LESAKA TECHNOLOGIES INC

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Lesaka Technologies, Inc. (“Lesaka” and collectively

with its consolidated subsidiaries, the “Company”), formerly named Net 1

UEPS Technologies, Inc., was incorporated in

the State of

Florida on May

8, 1997. The

Company is a

provider of financial technology,

or fintech, products and services, primarily in South Africa and neighboring

countries,

to unbanked and underbanked consumers, and

fintech solutions

for merchants

operating in

formal and

informal markets.

offers

an integrated

multiproduct platform

that provides transactional

accounts (banking), lending,

insurance, payouts, card

acquiring, cash

management, software and

Alternative

Digital Products (“ADP”). ADP includes the Company’s prepaid solutions and supplier

enabled payments. By providing a

full-service

fintech platform in its connected ecosystem, the Company facilitates the digitization of commerce in its markets and participate in the

secular shift from cash to digital.

Basis of presentation

The accompanying

statements include

subsidiaries over

which Lesaka

exercises control

and have

been

prepared in accordance with accounting principles generally accepted

in the United States of America (“GAAP”).

Revision of Previously Issued Financial Statements

In

April

2025,

the

Company

that

it

had

misclassified

certain

of

its

The

CCC

Revolving Credit Facility was scheduled to be repaid in full on November 2024, at the date of issue of the June 30, 2024 consolidated

financial statements,

but this

was extended

of times

and was

ultimately refinanced

in September

2025 (refer

to Note

12).

The

Company

incorrectly

classified

amounts

due

under

its

CCC

Credit

as

instead

of

as

current portion

of long-term borrowings

in its audited

balance sheet as

2024. The table

below presents the

impact of the

revision of the Company’s financial

statements for the year ended June 30, 2024:

Consolidated balance sheet

As of June 30, 2024

As

Correction

Revised

Current portion of long-term borrowings

$

3,878

$

11,841

$

15,719

$

139,308

$

(11,841)

$

127,467

The

correction

did

not

impact

the

audited

of

of

comprehensive (loss) income, consolidated statement of changes

in equity, or consolidated statements of cash flows

for the year ended

2024 and,

except as

noted above,

audited balance

sheet as

of June

The misclassification

did not

affect compliance

with any

debt covenants.

assessed the

materiality of

this error and

presentation on

prior

period consolidated

financial statements in

SEC Staff

Accounting Bulletin

(“SAB”) No. 99

“Materiality” and SAB

No.

108,

“Considering

the

Effects

of

Prior

Year

Misstatements

when

Quantifying

Misstatements

in

the

Current

Year

Statements.” Based

on this

assessment, the

Company has

previously issued

were not

misstated based upon overall considerations of both quantitative and qualitative

factors.

SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The financial statements of

entities which are controlled

by Lesaka, referred to as

subsidiaries, are consolidated. Inter-company

accounts and transactions are eliminated upon consolidation.

The Company, if it is the primary beneficiary,

consolidates entities which are considered to be variable interest entities (“VIE”).

The primary beneficiary is considered

to be the entity that will absorb a

majority of the entity's expected losses,

receive a majority of

the entity's expected residual returns, or both. The Company has an obligation to absorb the

financial losses of the Lesaka ESOP Trust

and also

has the

ability to

control this

trust and

therefore it

has been

consolidated. This

trust does

not generate

significant losses

or

residual returns.

Business combinations

The

Company

for

its

under

the

method

of

accounting.

The

total

value

of

the

consideration paid

for acquisitions is

allocated to

the underlying

net assets acquired,

based on their

respective estimated fair

values.

The Company uses a number

of valuation methods to determine

the fair value of assets and

liabilities acquired, including discounted

cash

flows,

external

market

values,

valuations

on

recent

or

a

thereof,

and

believes

that

it

uses

the

most

measure

or

a

of

to

value

each

asset

or

liability.

measurement-period

adjustments in the reporting period in which the adjustment amounts are determined.

Use of estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions

that

affect

the

amounts

of

assets

and

and

of

contingent

assets

and

at

the

date

of

the

and

the reported

amounts

of revenues

and

expenses during

the reporting

period.

Actual results

could

differ

from

those

estimates.

Translation of foreign

currencies

The primary

functional currency

of the

consolidated entities

is the

Rand (“ZAR”)

and the

currency is the U.S. dollar.

Assets and liabilities are translated

at the exchange rates in effect

at the balance sheet date. Revenues

and

expenses are translated at average

rates for the period. Translation

gains and losses are reported in

accumulated other comprehensive

income in total

equity.

The Company releases the

foreign currency translation

reserve included in accumulated

other comprehensive

income attributable

to a foreign

entity upon sale

or complete, or

substantially complete,

liquidation of the

investment in that

foreign

entity and includes the release in the gain or loss reported related to the sale or

liquidation of the foreign entity.

Foreign exchange transactions are translated at the spot rate ruling at the date of the transaction. Monetary items are translated at

spot rate

at the

balance sheet

date. Transactional

gains and

losses are

in selling,

general and

expense on the Company’s consolidated

statement of operations for the period.

Cash, cash equivalents and restricted cash

include cash on hand and funds

deposited in bank accounts with

financial institutions that are liquid,

unrestricted and

readily available.

represents cash

legally or

contractually restricted

as to

use and

cash related to cash withdrawn from the Company’s debt facilities to fund ATMs

as well cash in certain bank accounts that have been

ceded to under certain of the Company’s

Allowance for credit losses

The Company uses historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for its lending

books. The allowance for credit losses related

to Consumer finance loans receivables is calculated by multiplying the

lifetime loss rate

with

the

lending

book.

The

for

credit

losses

related

to

finance

loans

receivables

is

calculated

by

adding

actual

receivables

in

default

plus

the

loss

rate

with

the

lending book. The Company

writes off microlending

finance loans receivable and

related service fees and interest

if a borrower is

in

arrears with

repayments for

more than

three months

or is

deceased. The

Company writes

off merchant

and working

capital finance

receivables and related

fees when it is

evident that reasonable

recovery procedures,

including where deemed

necessary, formal

legal

action, have failed. Prior to July 1, 2023, the Company regularly reviewed the ageing of outstanding amounts due from borrowers and

adjusted its allowance based on management’s

estimate of the recoverability of the finance loans receivable.

Allowance for credit losses (continued)

The Company uses 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 calculated

by multiplying the

rate with

recent invoice/origination amounts.

July 1,

2023, a specific

provision is

established where it

is considered

likely that all or

the amount due

from customers renting

safe assets, point of

sale (“POS”) equipment,

receiving support

and

maintenance

or

or

purchasing

licenses

or

SIM

cards

from

the

Company

will

not

be

recovered.

Non-

recoverability

is assessed

based

on a

quarterly

review

by management

of

the ageing

of outstanding

amounts,

the

location

and

the

payment history of the customer in relation to those specific amounts.

is valued

at the

lower of

cost and

net realizable

value. Cost

is determined

on a

first-in,

first-out basis

and includes

transport and handling costs.

Property, plant

and equipment

Property,

equipment are

shown at

cost less accumulated

depreciation. Property,

equipment are

depreciated

on the straight-line basis at rates which

are estimated to amortize the assets to

their anticipated residual values over their useful

lives.

Within the following asset classifications, the expected

economic useful lives are approximately:

Vaults

years

to

years

Office equipment

to

years

Vehicles

to

years

Furniture and fittings

to

years

The gain or loss arising

on the disposal or retirement

of an asset is determined

as the difference between

the sales proceeds and

the carrying amount of the asset and is recognized in income.

Leases

The Company determines whether an arrangement is a lease at inception.

Operating leases are included in operating lease right-

of-use assets (“ROU”),

operating lease liability

• current, and

operating lease liability

– long term

in its consolidated

balance sheets.

have any

significant finance

leases as

of June

but its

policy is

to include

finance leases in property and equipment, other payables, and other

long-term liabilities in its consolidated balance sheets.

A ROU asset

represents the

right to use

an underlying

asset for the

lease term and

the lease liabilities

represent its

obligation to

make lease

payments arising

lease arrangement.

Operating lease

ROU assets

and liabilities

are recognized

at

commencement date based on

the present value of

lease payments over the

lease term. As

most of the

Company’s leases do not provide

an implicit rate,

the Company generally

uses its incremental

borrowing rate

the estimated rate

of interest for

collateralized

borrowing over

a similar term

of the lease

payments at commencement

date. The operating

lease ROU asset

also includes any

lease

prepayments made

and excludes lease

incentives. The terms

of the Company’s

lease arrangements may

include options to

extend or

terminate

the

lease

when

it is

certain

that

will exercise

that

option.

Lease

expense

for

lease payments

is

recognized on a straight-line basis over the lease term.

The Company does not recognize right-of-use assets and lease liabilities for lease arrangements with a term of twelve months or

less. The Company

accounts for all

components in a

lease arrangement as

a single combined

lease component. Costs

incurred in the

adaptation of leased properties to

serve the requirements of

the Company (leasehold improvements) are

capitalized and amortized over

the shorter of the estimated useful life of the asset and the remaining term of

the lease.

Equity-accounted investments

The Company uses the equity

method to account for

investments in companies when

it has significant influence but

not control

over

of the

company.

equity method,

initially records

the investment

at cost

and

thereafter

adjusts the carrying value of the investment to recognize its proportional share of the equity-accounted company’s net income or loss.

In addition, when an investment qualifies for the equity

method (as a result of an increase in the level of ownership

interest or degree

of influence),

the cost

of acquiring

the additional

the investee

is added

to the

current basis

of the

held interest and the equity method would be

applied subsequently from the date on which

the Company obtains the ability to exercise

significant influence over the investee.

releases a

pro rata

the foreign

currency translation

reserve related

to an

equity-accounted investment

that is

in accumulated

other comprehensive

income to

earnings upon

the sale

of a

its ownership

the

investment.

The

release

of

the

pro

rata

portion

of

the

foreign

reserve

is

in

the

measurement of

the gain

or loss

on sale

of a

ownership interest

in the

equity-accounted investment.

The

Company does not recognize cumulative losses in excess of its investment or loans in an equity-accounted

investment except if it has

an obligation to provide additional financial support.

Dividends received from an equity-accounted investment reduce the carrying value

of the Company’s investment. The Company

has elected to classify distributions received from equity method investees using the nature of the distribution approach.

This election

requires the Company to evaluate

each distribution received on the

basis of the source of the

payment and classify the distribution

as

either

cash

inflows

or

investing

cash

inflows.

The

Company

reviews

its

for

whenever events or circumstances indicate that the carrying amount of

the investment may not be recoverable.

the

excess

of

the

price

of

an

enterprise

over

the

fair

values

of

the

assets

acquired and liabilities assumed based

upon their estimated fair

value at the date

of purchase. The Company

reviews the carrying value

of goodwill annually or more frequently if circumstances indicate impairment

has occurred.

Circumstances that

could trigger

an impairment test

include but are

not limited to:

a significant adverse

change in the

climate or legal

factors; an adverse

action or assessment

by a regulator;

unanticipated competition; loss

of key personnel;

the likelihood

that a reporting unit or

significant portion of a reporting

unit will be sold

or otherwise disposed; and results

of testing for recoverability

of a significant asset group within a reporting unit. If goodwill is allocated to a reporting unit

and the carrying amount of the reporting

unit exceeds

of that reporting

unit, an impairment

loss is recorded

in the statement

Measurement of

the

fair value of a reporting unit is based on present value techniques of estimated

future cash flows.

Intangible assets are shown at

cost less accumulated amortization. Intangible assets

are amortized over the following

useful lives:

Customer relationships

to

years

Software, integrated platform and unpatented technology

to

years

FTS patent

years

Exclusive licenses

years

Brands and trademarks

0.5

to

years

are periodically

evaluated for

recoverability,

and those

evaluations take

into account

events or

that warrant revised estimates of useful lives or that indicate that impairment

exists.

Debt and equity securities

Debt securities

The Company is required to

classify all applicable debt securities

as either trading securities, available

for sale or held

to maturity

upon investment in the security.

Held to maturity

Debt securities acquired by the Company which it has the ability and the positive intent to hold to maturity are classified as held

to maturity debt securities. The Company is required to make an election to classify these debt securities as held to maturity and these

securities are carried at amortized cost. The amortized cost

of held to maturity debt securities

is adjusted for amortization of premiums

and accretion of discounts to maturity.

Interest received from the held to

maturity security together with this amortization

in interest income in the Company’s consolidated statement of operations. The Company had

a held to maturity security as of

2024, respectively,

Note 4.

uses historical

default experience

lifetime of

debt securities

in

order

to

calculate

a

rate

for

its held

to

maturity debt

securities.

As of

each of

2024,

and

2025,

the

carrying value of the Company’s

held to maturity debt securities was $

.

Impairment of debt securities

Up

until

the

adoption

of

Measurement

of

Credit

Losses

on

Instruments

on

July

1,

2023,

the

Company’s available for sale and held to maturity debt securities with unrealized

losses are reviewed quarterly to identify other-than-

temporary impairments in value.

