LESAKA TECHNOLOGIES INC

See “Item

1A RISK

FACTORS”

in Part

I of

our Annual

for the

fiscal year

ended June

for a

discussion

of

risk

factors

relating

to

(i)

our

(ii)

in

South

Africa

and

other

foreign

markets,

(iii) government

regulation, and (iv) our common stock. Except

as set forth below, there have been no material

changes from the risk factors previously

disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30,

We may not be able

to successfully integrate Adumo and Recharger’s operations

with our business.

On October 1, 2024, we announced the closing of our ZAR 1.67 billion ($96.2 million) investment to acquire a 100% interest in

Adumo and

5, 2024,

we announced

of our

ZAR 503.4

million ($27.0

million) investment

to acquire

a 100%

interest in

Integrating these

businesses into

our company

may require

significant attention

from our

senior management

which may divert their attention from our day-to-day business. The difficulties of integration may be increased by cultural differences

between

our

two

organizations

and

the

necessity

of

retaining

and

integrating

personnel,

Adumo

and

key

employees and management team. The services of some of these individuals will be important to the continued growth and success of

Adumo and Recharger’s business and to our ability to integrate those businesses

with ours. If we were to lose the

services of these key

employees or

fail to

sufficiently integrate

them, our

ability to

operate

these businesses

successfully would

likely be

materially and

adversely impacted.

As such, if we are unable to successfully integrate Adumo and Recharger’s

operations into our business we could be required to

record material impairments, and as a result, our financial condition,

results of operations, cash flows and stock price could suffer.

We

depend upon

third-party suppliers,

making us

vulnerable to

supply shortages

and price

fluctuations, which

could harm

our business.

We

obtain our

smart cards, ATMs,

electronic payment

and POS devices,

components for our

safe assets, components

to repair

the ISV (independent software vendor)

division’s POS hardware, and the other

hardware we use in

our business from a

limited number

of suppliers, and

do not manufacture

this equipment ourselves.

We generally do not have

long-term agreements with

our manufacturers

or component suppliers.

If our suppliers

become unwilling or

unable to provide

us with adequate

supplies of parts

or products when

we need them,

or if they

increase their prices,

we may not

be able to

find alternative

sources in a

timely manner

and could be

faced

with a critical shortage. This

could harm our ability to meet customer

demand and cause our revenues

to decline. Even if we are

able

to secure alternative sources in a timely manner,

our costs could increase as a result of supply or geopolitical shocks, which

may lead

to

an

in

the

prices

of

goods

and

from

third

parties.

A

supply

interruption,

such

as

the

recent

global

shortage

of

semiconductors, or

an increase

in demand

beyond current

suppliers’ capabilities

could harm

our ability

to distribute

our equipment

and thus to

acquire new customers

who use our

technology. Any

interruption in the

supply of the

hardware necessary to

operate our

technology, or our inability to obtain substitute equipment at acceptable prices in a

timely manner, could impair our ability to meet the

demand of our customers, which would have an adverse effect on

our business.

We do

not have a South African banking

license and, therefore, we provide

our EPE solution through an

arrangement with

a third-party bank, which

limits our control over this

business and the economic benefit we

derive from it. If

this arrangement were

to terminate,

we would

not be

able to

operate our

EPE business

without alternate

means of

access to

a banking

license. We

are

also required

to comply

requirements of

payment schemes,

VISA and

Mastercard.

Furthermore,

we provide

our services under

partnerships with South

African banks. We will

be unable to

provide our payments

and card-acquiring

businesses if we

fail to comply

with payment scheme

rules, and/or fails

to maintain certain

regulatory licenses and

registrations,

and/ or if we were unable to continue to partner with South African banks to provide

our payments and card acquiring services.

The

South

African

retail

banking

market

is

highly

regulated.

Under

current

law

and

regulations,

our

EasyPay

Everywhere

(“EPE”) business activities require

us to be registered as

a bank in South Africa

or to have access to an

existing banking license.

We

are not currently so registered,

but we have an agreement

with Grindrod Bank, a subsidiary

of African Bank Limited, that

enables us

to implement

our EPE

program in

compliance

relevant laws

and regulations.

If this

agreement

were to

be terminated,

we

would

not

be

able

to

operate

these

unless

we

were

able

to

obtain

access

to

a

banking

license

through

alternate

means.

Furthermore, we have

to comply with the

South African Financial

Intelligence Centre Act,

2001 and money

laundering and terrorist

control

regulations,

when

we

open

new

bank

accounts

for

our

and

when

they

transact.

Failure

to

effectively

implement and

monitor responses

to the

legislation and

regulations may

result in

significant fines

or prosecution

of Grindrod

Bank

and ourselves.

We

are required

to comply

requirements of

payment schemes,

including VISA

and Mastercard.

We

have deployed

a

significant number of devices, and any

mandatory compliance upgrades to our deployed POS

devices would require significant capital

expenditures and/or be

disruptive to our

customer base. Failure

to comply with

the payment schemes’

rules may result

in significant

fines and/or a loss of license to participate in the scheme(s).

