LESAKA TECHNOLOGIES INC

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three and six months ended December 31, 2025 and 2024

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

Policies

Unaudited Interim Financial Information

The accompanying

statements include

all majority-owned

subsidiaries over

which

the Company exercises

control and have been

prepared in accordance with

U.S. generally accepted accounting

principles (“GAAP”)

and

the rules

and

regulations

of

the United

States Securities

and

Commission

for

Quarterly Reports

on Form

10-Q

and

include all of

the information and

disclosures required

for interim financial

reporting. The results

and six

months ended December 31, 2025 and

2024, are not necessarily indicative

of the results for the full year.

The Company believes that

the disclosures are adequate to make the information presented not misleading.

These

should

be

read

in

conjunction

with

the

statements,

accounting policies and financial notes thereto included in the

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

30,

In

the

opinion

of

management,

the

accompanying

reflect

all

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

representation of financial results for the

interim periods presented.

References to “Lesaka” are references

solely to Lesaka Technologies,

Inc. References to the “Company” refer

to Lesaka and its

consolidated subsidiaries, collectively,

unless the context otherwise requires.

Revision of Previously Issued Financial Statements

Understatement of cost and accumulated depreciation

for computer equipment

In October 2025, the Company

identified that it had understated

its June 30, 2025, amounts

of cost and accumulated depreciation

for

computer

equipment

as

well

as

the

totals

for

cost

and

by

$

6.5

million

in

the

notes

to

the

audited

for

the

years

ended

June

30,

2025,

and

The

value

of

property,

plant

and

equipment reported as

of June

30, 2025, was

not impacted by

the error. The Company has

recast its

accumulated depreciation presented

on the condensed consolidated balance sheet as of June 30, 2025, to increase

the amount from $

48,636

to $

55,086

.

The Company assessed the materiality of this error and change in presentation on prior period consolidated

in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99“Materiality” and SAB No.

108, “Considering the Effects of Prior

Year

when

Quantifying

in

the

Current

Year

Financial

Statements.”

Based

on

this

assessment,

the

Company has concluded

that previously issued

financial statements were

not materially misstated

based upon overall

considerations

of both quantitative and qualitative factors.

Understatement of cost of goods sold, IT processing,

servicing and support due to incorrect claim of indirect

taxes

Subsequent to the issuance

of the Company’s

Quarterly Report on Form

10-Q for the three

months ended September

it

that

its

certain

taxes

had

not

been

accounted

for

correctly

in

its

balance

sheet,

operations,

statement of

loss, consolidated

statement of

equity,

statement of cash flows and

related notes to the

consolidated financial statements included in

previously filed Annual Reports on

Form

10-K and Quarterly Reports on Form 10-Q since June 30, 2022, and these filings were incorrect. In these previous filings, the amount

of

certain

taxes

were

incorrectly

claimed

in

monthly

tax

submission

to

the

taxing

authority

and

were

incorrectly

excluded

from

cost of

goods

sold, IT

in the

and

other

payables

and

retained

in

the

balance

sheet.

The

corrected

presentation

in

the

revised

certain

taxes

in

cost

of

goods

sold,

IT processing,

and

support

in

the

consolidated statements of operations and other payables and retained

earnings in the consolidated balance sheet

The Company has

also determined that

it may also

be liable for

penalties and interest

indirect taxes not

paid in a

timely manner and has recorded the penalties in the selling,

general and administration expense and the interest in interest expense

in

the revised consolidated statements of operations.

The cumulative sum of the penalties and interest are included in other payables and

retained earnings in the revised consolidated balance sheet.

The Company has determined

that at this time

it is more likely

than not that it

will be unable to

claim an income tax

deduction

related to the error, however,

it is performing further analysis of

its tax position with its external tax advisors.

Therefore, there are no

income tax adjustments reflected in these condensed consolidated

financial statements related to the correction of this error.

Policies (continued)

Revision of Previously Issued Financial Statements (continued)

Understatement of cost

of goods sold,

IT processing, servicing and

support due to

incorrect claim of indirect taxes

(continued)

The Company assessed the materiality of this error and change in presentation on prior period consolidated

in

with

SAB

No.

99“Materiality”

and

SAB

No.

108,

“Considering

the

Effects

of

Prior

Year

when

Quantifying

Misstatements in

the Current

Year

Financial Statements.”

Based on

this assessment,

has concluded

that

issued

were

not

materially

misstated

based

upon

overall

considerations

of

both

quantitative

and

qualitative factors.

has revised the

previous presentations

on the condensed

consolidated statements

and

six months ended December

31, 2024, and corrected them

in this filing. The Company

has also included the impact

of the correction

for

in the

for the

ended

2025, included in

this filing. The

impact of

these revisions has

increased cost

of goods

and support,

expense and

interest expense,

and all

subtotals from

operating income

(loss) to

net

income (loss) attributable to Lesaka for the affected periods.

Specifically,

for the

by

$

0.18

general

and

expense

by

$

0.06

income

by

$

0.25

million, Interest

expense increased

by $

0.12

million, and

$

0.36

million, as

a

result of the correction

to amounts reported

for the three months

ended September 30,

2025. Basic and Diluted

loss per share for

the

six months ended December 31, 2025, were not impacted

by the correction to amounts reported for

the three months ended September

has revised

the condensed

consolidated balance

sheet as

of June

and corrected

it in

this filing

where

these amounts

are presented as

comparative prior

period amounts in

other payables and

retained earnings and

affected subtotals

and

totals.

The tables below present the impact of

the revisions to specific captions to

the Company’s condensed consolidated balance sheet

and condensed consolidated statement of operations for the periods

identified.

Condensed consolidated balance sheet

June 30, 2025

$

72,079

$

3,956

$

76,035

(185,664)

Retained earnings

222,719

(3,994)

218,725

Condensed consolidated statement of operations

(in thousands, except per share data)

$

130,696

$

$

130,866

33,777

33,837

6,174

6,266

Basic income (loss) per share attributable to Lesaka shareholders

$

(0.40)

$

$

(0.40)

Diluted income (loss) per share attributable to Lesaka shareholders

$

(0.40)

$

$

(0.40)

Condensed consolidated statement of operations

(in thousands, except per share data)

$

249,605

$

$

249,941

58,976

59,094

11,206

11,382

Basic income (loss) per share attributable to Lesaka shareholders

$

(0.51)

$

(0.01)

$

(0.52)

Diluted income (loss) per share attributable to Lesaka shareholders

$

(0.51)

$

(0.01)

$

(0.52)

Policies (continued)

Recent accounting pronouncements adopted

In December 2023,

the Financial Accounting

Standards Board (“FASB”)

issued guidance regarding

Income Taxes

(Topic

to improve income tax

disclosure requirements. The guidance

requires entities, on an

annual basis, to (1) disclose

specific categories

in the income tax rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if

the effect of those reconciling items is equal to or greater than five percent of

the amount computed by multiplying pre-tax income or

loss by

the applicable

statutory income

tax rate).

This guidance

was effective

for the

Company beginning

July 1,

2025 for

its year

ended June 30, 2026.

Recent accounting pronouncements not yet adopted

as of December 31, 2025

In

November

2024,

the

FASB

issued

Income

Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

Disclosures

(Subtopic

220-40)

which

disclosure

of

income

statement

for

public

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

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

it

disaggregation

of

certain

expense

into

specified

categories

in

disclosures

within

the

footnotes

to

the

statements. This guidance is effective for the

Company beginning July 1, 2027. Early

adoption is permitted. The Company is

currently

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

In

July

2025,

the

FASB

issued

Financial

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.

