.9

The following table presents supplemental balance

sheet disclosure related to the

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

lease liabilities as of December 31, 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)

10.5

10.5

Leases (continued)

The maturities of the Company’s

operating lease liabilities as of December 31, 2024, are presented below:

Maturities of operating lease liabilities

Year

ended June 30,

2025 (excluding six months to December 31, 2024)

$

2,338

3,200

2,155

1,369

Thereafter

Total undiscounted

operating lease liabilities

9,381

Less imputed interest

1,305

Total operating lease liabilities,

8,076

Operating lease liability - current

3,257

Operating lease liability - long-term

$

4,819

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.

Change to internal reporting structure and re

cast of previously reported information

chief operating

decision maker

is the

Executive Chairman.

He changed

and internal reporting

structures to present

a new segment,

Enterprise, separately.

The chief operating

decision maker has

decided to

analyze the Company’s

operating performance primarily based on three operational lines, namely,

(i) Merchant, which focuses on

both formal and informal sector

merchants.

Formal sector merchants are generally

in urban areas,

have higher

revenues and

have access

to multiple

service providers.

Informal sector

merchants, which

are often

sole proprietors

and

usually

have lower

revenues compared

with formal

section merchants,

operate in

rural areas

or in

informal urban

areas and

do not

always have access to a full-suite of traditional banking products;

(ii) Consumer,

which primarily

focuses on

individuals who

have historically

been excluded

from traditional

financial services

and to whom we offer transactional accounts (banking), insurance, lending (short-term

loans), payments solutions (digital wallet) and

various value-added services;

and

(iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobile

network operators (“MNOs”) and municipalities.

Reallocation of certain activities among operating segments

The

change

in

our

segments

during

the

second

quarter

of

fiscal

the

separation

of

out

of

Merchant.

The

Company

has also

allocated

the

majority

to

Merchant,

with

a

smaller

part

of

its operations

focusing on the provision

of physical and digital

prepaid and secure payout

solutions for South African

businesses with large individual

end-users being allocated to Consumer.

Previously reported information has been recast.

The Merchant segment includes revenue generated from the sale of prepaid airtime, and fees earned from the provision

of value-

added services (“VAS”)

and card-acquiring services to informal sector merchants.

It also includes activities related to the provision of

goods

and services

provided

to corporate

and

other

juristic entities.

The

Company

earns fees

from

performed

card acquiring

and the

provision

of a

payment

gateway services)

for

its customers,

and

rental and

license fees

from

the

provision of point

of sales (“POS”) hardware

and software to

the hospitality industry.

The Company also

provides cash management

and payment services to merchant customers through a digital vault which is located at the customer’s premises and through which the

Company is able to provide

the services which generate

processing fee revenue. From

July 1, 2023, the segment

includes fees earned

from transactions performed by customers utilizing its ATM

infrastructure.

Reallocation of certain activities among operating segments (continued)

The Consumer segment

includes activities related

to the provision

of financial services

to customers,

including a bank

account,

loans and

insurance products.

charges monthly

administration fees

for all

bank accounts.

Customers that

have a

bank

account managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant POS.

earns processing

fees from

transactions processed

for these

customers. The

Company also

earns fees

on transactions

performed

by

other

banks’

utilizing

its

ATM

(until

June

30,

or

POS. The

Company

provides

short-term

loans

to

customers in South Africa for which it earns initiation and monthly service fees, and interest revenue from the second quarter of fiscal

The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthly

insurance premium.

also earns fees

from the provision

of physical and

digital prepaid

and secure payout

solutions for

South African businesses.

The Enterprise segment provides its business and government-related customers with transaction

processing services that involve

the collection, transmittal and retrieval of all transaction data. This segment also includes sales of hardware

and licenses to customers.

Hardware includes

the sale of

POS devices, SIM

cards and other

consumables which can

occur on an

ad hoc basis.

Licenses include

the right to use certain technology developed by the Company.

The reconciliation of the reportable segment’s revenue to revenue from external customers for the three months ended December

31, 2024 and 2023, is as follows:

Revenue

Reportable

Segment

Inter-

segment

From

external

$

115,811

$

$

115,217

22,929

22,929

8,933

8,672

Total for the three

months ended December 31, 2024

$

147,673

$

$

146,818

$

117,182

$

$

116,268

16,707

16,707

11,921

1,003

10,918

Total for the three

months ended December 31, 2023

$

145,810

1,917

143,893

The reconciliation of

the reportable segment’s

revenue to revenue from

external customers for the

six months ended December

31, 2024 and 2023, is as follows:

Revenue

Reportable

Segment

Inter-

segment

From

external

$

231,441

$

1,182

$

230,259

44,001

44,001

20,815

2,711

18,104

Total for the six months ended

$

296,257

$

3,893

$

292,364

$

229,243

$

1,612

$

227,631

32,287

32,287

21,388

1,324

20,064

Total for the six months ended

$

282,918

$

2,936

$

279,982

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 is

working on obtaining a

separate lending facility to

fund a portion of

its Consumer lending

twelve months

ended June

30, 2025.

expected to

have this

facility in

place on

July 1,

2024, however,

the

Company has

been unable to

finalize terms as

the separate

lending facility

will form part

of a broader

refinancing of

facilities. Therefore, the Company has included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for

the

31, 2024. The

Company does

not allocate

once-off items,

stock-based compensation

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

specifically hired

for group

roles and

related directly

to managing

the US-listed

entity; expenditures

compliance with

the

Sarbanes-Oxley Act of

2002; non-employee directors’

fees; legal

fees; group and

US-listed related

audit fees; and

directors and officer’s

insurance premiums.

