LESAKA TECHNOLOGIES INC

Evaluation of disclosure controls

and procedures

supervision and

participation of

our management,

including our

Executive Chairman

and our

Group Chief

Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as

such term is defined under Rule 13a-15(e)

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Executive Chairman and

Group Chief

Financial Officer

our disclosure

controls and

procedures were

not effective

as of

2025, due

to

the material weaknesses in internal control over financial reporting as described

below.

Internal Control over Financial Reporting

Internal control over financial reporting

is a process designed

by, or under the supervision of, our

Executive Chairman and Group

Chief

Officer,

or

persons

similar

functions,

and

effected

by

our

board

of

directors,

and

other

personnel, to provide

reasonable assurance regarding

the reliability of

financial reporting and

the preparation of

for external purposes in accordance with U.S. GAAP.

Internal control over financial reporting includes

those policies and procedures that

(1) pertain to the

maintenance of records that,

in reasonable detail, accurately and fairly

reflect the transactions and dispositions of

our assets; (2) provide reasonable

assurance that

transactions are recorded as

necessary to permit preparation of

financial statements in accordance

with U.S. GAAP,

and that receipts

and expenditures of the company are being made only in accordance with authorizations of our officers and directors; and (3) provide

reasonable assurance regarding prevention

or timely detection of unauthorized

acquisition, use or disposition

of our assets that could

have a material effect on our audited consolidated financial statements.

Inherent Limitations in Internal Control

over Financial Reporting

Internal control over financial reporting cannot provide absolute assurance of achieving

financial reporting objectives because of

its inherent

limitations.

Internal

control

over

is a

process that

involves

human

diligence

and

and

is

subject

to

lapses

in

judgment and

breakdowns

resulting

from human

failures.

Internal

also

can

be

circumvented by collusion or improper

management override. Because of such

limitations, there is a risk that

material misstatements

may not

be prevented

or detected

on a

timely basis

by internal

these inherent

limitations

are known features of the financial reporting

process. Therefore, it is possible to design safeguards into

the process to reduce, though

not eliminate, this risk.

Management’s

Report on Internal Control Over Financial Reporting

Management,

our

Chairman

and

our

Group

Chief

Officer,

is

for

establishing

and

maintaining

adequate

control

over

our

reporting.

conducted

an

of

the

of

internal control over financial reporting based on criteria established in Internal Control – Integrated Framework

(2013) issued by the

Committee

of Sponsoring

Organizations

of the

Treadway

(COSO). Based

on this

and as

described

below,

management concluded that our internal control over financial reporting was not

effective as of June 30, 2025.

As permitted by

the rules of

the SEC, management

has excluded Adumo

from its evaluation

ended

June 30, 2025, the year of acquisition. As of June 30, 2025, Adumo and Recharger’s total assets represented approximately 7% of our

consolidated total

assets and approximately

13% of consolidated

total current

assets. Their total

revenues constituted

8% of our consolidated revenue

and their operating income constituted

approximately 11% of our

consolidated operating loss for the

year ended June 30, 2025.

A material

weakness is

a deficiency,

or a

combination of

deficiencies, in

reporting, such

that a

exists that

a

of

our

annual

or

interim

would

not

be

prevented

or

detected on a timely basis.

As of June 30, 2025, we identified material weaknesses related to:

●

Our

lending

risk

and

to

changes

in

systems

and

over

and

from

service

and

insufficient design

and implementation

of ITGCs,

service organizations

and process

level controls,

resulting

in ineffective

controls, including

a lack

of validation

of the

completeness and

accuracy of

information used

within the process;

●

Our payroll process, specifically

insufficient risk assessment

and monitoring activities relating

to changes over the

of

to

the

centralized

payroll

over

from

service

and

insufficient design and implementation of ITGCs, controls over service organizations and process level controls resulting in

ineffective process level controls including a lack of validation of

the completeness and accuracy of information used within

this process;

●

Our

annual

related

to

risk

and

design

and

implementation of controls resulting in ineffective process level

●

combination process,

specifically insufficient

risk assessment

and ineffective

design and

implementation of

purchase price

allocation of

information resulting in ineffective process level controls including a lack of validation of the completeness and accuracy

of

information used;

●

Our

revenue

recognition

process

to

prepaid

airtime

sold

and

fees

to

certain

specifically insufficient risk assessment and ineffective design and implementation of

controls related to our judgement over

revenue recognized either as principal versus as agent resulting in ineffective

process level controls.;

●

Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation of

controls including

insufficient controls

over information

resulting in

ineffective process

level controls

including a

lack of

of the journal entry

population and a lack of

and accuracy of

information used within the process; and

●

An insufficient number of experienced and trained resources to execute

on their internal control responsibilities resulting in

design, implementation

and operating

effectiveness of

controls for

processes in

the scope

of our

internal control over financial reporting evaluation.