On

18,

2025,

the

FASB

issued

Intangibles—Goodwill

and

Other—

Internal-Use

Software

(Subtopic 350-40)

which amends certain

aspects of the

accounting for and

disclosure of software

costs under ASC

350-40. The new

makes

targeted

improvements

to

existing

but

does

not

fully

align

the

framework

for

for

internally

developed software

costs that

are subject

to ASC

350-40 with

the framework

applied to

software to

be sold

or marketed

externally

that is

guidance regarding

Costs of

Software to

Be Sold,

Leased, or

Marketed

(Subtopic ASC

985-20)

. The

new guidance

also does not amend the guidance

on costs of software licenses that

are within the scope of ASC 985

-20. The amendments supersede

the guidance

on website

development costs

in guidance

Website

Development Costs

(Subtopic ASC

350-50)

and relocate

that guidance,

along with the

recognition requirements

for development costs

specific to websites,

to ASC 350

-40. This guidance

is

effective for

the Company beginning

July 1, 2028,

and interim reporting

periods during that fiscal

year. Early

adoption is permitted.

Entities

may

apply

the

prospectively,

retrospectively,

or

via

a

modified

prospective

method.

The

modified

prospective

approach

would

allow

entities

to

account

for

an

in-process

project

that,

before

the

date,

met

the

capitalization requirements but would no longer meet

the requirements for capitalization under the

new guidance by derecognizing the

capitalized costs for

that in-process project

through a

cumulative-effect adjustment

to the opening

balance of retained

earnings. The

Company is currently assessing the impact of this guidance on its financial

statements and related disclosures.

On December

8, 2025,

the FASB

issued guidance

Interim Reporting

(Topic

which is

intended to

improve the

navigability

of the

in ASC

and clarify

when it

applies.

Under the

amendments, an

entity is

ASC 270

if

it

provides “interim financial

statements and notes

in accordance with

GAAP.” The updated guidance also

addresses the

form and content

of such financial statements, adds lists to ASC 270 of the interim disclosures required by all other Codification topics, and establishes

a principle

under which an

entity must “disclose

events since the

end of the

last annual reporting

period that have

a material impact

on the entity.”

As the FASB

stated in the

proposed guidance and

reiterates in the ASU,

the amendments are

not intended to “change

the fundamental nature

of interim reporting

or expand or

reduce current interim

disclosure requirements.” This

guidance is effective

for the

Company beginning

July 1,

2028, and

interim reporting

periods during

that fiscal

year.

Early adoption

is permitted.

Entities

m

ay apply the guidance prospectively,

retrospectively, or via a modified

prospective transition method.

Acquisitions

and Dispositions

Refer to Note 3 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the

2025, for

additional information

regarding the

acquisition of

Recharger Proprietary

Limited (“Recharger”)

and

the proposed acquisition of Bank Zero Mutual Bank (“Bank Zero”) (which transaction

remains conditional).

The cash paid,

net of cash

received related

to the Company’s

acquisitions during

is

summarized in the table below:

Total

Total cash paid

$

Less: cash acquired

Total cash paid, net

of cash received

$

2026 Proposed acquisitions of Bank Zero

On

June

26,

2025,

Lesaka

Technologies

Limited

(“Lesaka

SA”)

entered

into

a

Implementation

Agreement (the

“Transaction

Implementation Agreement”)

with Zero

Research Proprietary

Limited (“Zero

Research”), Bank

Zero,

and other parties identified in Annexure

A to the Transaction Implementation

Agreement (being all of the shareholders of Bank

Zero

save

for

Zero

Research

and

Naught

Holdings

Ltd,

the

“Bank

Zero

Sellers”),

the

parties

listed

in

Annexure

B

to

the

Implementation Agreement (being all

of the shareholders

of Zero Research

save for Naught

Holdings Ltd, the

“Zero Research Sellers”)

and Naught Holdings Ltd.

The Company incurred transaction-related expenditures of $

0.04

0.1

million during the three and six months ended

December 31, 2025, respectively,

related to the proposed acquisition of

Bank Zero. The Company’s

accruals presented in Note 10 of

as December 31,

2025, includes an

accrual of transaction related

expenditures of $

0.3

million and the

Company expects to

incur further

transaction costs of $

0.2

million during the 2026 fiscal year.

2026 Acquisitions

On November

10, 2025,

the Company,

through its

wholly

owned

subsidiary,

Prism Holdings

Limited

(“Prism”),

entered

into

a

Sale

of

Shares

Agreement

(the

“Atom

Purchase

Agreement”)

with

Gravaton

Investments

Limited

(“Gravaton”) and Atom Operations Proprietary Limited (“Atom”). Pursuant to the Atom Purchase Agreement and subject to its terms

and conditions, Prism agreed to

acquire, and Gravaton agreed

to sell, all of

the outstanding equity interests

in Atom for a

total purchase

consideration of

$

0.7

million which comprised

of $

0.4

6.0

million, translated at

December 1, 2025

exchange rates)

in

cash and

76,716

shares of the Company’s

shares of common stock (which

had an aggregate value

of $

0.3

million (

76,716

multiplied

by

$

3.95

)

on closing).

The transaction

closed

on December

1, 2025.

did not

incur

any

costs

related to this acquisition.

2025 Acquisitions

On November 19,

2024, the Company,

through Lesaka SA,

entered into a

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

the Recharger

Purchase Agreement

and subject to

its terms and

conditions, Lesaka

SA agreed to

acquire, and

the Seller

agreed to sell, all of the outstanding equity interests in Recharger.

The transaction closed on March 3, 2025.

Acquisitions and Dispositions (continued)

The

Company

completed

the

price

related

to

the

acquisition

during

the

three

months

ended

September 30,

2025. There

were no

changes to

the Recharger

preliminary purchase

price allocation

as of

2025. The

final

price

related

to

the

acquisition,

at

the

foreign

rates

applicable

on

the

date

of

acquisition, is provided in the table below:

Final purchase price allocation

$

1,720

Accounts receivable

Property, plant and equipment

Operating lease right of use asset

3,614

Intangible assets

16,171

Deferred income taxes assets

(149)

(1,439)

Operating lease liability - current

(185)

(4)

Deferred income taxes liabilities

(4,366)

Operating lease liability - long-term

(269)

Fair value of assets and liabilities on acquisition

$

15,825

Transaction costs and certain compensation

costs

did not

incur any

the Bank

Zero acquisition

ended

December 31, 2024. The table

below presents transaction costs incurred

related to the acquisitions of Adumo

and Recharger,

and the

proposed acquisition of Bank Zero during the three and six months

ended December 31, 2025 and 2024:

Bank Zero transaction costs

$

$

$

$

Adumo transaction costs

1,702

Recharger transaction costs

(1)

Total

$

$

$

$

1,952

(1)

and

ended

2024, of

$

0.22

$

0.25

respectively, have been allocated from Selling, general and administration to

Transaction costs related to Adumo, Recharger and Bank

Zero

in the

statement operations

for

and

31,

Pro forma results related

to acquisitions

Pro forma results of operations have not been presented for the

acquisition of Atom because the effect of this acquisition was not

material to the Company.

Since the closing of these

acquisitions, Atom has contributed

revenue and net income of

$

0.05

$

(0.01)

million, respectively, for the six

months ended December 31, 2025.