We provide card acquiring services

to our customers

by partnering with

Nedbank Limited and

ABSA Bank Limited,

and payment

processing services

in partnership

largest banks

Africa. If

these agreements

were to

be terminated,

Adumo would

not be able to operate

its payment services unless it

were able to obtain

alternative card acquiring or

payment processing agreements

with other partners

or obtain a direct

designation license with

the scheme's and

regulatory bodies. In

addition, if we

were to lose our

PASA registrations

or fail to have them renewed, it would be unable to operate its payment services.

Compliance with the requirements under these various regulatory regimes may

cause us to incur significant additional costs and

failure to

comply with

such requirements

could result

in the

shutdown of

the non-complying

facility,

the imposition

of liens,

fines

and/or civil or criminal liability.

In

addition,

the

South

African

Financial

Advisory

and

Intermediary

Services

Act,

2002,

persons

who

act

as

intermediaries between financial product

suppliers and consumers in

South Africa to register

as financial service providers.

EasyPay

Insurance was

granted a Financial

Service Provider,

or FSP,

license on June

9, 2015, and

EasyPay Financial

Services (Pty) Ltd

was

granted

a FSP

license on

July 11,

2017. If

our FSP

licenses are

withdrawn or

suspended, we

may be

stopped from

continuing our

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

arrangement with a third party FSP.

Furthermore, the

proposed Conduct

of Financial

Institutions Bill

will make

significant changes

to the

current licensing

regime

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

Financial Institutions Bill

was published for public comment on September 29, 2020.

Proposed regulatory changes to the national payments system are expected to have a substantial impact on the South African

payments industry.

It may change

the manner in

which we conduct

business and

likely lead

to increased operating

costs for our

business as we work to ensure compliance with the new legislative

and regulatory framework, which may have a material adverse

effect on our business.

On March

3, 2025,

African Reserve

Bank (“SARB”)

published

certain draft

regulatory documents

for commentary

that

are

expected

to have

a substantial

impact

on how

we conduct

our

business namely:

(i)

a draft

directive

entitled

“Directive

in

respect

of specific

payment

activities within

the

national

payment

system”

(the “Directive”);

(ii) a

draft

exemption

notice

entitled

“Designation by the

Prudential Authority of

specific activities conducted

in the national

payment system which

shall be deemed

not

to constitute

‘the business

of a

bank’ under

paragraph (cc)

in section

1(1) of

the Banks

Act, 1990”

(the “Exemption

Notice”); and

(iii) the National

Payment System

Bill (“NPS

Bill”), which

seeks to

replace the

existing National

Payment System

Act, 1998.

The

proposed regulations

were made

available for

comment, and

we submitted

detailed comments

to our

industry body,

Association of

South African Payment Providers, on the proposed regulations.

The key objectives of the proposed regulations are to

clarify the mandate and objectives of the

SARB with respect to the national

payment

system

(“NPS”);

and

establish

a

robust

regulatory,

oversight,

and

supervisory

framework

for

the

NPS.

The

proposed

regulations also aim

to promote financial

inclusion, competition, the

prevention of financial

crime, and the

fair treatment and

protection

of

customers,

while introducing

an activity-based

licensing and

authorization

regime. In

this regard,

the Directive

defines

thirteen

“payment

activities”

and

that

a

person,

which

can

be

a

bank

or

a

non-bank,

providing

a

“payment

activity"

must

obtain

authorisation from the

SARB to undertake

such activity.

Under the Exemption

Notice, certain payment

activities are exempted

from

the definition of ‘the business of a bank’. Prior to the

Exemption Notice, these activities could only be undertaken by a bank. Pursuant

to the

Exemption Notice,

these activities

can be

undertaken by

non-banks, subject

to certain

conditions. Certain

of our

including EasyPay Everywhere,

Adumo and Kazang Pay,

currently undertake activities which

would qualify as “payment

activities”

Directive and

the NPS Bill.

Under the

current regulatory

framework, these

activities are

undertaken in

partnership with

a

sponsoring bank and the sponsoring bank is

subject to regulation by the SARB.

In other words, the business undertaking the “payment

activity” is not subject to direct regulation with respect to such payment activities.

It is

uncertain if

and when

the proposed

regulations will

enter into

effect and

whether a

non-bank such

as the

relevant Lesaka

may

elect

whether

to

conduct

an exempted

payment

by

partnering

with

a

bank

to

do so,

or on

its own,

if

it

is

authorised by the

SARB -

i.e. whether both

options will

be available

to a

non-bank. Should

our businesses

be subject to

direct regulation

under this new regime (i.e., if our current sponsorship model

is no longer available), we expect that we

will incur significant operating

costs to comply

with the new

requirements, and

to obtain

authorization with

respect thereto. Furthermore,

while some requirements

may already exist under

other current regulatory frameworks

for certain of our

businesses, we will likely

need to invest in additional

resources, systems and processes to

satisfy the regulatory requirements contemplated in the

proposed regulations, which may also lead

to increased operational costs, which may have a material adverse effect

on our business.