With regard to available for sale and held to maturity debt securities, the Company considers (i) the ability and intent to hold the

debt security for a

period of time to

allow for recovery of

value (ii) whether it

is more likely than

not that the Company

will be required

to sell the debt security;

and (iii) whether it expects

to recover the entire carrying

amount of the debt security.

The Company records

loss in its

of operations representing

the difference between

the debt securities

carrying value

and the current fair value as

of the date of the impairment

if the Company determines that

it intends to sell the debt

security or if that

it is

more likely

than not

that it

will be

sell the

debt security

before recovery

of the

amortized cost

basis. However,

the

is split

between a

credit loss

and a

non-credit loss

for debt

securities that

determines that

it does

not

intend to sell or that it is more likely than not that it will

not be required to sell the debt securities before the recovery of the amortized

cost basis. The credit loss portion, which is measured as the difference

between the debt security’s cost

basis and the present value of

expected future cash flows,

is recognized in the Company’s

consolidated statement of operations.

The non-credit loss portion,

which

is measured

as the

difference between

security’s

cost basis and

its current

fair value,

income, net of applicable taxes.

Equity securities

Equity

are

measured

at

fair

value.

Changes

in

the

fair

value

of

equity

are

in

the

of operations within

the caption titled

“change in fair

value of equity

securities”. The

Company may elect

to

measure equity securities without readily determinable fair

values at its 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 minus changes

in observable

prices equity

securities”). Changes

in the fair

observable prices

equity

securities are discussed

in Note 9.

During the Company’s

second and third

quarter of fiscal

2025, the Company

recorded changes in

the

fair

value

of

equity

as

a

result

of

changes

in

market

prices

related

to

its

in

One

Limited

(“MobiKwik”). During the fourth quarter of fiscal 2025, the Company disposed

of its entire interest in MobiKwik and incurred a loss

on disposal.

The changes

in fair

value and

the loss

on disposal

are included

in the

caption change

in fair

2025. There

were

no

prices equity securities during the years ended June 30, 2024 and 2023, respectively.

The Company performs a qualitative assessment

on a quarterly basis and recognizes an impairment loss if there are sufficient indicators

that the fair value of the equity security is less

than its carrying value.

Policy reserves and liabilities

Reserves for policy benefits and claims payable

The Company determines its reserves for policy benefits under

its life insurance products using a model which estimates claims

not been

and

total

present

value

of disability

claims-in-payment

at

the balance

sheet

date. This

model

allows for

best estimate

assumptions based

on experience

(where sufficient)

plus prescribed

margins,

as required

in the

markets

in

which these products are offered, namely South Africa.

The best estimate assumptions include (i) mortality and morbidity assumptions reflecting the company’s

most recent experience

and (ii) claim reporting delays reflecting Company specific and industry experience. Most of the disability claims-in-payment reserve

is

reinsured

and

the

values

were

based

on

the

reserve

held

by

the

reinsurer.

The

values

of

matured

guaranteed

endowments are increased by late payment interest (net of the asset management

fee and allowance for tax on investment income).

Deposits on investment contracts

For the Company’s interest-sensitive

life contracts, liabilities approximate the policyholder’s account

value.

Reinsurance contracts held

The Company enters into reinsurance

contracts with reinsurers under

which the Company is compensated

for the entire amount

or a portion of losses arising on one or more of the insurance contracts it issues.

The expected benefits to which the Company is

entitled under its reinsurance contracts held are recognized as reinsurance

assets.

These assets consist

of short-term

balances due from

reinsurers (classified within

Accounts receivable,

net and other

receivables) as

well as long-term receivables (classified within other long-term assets) that are dependent on the expected claims and benefits arising

related reinsurance

contracts. Amounts

recoverable from

or due

to reinsurers

are measured

consistently with

the amounts

associated with the reinsured contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets are assessed

for impairment at

each balance sheet

date. If there

is reliable

objective evidence that

amounts due may

not be recoverable,

reduces the carrying amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss in its consolidated

statement of operations. Reinsurance premiums are recognized when

due for payment under each reinsurance contract.

Redeemable common stock

Common stock

that is

redeemable (1)

at a

fixed or

determinable price

on a

fixed or

determinable date,

(2) at

the option

of the

holder,

or (3)

upon the

occurrence of

an event

that is

not solely

control of

Company is

presented outside

of total

Lesaka

equity (i.e. permanent equity). Redeemable common stock is

initially recognized at issuance date fair value

and the Company does not

adjust

the

issuance date

if redemption

is not

probable.

re-measures

the redeemable

common

stock

to the

maximum

amount

at

the

balance

sheet

date

once

is

probable.

Reduction

in

the

amount

of

the

redeemable common stock is

only appropriate to the

extent that the Company

has previously recorded increases

in the carrying amount

of the

as the

redeemable common

stock may

not be

carried at

an amount

that is

less than

the initial

amount reported outside of permanent equity.

Redeemable common stock is reclassified as permanent equity when presentation outside

permanent equity is no longer required

(if, for example, a redemption

feature lapses, or there

is a modification of the

terms of the instrument). The

existing carrying amount

of the redeemable common

stock is reclassified to permanent

equity at the date of

the event that caused the

reclassification and prior

period consolidated financial statements are not adjusted.

Revenue recognition

The

Company

revenue

upon

of

control

of

promised

or

to

in

an

amount

that

reflects

the

the

Company

expects

to

receive

in

for

those

or

The

Company

enters

into

contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted

for as

separate performance

observable standalone

selling prices.

Revenue is

recognized net

of allowances

for

returns and any taxes collected from customers, which are subsequently remitted

to governmental authorities.

Nature of products and services

The Company purchases airtime vouchers for resale to customers and acts as

a principal in these transactions.

Airtime purchased

for resale is included in inventory and released to cost of goods sold,

IT processing, servicing and support upon sale of the inventory.

The Company negotiates and agrees sales prices for airtime sales

with its customers and revenue is measured at the agreed contractual

price. The Company recognizes revenue when the airtime is delivered

to the customer.

The Company earns processing fees from transactions processed for its customers.

The Company provides its customers with transaction processing services that involve the collection, transmittal and retrieval of

all transaction data in exchange for consideration upon completion of the transaction and recognizes revenue from these activities at a

point in time.

In certain instances,

the Company also

provides a funds

collection and settlement

service for its

customers and recognizes

revenue from these activities at a point in time.

The Company also provides customers with cash management and digitization services which enables its merchant customers to

deposit

cash into

digital vaults

operated

by the

after which

are then

accessible by

to

either transfer to their nominated bank account or to pay certain pre-selected suppliers and recognizes revenue from these activities at

a point in time.

The Company considers

each of these services

as a single performance

obligation. The Company’s

contracts specify

a transaction

price for

services provided.

Processing revenue fluctuates

the type and

the volume of

transactions processed.

Revenue is recognized on the completion of the processed transaction.

The Company provides

rental and support

services under a

master rental agreement

with customers. Control

of the rental

asset

is transferred through the right of

use on a monthly basis as per

the master rental agreement terms. Customers

are required to pay the

monthly

rental and

support fee

in advance

.

The performance

obligation

for the

service component

is provided

month and

revenue is recognized at the end of the month. The Company recognizes revenue

from these activities over time.

The

as

a

processor

and

in

the

capacity

of

an

agent,

facilitates

the

delivery

of

ADP

to

its

prepaid

airtime

vouchers,

prepaid

and

gaming

vouchers)

and

earns

a

commission

once

these

are

delivered to the customer.

The Company recognizes revenue from these activities at

a point in time. Revenue from these transactions

fluctuates based on the volume of ADP services distributed.

Customers

serviced

by the

operating segment

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 point of sale device

(“POS”). The Company

also earns processing

fees from transactions

processed for these

customers. The

Company’s contracts

specify a transaction

price for

each service

provided (for

instance, ATM

withdrawal,

balance enquiry,

etc.). Processing

revenue

fluctuates

the type

and

volume of transactions performed by the customer. Revenue is recognized on the completion of the processed transaction at a point in

time.

provides bank accounts

to customers

and this service

is underwritten

by a regulated

banking institution

because

the Company is not

a bank. The Company

charges its customers

a fixed monthly

bank account administration

fee for all active

bank

accounts regardless of

whether the account

holder has transacted

or not. The

Company recognizes account

holder fees on a

monthly

basis on

all active

bank

accounts,

which

are earned

over

time and

billed

on a

monthly

basis. Revenue

from account

holders’

fees

fluctuates based on the number of active bank accounts.

Revenue recognition (continued)

Nature of products and services (continued)

The Company provides

short-term loans to

customers (consumers) in

South Africa and charges

up-front initiation fees,

and monthly

service fees.

Interest earned

from customers

rate method,

which requires

the

utilization of the rate of return implicit in the loan, that is, the contractual interest rate adjusted for any

net deferred loan initiation fees

or costs, premium,

or discount existing at

the origination or acquisition

of the loan. Monthly

service fee revenue is

recognized under

the contractual terms of

the loan. The monthly service

fee are earned over time

and is fixed upon initiation

and does not change over

the term of the loan and is recognized when billed on a monthly basis.

Interest earned from

The Company provides short-term loans to merchants in South Africa and levies interest on the amount lent. The Company does

not charge

these customers

up-front initiation

fees or

monthly service

fees. Interest

earned from

customers is

recognized using

the

rate method,

which requires

the utilization

of the

rate of

return implicit

in the

loan, that

is, the

contractual interest

rate adjusted

for any net

deferred loan

fees or

costs, premium,

or discount

existing at

the origination

or acquisition

of the

loan. The

interest rate included in the contract with the customer generally changes with changes to benchmark rates of interest set by the South

African Reserve Bank (“SARB”).

The Company supplies hardware and licenses for its customers to use the Company’s

technology. Hardware includes the sale of

POS devices, SIM cards and other consumables which

can occur on an ad

hoc basis. The Company recognizes revenue from hardware

at

the

price

in

the contract

as the

is delivered

to the

customer.

Licenses

include

the right

to access

certain technology developed by the Company and the associated revenue

is recognized ratably over the license period.

The Company writes

life insurance contracts, and

policy holders pay

the Company a

monthly insurance premium at

the beginning

of each month. Premium revenue

is recognized on a monthly basis net of

policy lapses. Policy lapses are provided

for on the basis of

expected non-payment of policy premiums.

Accounts Receivable, Contract Assets and Contract Liabilities

The

Company

receivable

when

its

right

to

under

its

with

becomes

unconditional. The Company has no contract assets or contract liabilities.

Research and development expenditure

Research and

development expenditure

is charged

to net

income in

in which

it is

incurred. During

ended

2024 and 2023, the

Company incurred research

and development expenditures

of $

0.5

0.5

0.5

Computer software development

Product

costs in

respect

of

intended

for

sale

to

licensees

are

expensed

as

until

technological

feasibility is attained.

Technological

feasibility is attained

when the Company’s

software has completed

system testing and has

been

to

be

viable

for

its

intended

use.

Once

technological

feasibility

is

reached,

the

Company

capitalized

such

costs

and

amortizes

these costs over

the products’

estimated life. The

time between

the attainment

of technological feasibility

and completion

of software development is generally short with insignificant amounts of development

costs incurred during this period.

Costs in

respect of

the development

of software

for the

internal use

are expensed

as incurred,

except to

the extent

that

these

costs

are

during

the

application

stage.

All

other

costs

those

in

the

project

development and post-implementation stages are expensed as incurred.

Income taxes

provides for income

taxes using the

asset and liability

method. This

approach recognizes

the amount of

income

taxes payable or refundable

for the current year,

as well as deferred

tax assets and liabilities for

the future tax consequence

of events

recognized in the financial statements and tax returns. Deferred taxes are

adjusted to reflect the effects of changes in tax laws or rates

in the

period of

enactment. The

majority of

income

taxes and

balances arise

in the

The

Company used the enacted statutory tax rate of

% for the years ended June 30, 2025, 2024 and 2023 to measure current

tax expense

(benefit) and deferred tax expense (benefit) in South Africa. There was a change in the South African enacted tax rate during the year

2023, from

% to

%. The Company

measured its South African

current tax expense

for the years

and 2024 and

its South African

deferred tax assets and

liabilities as of

and 2024, using

the enacted statutory

tax

rate in South Africa of

%.

In establishing the appropriate deferred tax asset valuation allowances, the Company assesses the realizability of its deferred tax

assets, and based on all available evidence, both positive

and negative, determines whether it is more likely than not

that the deferred

tax

assets

or

a

portion

thereof

will

be

realized.

The

Company

does

not

future

reversals

of

taxable

differences associated with indefinite lived assets

where the timing of the

reversal cannot be predicted as

a source of income to

support

deferred tax assets for carryforward that do not expire.

Unrecognized tax

benefits are recorded

in the financial

statements for positions

which are not

considered more likely

than not,

the technical

merits of the

position, of being

sustained upon

examination by

the taxing authorities.

For positions that

meet

the more likely than not

standard, the measurement of

the tax benefit recognized

in the financial statements is based

upon the largest

amount of tax benefit that, in management’s judgement, is greater than 50% likely of being

realized based on a cumulative probability

of

the possible

outcomes.

The

policy

is to

include

related

to

income

taxes

in

interest expense

and

penalties in selling, general and administration in the consolidated statements of

operations.