Acquisitions and Dispositions (continued)

Dispositions

Dispositions

December 2025 disposal of Humble

On

1,

2025,

Adumo

(RF)

Limited,

a wholly

-owned

subsidiary

of the

Company,

disposed

of its

entire

Humble Software

Proprietary Limited

(“Humble”) and

received

306,767

as

consideration. The fair value of these

306,767

shares of the Company’s common stock on December 1, 2025, was $

1.2

million. These

shares have

been included in

treasury shares.

presents the impact

of the deconsolidation

of Humble

and the calculation of the net loss recognized on deconsolidation:

Deconsolidation of Humble

Humble

Fair value of consideration received

$

1,211

Add carrying value of noncontrolling interest on deconsolidation

Less: carrying value of Humble, comprising

1,988

Accounts receivable, net

Property, plant and equipment,

net

1,515

Intangible assets, net

Deferred income taxes assets

(4)

(58)

(1)

Released from accumulated other comprehensive income – foreign

currency translation reserve

(26)

Loss recognized on disposal, before transaction costs

(730)

Loss recognized on disposal, before tax

(730)

Taxes related to gain

recognized on disposal

Tax benefit related

to loss recognized on disposal

(1)

Release of valuation allowance

(1)

Loss recognized on disposal, after tax

$

(730)

(1)The Company incurred a capital loss of $

0.04

million. The Company recorded a valuation allowance of $

0.04

million related

to the capital loss generated.

finance loans receivable, net

Accounts receivable, net and other receivables

The Company’s accounts receivable,

net, and other receivables as of December 31, 2025, and June 30, 2025, are presented in

the table below:

Accounts receivable, trade, net

$

23,247

$

16,433

Accounts receivable, trade, gross

25,503

18,186

Less: Allowance for doubtful accounts receivable, end of period

2,256

1,753

1,753

1,241

(189)

(521)

1,856

(310)

(847)

Deconsolidation

(4)

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

net of

allowance: December 2025: $

; June 2025: $

Other receivables

34,997

26,092

Total accounts receivable,

net and other receivables

$

58,244

$

42,525

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

month-end

that

are

disproportionately

small

to

the

total

invoiced

amounts.

The

month-end

are

more

volatile

than

the

monthly

invoice

amounts

because

they

are

affected

by

operational timing issues and

the fact that a balance

is outstanding at month-end

is not necessarily an indication

of increased risk but

rather a matter of operational timing.

Credit risk in respect of trade receivables

is 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

multiplying

the

lifetime

loss

rate

with

recent

invoice/origination

amounts.

Management

actively

monitors

performance of these receivables over

short periods of time. Different

balances have different rules to

identify an account in distress.

Once balances

in distress are

identified, specific

allowances are immediately

created. Subsequent

recovery from distressed

accounts

is not significant.

O

ther receivables include prepayments, deposits, income taxes receivable and

other receivables.

finance loans receivable, net (continued)

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of December 31, 2025, and June 30, 2025, is presented

in the table below:

Microlending finance loans receivable, net

$

82,250

$

52,492

Microlending finance loans receivable, gross

88,010

56,140

Less: Allowance for doubtful finance loans receivable, end of period

5,760

3,648

3,648

1,947

(161)

4,881

4,301

(3,113)

(2,499)

Merchant finance loans receivable, net

21,343

21,618

Merchant finance loans receivable, gross

24,121

23,214

Less: Allowance for doubtful finance loans receivable, end of period

2,778

1,596

1,596

2,697

(117)

(22)

1,365

2,576

(229)

(3,709)

Total finance

loans receivable, net

$

103,593

$

74,110

Total

finance

loans

receivable,

net,

comprises

microlending

finance

loans

receivable

related

to

the

microlending

Africa as

well as

its merchant

finance loans

receivable related

to Connect’s

lending activities

Africa.

Certain merchant finance loans receivable with an aggregate balance

of $

20.5

million as of December 31, 2025 have been pledged as

security for the Company’s

revolving credit facility (refer to Note 9).

Allowance for credit losses

Microlending finance loans receivable

Microlending finance loans receivable is related to the Company’s

microlending operations in South Africa whereby it provides

unsecured short-term loans to qualifying customers. Loans to customers

have a tenor of up to nine months, with the majority of loans

originated having

a tenor of

six months.

analyses this lending

book as a

single portfolio

because the

loans within the

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

the credit risk of the lending book.

Refer to Note 5 related to the Company risk management process related to

these receivables.

The Company has operated this lending book for more than

and uses historical default experience over the lifetime of

loans in order

to calculate a

lifetime loss rate

for the lending

book. The allowance for

credit losses related

to these microlending finance

loans receivables

is calculated

by multiplying

the lifetime

loss rate

month end

outstanding lending

book. The

lifetime loss

rate as of each of June 30,

2025 and December 31, 2025,

was

6.50

%. The performing component (that

is, outstanding loan payments

not in

arrears) of

the book

exceeds more

than

%, of

the outstanding

lending book

as of each

of June

and December

31,

Merchant finance loans receivable

Merchant finance loans

receivable is related

to the Company’s

Merchant lending activities

in South Africa

whereby it provides

unsecured

short-term loans

to qualifying

customers. Loans

to customers

have a

tenor of

up to

twelve months,

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

o

f the lending book. Refer to Note 5 related to the Company risk management

process related to these receivables.

finance loans receivable, net (continued)

Finance loans receivable, net (continued)

Allowance for credit losses (continued)

Merchant finance loans receivable (continued)

The Company uses historical default

experience over the lifetime of loans generated

thus far in order to calculate a lifetime

loss

rate for the lending

book. The allowance

for credit losses related

to these merchant

finance loans receivables

is calculated by adding

together actual receivables in default plus

multiplying the lifetime loss rate

with the month-end outstanding lending book.

The lifetime

loss

rate

as

of

each

of

June

30,

and

31,

2025,

was

1.14

%.

The

performing

(that

is,

outstanding loan

payments not

in arrears),

under-performing

component (that

is, outstanding

loan payments

that are

in arrears)

and

non-performing

(that

is,

loans

for

which

payments

appeared

to

have

ceased)

of

the

book

%,

% and

%, respectively, of the outstanding lending

book as of

The performing component, under-

performing component and non-performing

component of the book represents

%,

% and

%, respectively,

of the

outstanding lending book as of December 31, 2025.

The Company’s inventory

comprised the following categories as of December 31, 2025, and June 30, 2025:

Raw materials

$

2,627

$

2,963

Work-in-progress

Finished goods

22,183

20,295

$

25,098

$

23,551

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

required to

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

exchange rate

has fluctuated

significantly over

the past

three years.

As exchange

rates are

outside the

control,

there can be no

assurance that future fluctuations will

not adversely affect the Company’s results of operations and

financial condition.

Risk management (continued)

Interest rate risk

As a result of its

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

interest rates, which

it

manages

through

regular

financing

activities.

rates

in

South

Africa

have

been

trending

downwards

in

recent

quarters and as of the date of this Quarterly Report, are expected to decline

by a further 25 basis points in the first quarter of calendar

2026 and stabilize

at that level

for the remainder of

that year. Therefore, ignoring the

impact of changes

to the margin on

its borrowings

(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

effectiveness

of

rate

hedging

strategies

to

manage

this

risk.

The

Company

generally

maintains surplus

cash in

cash equivalents

and held

to maturity

investments and

has occasionally

invested in

marketable

securities.

Credit risk

Credit

risk

relates

to

the

risk

of

loss

that

the

Company

would

incur

as

a

result

of

non-performance

by

counterparties.

The

Company

maintains

credit

risk

policies

in

respect

of

its

counterparties

to

minimize

overall

credit

risk.

These

policies

include

an

evaluation

of

a

potential

counterparty’s

condition,

credit

rating,

and

other

credit

criteria

and

risk

mitigation

tools

as

the

management deems

appropriate.