Of the

material weaknesses

described above,

the material

weaknesses related

to the

revenue recognition

process resulted

in a

material corrected misstatement for the

2025 and a restatement for

each of the quarters

ended September 30, 2024,

December 31,

March 31,

2025 of

our revenue

and cost

of goods

sold, IT

processing, servicing

and support,

exclusive of

depreciation and amortization. There

was no impact on the

Company’s reported

operating income (loss), net

loss or loss per share

in

any of such quarters.

Of the material weaknesses described above, the material weaknesses

related to the annual goodwill impairment process resulted

in

a

and

a

immaterial

of

and

loss in

the

consolidated financial statements for the year ended June 30, 2025

.

Of the material weaknesses described above, the

material weaknesses related to the journal entry process

resulted in a corrected

immaterial misstatement

to our

revenue and

cost of

goods sold,

IT processing,

servicing and

support, exclusive

of depreciation

and

amortization in the Company’s consolidated

financial statements for the year ended June 30, 2025.

Of the material weaknesses described above, the material weakness related to an insufficient

number of experienced and trained

execute on

their internal

control responsibilities

also resulted

in a

corrected material

misstatement of

current and

long-

term borrowings in the Company’s

consolidated financial statements for the year ended June 30, 2025.

All

other

did

not

result

in

any

or

immaterial

misstatements,

however

a

possibility exists that material misstatements in the Company’s consolidated financial statements may not be prevented or detected on

a timely basis.

Lesaka’s independent registered public accounting

firm, KPMG Inc, who audited the consolidated financial statements included

in this Annual

Report, has expressed

an adverse report

on the operating

effectiveness of our

as of June 30, 2025, which appears in Part II, Item 9 of this Annual Report.

Remediation of Newly Identified Material Weaknesses

To address the material weaknesses, our management,

including our Information Technology

(“IT”) team, has commenced with

remediation of these material

weaknesses including, but not

limited to: (1) developing

and implementing a comprehensive

remediation

plan that includes specific actions aimed at enhancing the

understanding of control owners related to the operation and

importance of

over

the principles

and

of

each control,

with

a focus

on

the impacted

over

service

ITGCs,

and

other

process

level

(2)

mandating

improved

risk

with governance

upon implementing

new systems

Group together

design,

implementation and monitoring

of control activities;

(3) the recruitment

of additional appropriately

skilled resources across

the Finance

and

Risk

and

Compliance

disciplines

coupled

with

the

further

upskilling

and

training

of

for

the

execution

of

key

as

well

as

a

focus

on

a

greater

degree

of

automation

of

throughout

the

organization,

(4)

the

embedding of

controls compliance

in the

key performance

indicators of

senior executives

across the

(5) collaborating

closely with internal and external assurance partners to ensure the robustness of

our remediation plan.

While we are actively taking steps

to implement our remediation plan, the material weaknesses

will not be deemed resolved until

the enhanced controls

operate for a

sufficient period of

time and management

has confirmed through testing

that the same

are operating

effectively.

We

will continue to

monitor the remediation

plan's effectiveness

and adjust

our efforts

as needed. As

we assess and

test

our internal control over financial reporting, we may identify the need for additional

measures or modifications to the plan.

Remediation of Previously Identified Material Weaknesses

Management has,

however, made

progress in remediating

the material weaknesses

identified in the

previous fiscal year

related

to the failure of

specific ITGCs for certain

IT systems to operate

effectively as well

as the insufficient

design and implementation

of

controls and policies

and procedures

goodwill impairment

assessment. As a

result, controls

in the areas

of user access

and

program-change

for

IT

systems

that

support

our

have

been

remediated.

Revised procedures

implemented related

to the

validation of

completeness and

accuracy of

the data used

in the

impairment model together with additional procedures implemented to enhance the precision levels in evaluating certain assumptions

utilized in this model. Even though the controls for the goodwill impairment process have been strengthened,

it has not yet been fully

remediated as model errors persisted.