The Company has elected the period cost method

and records U.S. inclusions in taxable income related to global

intangible low

taxed income (“GILTI”)

as a current-period expense when incurred.

Stock-based compensation represents the

cost related to

stock-based awards granted.

The Company measures

equity-based stock-

based compensation cost at

the grant date, based on

the estimated fair value of

the award, and recognizes the

cost as an expense on

a

straight-line basis (net of estimated forfeitures) over the requisite

service period. In respect of awards with only service

conditions that

have a graded

vesting schedule, the

Company recognizes compensation

cost on a straight-line

basis over the

requisite service period

for the

entire award.

The forfeiture

rate is

estimated using

historical trends

of the

awards forfeited

vesting.

The

expense is recorded in

the statement of operations and

classified based on the recipients’

respective functions. The Company

records

assets for awards

that result in

deductions on the

income tax returns,

amount of compensation

cost recognized and the Company’s

statutory tax rate in the jurisdiction

in which it will receive a deduction.

Differences between the

for financial

reporting purposes

and the

actual tax

deduction reported

on the

return are recorded in income tax expense in the consolidated statement

Equity instruments issued to third parties

Equity

instruments issued

to third

parties

for services

represents the

cost related

to equity

instruments granted.

The

Company measures

this cost at

the grant date,

estimated fair value

of the award,

and recognizes the

cost as an

expense

on a

straight-line basis

(net of

estimated forfeitures)

requisite service

period. The

forfeiture rate

is estimated

the

expectation of the

number of awards

that will be forfeited

prior to vesting.

The Company records

deferred tax assets

for

awards that

deductions on

returns, based

on the

cost recognized and the Company’s

statutory tax rate in the jurisdiction

in which it will receive a deduction.

Differences between the

for financial

reporting purposes

and the

actual tax

deduction reported

on the

return are recorded in the statement of operations.

Settlement assets and settlement obligations

The

Company

with

cash

and

digitization

which

enable

its

to

deposit

cash into

digital vaults

operated

by the

after which

are then

accessible by

to

either transfer to their nominated bank account or to pay certain pre-selected suppliers.

Settlement assets comprise (1) cash received from merchant customers

from cash deposits into the Company’s safe assets, which

are

then

accessible

by

to

either

to

their

nominated

bank

account

or

to

pay

certain

pre-selected

suppliers,

and

(2)

cash

from

credit

card

(as

well

as

other

types

of

payment

services)

which

have

with

selling

goods

and

that

are

the

and

on

whose

behalf

it

the

transactions between various parties.

Settlement

comprise

(1)

amounts

that

the

Company

is

obligated

to

disburse

to

or

to

their

nominated pre-selected suppliers, and (2)

amounts that the Company is obligated

to disburse to merchants selling goods

that are the Company’s customers and on whose behalf it processes

the transactions between various parties and settles the funds from

the credit card companies to the Company’s

merchant customers.

The balances

at each reporting

date may vary

widely depending on

the timing of

the receipts and

payments of these

obligations.

Recent accounting pronouncements adopted

In November 2023,

the Financial Accounting

Standards Board (“FASB”)

issued guidance regarding

Segment Reporting (Topic

to

improve

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

of

profit

or

loss,

new

segment

for

with

a

single

segment, and contains other disclosure requirements. This guidance was 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). Refer to

Note 21.

Recent accounting pronouncements not yet adopted

as of June 30, 2025

In

December

2023,

the

FASB

issued

Income

Taxes

(Topic

to

improve

income

tax

requirements. The guidance requires

entities, on an

annual basis, to

(1) disclose specific categories

in the income tax

rate reconciliation

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

of those reconciling items

is equal

to or

greater

than

five percent

of the

amount computed

by multiplying

pre-tax

income

or loss

by the

statutory

income tax rate). This guidance

is effective for the Company

beginning July 1, 2025. The Company

is currently assessing the impact

of this guidance on its financial statements and related disclosures.

In

2024,

the

FASB

issued

Income

Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

Disclosures

(Subtopic

220-40)

which

of

income

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

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

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

In

July

2025,

the

FASB

issued

Instruments-Credit

Losses

(Topic

Measurement

of

Credit

Losses for Accounts Receivable and Contract Assets

which amends current guidance to provide a practical

expedient (for all entities)

and an accounting

policy election (for

all entities, other than

public business entities,

that elect the practical

expedient) related to

the

estimation of expected credit

losses for current accounts receivable

and current contract assets that

arise from transactions accounted

for under

Revenue From Contracts With

Customers (Topic

606).

This guidance is effective for

the Company beginning July 1, 2026,

and interim

reporting periods during

that fiscal year.

Early adoption

is permitted. The

Company is currently

assessing the impact

of

this guidance on its financial statements and related disclosures.

ACQUISITIONS

The Company did not make any acquisitions during the year ended June 30, 2023.

The cash paid, net of cash received related to

the Company’s acquisition during

the years ended June 30, 2025 and 2024, is summarized in the table below:

Total cash paid

$

24,161

$

2,248

Less: cash acquired

11,215

Total cash paid, net

of cash received

$

12,946

$

1,583

Acquisitions

October 2024 acquisition of Adumo

On May 7,

2024, the Company

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

Lesaka SA, agreed to

acquire, and the Sellers agreed

to sell, all of

the

equity

and

certain

claims

in

the

Adumo

(RF)

Limited

(“Adumo”).

The

closed

on

October 1, 2024.

Adumo is an

independent payments and commerce

enablement platform in Southern

Africa, with operations across

Namibia,

Botswana

and

Kenya.

For

more

than

two

decades,

Adumo

has

facilitated

physical

and

online

between

retail

and

end-consumers

by

a

unique

of

payment

and

solutions,

which

currently include

embedded payments,

integrated payments,

reconciliation services,

merchant lending,

customer engagement

tools,

card issuing program management and data analytics.

Adumo operates

across three businesses,

which provide

payment processing

and integrated software

solutions to different

end

markets:

●

The

Adumo

Payments

offers

payment

and

to

small-and-

medium (“SME”) merchants

in South Africa,

Namibia and Botswana, and

the Adumo Payouts

business provides card

issuing

program management to

corporate clients

such as Anglo

American and Coca-Cola

(Adumo Payments was

allocated to Merchant

operating segment and Adumo Payouts was allocated to the Consumer

operating segment);

●

The Adumo ISV business,

known as GAAP,

has operations in South

Africa, Botswana and

Kenya, and clients in

a number of

other

countries, and

is the

leading

provider of

point-of-sales

and

to the

hospitality

industry in

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

Pizza Hut, Nando’s and Krispy Kreme

(Adumo ISV was allocated

to Merchant operating segment); 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

and

clients

in

South

Africa

and

Namibia

(Adumo

Venture

was

to

the

segment).

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 (

17,279,803

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). Certain indirect shareholders of the sellers were investors in Adumo and the Company.

These shareholders ultimately

an aggregate

of

at a

$

4.79

common stock (refer to Note 14).

October 2024 acquisition of Adumo (continued)

The closing

of the

transaction was

customary closing

conditions which

we fulfilled

closing. 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.

The Company incurred

transaction-related expenditures

of $

1.6

2.3

and

2024,

related

to

the

of

Adumo.

The

accruals

in

Note

of

as

June

30,

2025,

includes an accrual

of transaction related

expenditures of $

0.1

million and the

Company does not

expect to incur

any further significant

transaction costs during the 2026

fiscal year.

March 2025 acquisition of Recharger

On November 19,

2024, the Company,

through Lesaka SA,

Sale of Shares Agreement

(the “Recharger

Purchase

Agreement”) with

Imtiaz Dhooma

(Recharger’s

former chief

executive officer)

and Ninety

Nine Proprietary

Limited (“the

Seller”).

Pursuant to

Purchase Agreement

and subject

to its

terms and

conditions, Lesaka,

Lesaka SA,

agreed to acquire, and the Seller agreed to sell, all of the outstanding equity interests in Recharger Proprietary Limited (“Recharger”).

The transaction closed on March 3, 2025.

At the same time, Recharger also entered into

independent contractor agreement with Recharger’s former chief executive officer

which has a

term of

months and required

him, among other

things, to support

operational activities of

business, in

consultation with Company representatives, facilitate the handover process and

assist Recharger in transitioning ownership to Lesaka

SA, avail himself for important

customer and vendor meetings, attend

scheduled weekly management committee

meetings regarding

operational and

business activities of

business, and providing

support on an

ad-hoc basis to

Company representatives

with regard to operational matters and in facilitating the hand over,

as and when reasonably required.

This acquisition has

been reported

as part

of the

Company’s Enterprise operating segment

and demonstrates positive

advancement

of the Company’s strategy in its Enterprise operating segment. The Company expects the acquisition to act as an entry point for it

into

the South African private utilities space while augmenting Enterprise’s

alternative payment offering.

The

consideration per

Purchase Agreement

was ZAR

503.4

million

($

27.0

and comprised

ZAR

328.4

17.6

cash and

ZAR

175.0

9.4

common stock,

to be

settled

in

two

tranches.

The

share

price

applied

to

the

number

of

shares

of

common

stock

to

be

issued

for

the

equity

consideration is

the volume-weighted

of the

common shares

for the

three-month period

the

disbursal

of

each

tranche.

Lesaka

SA

extended

a

ZAR

43.1

million

($

2.3

loan

to

at

closing

which

was

exclusively used to repay an existing loan due by Recharger

to the Seller.

The first tranche,

comprising ZAR

153.4

8.2

million) in cash

and

shares of the

with a value of ZAR

98.3

5.3

million), was settled at

closing. The value of the

shares of common stock were

calculated using

the shares issued multiplied

by the Company’s

closing price on the Johannesburg

Stock Exchange on March

3, 2025, of ZAR

90.00

,

and translated

to U.S.

dollars at

the exchange

rate of

$1: ZAR

18.63

. Lesaka

SA delivered

the

common stock from

a pool of shares

it purchased in

October 2024, and

the Company recognized

a gain in

additional paid-in-capital

of $

0.4

million related to the difference between in the value on March 3, 2025,

and the price paid per share in October 2024.

March 2025 acquisition of Recharger (continued)

The total purchase consideration

was ZAR

294.8

15.8

million) and comprised the

issuance of the

the

common

stock

with

a

value

of

ZAR

98.3

million

($

5.3

million),

the

settlement

of

the

pre-existing

relationship

shareholder loan of ZAR

43.1

2.3

million) and cash of ZAR

153.4

8.2

) million.

The second

and final

tranche is due

on March

3, 2026,

and comprises

a contractual

cash payment

of ZAR

175.0

9.4

million) and the delivery

of shares of Lesaka’s

common stock with a

contractual value of ZAR

75.0

4.0

million). Pursuant

to the

Purchase Agreement,

payment

of the

second tranche

in March

2026 was

contingent

on Recharger’s

former

chief

executive officer’s ongoing service under the independent contractor agreement until June 30, 2025. The second tranche would not be

paid if

he failed

the requisite

service, except

if failure

future services

is due

to expiry

of the

contract, mutual

or death

of the

former chief

executive officer.

The former

chief

executive officer

was also

a director

of the

Seller,

and

signed the Recharger

Purchaser Agreement on behalf

of himself, Recharger

and the Seller.

He also signed an independent

contractor

agreement under which he

is required to

provide post-combination service to Recharger until

March 2026 (but the

vesting of the shares

is only for services to

June 30, 2025). The Company

has determined that as the payment

of the second tranche is

contingent on these

post-combination services, the value of the

second tranche is not

treated as purchase consideration and

rather, under GAAP, represents

compensation for post-combination services.

In late May 2025, an addendum was signed to reduce

the post-combination period from

twelve months to four months (i.e. from March 2025 to June 2025).

The post-combination

services for the

2025, of $

13.6

million was calculated

as the sum of

the future cash

payment and the

future shares to

be provided. The

the future shares

to be

provided was calculated

value of ZAR

75.0

million divided by

the volume-weighted average price

of the Company’s common shares

for the three-month

period

prior

to June

30,

2025, and

at the

rate. The

post-combination

in the

caption

transaction costs related to

Adumo, Recharger and Bank

Zero acquisitions and

included on the

statement of operations.

The

Company

records

charges

that

are

cash-settled

awards

payables.

The

liability for

the

future payments is included in

the caption Other payables in

the consolidated balance sheet

as of June 30,

2025, refer to Note

13. There

is no unrecognized compensation costs related to the post-combination

compensation charge as of June 30, 2025.

The

Company

transaction-related

of $

0.4

million

during

ended

2025,

related

to

the

acquisition of Recharger.

The Company’s accruals presented in Note 13 of as June 30, 2025, includes an accrual of transaction

related

expenditures of $

0.1

million and the Company does not expect to incur

any further significant transaction costs during the 2026 fiscal

year.

Other acquisitions

Effective

1,

2024,

the

through

its

wholly

owned

Adumo

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

to the

acquisition of

Adumo by

and the balance

of ZAR

4.0

million

will be paid

in

two

equal tranches, one

in March 2025

and the other

in September 2025.

The Company did

not incur any

transaction costs related to this acquisition.