With

respect to

credit risk

on 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

factors such

as other debts

and total expenditures

on normal household

and lifestyle expenses.

allowances

may

be required

should the

ability of

its customers

to make

payments when

due

deteriorate

in the

future. Judgment

is

required to assess

the ultimate recoverability

of these finance

loan receivables, including

ongoing evaluation

of the creditworthiness

of each customer.

Merchant lending

The Company maintains an allowance for

doubtful finance loans receivable related to

its Merchant services segment with

respect

to short-term loans to qualifying merchant customers. The

Company’s risk management procedures include adhering to its proprietary

lending criteria which uses

an online-system loan application

process, obtaining necessary customer transaction-history

data and credit

bureau checks.

The Company considers

these procedures

to be appropriate

because it takes

into account

a variety of

factors such

as

the customer’s credit capacity and customer-specific

risk factors when originating a loan.

Equity price and liquidity risk

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

of equity

securities that

it holds

from time

to time.

The market

price of

these securities

may fluctuate

for a

variety of

reasons and,

consequently,

the

amount

that

the

Company

may

obtain

in

a

subsequent

sale of

these

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

section describes

the valuation

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

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

active markets for identical assets or liabilities

fair value.

This pricing

methodology would

apply to

Level 1

investments. If quoted

prices in

active markets

for identical

assets or

liabilities are

not available

fair value,

then the

Company uses

quoted

prices for

similar assets

and

liabilities or

inputs

other

than

the

quoted

prices

that

are

observable

either

or

indirectly. These

investments

would

be included

in

Level

investments. In

circumstances

in

which

inputs

are

generally

unobservable,

values

typically

reflect

management’s

of

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

The fair values are therefore determined using model-

based techniques that include

option pricing models, discounted

cash flow models, and

similar techniques. Investments

valued using

such techniques are included in Level 3 investments.

Asset measured at fair value using significant unobservable inputs – investment

in Cell C

held

class “A” shares

in Cell

C Limited

(“Cell C”), a

significant mobile

telecoms provider

Africa.

In November 2025,

Cell C completed a

restructuring process in anticipation

of its listing on

the securities exchange

operated

by the JSE Limited. Under this process, a new holding company,

Cell C Holdings Limited (“Cell C Listco”), was established for Cell

C, with a transaction

step including the transfer

of shares in Cell

C by its existing

shareholders to Cell C

Listco in exchange

for Cell

C Listco issuing shares to

the existing Cell C shareholders

(the “Flip-up”). The

Company exchanged its

class “A” shares

in Cell C for

76,590

shares in Cell C Listco. Cell C Listco listed on November 23, 2025.

On October 31, 2025, in considering the proposed restructure

and listing of Cell C Listco, Lesaka SA entered into an

agreement

with The

Prepaid Company

Proprietary Limited

(“TPC”) to

dispose of

its shares

in Cell

C (or,

after the

Flip-up is

implemented, its

shares in Cell C Listco) (“Relevant Shares”), if certain conditions are met. Under the

terms of the agreement, if:

●

the listing

occurred by

November 30,

2025, and

the value

of Lesaka

SA’s

shares in

Cell C

was less

than ZAR

then Lesaka SA could choose to either hold the shares, or sell the Relevant Shares to TPC for a purchase price equal to ZAR

million; or

●

the listing did

not occur by

November 30, 2025

(or, earlier

than this date,

it is determined

that the listing

will not proceed),

then Lesaka SA

could sell the Relevant

Shares to TPC for

ZAR

million. If, after

this sale and before

April 30, 2026, the

Listing occurs and the

list price per share

(“A”) is more than the

price paid to Lesaka

SA per Relevant Share

(the aggregate

ZAR

million) (“B”), then TPC shall pay an amount equal to the difference between A and B, multiplied by the number of

Relevant Shares to Lesaka SA as a top-up to the purchase consideration.

The value of Lesaka SA’s

shares in Cell C Listco was less than ZAR

million on listing and Lesaka SA elected to sell its Cell

C Listco shares to TPC for ZAR

3.0

million) and received the cash proceeds in December 2025.

The

Level

asset

represented

an

of

class

“A”

shares

in

Cell

C.

The

Company

used

a

discounted cash

flow model

developed by

the fair value

of its

Cell C as

of June

and valued Cell C

at $

0.0

(zero) as of June

30, 2025. The Company

assumed that Cell C’s

deferred tax assets would

be utilized over

the forecast period. The Company has assumed a marketability discount of

% as of June 2025 and a minority discount of

%. The

Company utilized the latest business plan provided

by Cell C management for the period ended May 31, 2030,

for the June 30, 2025,

valuation.

The following key valuation inputs were used as of June 30, 2025:

Weighted Average

Cost of Capital ("WACC"):

%

Long term growth rate:

4.5

%

Marketability discount:

%

Minority discount:

%

Net adjusted external debt - June 30, 2025:

(1)

ZAR

8.3

billion ($

0.5

billion), no lease liabilities included

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

The following table

presents the

Company’s assets measured at

fair value on

a recurring

basis as

of December 31,

2025, according

to the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Assets

(Level 1)

Other

Observable

Inputs

(Level 2)

Unobservable

Inputs

(Level 3)

Total

Assets

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)

6,793

6,793

Total assets at fair value

$

6,929

$

$

$

6,929

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)

Other

Observable

Inputs

(Level 2)

Unobservable

Inputs

(Level 3)

Total

Assets

Investment in Cell C

$

$

$

$

Related to insurance business

(included in other long-term

assets)

Fixed maturity investments

(included in cash and cash

equivalents)

4,739

4,739

Total assets at fair value

$

4,864

$

$

$

4,864

During the three and six

2025, respectively, the Company transferred its investment in

Cell C Listco

out

of

Level

the

of

these

equity

securities.

During

the

three

and

six

months

ended

31,

2025,

the Company recorded an

increase in the carrying

value of its investment

in Cell C Listco

prior to the disposal

of these

equity securities.

There were

no

transfers in or out of Level 3 during the three and six months ended December 31, 2024. There was

no

movement

in the

carrying value

of assets

measured at

on a

recurring basis,

and categorized

within Level

3, during

and six

months ended December 31, 2024.

Summarized below is the movement in the carrying value of

assets and liabilities measured at fair value on a recurring

basis, and

categorized within Level 3, during the six months ended December 31, 2025:

Carrying value

Assets

$

Gain on fair value re-measurement

2,971

Disposal of investment in Cell C

(2,971)

(1)

$

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

South African rand against the U.S. dollar on

t

he carrying value.

Summarized below is the movement in the carrying value

of assets and liabilities measured at fair value on

a recurring basis, and

categorized within Level 3, during the six months ended December 31, 2024:

Carrying value

Assets

Balance as of June 30, 2024

$

(1)

$

(1) The

foreign currency

adjustment represents the

effects of

the fluctuations

of the South

African rand

against the U.S.

dollar

Assets measured at fair value on a nonrecurring basis

measures equity

investments without

readily determinable

fair values

at fair value

on a

nonrecurring basis.

The

fair values of

these investments

are determined

valuation techniques

using the best

information available

and may include

quoted market prices, market comparables, and discounted cash flow

projections. An impairment charge is recorded when the cost

of

the

asset

exceeds

its

fair

value

and

the

excess

is

to

be

other-than-temporary.

The

Company

has

no

liabilities

that

are

measured at fair value on a nonrecurring basis.

Equity-accounted investments and other long-term assets

Refer to Note 9 to the Company’s audited consolidated

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

year ended June 30, 2025, for additional information regarding its equity

-accounted investments and other long-term assets.