Changes in Internal Control over Financial Reporting

Except as described above,

there were no changes

in our internal control over

financial reporting during the

quarter ended June

30, 2025, that

have materially affected,

or are reasonably

likely to materially

affect, our

As

stated,

has

from

its evaluation

of the

of

over

reporting for

the year of

acquisition, however

continues to

evaluate Adumo

and Recharger’s

control

over

(refer

to

Item

1A—“Risk

Factors—Failure

to

control

over

reporting in accordance with Section 404 of the Sarbanes-Oxley Act).

and Board of Directors of Lesaka Technologies,

Inc.

Opinion on Internal Control Over Financial Reporting

We have audited

Lesaka Technologies, Inc.

and subsidiaries’ (the Company) internal control over financial reporting as of

June

criteria established

in

– Integrated

Framework (2013)

the Committee

of Sponsoring

Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on the

achievement of the objectives

of the control

criteria, the Company has

not maintained effective internal

control over financial reporting

as of

2025, based

on criteria

established

in

– Integrated

Framework (2013)

the Committee

of

Sponsoring Organizations of the Treadway

Commission.

We

also have

audited, in

the standards

of the

Public Company

Accounting Oversight

Board (United

States)

(PCAOB),

the

balance

sheets

of

the

Company

as

of

June

30,

and

2024,

the

related

of

operations, comprehensive loss or

income, changes in equity,

and cash flows for

each of the years in the

two-year period ended June

30, 2025, and

the related notes

(collectively, the consolidated financial statements), and

our report dated

expressed

an unqualified opinion on those consolidated financial statements.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there

is a reasonable possibility that

a material misstatement of the

company’s annual

or interim financial statements will

not be prevented

or detected on a timely basis. Material weaknesses related to risk assessment, sufficient experienced and trained resources, design and

of

control

activities,

and

communication,

and

have

been

and

in

assessment.

The

were

in

determining

the

nature,

timing,

and

extent

of

audit

tests

applied

in our

the 2025

statements, and

this report

affect

our report

on those

financial statements.

The Company acquired the Adumo (RF) Proprietary Limited,

Recharger Proprietary Limited, Master Fuel Software and Support

Limited

and

Genisus

Risk

Limited

(the

“Acquisitions”)

during

2025,

and

from

its

of

the

of

the

control

over

as

of

June

30,

2025,

the

Acquisitions’

control

over

with

total

assets

of

$22,840

and

total

revenues

of

$51,651

of the

Company as

of and

for the

2025. Our

of the

Company

also excluded

an evaluation

of the

of the

Acquisitions.

The

is

for

maintaining

control

over

and

for

its

assessment of

of internal

financial reporting,

the accompanying

Management’s

Report on

Internal Control over Financial Reporting. Our

responsibility is to express

an opinion on the Company’s internal control over financial

reporting based

on our

audit. We

are a

public accounting

firm registered

PCAOB and

to be

independent with

respect to the

Company in accordance

with the U.S. federal

securities laws and

the applicable rules

and regulations of

the Securities

and Exchange Commission and the PCAOB.

We conducted

our audit in accordance with

the standards of the PCAOB. Those

standards require that we plan

and perform the

audit to

obtain reasonable

assurance about

whether effective

reporting was

maintained in

all material

respects. Our

audit of internal

control over financial

reporting included

obtaining an understanding

of internal control

assessing

the

risk

that

a

weakness

exists,

and

testing

and

evaluating

the

design

and

of

assessed risk. Our

audit also included

performing such other

procedures as we

considered necessary

in

the circumstances. We

believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A

company’s

control

over

is

a

process

designed

to

provide

the

reliability of financial

reporting and the

preparation of financial

statements for external

purposes in accordance with

generally accepted

accounting principles. A company’s internal

control over financial reporting includes those policies and procedures that (1) pertain to

the maintenance of records that, in reasonable detail, accurately and fairly

reflect the transactions and dispositions of the assets of the

company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted

accounting principles, and that

receipts and expenditures of

the company are being made

only in

accordance

with

authorizations

of

and

directors

of

the

company;

and

(3)

provide

prevention or timely detection of

unauthorized acquisition, use, or disposition

of the company’s assets that could have

a material effect

on the financial statements.

Because

of

its

inherent

limitations,

control

over

may

not

prevent

or

detect

misstatements.

Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of

changes in conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

/s/ KPMG Inc.

Johannesburg, Republic of South Africa