The

through

Lesaka

SA,

%

of

Genisus

Risk

Limited

(“Genisus

Risk”)

for

a

cash

consideration of ZAR

2.0

0.1

million). The Company

did not incur

any significant transaction

this acquisition.

The

through

its

wholly

owned

Cash

Connect

Solutions

Limited

(“CCMS”),

% of

Master Fuel

(“Master Fuel)

for a

cash consideration

of ZAR

2.0

0.1

million). The

Company did not incur any significant transaction costs related to this acquisition.

2026 Proposed acquisitions of Bank Zero

On

June

26,

2025,

Lesaka

SA

entered

into

a

(the

“Transaction

Agreement”) with

Zero Research

(“Zero Research”),

Mutual Bank

(“Bank Zero”),

parties

identified in

Annexure A

to the

Implementation Agreement

(being all

of the

of Bank

Zero save

for Zero

Research and

Naught

Holdings Ltd,

the “Bank

Zero Sellers”),

the parties

listed in

Annexure

B to

the Transaction

Agreement (being

all of the

shareholders of

Zero Research save

for Naught

Holdings Ltd, the

“Zero Research

Sellers”) and

Naught

Holdings Ltd. All amounts below translated at the closing rate of $1: ZAR

17.76

as of June 30, 2025.

The

payable

by

Lesaka

SA

in

for

the

shares

in

Bank

Zero

and

the

consideration payable by

Lesaka SA in exchange

the subscription shares will be

settled through a combination

of delivery of Lesaka

and up

to ZAR

91.0

5.1

in cash.

Zero Research

will apply

the cash

and Lesaka

shares

received by it to settle

the repurchase consideration due to the

Zero Research Sellers. Following implementation of

each of these steps,

and subject to the below

adjustment, the Bank Zero Sellers, Zero

Research Sellers and Naught Holdings

Ltd will own approximately

% of Lesaka's

fully diluted shares

at the time

of completion of

the proposed transaction.

The Transaction Implementation Agreement

allows a

mechanism (in

certain circumstances)

pursuant to which

the Bank

Zero Sellers and

the Zero

Research Sellers

may acquire

fewer shares in Lesaka and a larger cash consideration.

The

customary

interim

period

undertakings

which

each

of

Zero

Research

and

Bank

Zero,

among

other

things

(i)

to

conduct

their

in

the

ordinary

course

during

the

period

between

the

execution of the Transaction Implementation

Agreement and the

closing of the

transaction contemplated thereby, and (ii)

not to engage

in certain kinds of transactions during

such period. The Transaction

Implementation Agreement is subject to

the fulfilment of certain

precedent.

The

will

lapse

if

all

of

the

precedent

are

not

met

or

not

waived by August 6, 2026 (or such later date as may be agreed).

Bank

Zero

and

Lesaka

SA

have

agreed

to

a

incentive

arrangement

of

the

transaction, under which an agreed portion of a number of shares of

Lesaka's shares of common stock calculated will be granted by (i)

dividing

ZAR

70.0

million

($

3.9

by

an

agreed

value

(as

defined

in

the

Agreement)

(the

“Retention LTIP

Shares”) and (ii) dividing

ZAR

30.0

1.7

million) by such

agreed value (the “Performance

LTIP

Shares”).

The

Retention

LTIP

Shares

will be

subject

to

time

and

certain

performance-based

vesting

The

terms

of the

incentive plan are required to be considered, and if necessary approved, by Lesaka's remuneration

committee.

The

Company

transaction-related

of $

0.6

million

during

ended

2025,

related

to

the

of

Bank

Zero.

The

accruals

in

Note

of

as

June

30,

2025,

an

accrual

of

transaction related expenditures of $

0.6

million and the Company expects to incur further

transaction costs of $

0.4

2026 fiscal year.

price allocation

for all acquisitions

finalized as of

2025, except for

price allocation of acquisitions during the year ended June 30, 2025,

translated at the foreign exchange rates applicable on the date of

acquisition, is provided in the table below:

Acquisitions during fiscal 2025

Adumo

Other

Total

Final

Preliminary

Final

$

9,227

$

1,720

$

$

11,215

Accounts receivable

6,799

7,544

5,122

5,319

Property, plant and equipment

9,170

9,237

Operating lease right of use asset

1,025

1,426

Equity-accounted investment

71,992

3,614

76,114

28,806

16,171

45,046

Deferred income taxes assets

1,061

1,197

2,809

2,809

Current portion of long-term borrowings

(1,178)

(1,178)

(3,266)

(149)

(440)

(3,855)

Other payables

(28,116)

(1,439)

(252)

(29,807)

Operating lease liability - current

(948)

(185)

(1,133)

Income taxes payable

(150)

(4)

(42)

(196)

Deferred income taxes liabilities

(7,107)

(4,366)

(19)

(11,492)

(326)

(269)

(595)

(7,308)

(7,308)

Other long-term liabilities

(140)

(140)

Settlement assets

8,603

8,603

Settlement liabilities

(8,530)

(8,530)

Fair value of assets and liabilities on acquisition

$

88,022

$

15,825

$

$

104,753

The

fair

value

of

the

non-controlling

was $

7.6

The

fair

value

of

the

non-controlling

was

determined as

the non-controlling

interests respective

the equity value

of the entity

acquired by

and which

was adjusted for a

% minority discount.

The preliminary allocation of the Recharger purchase price is

based upon preliminary estimates which used information that

was

to management

at the

time

were

prepared

and

these

and

are

subject to change

within the measurement

period, up to

one year from

the acquisition date.

the allocation may

change.

We continue

to refine certain inputs to the calculation of acquired intangible assets.

2025 Acquisitions (continued)

Transaction costs and certain compensation

costs

did

no

t incur

any transaction

costs related

to the

Adumo, Recharger

and the

acquisitions during

the

year ended June 30, 2023, and did

no

t incur any transaction costs related to the Bank Zero acquisitions during the year ended June 30,

The

table

below

presents

costs

related

to

the

of

Adumo

and

and

the

acquisition of Bank Zero, as well as certain post-combination compensation costs expensed during the years ended June 30, 2025 and

2024:

Year

Adumo transaction costs

$

1,564

$

2,293

Recharger transaction costs

(1)

Recharger post-combination services expensed

13,586

Bank Zero transaction costs

Total

$

16,159

$

2,325

(1) Recharger transactions costs for the year ended June

30, 2024, of $

0.03

million have been allocated from Selling, general

and

to Transaction

costs related

to Adumo

and

certain compensation

costs in

operations for the year ended June 30, 2024.

Pro forma results related

to acquisitions

Pro forma results of operations have not been

presented for the acquisition of IVAS Nam, Genisus Risk and Master Fuel because

the effect of these acquisitions, individually and in aggregate, are

not material to the Company. Since the closing of these acquisitions,

they have contributed revenue and net income of $

0.8

0.1

million, respectively, for the

year ended June 30, 2025.

The results of the Adumo and Recharger’s operations are reflected in the Company’s

financial statements from October 1, 2024,

and

March

3,

2025,

The

unaudited

pro

forma

revenue

and

net

income

has

been

prepared as if the acquisitions

of Adumo and Recharger had occurred on

July 1, 2023, using the applicable average foreign exchange

rates for the periods presented:

Year

Revenue

$

673,536

$

630,672

$

(68,367)

$

(37,324)

The unaudited pro forma financial

information presented above includes the

business combination accounting and

other effects

(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 a

purchase price in

cash; (3) an

adjustment to exclude all

transaction-related costs

recognized in

of operations

for three

and nine

months ended

March

31, 2025,

and include

the applicable

transaction-related costs

for the

2024; an

adjustment to

exclude the

post-

related

to

the

in

the

of

for

three

and

nine

months

ended

March

31,

2025,

and

include

the

expense

during

the

year

ended

June

30,

The

unaudited

pro

forma

net

income

above

does

not

include

any

cost

savings

or

other

that

may

result

from

the

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 acquisitions,

Recharger have

contributed aggregate

revenue of

$

48.6

net loss

attributable to

including intangible

assets amortization

assets acquired,

net of

deferred taxes

and the

post-

combination compensation charge, of $

16.4

2024 Acquisitions

April 2024 acquisition of Touchsides

In

April

the

Company

closed

the

of

Limited

(“Touchsides”).

has

been

allocated to our

Merchant operating segment.

The final purchase

price allocation of

the Touchsides acquisition, translated at

the foreign

exchange rates applicable on the date of acquisition, is provided in the table below:

$

Accounts receivable

Property, plant and equipment

1,106

Operating lease right of use asset

(53)

Other payables

(279)

Operating lease liability – current

(63)

Deferred income taxes liabilities

(9)

(52)

Fair value of assets and liabilities on acquisition

$

2,248

Pro forma

operations have

not been

presented because

the effect

of the

acquisition is

not material

to the

Company. During

the year ended June 30, 2024, the Company

incurred acquisition-related expenditure of

$

0.1

million related to this

Since

the

closing

of

the

it

contributed

revenue

and

net

loss

of

$

0.9

million

and

$

0.2

respectively, for the

year ended June 30, 2024.

2023 Acquisitions

None.

net

Accounts receivable, net and other receivables

accounts receivable,

net, and other

receivables as of

2025, and June

30, 2024, are

table below:

Accounts receivable, trade, net

$

16,433

$

13,262

Accounts receivable, trade, gross

18,186

14,503

Allowance for credit losses, end of period

1,753

1,241

1,241

(521)

(511)

1,856

1,305

(847)

(67)

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

net of

allowance: 2025: $

, 2024: $

Current portion of total held to maturity investments

7.625

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

8.625

%

notes

Other receivables

26,092

23,405

Total accounts receivable,

net

$

42,525

$

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

at

that

are

disproportionately

small

compared

to

the

total

invoiced

amounts.

The

balance

are

more

volatile

than

the

monthly

invoice

amounts

because

they

are

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

calculated

by

the

loss

rate

with

recent

invoice/origination

amounts.

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 the amount due from the purchaser related

to the sale of

the Company’s interest in Carbon Tech Limited (“Carbon”),

which was accounted for

as an equity-accounted investment,

of $

0.25

million, net of an allowance for doubtful loans receivable of $

0.25

million as of June 30, 2023, and an amount due related to

the sale of

the loan,

with a face

$

3.0

million, which was

sold in September

2022 for

$

0.75

million, net of

for

doubtful loans

receivable of

$

0.75

million, refer

to Note 9

for additional

information. The Company

received the

outstanding $

0.25

million

related

to the

sale of

the equity

-accounted

October

2023,

and

has reversed

the allowance

for

loans

receivable of

$

0.25

million during

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

respectively was $

(zero).

No

interest income from the Cedar Cellular note was recorded during the years ended June 30, 2025, 2024

and 2023, respectively.

Interest, if any,

on this investment

will only be

paid, at Cedar

Cellular’s election, on

its maturity which

is in

the process of being extended beyond its original date of August 2022.

net

Accounts receivable, net and other receivables (continued)

The Company does not expect

to recover the amortized cost

basis of the Cedar

Cellular notes due to its

assessment that the equity

in Cell

C currently

has no

value

which

would

there

being

no future

cash flows

to be

collected

from

on

maturity.

The Company could

not calculate an

rate on the

Cedar Cellular note

because the carrying

value was zero

($

0.0

million) as of June 30, 2025 and 2024. The Company

therefore could not calculate the present value of the expected cash flows

to be collected from the debt security by discounting these cash flows at the interest rate implicit in the security upon acquisition (at a

rate of

24.82

%) because there are no future cash flows to discount.

Other receivables include prepayments, deposits, income taxes receivable and

other receivables.

Contractual maturities of held to maturity investments

Summarized below is the contractual maturity of the Company’s

held to maturity investment as of June 30, 2025:

Estimated

fair

value

(1)

Due in one year or less

(2)

$

$

Due in one year through five years

Due in five years through ten years

Due after ten years

Total

$

$

(1) The estimated fair value of the Cedar Cellular note has been calculated utilizing the

Company’s portion of the assets held by

Cedar Cellular, namely,

Cedar Cellular’s investment in Cell C.

(2) The cost basis is zero ($

0.0

million).

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of June 30, 2025, and June 30, 2024, is presented in the table

below:

Microlending finance loans receivable, net

$

52,492

$

28,184

Microlending finance loans receivable, gross

56,140

30,131

Allowance for credit losses - finance loans receivable, end of period

3,648

1,947

1,947

1,432

(161)

(210)

4,301

2,454

(2,499)

(1,795)

Merchant finance loans receivable, net

21,618

15,874

Merchant finance loans receivable, gross

23,214

18,571

Allowance for credit losses - finance loans receivable, end of period

1,596

2,697

2,697

2,150

(22)

(359)

2,576

2,479

(3,709)

(1,672)

Total finance

loans receivable, net

$

74,110

$

44,058

net

Finance loans receivable, net (continued)

Total finance

loans receivable, net, comprises microlending finance loans receivable related to the Company’s

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 $

20.7

million as

2025 have been

pledged as security

for the Company’s revolving

credit facility (refer to Note 12).

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

six months

. The Company

analyses this lending

book as a

single portfolio

because the

loans within the

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

the credit risk of the lending book.