Equity-accounted investments

ownership percentage in its equity-accounted

investments as of December 31,

2025, and June 30, 2025, was as

follows:

Sandulela Technology

(Proprietary) Limited (“Sandulela”)

49.0

%

49.0

%

SmartSwitch Namibia (Proprietary) Limited (“SmartSwitch Namibia”)

50.0

%

50.0

%

SmartSwitch Namibia

The

Company

a

loss

on

of

of

$

0.6

million

during

the

six

months

ended

December 31, 2025, which primarily includes the release of accumulated

other comprehensive loss (refer to Note 12).

Other long-term assets

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

31, 2025, and June 30, 2025:

Total equity investments

$

$

Investment in Cell C (June 30, 2025:

%) at fair value (Note 5)

(1)

Investment in

% of Cowdi at fair value

(2)

Investment in

87.5

% of CPS (June 30, 2025:

87.5

%) at fair value

(2)(3)

Policy holder assets under investment contracts (Note 8)

Reinsurance assets under insurance contracts (Note 8)

2,020

1,837

Other long-term assets

1,975

1,847

Total other long-term

assets

$

4,381

$

3,809

(1) The Company disposed of its entire shareholding in Cell C in December

2025, refer to Note 5 for additional information.

(2) The Company determined

that Cowdi and CPS do

not have a readily

determinable fair value and

therefore elected to record

its investments

at cost minus impairment, if

any, plus or minus changes resulting

from observable price changes in

orderly transactions

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

(

3. On October 16,

2020, the High Court of

South Africa, Gauteng Division, Pretoria

ordered that CPS be

placed into liquidation.

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

Other long-term assets (continued)

During

and six

invested

$

0.3

million

to acquire

a

% interest

in

Cowdi Limited (“Cowdi”), an entity incorporated in England and Wales,

with operations through a Kenyan wholly-owned subsidiary

offering digital

loans to customers

in that country.

The Company also

extended a $

0.75

million credit facility

to Cowdi. The

facility

was undrawn as of December 31, 2025.

The Company previously owned

6,215,620

equity shares of One MobiKwik

Systems Limited (“MobiKwik”). MobiKwik

listed

on

the

National

Stock

of

India

(“NSE”)

on

18,

Up

until

its

listing

MobiKwik

did

not

have

a

readily

determinable fair

value and

elected to

measure its

MobiKwik at

cost minus

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

on

the

NSE

on

the

last

trading

day

related

to

last

day

of

the

period

to

determine the fair value

of the equity securities

owned by the Company.

The Company determined

a fair value per

MobiKwik share

of $

6.85

(INR

586.15

at the

USD: INR

exchange rates applicable

as of

December 31, 2024).

The Company used

this valuation

as the

basis for

its adjustment

to decrease

the carrying

value of

its investment

in MobiKwik

by $

33.7

million from

$

76.3

million to

$

42.6

million as of December 31,

2024. The change in the

fair value of MobiKwik for

the three and six months ended

2024, of $

33.7

million, is included in the

caption “Change in fair

value of equity securities”

in the consolidated statement of

for the three and six months ended December 31, 2024. The Company disposed of its entire shareholding in MobiKwik in June 2025.

are the components

of the Company’s

equity securities without

readily determinable

fair value and

held to

maturity investments as of December 31, 2025:

Cost basis

holding

holding

gains

losses

value

Equity securities:

Investment in Cowdi

$

$

$

$

Investment in CPS

Total

$

$

$

$

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, 2025:

Cost basis

holding

holding

gains

losses

value

Equity securities:

Investment in CPS

$

$

$

$

Held to maturity:

Investment in Cedar Cellular notes

Goodwill and intangible assets, net

Summarized below is the movement in the carrying value of goodwill

for the six months ended December 31, 2025:

Gross value

value

$

236,109

$

(36,714)

$

199,395

(1,515)

(1,515)

(1)

16,194

(2,188)

14,006

$

250,788

$

(38,902)

$

211,886

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

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

Goodwill has been allocated to the Company’s

reportable segments as follows:

value

$

179,634

$

6,027

$

13,734

$

199,395

(1,515)

(1,515)

(1)

12,609

14,006

$

190,728

$

6,453

$

14,705

$

211,886

(1) The foreign

currency adjustment represents

the effects

of the fluctuations

of the South

African rand

against the U.S.

dollar

Intangible assets, net

Carrying value and amortization of intangible assets

Summarized below is

the carrying value

and accumulated amortization

of intangible assets as

of December 31,

2025, and June

30, 2025:

As of December 31, 2025

As of June 30, 2025

Gross

value

Net

value

Gross

value

Net

value

Finite-lived intangible assets:

Software, integrated

platform and unpatented

technology

$

149,178

$

(52,905)

$

96,273

$

137,099

$

(41,925)

$

95,174

Customer relationships

57,248

(22,842)

34,406

53,369

(18,568)

34,801

Brands and trademarks

(1)

19,523

(18,539)

18,233

(8,993)

9,240

FTS patent

2,311

(2,311)

2,158

(2,158)

Total finite-lived

assets

$

228,260

$

(96,597)

$

131,663

$

210,859

$

(71,644)

$

139,215

(1)

During

early

calendar

2025,

the

executive

considered

the

unification

of

the

merchant

segments

and

the

realignment

of

the

brands

under

the

master

brand

“Lesaka”.

The

Board

of

Directors

approved 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 affected

brands

under the

master brand

and expects

to have

complete alignment

by February

2027,

with

certain brands aligned in December

2025. The change in

brands has resulted in

a change in

the useful lives of

certain of the Company’s

brand

and

trademark

assets

which

has

resulted

in

an

increase

(excluding

the

impact

on

Adumo

and

GAAP

brands)

in

amortization expense of

$

3.2

6.3

million during the three

and six months ended

December 31, 2025 compared

three and six months ended December 31, 2024. The

change in the useful lives resulted in a $

2.3

4.6

million increase in

net loss from continuing operations

for the three and six

months ended December 31, 2025,

respectively, and

did not

h

ave a significant impact on earnings (loss) per share. The change did not impact prior periods.

Goodwill and intangible assets, net (continued)

Intangible assets, net (continued)

Aggregate amortization

expense on the

finite-lived intangible

assets for the

31, 2025 and

2024,

was $

9.8

4.9

million, respectively. Aggregate amortization expense on the

finite-lived intangible assets for

ended December 31, 2025 and 2024,

was $

18.9

8.8

Future estimated annual amortization expense

for the next

five fiscal years

and thereafter,

assuming exchange

rates that prevailed

on December

31, 2025, is

presented in

the table

below. Actual amortization expense in future periods could differ from this estimate

as a result of acquisitions, changes

in useful lives,

exchange rate fluctuations and other relevant factors.

Fiscal 2026 (excluding six months ended December 31, 2025)

$

12,527

Fiscal 2027

22,780

Fiscal 2028

22,316

Fiscal 2029

21,164

Fiscal 2030

19,697

Thereafter

33,179

Total future

estimated annual amortization expense

$

131,663

Assets and policyholder liabilities under insurance and investment

Reinsurance assets and policyholder liabilities under insurance contracts

is the

movement in

reinsurance assets

and policyholder

liabilities under

insurance contracts

six

months ended December 31, 2025:

Reinsurance

Assets

(1)

Insurance

(2)

$

1,837

$

(2,644)

Increase in policyholder benefits under insurance contracts

(6,055)

Claims and decrease in policyholders’ benefits under insurance contracts

(126)

5,939

(3)

(193)

$

2,020

$

(2,953)

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

(2) Included in other long-term liabilities;

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

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

if the reinsurer is unable

to meet its obligations, the

Company retains the liability.