Once-off

items represent

non-recurring

expense items,

including costs

related

to acquisitions

and transactions

or

not

loss

FV

for

foreign

mark-to-market

on

certain

accounts.

the

expense

in

the

Consumer Segment Adjusted EBITDA. The Stock-based compensation adjustments reflect stock-based compensation expense and are

excluded from the calculation of Segment Adjusted

EBITDA and are therefore reported as reconciling

items to reconcile the reportable

segments’ Segment Adjusted EBITDA 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

reported on a separate line in the Company’s Consumer and Merchant

(now Merchant, Enterprise and Consumer) operating segments.

The reconciliation of the reportable

segments’ measure of profit or

loss to loss before income taxes

for the three and six months

ended December 31, 2024 and 2023, is as follows:

Reportable segments' measure of profit or loss

$

14,630

$

10,963

$

26,942

$

20,808

Operating loss: Group costs

(2,820)

(2,011)

(5,769)

(3,833)

Once-off costs

(488)

(2,293)

Interest adjustment

1,588

Unrealized Loss FV for currency adjustments

(435)

(216)

Stock-based compensation charge adjustments

(2,644)

(1,804)

(5,021)

(3,563)

(8,223)

(5,813)

(14,499)

(11,669)

(161)

(161)

Reversal of allowance of EMI doubtful debt

1,307

(6,174)

(4,822)

(11,206)

(9,731)

Loss before income tax expense

$

$

(2,064)

$

$

(6,046)

The following tables summarize

supplemental segment information

for the three and six months

ended December 31, 2024 and

2023:

Revenues

$

115,811

$

117,182

$

231,441

$

229,243

8,933

11,921

20,815

21,388

22,929

16,707

44,001

32,287

Total reportable segment

revenue

147,673

145,810

296,257

282,918

Segment Adjusted EBITDA

(1)(2)

10,319

7,497

17,873

14,407

(2)

(31)

1,706

(1)(2)

4,342

2,575

8,738

4,695

Total Segment Adjusted

EBITDA

14,630

10,963

26,942

20,808

3,027

1,944

5,254

3,904

3,356

2,220

5,885

4,467

4,867

3,593

8,614

7,202

Total

8,223

5,813

14,499

11,669

Expenditures for long-lived assets

5,783

2,052

9,669

4,736

6,318

2,198

10,283

5,007

Total

$

6,318

$

2,198

$

10,283

$

5,007

(1) Segment Adjusted

EBITDA for the

31, 2024, includes

retrenchments costs for

$

0.01

0.1

million). Segment

for Merchant

includes retrenchment

$

0.01

0.1

million) and Consumer includes retrenchment costs of $

0.1

1.3

million) for the three months ended December 31,

(2) Segment

for the

includes retrenchments

costs for

$

0.1

1.2

million) and Enterprise of $

0.0

0.2

million). Segment Adjusted EBITDA

for Merchant includes

retrenchment costs

of $

0.2

4.7

million) and

Consumer includes

retrenchment costs

of $

0.2

2.8

million)

for the six months ended December 31, 2023.

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

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

allowances

and

non-deductible

transaction-related

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

and

six

months

ended

31,

2024,

the

tax

rate

was

impacted

by

the

tax expense

recorded by the

Company’s profitable South African operations,

non-deductible expenses (including transaction-related expenditures),

by certain of

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

and

six

months

ended

31,

2023,

the

tax

rate

was

impacted

by

the

tax expense

recorded by the Company’s

profitable South African operations,

non-deductible expenses, the

on-going losses incurred

by certain of

the Company’s South African businesses and the associated valuation allowances created related to the deferred tax assets recognized

Uncertain tax positions

As of three months ended December 31, 2024 and June 30, 2023, the Company had

no

unrecognized tax benefits. The Company

files income

tax returns

mainly in

Botswana, Namibia

and in

the U.S.

federal jurisdiction.

As of

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

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

($

1.8

at

rates

applicable as of December 31, 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

rates

applicable as of December 31, 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 December 31,

2024. The maximum

potential amount that

the Company could

pay under these

guarantees is ZAR

35.2

2.1

rates applicable

as of

2024). As

discussed in

Note 9,

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

applicable

as

of

31,

2024).

The

guarantees

have

reduced

the

amount

under

its indirect

and

derivative facilities in the Company’s

short-term credit facilities described in Note 9.

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.

Subsequent events

Proposed acquisition of Recharger

On November 20, 2024,

the Company announced the

acquisition of Recharger (Pty)

Ltd (“Recharger”).

The acquisition is

subject

to

the

satisfaction

of

customary

closing

conditions,

certain

regulatory

approvals.

As

of

January

29,

2025,

all regulatory

approvals, including approval by

the Competition Commission (South

Africa), were satisfied. The acquisition

is expected to close in

the third quarter of fiscal 2025.

The purchase

consideration of

ZAR

be paid

over

two

tranches with

the first tranche

settled at closing

and the

second tranche

a year later.

The purchase consideration

will be settled

through a

ZAR

million in cash

and ZAR

million in shares of

common stock. The share

price applied to determine

the number of shares

of common stock

to be

issued for

the equity

consideration will be

the volume-weighted

average price

common shares

for

the three-month period prior

to the disbursal

of each tranche. The

Company will also

make a ZAR

million contribution to Recharger

at closing which will be used exclusively to repay a loan due by Recharger

to the seller.

The Company expects the acquisition

to act as an

entry point for it

into the South African

private utilities space while

augmenting

the Enterprise division’s alternative

payment offering.