Refer to Note 6 related to the Company risk management process related to

these receivables.

The Company has operated this lending book for more than

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

by multiplying

the lifetime

month end

outstanding lending

book. The

rate as of each of June 30,

2025 and 2024, was

6.50

%. The performing component (that is, outstanding

loan payments not in arrears)

of the book exceeds more than

% of outstanding lending book as of June 30, 2025.

Merchant finance loans receivable

Merchant finance loans

receivable is related

to the Company’s

Merchant lending activities

whereby it provides

unsecured

short-term loans

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 6 related to the Company risk management process related to these receivables.

commenced lending

to merchant customers

approximately four years

ago and

uses historical default

experience

lifetime of

loans generated

thus far

to calculate

a lifetime

for the

lending book.

The allowance

losses related to

these merchant finance

loans receivables is

calculated by adding

together actual receivables

in default plus

the

loss

rate

with

the

lending

book.

The

loss

rate

as

of

June

30,

and

2024,

was

1.14

% and

1.18

%, respectively.

The performing component (that is,

outstanding loan payments not in arrears),

under-

component (that

is, outstanding

loan payments

that are

in arrears)

and non-performing

component (that

is, outstanding

loans

for

which

appeared

to

have

ceased)

of

the

book

%,

%

and

%,

of

the

outstanding lending book as of June 30, 2025.

INVENTORY

The Company’s inventory

comprised the following categories as of June 30, 2025, and 2024.

Raw materials

$

2,963

$

2,791

Work in progress

Finished goods

20,295

15,364

$

23,551

$

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 year ended June 30, 2025.

OF FINANCIAL INSTRUMENTS

Fair value of financial instruments

Initial recognition and measurement

Financial instruments

are recognized

when the

Company becomes

a party

to the

transaction. Initial

measurements are

at cost,

which includes transaction costs.

Risk management

The Company manages its exposure

to currency exchange, translation, interest rate,

credit, microlending credit and equity price

and liquidity risks as discussed below.

Currency exchange risk

The Company is subject to currency exchange risk because it purchases components

for its vaults, that the Company assembles,

and inventories

that it is

settle in other

currencies, primarily

the euro, renminbi,

and U.S. dollar.

has used

forward contracts in order to limit its

exposure in these transactions to fluctuations

in exchange rates between the South African

rand

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

Translation risk

Translation risk relates to

the risk that

the Company’s results of operations

will vary significantly

as the U.S.

dollar is its

currency,

but it earns a

significant amount of its

revenues and incurs a

significant amount of its

expenses in ZAR. The

U.S. dollar to

the ZAR

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.

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

financing

activities.

rates

in

South

Africa

have

been

trending

downwards

in

recent

quarters and

as of the

date of this

Annual Report,

are expected to

decline by a

further 25 basis

points in the

first quarter

of calendar

and stabilize at

that level for

the remainder of

that year. 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

the

cost

and

of

rate

hedging

strategies

to

manage

this

risk.

The

Company

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

of

a

counterparty’s

credit

rating,

and

other

credit

and

risk

tools

as

the

management deems

With

respect to

credit risk

on certain

financial instruments,

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

as other debts

and total expenditures

on normal household

and lifestyle expenses.

may

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.

Risk management (continued)

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

because it takes

into account

a variety of

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

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

are

listed.

The

Company

may

not be

able

to

sell some

or

all

of

these

at

one

time,

or

over

an

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

or at all.

Financial instruments

Fair value

is defined

as the price

that would

be received

upon sale

of an

asset or

paid upon

transfer of

a liability

in an orderly

transaction between

market participants

at the

measurement date

and in

the principal

or most

advantageous market

for that

asset or

liability. The

fair value should be calculated based

on assumptions that market participants

would use in pricing the asset

or liability,

not on assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk

including the Company’s own credit

risk.

Fair value measurements and inputs are categorized into a

fair value hierarchy which prioritizes the inputs into

three levels based

on the

extent to which

inputs used

in measuring

are observable

in the

market. Each fair

value measurement

is reported in

one of the three levels which is determined by the lowest level input that is significant

to the fair value measurement in its entirety.

These levels are:

●

Level 1 – inputs are based upon unadjusted quoted prices for identical instruments

traded in active markets.

●

Level 2 – inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar

instruments in

markets that

are not

active, and

model-based valuation

techniques for

which all

significant assumptions

are

in the

market or

can be

corroborated

by observable

market

data for

substantially the

full term

of the

assets or

liabilities.

●

Level

–

inputs

are

unobservable

and

typically

reflect

of

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.

section describes

the valuation

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

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

disposed of its entire holding,

6,215,620

equity shares, in MobiKwik in

late June 2025. 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

elected to

measure its

MobiKwik at

impairment, if

any,

plus or

minus changes

resulting from

observable price

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 used

MobiKwik’s closing price reported on

the NSE on the last trading day related to last day of each of the Company’s external reporting

periods

through

March

31,

to

the

fair

value

of

the

equity

owned

by

the

Company.

Refer

to

Note

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

its investment

in Cell

C as of

June 30, 2024,

and valued Cell

C at $

0.0

(zero) and

$

0.0

(zero) as

of

June 30, 2025, 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. The Company

has assumed a

marketability discount

of

% (2024:

%) and a

minority discount

of

% (2024:

%). The Company

utilized the

latest business

plan

by Cell

for

ended

May

31,

2030,

for

the

2025,

and

plan

approved by

Cell C management

for the period

ended December 31,

2027, for

the June 30,

2024, valuation. Adjustments

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 June 30, 2025 and 2024:

Weighted Average

Cost of Capital ("WACC"):

% as of June 30, 2025 and between

% and

% as of June 30, 2024

Long-term growth rate:

4.5

% (

4.5

Marketability discount:

% (

Minority discount:

% (

Net adjusted external debt - June 30, 2025:

(1)

ZAR

8.3

0.5

billion), no lease liabilities included

Net adjusted external debt - June 30, 2024:

(2)

ZAR

0.4

billion), no lease liabilities included

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

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

June 30, 2024.

of Cell C

as of June

30, 2025, utilizing

the discounted

cash flow valuation

model developed

by the Company

is

sensitive to the following inputs: (i)

the ability of Cell C to achieve

the forecasts in their business case; (ii)

the WACC

rate used; and

(iii) the

minority and marketability

discount used. Utilization

of different inputs,

or changes to

these inputs, may

a significantly

higher or lower fair value measurement.

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 used

in the Cell

C valuation on June

30, 2025, all amounts translated at

rates applicable as of June 30, 2025:

Sensitivity for fair value of Cell C investment

1.0% increase

1.0% decrease

WACC

rate

$

(669)

$

1,095

EBITDA margin

$

1,780

$

(1,444)

The aggregate fair value of Cell C’s shares as of

June 30, 2025, represented

0.0

% of the Company’s total assets, including these

shares. The Company expects that there will

be short-term equity price volatility with respect

to these shares given that Cell

C remains

in a turnaround process

Derivative transactions - Foreign exchange contracts

As part

of the

risk management

strategy,

enters into

derivative transactions

to mitigate

exposures to

foreign

currencies

using

foreign

contracts. These

foreign

are

over-the-counter

derivative

transactions. Substantially all of the Company’s derivative exposures are with counterparties that have long-term credit ratings of “B”

(or equivalent)

or better.

uses quoted

prices in

active markets

for similar

assets and liabilities

to determine

(Level 2). The

Company has

no derivatives

that require

measurement under

Level 1,

Level 2

or Level

3 of

value

hierarchy.

The Company had

no

outstanding foreign exchange contracts as of June 30, 2025 and June 30,

2024, respectively.

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2025, according to

the fair value hierarchy:

Quoted Price in

Active Markets for

Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

Total

Assets

Investment in Cell C

$

$

$

$

Related to insurance business:

Cash, cash equivalents and

restricted cash (included in other

long-term assets)

Fixed maturity investments

(included in cash and cash

equivalents)

4,739

4,739

Total assets at fair value

$

4,864

$

$

$

4,864

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)

Significant Other

Observable Inputs

(Level 2)

Significant

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 years ended June 30, 2025 and 2024, 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 years ended June 30, 2025

and 2024. Summarized below is the movement in

the carrying value of assets measured at fair

value on a recurring basis, and categorized within Level 3, during the year

ended June 30, 2025:

Assets

$

(1)

$

(1) The

foreign currency

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

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 year ended June 30, 2024:

Assets

Balance as at June 30, 2023

$

(1)

$

(1) The

foreign currency

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

on the carrying value.

Trade, finance loans and other receivables

Trade, finance loans and other receivables originated by the Company are

stated at cost less allowance for credit losses. The fair

value of trade, finance loans and other receivables approximates their carrying

value due to their short-term nature.

Trade and other payables

The fair values of trade and other payables approximates their carrying amounts, due

to their short-term nature.

Assets and liabilities measured at fair value on a nonrecurring basis

measures equity

investments without

readily determinable

at fair

value on

a nonrecurring

basis. The

fair values of

these investments are

determined based on

valuation techniques using

the best information

available, and may

include

quoted market prices, market comparables, and discounted cash flow

projections. An impairment charge is recorded when the cost

of

the

asset

exceeds

its

fair

value

and

the

excess

is

to

be

other-than-temporary.

Refer

to

Note

for

charges

recorded during the

reporting periods presented

herein. The Company

has

no

liabilities that

are measured at

on a

nonrecurring

basis.

PROPERTY,

PLANT AND EQUIPMENT,

net

is the cost,

accumulated depreciation

and carrying amount

of property,

equipment as of

2025 and 2024:

Cost

Vaults

$

33,276

$

24,641

45,597

44,538

9,723

9,365

4,873

3,088

93,560

81,698

Accumulated depreciation:

Vaults

11,911

8,838

27,708

32,871

7,225

6,854

1,747

1,165

48,636

49,762

Carrying amount:

Vaults

21,365

15,803

17,889

11,667

2,498

2,511

3,126

1,923

$

44,924

$

31,936

LEASES

The

Company

has

leasing

classified

as operating

leases under

guidance.

These leasing

relate primarily

to the

lease of

its corporate

head

office,

offices,

a manufacturing

facility,

and branch

locations through which the

Company operates its financial services

business in South Africa.

operating leases have

a remaining

lease term

of between

one year

to

. The

operates parts

of its

business from

locations which it leases for a period of less than

one year

.

operating lease expense

during the years

2025, 2024 and

2023, was $

4.8

3.2

and $

2.9

million, respectively. The Company

does not have any significant leases that have not commenced as of June 30, 2025.

has entered into

short-term leasing

arrangements, primarily

for the lease

of branch

locations and other

its financial

services business

Africa.

short-term lease

expense during

30,

2025, 2024 and 2023, was $

4.7

3.6

4.2

LEASES (continued)

table presents

supplemental

balance sheet

disclosure related

to our

right-of-use assets

and our

operating leases

liabilities as of June 30, 2025 and 2024:

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

Weighted average

remaining lease term (years)

2.84

3.07

Weighted average

discount rate

9.8

%

10.5

%

Maturities of operating lease liabilities

$

4,852

3,344

2,116

Total undiscounted

operating lease liabilities

11,660

Less imputed interest

1,524

Total operating lease liabilities,

10,136

Operating lease liability - current

4,007

$

6,129

INVESTMENTS AND OTHER LONG-TERM ASSETS

Equity-accounted investments

The Company’s ownership percentage

in its equity-accounted investments as of June 30, 2025 and 2024, was as follows:

Sandulela Technology

Proprietary Limited ("Sandulela")

%

%

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

%

%

Finbond

In December

Company sold

its entire

remaining equity

Finbond which

comprised of

220,523,358

shares,

and which represented approximately

27.8

% of Finbond’s issued and

outstanding ordinary shares immediately

prior to the

sale. Lesaka

SA had pledged, among other things, its entire equity interest in Finbond as security for its previous South African facilities described

Sale of Finbond shares during the years ended

June 30, 2024

On

August

10,

2023,

the

through

its

wholly

owned

Net1

Finance

(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 closed in December 2023. The Company did

no

t record a gain or loss on the disposal because

the sale

proceeds were

equivalent to

the net

carrying value,

including accumulated

reserves, of

the investment

as of

the

date.

The

cash

of

ZAR

64.2

million

($

3.5

were

used

to

repay

capitalized

under

our

borrowing facilities, refer to Note 12.

The

Company

sold

25,456,545

shares

for

cash during

the

year

ended

2023,

and

a

loss of

$

0.4

million in the caption loss on equity-accounted investment in the Company’s consolidated statement of operations for the years ended

June 30, 2023.

Equity-accounted investments (continued)

Finbond (continued)

Sale of Finbond shares during the years ended

June 30, 2024 and 2023 (continued)

The following table presents the

calculation of the loss on disposal

of Finbond shares during the

years ended June 30, 2024

and

2023:

Year

Loss on disposal of Finbond shares:

Consideration received in cash

$

3,508

$

Less: carrying value of Finbond shares sold

(2,112)

(363)

Less: release of foreign currency translation reserve from accumulated other

loss

(1,543)

(252)

Add: release of stock-based compensation charge related

to equity-accounted investment

Loss on sale of Finbond shares

$

$

(341)

Finbond impairments

the year ended June 30, 2024

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

1.2

quarter ended September

30, 2023, which

represented the difference

between the determined

Finbond and the Company’s carrying value, including the foreign currency translation reserve (before the impairment). The Company

used the

ZAR

0.2911

referenced in

the August

2023 agreement

referred to

above to

calculate the

determined fair

value for

Finbond.