The value of insurance

contract liabilities is based

on the best estimate assumptions of future experience plus prescribed

margins, as required in the markets in which these

products are

offered,

namely South

Africa. The

process of

deriving the

best estimate

assumptions plus

prescribed margins

includes assumptions

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

Assets and policyholder liabilities under investment contracts

Summarized below is the movement

in assets and policyholder

liabilities under investment contracts during

the six months ended

Assets

(1)

Investment

(2)

$

$

(125)

Increase in policy holder benefits under investment contracts

(3)

(3)

(8)

$

$

(136)

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

(2) Included in other long-term liabilities;

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

The Company does not offer any investment products with

guarantees related to capital or returns.

Borrowings

Refer to

Note 12

to the

audited consolidated

its Annual

for

the year ended June 30, 2025, for additional information regarding

its borrowings.

Reference rate reform

After the

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

which the

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 JIBAR,

an average

of 3

month negotiable

certificates of

deposit (“NCD”)

rates, on

2025, was

6.75

%. The

prime rate, the benchmark rate at which private sector banks lend to the public

in South Africa, on December 31, 2025, was

10.25

%.

Movement in short-term credit facilities

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

of December 31, 2025, and

the movement in the Company’s short-

term facilities from as of June 30, 2025 to as of December 31, 2025:

RMB

RMB

Nedbank

GBF

Other

Facilities

Total

Short-term facilities available as of December 31, 2025

$

42,267

$

6,073

$

9,441

$

57,781

Overdraft

42,267

42,267

6,073

9,441

15,514

Movement in utilized overdraft facilities:

No restrictions as to use

24,469

24,469

24,469

24,469

Utilized

48,509

48,509

Repaid

(1)

1,456

1,456

21,333

21,333

No restrictions as to use

$

21,333

$

$

$

21,333

Interest rate as of December 31, 2025 (%)

(2)

9.75

N/A

N/A

Interest rate as of June 30, 2025 (%)

(2)

10.25

N/A

N/A

Movement in utilized indirect and derivative facilities:

$

$

1,864

$

$

1,983

Guarantees cancelled

(1,611)

(1,611)

Utilized

1,536

1,536

(1)

$

$

1,917

$

$

2,044

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

(2) RMB GBF interest is set at prime less

0.50

%.

Interest expense incurred under

the Company’s South African short-term borrowings

and included in

the caption interest

expense

on the condensed consolidated statement of operations during the three months ended December 31, 2025 and 2024, was $

0.8

million

and $

0.6

Interest expense incurred

under the Company’s

South African short-term

borrowings and included

in

the caption interest

expense on the condensed

consolidated statement of

operations during the

and 2024, was $

1.3

2.4

The

Company

cancelled

overdraft

on

October

1,

2024,

and

settled

overdraft

balance of ZAR

20.0

1.1

million) on the

same day.

The repayment is

caption repayment

of bank overdraft

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

1, 2024.

Borrowings (continued)

Movement in long-term borrowings

is the

movement in

long-term borrowing

from as

of June

to as

31,

2025:

Facilities

Lesaka A

Lesaka B

Asset

backed

CCC

Total

Included in current

$

$

8,448

$

3,508

$

$

11,956

Included in long-term

120,375

47,873

3,671

16,894

188,813

Opening balance as of June 30, 2025

120,375

56,321

7,179

16,894

200,769

Facilities utilized

3,057

4,029

Facilities repaid

(2,385)

(2,385)

Non-refundable fees paid

(33)

(33)

Non-refundable fees amortized

(1)

8,520

3,983

1,242

14,278

Closing balance as of December 31, 2025

129,047

60,304

8,389

19,087

216,827

Included in current

9,046

3,979

13,025

Included in long-term

129,047

51,258

4,410

19,087

203,802

Unamortized fees

(951)

(23)

(974)

Due within 2 years

12,061

2,518

14,579

Due within 3 years

18,091

1,530

19,110

38,731

Due within 4 years

129,998

21,106

151,466

Due within 5 years

$

$

$

$

$

Interest rates as of December 31, 2025 (%):

10.00

9.90

11.00

10.15

Base rate (%)

6.75

6.75

10.25

10.25

Margin (%)

3.25

3.15

0.75

(0.10)

(2)

(3)

(4)

(5)

Interest rates as of June 30, 2025 (%):

10.54

10.44

11.50

11.70

Base rate (%)

7.29

7.29

10.75

10.75

Margin (%)

3.25

3.15

0.75

0.95

Footnote number

(2)

(3)

(4)

(6)

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

U.S. dollar.

(2) Interest

on Facility

A and Facility

B is based

on the JIBAR

in effect

from time

to time

plus an

initial margin

of

3.25

% per

annum until

2025. From

July 1,

margin on

Facility A

is determined

with reference

to the

Net Debt

to EBITDA

Ratio, and the

margin will be either

(i)

3.25

%, if the Net

Debt to EBITDA Ratio

is greater than or

equal to 2.5 times;

or (ii)

2.5

%, if

the Net Debt to EBITDA Ratio is less than 2.5 times.

(3) Interest on

Facility B is calculated

based on JIBAR from

time to time plus

an initial margin

of

3.15

% per annum

until June

30, 2025. From July 1, 2025, the margin on Facility B is determined with reference to the Net Debt to EBITDA Ratio, and the margin

will be either (i)

3.15

%, if the Net

Debt to EBITDA Ratio is greater than

or equal to 2.5 times;

or (ii)

2.4

%, if the Net Debt

to EBITDA

Ratio is less than 2.5 times.

(4) Interest is charged at prime plus

0.75

% per annum on the utilized balance.

(5) Interest is charged at prime less 0.10% per annum on

the utilized balance.

(6) Interest is charged at prime plus

0.95

% per annum on the utilized balance.

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

caption interest expense

on the condensed consolidated statement of operations during the three months ended December 31, 2025 and 2024, was $

3.7

million

and $

4.2

Prepaid facility fees

amortized included

in interest expense

during the three

31, 2025 and 2024, respectively,

were $

0.1

0.1

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

caption interest expense

on the condensed

consolidated statement of

operations during the

and 2024, was

$

7.5

million

and $

4.2

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

31,

2025 and 2024, respectively,

were $

0.2

0.1

Borrowings (continued)

Movement in long-term borrowings (continued)

Interest expense incurred under the Company’s

South African long-term borrowings to fund its Consumer lending book (for the

December 31, 2025) and

interest incurred under

CCC and K2020 facilities

relates to borrowings

utilized to fund a portion of the Company’s merchant finance loans receivable were $

1.8

0.4

million, respectively, and is

included in the caption cost of

goods sold, IT processing, servicing and support

on the condensed consolidated statement of operations

for the three months ended December 31, 2025 and 2024.

Interest expense incurred under the Company’s

South African long-term borrowings to fund its Consumer lending book (for the

31, 2025)

and interest

incurred under

CCC and

K2020 facilities

relates to

utilized to fund a portion of the Company’s merchant finance loans receivable were $

3.3

0.4

million, respectively, and is

included in the caption cost of

goods sold, IT processing, servicing and support

on the condensed consolidated statement of operations

for the six months ended December 31, 2025 and 2024.

cancelled Adumo’s

arrangements on

October 1,

2024, and

settled Adumo’s

of ZAR

126.7

million

($

7.2

million) on

the same

day.

The repayment

is included

in the

caption

repayment of

borrowings included on the Company’s unaudited condensed consolidated statements

of cash flows for

the three and six

December 31, 2024.

Summarized below is the breakdown of other payables as of December

31, 2025, and June 30, 2025:

Vendor

wallet balances

$

25,949

$

19,529

Accruals

14,280

8,469

Provisions

7,309

8,497

Clearing accounts

12,404

6,766

Value

-added tax payable

(A)

8,428

6,347

Deferred consideration due to seller of Recharger

14,815

13,837

Payroll-related payables

2,233

1,931

Other

7,083

10,659

$

92,501

$

76,035

(A) Value-added

tax payable

and the

total of

have each

$

4.0

million as

a result

of the

correction

discussed in Note 1.

Other includes deferred income, client deposits and other payables.

In December 2025,

the Company determined

that the liquidation

of CPS is at

an advanced stage

and released an

accrual raised

at the time of

deconsolidation. The release has

been included in the

caption “Other income” in

the consolidated statement of

for the three and six months ended December 31, 2025.

Capital structure

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

net of treasury

The following table presents a

reconciliation between the number of

shares, net of treasury, presented in the

consolidated statement of changes in

equity during the six months ended

December 31, 2025 and 2024, respectively,

and the number

of shares, net of treasury,

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

31, 2025 and 2024, respectively:

Number of shares, net of treasury:

Statement of changes in equity

80,203,148

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

2,500,483

2,902,303

Number of shares, net of treasury,

excluding non-vested equity shares that have not

vested

79,023,692

77,300,845

in accumulated

loss per

ended

foreign

reserve

Total

Balance as of October 1, 2025

$

$

Movement in foreign currency translation reserve related to disposal of

subsidiary

(22)

(22)

10,257

10,257

$

$

in accumulated

loss per

component during

December 31, 2024:

foreign

reserve

Total

Balance as of October 1, 2024

(A)

$

$

Movement in foreign currency translation reserve related to liquidation

of subsidiaries

(A)

(21,858)

(21,858)

(A)

$

$

(A) Accumulated other comprehensive loss and Total

as of October 1, 2024, have each

increased by $

0.04

million as a result of

the correction discussed in Note 1. Accumulated

other comprehensive loss and Total

for the three months ended December 31, 2024,

have each decreased by $

-0.3

million as a result of the correction discussed in

Note 1 to the amount included in the caption Movement

in

foreign

reserve.

other

loss

and

Total

as

of

31,

2024,

have

each

decreased by $

-0.3

The

table

below

the

change

in

other

loss

per

during

the

six

months

ended

foreign

reserve

Total

Balance as of July 1, 2025

(A)

$

$

Release of foreign currency translation reserve related to liquidation of equity

-accounted

Release of foreign currency translation reserve related to liquidation of subsidiaries

(22)

(22)

(A)

16,790

16,790

(A)

$

$

(A) Accumulated other comprehensive loss and Total

as of July 1, 2025, have each decreased by $

0.04

million as a result of the

correction discussed in Note 1.

for the six months ended

December 31, 2025, have

each increased by

$

0.1

as discussed in Note

1, to the amount

included in the caption

Movement

in foreign

currency translation

reserve for

September 30,

2025. Accumulated

loss and

T

otal as of December 31, 2025, have each increased by $

0.1

Accumulated other comprehensive loss (continued)

The

table

below

the

change

in

other

loss

per

during

the

six

months

ended

December 31, 2024:

a

foreign

reserve

Total

Balance as of July 1, 2024

(A)

$

$

Movement in foreign currency translation reserve related to liquidation

of subsidiaries

Movement in foreign currency translation reserve related to equity-accounted

(A)

(11,499)

(11,499)

(A)

$

$

(A) Accumulated other

comprehensive loss and Total

as of July 1,

2024, have each decreased

by $

0.1

million as a result of

the

correction discussed in Note 1.

for the six months ended

December 31, 2024, have

each decreased by

$

-0.1

of the correction

discussed in Note

1 to the

amount included in

the caption Movement

in

foreign currency translation reserve. Accumulated other comprehensive loss and Total as of December

31, 2024, have each decreased

by $

0.01

The movement in the

foreign currency translation reserve represents

the impact of translation of

consolidated entities which have

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

reporting currency, which is USD.

During

the

six

months

ended

31,

2025,

the

Company

reclassified

losses

of

$

0.6

million

from

other

loss

(accumulated

foreign

reserve)

to

net

loss

related

to

the

on

liquidation

of

an

equity-accounted investment. During

each of the three and six

2025, the Company reclassified

a loss of

$

0.02

million, respectively, from accumulated other comprehensive loss (accumulated foreign currency translation reserve) to net loss

related to the disposal of a subsidiary. During each of the three and six months ended December 31, 2024, the Company reclassified a

loss of $

0.006

from accumulated

loss (accumulated

foreign currency

translation reserve)

t

o net loss related to the liquidation of subsidiaries.

Stock-based compensation

Amended and Restated

2022 Stock

Incentive Plan (“20

22 Plan”)

and the vesting

terms of certain

stock-based

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

for the

2025. On

September 2,

Board resolved

to request

the approval

of the

shareholders to increase the

number of shares

available for issuance under

the 2022 Plan by

3,000,000

. On December

8,

2025, the Company’s shareholders approved

the amendment.

Stock option and restricted stock activity

Options

The following table summarizes stock option activity for the six months

ended December 31, 2025 and 2024:

shares

average

price

($)

average

term

value

($'000)

average

grant date

($)

Outstanding - June 30, 2025

8.71

3.55

1.20

Outstanding - December 31, 2025

8.71

3.03

1.20

Outstanding - June 30, 2024

4,918,248

8.70

4.51

1.77

Granted – December 2023

350,000

6.00

1.24

Granted – November 2020

250,000

8.00

0.71

Exercised

(17,014)

3.02

Forfeited

(13,333)

11.23

8.83

Outstanding - December 31, 2024

5,487,901

8.48

4.04

1,418

1.76

No

stock options were awarded

during the three and

December 31, 2025. The

600,000

stock

options to

an executive officer

three and six

31, 2024, with

strike prices ranging

from $

to $

.

The

600,000

stock options

will vest on

2026, and

vesting is

the executive

officer’s

continued employment

with the Company through to the vesting date. The

600,000

stock options expire on January 31, 2029.

No

stock options were exercised or forfeited during the three

and six months ended December 31, 2025. During each

of the three

2024, the Company

received $

0.05

million from the

exercise of

17,014

stock options, respectively.

Employees forfeited an aggregate of

13,333

stock options during each of the three and six months ended December 31, 2024.

The

fair

value

of

each

option

is

estimated

on

the

date

of

grant

using the

Cox

Ross

Rubinstein

binomial

model

that

uses the

assumptions noted in the

following table. The estimated

expected volatility is calculated

based on the Company’s

-day volatility.

The estimated

expected life

of the

option was

determined based

on the

historical behavior

of employees

who were

granted options

with similar terms.

Options (continued)

presents the range

of assumptions used

to value stock

options granted during

31, 2024:

Six months

ended

Expected volatility

%

Expected dividends

%

Expected life (in years)

Risk-free rate

4.3

%

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

shares

average

price

($)

average

term

value

Vested

and expecting to vest - December 31, 2025

8.71

3.03

These options have an exercise price range of $

3.01

to $

14.00

.

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

31, 2025:

shares

average

price

($)

average

term

value

Exercisable - December 31, 2025

869,570

3.98

3.47

No

stock options became exercisable during each

of the three and six

months ended December 31, 2025 and

2024. The Company

issues new shares to satisfy stock option exercises.