Finbond impairments

the year ended June 30, 2023

considered the combination

of the ongoing

losses incurred and

reported by Finbond

and its lower

share price as

impairment indicators as of

September 30, 2022. The

Company performed an impairment

assessment of its holding

in Finbond as of

September 30,

2022. The Company

recorded an impairment

1.1

June 30, 2023,

other-than-temporary

in

Finbond’s

value,

which

represented

the

difference

between

the

fair

value

of

the

Company’s interest

in Finbond and the Company’s

carrying value (before the impairment).

During fiscal 2023, there continued

to be

limited trading

shares on

the JSE

because a

small number

of shareholders

owned approximately

% of

its issued

and

outstanding shares between them. The Company calculated a fair value per share for Finbond by applying a liquidity discount of

%

to the September 30, 2022, Finbond closing price of ZAR

0.49

. The Company increased the liquidity discount from

% (used in the

previous impairment assessment)

to

% (used in

the September 30,

2022 assessment) as

a result of

the ongoing limited

trading activity

observed on the JSE.

Carbon

In September 2022, the

Company entered into a binding

term sheet to sell its entire

interest, or

%, in Carbon for $

0.5

million

and a

loan due from

Carbon, with a

face value of

$

million, for $

0.75

million. Both

the equity

interest and

the loan had

a carrying

$

(zero) at June

30, 2022.

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

amount, of

$

0.75

March 2024

(the amount

has not

been received

as of

2024 (refer

to Note

4)). The

Company

has

the $

0.25

million

on closing

to the

sale of

the

equity interest

and

the subsequent

funds

received first to the sale of the equity interest and then to the loans.

Equity-accounted investments (continued)

Carbon (continued)

believed that

the Carbon

shares provided

as security

was $

(zero), which

was in

line with

the

carrying value as

of June 30, 2022,

and created an allowance

for doubtful loans receivable

related to the $

1.0

million previously due

from Etobicoke.

did not

incur any significant

transaction costs.

has included

the gain of

$

0.25

million

related to the sale of the Carbon equity interest in the caption net

gain on disposal of equity-accounted investments in the Company’s

consolidated statements of operations.

The following table presents the calculation of the gain on disposal of Carbon

during the year ended June 30, 2023:

Year

ended

Gain on disposal of Carbon shares:

Consideration received in cash in September 2022

$

Less: carrying value of Carbon

Gain on disposal of Carbon shares:

(1)

$

(1)

The

Company

did

not

pay

taxes

related

to

the

sale

of

Carbon

because

the

base

cost

of

its

exceeds

the

sales

received.

believe

that it

will be

able to

utilize the

loss generated

because

Net1 BV

does

not

generate taxable income.

VantagePay

Limited

The Company provided VantagePay with a working capital

facility of $

1.5

million. The Company created

an allowance for credit

losses related to loans receivable of $

1.5

million during the year ended June 30,

2021, related to the full amount

outstanding as of June

30, 2021. This amount was still outstanding as of June 30, 2025.

Summarized

below is

the movement

in equity-accounted

investments during

which

includes the investment in equity and the investment in loans provided

to equity-accounted investees:

Finbond

Other

(1)

Total

Investment in equity

$

3,040

$

$

3,171

Comprehensive loss:

(956)

(790)

Other comprehensive income

Equity accounted (loss) earnings

(1,445)

(1,279)

Share of net (loss) income

(278)

(112)

Impairment

(1,167)

(1,167)

Dividends received

(95)

(95)

Sale of shares in equity-accounted investment

(2,096)

(2,096)

(2)

(2)

Comprehensive income:

Equity accounted earnings

Share of net income

Dividends received

(96)

(96)

Sale of shares in equity-accounted investment

(507)

(507)

Equity-accounted investment acquired in business combination (Note

(2)

$

$

$

(1) Includes Sandulela and SmartSwitch Namibia;

(2) The foreign currency

adjustment represents the

effects of the fluctuations

of the ZAR and

Namibian dollar, against

the U.S.

Summarized below is the breakdown of other long-term assets as of June 30,

2025, and June 30, 2024:

Total equity investments

$

$

76,297

Investment in MobiKwik (June 30, 2024:

%)

(1)

76,297

% of Cell C (June 30, 2024:

%) at fair value (Note 6)

87.50

% of CPS (June 30, 2024:

87.50

%) at fair value

(1)(2)

Policy holder assets under investment contracts (Note 11)

Reinsurance assets under insurance contracts (Note 11)

1,837

1,469

1,847

Total other long-term

assets

$

3,809

$

77,982

(1) The

Company determined

that MobiKwik

(up until

December 2024)

and CPS do

not have

readily determinable

and therefore elected

to record these

investments at cost

minus impairment, if

any,

plus or minus

changes resulting from

price changes in orderly

transactions for the identical

or a similar investment

of the same issuer.

The Company disposed

of its entire

investment in MobiKwik in late June 2025.

(2) On October 16, 2020, the

High Court of South Africa, Gauteng Division,

Pretoria ordered that Cash Paymaster Services (Pty)

Ltd (“CPS”) be placed into liquidation.

signed a

subscription agreement

with MobiKwik,

one of

India’s

largest independent

mobile payments

networks and buy now

pay later businesses.

Pursuant to the

subscription agreement, the Company agreed

to make an

equity investment

of up to $

40.0

million in MobiKwik over a

-month period. The Company made an

initial $

15.0

million investment in August 2016

and a

further

$

10.6

million investment

in June

2017,

under this

agreement.

2019, the

Company

paid

$

1.1

million

to

subscribe

for

shares

in

MobiKwik.

The

Company

owned

6,215,620

equity

shares

in

MobiKwik, which as of June 30, 2024, represented approximately

% of MobiKwik’s issued share capital.

Refer to Note 6 for additional information

regarding the determination of the fair value

of Company’s investment

in MobiKwik

as of June 30, 2025. The Company disposed of its entire equity interest in

MobiKwik for $

16.4

million during the year ended June 30,

2025,

and

a

loss of

$

59.8

This

loss comprised

of (i)

fair

value

to

the carrying

value

of its

investment by $

54.2

million from $

76.3

million as of June 30, 2024, to $

22.1

million as of March 31, 2025, and (ii) a further loss $

5.6

million upon disposal in the

fourth quarter of fiscal 2025. The

loss is included in the

caption “Change in fair value of

equity securities”

in the consolidated statement of operations for the year ended June 30, 2025.

did not

identify any

observable transactions

during

and 2023,

and

therefore there

was no

MobiKwik during

these years.

2021, MobiKwik

entered

into

of

separate

agreements

with

new

to

raise

additional capital

through

the

of additional

shares. The Company used the

valuation from MobiKwik’s June 2021 capital raise as

the basis for its

fair value determination of $

76.3

million as of June 30, 2024.

Cell C

On

August

2,

2017,

the

through

its

Net1SA,

purchased

75,000,000

class

“A”

shares

of

Cell

C

for

an

aggregate purchase price of ZAR

2.0

151.0

million) in cash. The Company funded the transaction through

a combination of

cash and a borrowing facility. Net1 SA has pledged, among other things, its entire equity interest in Cell

C as security for the previous

facilities described

On September 30,

2022, Cell C

completed its

recapitalization process

which included

the issuance of

additional equity instruments

by Cell C. The

effective percentage

holding in Cell C’s

equity has reduced

from

% to

% following

the

recapitalization.

in

Cell C

is carried

at

fair

value.

Refer

to Note

for

additional information regarding changes in the fair value of Cell C.

CPS

deconsolidated

its investment

in CPS

in May

2020. As

of June

owned

87.5

% of CPS’ issued share capital.

Other long-term assets (continued)

are the components

of the Company’s

without readily

determinable fair

value and held

to

maturity investments as of June 30, 2025:

holding gains

holding losses

Carrying

value

Equity securities:

Investment in CPS

$

$

$

$

Held to maturity:

Investment in Cedar Cellular notes

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:

holding gains

holding losses

Carrying

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

ASSETS,

net

Summarized below is the movement in the carrying value of goodwill

for the years ended June 30, 2025, 2024 and 2023:

Gross value

$

175,476

$

(12,819)

$

162,657

(7,039)

(7,039)

(1)

(22,857)

(21,875)

152,619

(18,876)

133,743

(1)

5,280

(472)

4,808

157,899

(19,348)

138,551

Acquisitions (Note 3)

(2)

76,114

76,114

(1)

2,096

(325)

1,771

$

236,109

$

(36,714)

$

199,395

(1) – The foreign currency adjustment represents the effects of the fluctuations between the South African Rand against the U.S.

(2) – Represents

goodwill arising from

the acquisition of Adumo,

Recharger, IVAS

Namibia and Master

Fuel and translated at

the foreign exchange rates applicable on the date the transactions became effective.

This goodwill has been allocated to the Merchant

(a portion Adumo, IVAS Namibia and Master Fuel), Consumer (a portion of Adumo) and Enterprise (Recharger) reportable operating

segments.

Goodwill associated with

the acquisitions represents the

excess of cost

over the fair value

of net assets

acquired. Goodwill arising

from

these

is not

deductible

for

tax

See

Note

for

the

allocation

of

the

price

to

value

of

acquired net assets.

ASSETS,

The Company assesses the carrying

value of goodwill for impairment

annually, or

more frequently,

whenever events occur and

circumstances change indicating

potential impairment. The Company

performs its annual impairment

test as at June 30 of

each year.

The Company did

not perform a qualitative

assessment during the

years ended June 30,

2025, 2024 or

2023, respectively.

Except as

discussed below, no goodwill

has been impaired during the years ended June 30, 2025, 2024 and 2023,

In order to determine the amount of

the goodwill impairments, the estimated fair value of

our reporting units’ business assets and

liabilities were compared to the carrying value of

their assets and liabilities. The Company

used a discounted cash flow model in

order

to determine the

the businesses

(this is

a Level-3 fair

value measurement). Based

on this

analysis, the Company

that the carrying value of the reporting units’ business assets and liabilities exceeded

their fair value at the reporting date.

In

determining

the

fair

value

of

the

units,

the

Company

key

judgements

related

to

the

revenue growth rates, weighted-average cost of capital (“WACC”)

applicable to peer and industry comparables of the reporting units,

and

the

forecast

periods

used.

The

Company

may

record

an

loss in

future

if

actual

growth

rates

are

lower

than

those

included in the Company’s discounted cash flow model. Furthermore, use of a higher weighted-average cost of capital may

also result

in an impairment loss in the future.

June 30, 2025 goodwill impairment loss

recognized an impairment

17.0

million as a

result of its

annual impairment

analysis related to

allocated to its Connect Cash

and Adumo Technologies reporting units within its Merchant segment,

its Adumo Payouts reporting unit

within

segment

and

its

EasyPay

unit

within

its

segment.

The

impairments

are

within

the

caption impairment loss in the consolidated statement of operations for

the year ended June 30, 2025.

At June 30, 2024,

the Connect Cash reporting

unit exceeded its carrying

value by

%.The impairment loss in

the Connect Cash

reporting unit resulted

from a reassessment of

the business’ growth prospects

in the context

of its strategic market

positioning, optimized capital expenditures and increase WACC

over prior years.

The impairment loss in the

reporting unit resulted from a reassessment

of the business’ growth prospects,

a strategic decision to exit low return

and sub-optimal merchants’ contracts.

The impairment loss in the Adumo Payouts reporting

unit resulted from a reassessment of the business’ growth

prospects of the

reporting unit with lower revenue and therefore lower free cash flow generation expected compared to when performing the purchase

price allocation.

Easypay was acquired

in fiscal 2006.

At June 30,

2024, the fair

value of the

EasyPay reporting unit

exceeded is carrying

value

by

%. The impairment loss in the EasyPay reporting unit during the year ended June 30, 2025, resulted from a reassessment of the

business’ growth and the expected impact on its future cash flows as a result the cash outflows

expected from initiatives to modernize

its existing technology platform to retain and expand its product offering

and customer base.

The fair

the ISV

and Humble

reporting unit

s

(both allocated

to Merchant)

acquisition of

Adumo

did

not substantially

exceed

the

value

of their

unit.

The

fair

value

of

the

ISV

unit

exceeded the carrying value by

2.4

% and Humble exceeded the carrying value

by

%. As of June 30,

2025, carrying value of goodwill

to

ISV

and

Humble

was

$

34.0

million

and

$

1.5

All

other

fair

value

exceeded

the

carrying value of the reporting unit by at least

%.

ASSETS,

Impairment loss (continued)

June 30, 2025 goodwill impairment loss (continued)

The table below

presents the impairment

per reporting unit

2025 and the

revenue growth rates,

WACC

and forecast period for

reporting units used

in the discounted

cash flow models

for the June

30, 2025 and June

30, 2024, and

for entities

acquiring during the current fiscal year, the information

used in the purchase price allocation:

Segments and reporting units

with impairments

Impairment

Remaining

Range of

revenue

growth rates

(%)

Terminal

revenue

growth rates

(%)

WACC

(%)

Forecast

period

(years)

$

9,268

$

22,283

Connect Cash

5,688

22,283

3.2

6.0

15.6

Used at June 30, 2024

13.9

5.0

14.7

3,580

(

) -

(10.0)

18.5

Used at acquisition

6.7

14.9

N/A

18.9

2,197

6,027

Adumo Payouts

2,197

6,027

7.5

40.2

6.0

18.2

Used at acquisition

11.8

26.6

N/A

18.9

5,576

3,533

EasyPay

5,576

3,533

65.6

6.0

22.5

Used at June 30, 2024

(

21.7

) -

6.9

6.0

14.7

Total

$

17,041

$

31,843

In the event that there is a deterioration in the Company’s operating segments, or in any other of the Company’s

businesses, this

may lead to impairments in future periods. Furthermore,

the difficulties of integrating Adumo and Recharger may be increased by the

necessity of integrating personnel with disparate

business backgrounds and combining different corporate cultures. The

may

not

be

able

to

retain

key

of

an

or

realize

cost

or

or

other

that

it

anticipated when selecting its acquisition candidates. These factors

may also lead to impairments in future periods.

June 30, 2023 goodwill impairment loss

recognized an

of $7.0

million as

a result

of its

annual impairment

analysis related

to goodwill

to

its hardware/

support

within

its Enterprise

segment. The

loss resulted

from

a

reassessment

of

the

business’

growth

prospects

given

the

change

in

demand

as

a

result

of

the

introduction

of

cheaper

hardware devices which incorporate

software widely adopted by our customers

customer-base, coupled with a challenging

economic

environment

in

South

Africa.

The

is

within

the

caption

loss

in

the

of

operations for the year ended June 30, 2023.

In order to determine the

amount of the goodwill

impairment, the estimated fair value

of our hardware/ software support business

assets and liabilities were compared to the carrying

value of its assets and liabilities.

The Company used a discounted cash flow model

to determine

of the business

(this is

a Level-3

measurement). Based

on this

analysis, the

Company

determined that the carrying value of the business’ assets and liabilities exceeded

their fair value at the reporting date.

ASSETS,

Impairment loss (continued)

June 30, 2023 goodwill impairment loss (continued)

Goodwill has been allocated to the Company’s

reportable segments as follows:

$

137,640

$

$

25,017

$

162,657

(7,039)

(7,039)

(1)

(18,523)

(3,352)

(21,875)

119,117

14,626

133,743

(1)

4,279

4,808

123,396

15,155

138,551

(9,268)

(2,197)

(5,576)

Acquisitions (Note 3)

63,808

8,423

3,883

76,114

(1)

1,698

(199)

1,771

$

179,634

$

6,027

$

13,734

$

199,395

(1) – The foreign currency adjustment

represents the effects of the fluctuations between

the South African Rand, against the

U.S.

ASSETS,

net

Intangible assets acquired

is the

of intangible

assets acquired,

translated at

the exchange

rate applicable

as of

the relevant

acquisition dates, and the weighted-average amortization period:

Fair value as of

acquisition date

Weighted-average

period (in years)

Finite-lived intangible asset:

Acquired during the year ended June 30, 2025:

Adumo – technology assets

$

13,998

Adumo – customer relationships

11,185

Adumo – brands

3,623

Recharger – technology assets

1,161

Recharger – customer relationships

15,010

Genisus Risk – technology assets

$

0.1

On acquisition of

these businesses, the

Company recognized an

aggregate deferred

tax liability of approximately

$

12.2

million

related to the acquisition of intangible assets during the year ended

Change in useful lives for certain brand and trademark intangible assets

During early calendar

2025, the

Company’s executive considered the

unification of the

Company’s merchant segments operations

and

the realignment

of the

brands under

the master

brand

“Lesaka”. The

Board of

the

realignment of certain of the Company’s brands to the master brand in May 2025. The Company has identified the steps and timing to

realign the

brands under

the master

brand and

expects to

have complete

alignment by

February 2027,

with certain

brands

expected to be

aligned by December

2025. The change

in brands

has resulted in

a change in

the useful lives

of certain of

brand and trademark intangible assets which has resulted in an increase in amortization expense of $

2.6

million during the year ended

June 30, 2025. The change in the useful lives resulted in a $

1.9

million increase in the Company’s net loss from continuing operations

for the year ended June 30, 2025, and did not have a significant impact on loss per

share. The change did not impact prior periods.

ASSETS,

Intangible assets (continued)

assesses the carrying

for impairment

whenever events

occur or

circumstances change

indicating that the carrying amount of the intangible asset may not be recoverable.

No

intangible assets have been impaired during the

30, 2025, 2024

and 2023, respectively,

except for intangible

assets of $

1.8

million related to

which were fully impaired

during the year ended

June 30, 2025. The

impairment was identified during

the Company’s annual goodwill

impairment testing. The method for determining fair

value is discussed above under Goodwill—Impairment loss. The

impairment of the

intangible assets is

caption Impairment loss

in the

consolidated statements of

operations.

Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2025, and June 30,

2024:

As of June 30, 2025

As of June 30, 2024

Gross

value

and

Net

value

Gross

value

Net

value

Finite-lived intangible assets:

Software, integrated

platform and unpatented

(1)

$

137,099

$

(41,925)

$

95,174

$

115,213

$

(25,763)

$

89,450

Customer relationships

(1)

53,369

(18,568)

34,801

25,880

(14,030)

11,850

FTS patent

2,158

(2,158)

2,107

(2,107)

Brands and trademarks

(1)

18,233

(8,993)

9,240

14,353

(4,300)

10,053

Total finite-lived

$

210,859

$

(71,644)

$

139,215

$

157,553

$

(46,200)

$

111,353

(1)

2025 balances

include the

as part

of the

Adumo acquisition

in October

2024, and

the

Recharger and Genisus Risk acquisitions in March 2025.

expense on

the finite-lived

for

the

years

30,

2025,

and

2023,

was

approximately $

22.0

14.4

15.0

Future estimated annual amortization expense for the next five

fiscal years and thereafter, using the exchange rates that prevailed

on June

30, 2025, is

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 2026

$

30,204

Fiscal 2027

20,576

Fiscal 2028

20,080

Fiscal 2029

19,389

Fiscal 2030

17,986

30,980

Total future

estimated annual amortization expense

$

139,215

ASSETS AND POLICYHOLDER LIABILITIES UNDER INSURANCE AND

INVESTMENT CONTRACTS

Reinsurance assets and policyholder liabilities under insurance contracts

Summarized below is the movement in reinsurance assets and policyholder liabilities under

insurance contracts during the years

ended June 30, 2025 and 2024:

Reinsurance

Assets

(1)

Insurance

(2)

Balance as of July 1, 2023

$

1,040

$

(1,600)

Increase in policy holder benefits under insurance contracts

(7,610)

Claims and policyholders’ benefits under insurance contracts

(464)

7,043

(3)

(74)

1,469

(2,241)

Increase in policy holder benefits under insurance contracts

(10,127)

Claims and policyholders’ benefits under insurance contracts

(131)

9,781

(3)

(57)

$

1,837

$

(2,644)

(1) Included in other long-term assets (refer to Note 9);

(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 large 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 estimates

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 years

30, 2025 and 2024:

Assets

(1)

Investment

(2)

Balance as of July 1, 2023

$

$

(241)

Increase in policy holder benefits under investment contracts

(4)

Claims and decrease in policyholders’ benefits under investment contracts

(44)

(3)

(1)

(15)

(216)

Increase in policy holder benefits under investment contracts

(5)

Claims and decrease in policyholders’ benefits under investment contracts

(101)

(3)

(5)

$

$

(125)

(1) Included in other long-term assets (refer to Note 9);

(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

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 in

regular contact

with its lenders

and will update

existing borrowing

agreements to the

new base rate

when ZARONIA is adopted by the financial industry and lenders as the new

reference rate.

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

2025, was

7.29

%. The

prime rate,

the benchmark

rate at

which

private

sector banks

lend

to the

public

Africa,

on June

30,

2025,

was

10.75

%, and

reduced

to

10.50

% on

July 31,

2025,

following a

0.25

% reduction in the South African repo rate, the rate at which the SARB lends money to commercial

banks.

Facilities obtained in February 2025

Lesaka

SA has

four loan

from

Bank

Limited

(acting

Rand

Bank division)

(“RMB”),

Bank

Limited

(acting

through

its

WesBank

division)

(“WesBank”),

Bank

Limited

being

a

South

African corporate and investment bank, Investec Bank Limited (acting through its Investment Banking division: Corporate Solutions)

(“Investec”

and

and

WesBank,

the

“Lenders”).

These comprise

a

term loan

of up

to

ZAR

2.2

billion

($

121.4

million) (“Facility

A”), an amortizing

loan of ZAR

1.0

56.3

million) (“Facility B”)

and a senior

revolving credit facility

of

up to ZAR

2.2

121.4

million) (“Senior RCF”), and a general

banking facility from RMB of up

to ZAR

700.9

39.5

million) (the “GBF”, and collectively with Facility A, Facility B and Senior RCF, the “Facilities”), which are described in more detail

below.

The Company,

and the

majority of

Lesaka SA’s

directly and

indirectly wholly-owned

subsidiaries have

agreed to

guarantee the obligations of Lesaka SA and of the other borrowers under the Facilities to the

Lenders.

The Common

Terms

Agreement (“CTA

”) governing

the above contains

customary covenants

which include

a requirement

for

Lesaka SA to

maintain specified

Net Debt to

EBITDA and

Interest Cover Ratios

(as defined

in the CTA)

and restricts the

ability of

Lesaka SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock,

prepay other debt, encumber

their

assets,

incur

indebtedness,

make

above

levels,

engage

in

certain

combinations

and

engage in other corporate

activities. The CTA

provides that if any

subsidiary of the Company receives

proceeds from the disposal of

shares in/claims against, or assets of MobiKwik, it would offer to prepay the certain specified loans/facilities and loan outstandings to

the Lenders (as contemplated in the CTA).

Lesaka SA paid non-refundable debt structuring fees of ZAR

10.0

0.5

million) to the Lenders on February 27, 2025.

Long-term borrowings – Facility A and Facility B Agreements

Lesaka SA may

borrow up to an

aggregate amount of

ZAR

2.2

billion for the sole

purpose of refinancing

the existing facilities

of Lesaka

SA and Cash

Connect Management

Solutions Proprietary

Limited’s

(“CCMS”) with RMB,

funding transaction

for general corporate purposes.

Lesaka SA utilized Facility

A in full on February

28, 2025, to settle a portion

of its existing facilities

with RMB and to settle all of CCMS’ existing facilities with RMB, as well as to pay certain transaction

costs.

Lesaka SA may

borrow up to

an aggregate of

ZAR

1.0

billion for the

sole purpose of

refinancing the Lesaka

SA existing facilities,

its

general

banking

facilities,

with

RMB,

and

for

general

Lesaka

SA

B

in

full

on

February 28, 2025, to repay a portion of its existing facilities as well as to settle a portion

of its existing general banking facility.

Facility A is required to be repaid in full on February 28, 2029. Facility A is subject to customary mandatory prepayment

terms.

Lesaka

SA

is

to

make

voluntary

prepayments

of

A,

and

is

to

subsequently

utilize

any

voluntary

prepayments made under Facility A under the RCF Agreement. Amounts

utilized under the RCF Agreement are required to be repaid

in full on February 28, 2029.

B

is

to

be

repaid

in

four

annual

installments,

as

follows:

(i) ZAR

million

($

8.4

on

28, 2026; (ii) ZAR

11.3

million) on February 28, 2027; (iii) ZAR

16.9

million) on February 28, 2028; and

(iv) R

19.7

million) on February 28,

2029. Facility B is

subject to customary

mandatory prepayment terms.

is permitted to make voluntary prepayments of Facility B, however it is unable

to subsequently utilize any amounts prepaid.

Facilities obtained in February 2025 (continued)

Long-term borrowings – Facility A and Facility B Agreements

Interest on Facility A

and Facility B as well

as any interest related

to utilization under

the RCF Agreement is

payable quarterly

in arrears at end of March, June, September and December,

with the first interest payment made on June 30, 2025.

Short-term facility - General Banking Facility

Lesaka SA and certain of

its subsidiaries may borrow up

to an aggregate of ZAR

700.9

million under a general banking facility

(“GBF”) from RMB for general corporate expenditure (including capital expenditure) and working capital purposes of the Lesaka SA

and certain of

its subsidiaries. Lesaka

SA utilized a

GBF to refinance

its existing general

banking facility.

As of June

30, 2025, the Company had utilized ZAR

434.5

24.5

million) of this facility.

The GBF was available for utilization from February 28, 2025, and is subject to

annual review by RMB.

Interest on the GBF is payable monthly and is based on the South African prime rate

in effect from time to time less

0.50

%.

The GBF Agreement

also provides Lesaka SA

and certain of its

subsidiaries with other

facilities in an aggregate

of ZAR

100.7

5.7

million), which indirect,

short-term direct and

contingent facilities, including

bank guarantee, forward exchange

contract,

credit card

and settlement

facilities. As

of June

30,

2025,

other

was ZAR

100.7

5.7

million). As

of June

had utilized

ZAR

33.1

million

($

1.9

million) of

its other

facilities to

enable the

bank to

issue guarantees,

letters of

credit and

forward exchange

contracts (refer

to

Note 22).

Wesbank Facilities

The Company, through certain

of its

South African subsidiaries,

has an

asset-backed facility of

ZAR

227.0

11.3

of which ZAR

127.5

7.2

million) has been utilized.

Refinanced CCC Loan Document,

comprising long-term borrowings

On November

29, 2022, the

through its indirect

South African subsidiary

Cash Connect Capital

(Pty) Ltd (“CCC”),

entered

into

a

Credit

(the

“Refinanced

CCC

Loan

Document”)

with

RMB

and

other

Company

subsidiaries within

the Connect Group

of companies

listed therein,

as guarantors. The

transaction closed on

December 1, 2022.

The

Refinanced CCC Loan Document was scheduled to be repaid in full on November 2024,

but this has been extended to September 30,

On September 5, 2025, the Company, through its indirect South African

subsidiaries CCC and K2020 Connect (Pty) Ltd,

entered

into a new Revolving Credit

Facility Agreement (“CCC Loan

Document”) which replaced

the Refinanced CCC Loan Document

and

increased the amount available from

ZAR

million to ZAR

million (of which ZAR

299.9

million has been utilized as of

June

30,

2025).

The

refinancing

closed

on

8,

The

portion

of

the

Refinanced

CCC

Loan

Document

has

been

presented in long-term borrowings in the consolidated balance sheet as of June 30, 2025, because the Company has demonstrated that

it has the intent and

ability to consummate the refinancing

prior to the issuance of

these consolidated financial statements.

The terms

of the CCC Loan Document are readily determinable, the agreement does not expire in the next 12 months and there is

no violation of

any provision to the CCC Loan Document.

Both the

Refinanced CCC

Loan Document

and the

CCC Loan

Document contain

customary covenants

that require

CCC and

K2020 to collectively

maintain a specified capital

adequacy ratio, restrict the

ability of the entities

to make certain distributions

with

respect

to

their

capital

stock,

encumber

their

assets,

incur

indebtedness,

make

engage

in

certain

combinations and engage in other corporate activities.

Pursuant to the CCC Loan Document, CCC and K2020 collectively

may borrow up to an aggregate of ZAR

400.0

million for the

sole purposes

of funding

CCC’s

and K2020’s

lending business,

settling up

to ZAR

20.0

to an

intercompany loan

to

CCC’s direct parent, and paying

structuring and execution fee and legal costs.

Refinanced CCC Loan Document,

comprising long-term borrowings (continued)

Pursuant to

the Refinanced

CCC Loan Document,

CCC was

permitted to

borrow up

to an aggregate

of ZAR

300.0

million for

the sole

funding CCC’s

lending business,

providing a

limited recourse

loan to

K2020, settling

up to

ZAR

35.0

million

related to an intercompany loan to CCC’s direct

parent, and paying the structuring and execution fee and legal

costs.

Interest on the Refinanced CCC Loan Document was, and under the CCC Loan Document is, payable on the

last business day of

each calendar month.

paid a

non-refundable structuring

and execution

fee of ZAR

1.7

million, or

$

0.1

million, including

value added

taxation, to RMB

on closing in

November 2022. The

Company paid a

non-refundable structuring and

execution fee

of ZAR

0.5

excluding value added taxation, to the RMB on closing of the CCC Loan Document

in September 2025.

Certain merchant finance loans receivable have been pledged as security

for the revolving credit facility obtained from RMB.

Nedbank facility, comprising short-term facilities

As of

2024, the

Company had

utilized ZAR

2.1

0.1

million) and

ZAR

2.1

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 22).

In terms of a commitment provided to the

lender under the CTA entered into on February 27, 2025, the Company has

undertaken

not to utilize more than ZAR

5.0

0.3

million) of the Nedbank Facility.

has entered

into cession

and pledge

agreements with

Nedbank related

of its

Nedbank credit

(the general banking

facility and a

indirect facility) and

the Company has

ceded and pledged

certain bank accounts

to

Nedbank and also provided a cession of Lesaka SA’s

shareholding in Cell C. The funds included in these bank accounts are restricted

as they may not be withdrawn without the express permission of Nedbank.

RMB Bridge

Facilities,

a short-term

facility

in September

amended

in December

(all

repaid)

On September

30, 2024,

a Facility

Letter (the

“F2024 Facility

Letter”) with

RMB to

provided Lesaka

SA a ZAR

665.0

million funding facility

(the “Bridge Facility”).

The Bridge Facility

was used by

Lesaka SA to (i)

settle an amount

of ZAR

232.2

due

Adumo

transaction (refer

to Note

3); (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

14); (iii) pay

an amount of

ZAR

147.5

million, which includes

interest, notified by

Investec to Adumo

of

the transaction

described in

Note 3,

and (iv)

pay an

origination fee

of ZAR

7.6

million to

RMB. The

Facility also

provided Lesaka

with ZAR

70.0

million for transaction-related expenses.

On

December

10,

2024,

Lesaka

SA

and

RMB

entered

into

a

First

to

the

Letter

(the

“F2024

Letter”).

The F2024

Letter provided

with an

additional ZAR

250.0

million general

banking facility

(“2024

GBF Facility”) which could be used for general corporate purposes. The Bridge Facility and 2024 GBF Facility were repaid in full on

February 28, 2025, utilizing funding obtained under the CTA

and the agreements were cancelled.

Interest on the

Bridge Facility and

the 2024 GBF Facility

was calculated at

the prime rate

plus

1.80

%. The Bridge

Facility and

the 2024

GBF Facility

were unsecured

and were

repaid in

full on

February 28,

2025, the

maturity date,

the refinancing

process.

Cancelled RMB Facilities,

as amended, comprising a

short-term facility (Facility E)

and long-term borrowings (all

repaid)

On July 21,

2017, Lesaka SA

Common Terms

Agreement, Subordination

Agreement, Security

Cession & Pledge

and

certain

ancillary

loan

documents

the

“Original

Loan

Documents”)

with

RMB,

a

South

African

and

bank, and

Nedbank Limited

(acting

and Investment

Banking division),

an African

and

investment bank (collectively, the “Lenders”).

Since 2017, these agreements have been amended to add

additional facilities, including

Facilities G and

H, which were obtained

to finance the acquisition

of Connect.

Facilities E, G and

H have been repaid

and cancelled

in February 2025 and there is

no

balance outstanding as of June 30, 2025.

Cancelled RMB Facilities,

as amended, comprising a

short-term facility (Facility E)

and long-term borrowings (all

repaid)

Short-term facility - Facility E

The available amount under Facility E was ZAR

0.9

49.5

million, translated at exchange rates applicable as of

2024). The Company cancelled

its Facility E facility agreement in

November 2024. The 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.

Interest on

the overdraft

facility was

payable on

the first

day of

the month

following utilization

of the

facility and

on the

final

maturity date based on the South African

prime rate. The overdraft facility amount utilized was

required to be repaid in full within

one

month of utilization and

at least

% of the amount

utilized was to be

repaid within

25 days

. The overdraft facility

was secured by a

pledge by

of, among

other things,

cash and

certain bank

accounts utilized

in the

ATM

funding process,

the

cession

of

Lesaka

SA’s

shareholding

in

Cell

C,

the

cession

of

an

policy

with

Senate

Transit

Underwriters

Managers

Proprietary Limited, and any rights and claims Lesaka SA had against Grindrod Bank Limited.

As at June 30, 2024, the Company had

utilized approximately ZAR

0.1

6.7

million) of this overdraft facility.

Long-term borrowings - Facility G and Facility H

16, 2023,

through Lesaka

SA, entered

into a

Fifth Amendment

and

Restatement Agreement,

which

included,

among

other

an

Amended

and

Restated

Common

Terms

(“Expired

CTA”),

an

Amended

and

Restated Senior Facility

G Agreement (“Facility G

Agreement”) and an

Amended and Restated

Senior Facility H

Agreement (“Facility

H Agreement”)

the “Loan

Documents”) with RMB.

Main Street 1692

(RF) Proprietary Limited

(“Debt Guarantor”),

a

South

African

company

incorporated

for

the

sole

purpose

of

holding

collateral

for

the

benefit

of

the

Lenders

and

acting

as

debt

guarantor is

also a party

to the Loan

Documents. Pursuant

to the

Facility G

Agreement, Lesaka

SA was

borrow up

to an

aggregate of approximately

ZAR

708.6

million. Facility G included

a term loan of

ZAR

508.6

million and a revolving

of up to

ZAR

million. Pursuant to

the Facility H

Agreement, Lesaka SA

was entitled to

borrow up to

an aggregate of

ZAR

357.4

On February 28,

2025, the Company

used its new borrowings

to settle Facility

G and Facility

H in full, including

interest of ZAR

201.7

10.9

million). These facilities, excluding

accrued interest, included (i)

Facility G of

ZAR

492.1

million

($

26.6

(ii) Facility

H of

ZAR

350.0

million

($

18.9

and

(iii) a

Facility G

revolver

of ZAR

200.0

million

($

10.8

million) (of

which ZAR

10.8

million) had

been utilized

at February

28, 2025).

These facilities

were repaid

in full

on

February 28, 2025,

utilizing funding

obtained under

the Expired CTA

and the Facility

G and Facility

H agreements

were cancelled.

Amounts translated at rates prevailing on the repayment date. The interest rate

on these facilities was JIBAR plus a margin of

4.75

%.

Lesaka SA paid a

quarterly commitment fee computed at

a rate of

% of the Applicable

Margin (as defined in the

Expired CTA)

on the amount

of the revolving

credit facility outstanding and

such commitment fee was

capitalized, subject to

the cap discussed

above.

The Company used cash proceeds of ZAR

64.2

3.5

million) received from the sale of Finbond shares (refer to Note 9)

during the year ended June 30, 2024, to repay capitalized interest under

Facility G and Facility H.

Cancelled Connect Facilities, comprising long-term borrowings and

a short-term facility (all repaid)

On March 22,

2023, the Company, through CCMS,

First Amendment and

Restatement Agreement, which

included,

among other

agreements, an

Amended

and Restated

Facilities Agreement

(“CCMS Facilities

Agreement”)

with RMB.

The CCMS

Facilities Agreement was

amended to increase

the Facility B available

under the CCMS Facilities

Agreement by ZAR

200.0

million

to ZAR

550.0

million. The final

maturity date was

extended to December

31, 2027, and

scheduled principal repayments

were amended,

with

the

first

scheduled

repayment

commencing

from

March

31,

These

were

repaid

in

full

on

28,

2025,

utilizing funding

obtained under

the CTA

and the

agreements cancelled.

settlement and

cancellation, the

Connect Facilities

included (i) an overdraft

facility (general banking

facility) of ZAR

170.0

9.2

million); (ii) CCMS Facility

A of ZAR

700.0

37.9

million); (iii) CCMS Facility B of ZAR

550.0

29.8

million) (both were fully utilized). Amounts translated at

rates prevailing on the repayment date.

On October

29, 2024, the

through CCMS, entered

into an addendum

to a facility

letter with RMB,

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 was

repayable in equal daily

instalments which commenced at

the end of

October

2024 with the final repayment made on February 15, 2025.

Cancelled Connect Facilities, comprising long-term borrowings and

a short-term facility (all repaid) (continued)

In February 2023, the Company,

through CCMS, obtained a ZAR

175.0

million temporary increase in its overdraft facility for a

period of

four months

to specifically

fund the

purchase of

prepaid airtime

vouchers. This

temporary increase

was repayable

in

four

equal monthly instalments of ZAR

43.8

million and which commenced

in March 2023. In May 2023,

through CCMS,

obtained a ZAR

155.0

million temporary increase

in its overdraft facility

for a period of

one month

to specifically fund the

of prepaid airtime vouchers. This temporary increase was repaid in full in June 2023. Interest at the South Africa prime rate less

0.1

%

was payable on a monthly basis on both of these temporary facilities.

Interest on CCMS Facility A and CCMS Facility B was payable quarterly

in arrears based on JIBAR in effect from time to time

plus a margin.

RMB facility, comprising indirect facilities

had a

short-term South

African indirect

under its

cancelled lending

facilities of

ZAR

135.0

7.4

million), which included facilities for guarantees, letters of credit and forward

exchange contracts. As of June 30,

2024, the Company

had utilized ZAR

33.1

1.8

million), of these

facilities to enable

the bank to

issue guarantees, letters

of

credit and forward exchange contracts (refer to Note 22).

Movement in short-term credit facilities

Summarized below are the Company’s short-term facilities as of June 30, 2025, and the movement in the Company’s

facilities from as of June 30, 2024 to as of June 30, 2025:

RMB

RMB

Nedbank

RMB

RMB

RMB

GBF

Other

Facilities

Connect

Bridge

Facility E

Total

Short-term facilities available as of