Restricted stock

The following table summarizes restricted stock activity for the six

months ended December 31, 2025 and 2024:

average grant

date fair value

Non-vested – June 30, 2025

2,169,900

7,833

Total granted

829,095

3,175

Granted – July 2025

3,772

Granted – August 2025

5,323

Granted – September 2025

200,000

Granted – October 2025

215,000

Granted – November 2025

160,000

Granted – November 2025, with performance conditions

245,000

Total vested

(217,179)

Vested

– August 2025

(10,933)

Vested

– October 2025

(33,333)

Vested

– November 2025

(120,434)

Vested

– December 2025

(52,479)

1,060

(23,465)

Forfeitures December 2022 award with market conditions

(257,868)

Non-vested – December 31, 2025

2,500,483

10,035

Non-vested – June 30, 2024

2,084,946

8,736

Total Granted

1,331,110

4,850

Granted – August 2024

32,800

Granted – October 2024

100,000

Granted – November 2024, with performance conditions

1,198,310

4,206

Total vested

(473,432)

2,469

Vested

– July 2024

(78,801)

Vested

– November 2024

(213,687)

1,134

Vested

– November 2024, with performance conditions

(103,638)

Vested

– December 2024

(77,306)

Non-vested – December 31, 2024

2,902,303

11,348

Restricted stock (continued)

Grants

In July,

August, September,

October and

November 2025,

granted

3,772

;

5,323

;

200,000

;

215,000

and

160,000

shares of restricted stock

to employees which have

time-based vesting conditions and which

are subject to the

employees’

continued employment with the Company through the applicable vesting

dates.

In November

245,000

to a

group comprising

employees and

which are

subject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditions

are satisfied: (1) a compounded annual

% appreciation in the Company’s stock price off a base

price of $

4.31

over the measurement

period commencing on November 1, 2025

through October 31, 2028, and (2) the recipient

is employed by the Company on a full-time

basis through to October 31, 2028. If either of these conditions is not satisfied, then none of the shares of restricted stock

will vest and

they will be forfeited. The Company’s

closing price on October 31, 2025, was $

4.30

.

The appreciation levels (times and price) and

annual target percentages to earn the

awards as of each period

ended are as follows:

●

Prior to the first anniversary of the grant date:

%;

●

Fiscal

2027,

the

30-day

volume

weighted-average

stock

price

(“VWAP”)

before

October

31,

is

1.15

4.96

or higher) than $

4.31

:

%;

●

Fiscal 2028, the Company’s

VWAP before

October 31, 2027 is

1.32

5.70

or higher) than $

4.31

:

%;

●

Fiscal 2029, the Company’s

VWAP before

October 31, 2028 is

1.52

6.55

) than $

4.31

:

%.

The fair value

of these shares

of restricted

stock was calculated

using a Monte

Carlo simulation. In

scenarios where

the shares

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

price on

vesting date.

In its calculation

of the

of the

restricted stock,

used an

equally weighted

volatility of

41.2

% for

the closing

price (of

$

4.35

), a

discounting based

on U.S.

dollar overnight

indexed swap

rates for

the grant

date, and

no

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

prices for the three years preceding the grant date.

In August 2024 and

October 2024, respectively, the Company granted

32,800

and

100,000

shares of restricted

stock to employees

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

the applicable vesting dates.

In November 2024, the

1,198,310

shares of restricted stock to

a group comprising employees

and which are

subject to a time-based vesting condition and a market condition

and vest in full only on the date, if any,

that the specified conditions

are satisfied.

has agreed to

grant an advisor

5,500

shares per month

in lieu of

cash for ad

hoc consulting services

provided to

the Company. The Company and

the advisor have

agreed that

the Company will

issue the

shares to the

advisor, in arrears, on

a quarterly

basis. During the three and six months ended

December 31, 2025, the Company recorded a stock-based

compensation charge of $

0.1

million

and

$

0.1

and

the

issuance

of

11,000

and

27,500

shares

of

common

stock

in

its issued

and

outstanding share count.

Vesting

In August,

October,

November and

December 2025,

an aggregate

of

217,179

granted

vested. Certain employees elected for

70,133

shares to be withheld

to satisfy the withholding

tax liability on the

vesting of their shares.

These

70,133

shares have been included in the Company’s

treasury shares.

In July 2024,

78,801

shares of restricted stock granted

to our former Group CEO,

vested. In November and

December 2024, an

aggregate

of

290,993

shares

of

stock

granted

to

vested.

Certain

elected

for

132,147

shares

to

be

withheld

to

satisfy

the

withholding

tax

liability

on

the

vesting

of

their

shares.

These

132,147

shares

have

been

in

the

treasury shares. In

November 2024,

103,638 shares of

restricted stock with

performance conditions

(share price targets)

vested following the achievement of the agreed performance condition.

Restricted stock (continued)

During

the

three

and

six

months

ended

31,

2025,

forfeited

12,672

and

23,465

shares

of

stock

their

termination

of

employment

with

the

Company.

During

each

of

the

three

and

six

months

ended

2025,

257,868

were forfeited

by executive

officers (including

a former

Group CEO)

as the

market condition (related to share price performance) were not achieved.

During

the

three

and

six

months

ended

31,

2024,

forfeited

37,221

and

40,321

shares

of

restricted stock following their

termination of employment with

the Company or the

failure to achieved agreed

performance conditions

(

29,121

shares were forfeited following the failure to achieved agreed share performance

targets).

Stock-based compensation charge and unrecognized compensation

cost

recorded a

charge, net,

and 2024,

of $

1.9

2.6

million, respectively, which

comprised:

Total

charge

Allocated to cost

of goods sold, IT

support

Allocated to

and

Three months ended December 31, 2025

$

1,829

$

$

1,829

Stock compensation charge related to ESOP

Reversal of stock compensation charge related to restricted

(51)

(51)

Total - three months

ended December 31, 2025

$

1,945

$

$

1,945

$

2,655

$

$

2,655

Reversal of stock compensation charge related to restricted

(11)

(11)

Total - three months

ended December 31, 2024

$

2,644

$

$

2,644

The Company recorded

a stock-based compensation

charge, net, during

the six months ended

December 31, 2025 and

2024, of

$

3.8

5.0

million respectively, which

comprised:

a

Total

charge

Allocated to cost

of goods sold, IT

support

Allocated to

and

Six months ended December 31, 2025

$

3,541

$

$

3,541

Stock compensation charge related to ESOP

Reversal of stock compensation charge related to

(63)

(63)

Total - six months ended

$

3,806

$

$

3,806

$

5,032

$

$

5,032

Reversal of stock compensation charge related to

(11)

(11)

Total - six months ended

$

5,021

$

$

5,021

The stock-based compensation charges

have been allocated to selling,

general and administration based

on the allocation of the

cash compensation paid to the relevant employees.

As

of

31,

2025,

the

total

unrecognized

compensation

cost

related

to

stock

options

was

$

4.2

which

the

Company expects to

recognize over

two years

. As of

the total unrecognized

compensation cost related

to restricted

stock awards was $

4.9

million, which the Company expects to recognize over

two years

.

During the three months

2025 and 2024, the

Company recorded a deferred

tax benefit of $

0.2

$

0.5

related to the stock-based compensation charge

recognized related to employees of Lesaka.

During the six

months

ended

31,

and

2024,

the

Company

a

deferred

tax

benefit

of

$

0.4

million

and

$

0.8

related

to the

stock-based

compensation

charge

recognized

related

of Lesaka.

During

these periods

the

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

because it does not believe that the stock-

based compensation

deduction would

be utilized

as it

does not

anticipate generating

sufficient taxable

income in

the United

States.

The Company deducts

the difference between

the market value on

the date of exercise

by the option

recipient and the

exercise price

from income subject to taxation in the United States.

Earnings (Loss) per share

has issued redeemable

which is redeemable

at an amount

other than

fair value.

Redemption of

a

class of

at other

than fair

value increases

or decreases

the carrying

amount of

the redeemable

and is

reflected in basic earnings

per share using the two-class

method. There were

no

redemptions of common stock, or

adjustments to the

carrying value of the redeemable

common stock during the three

2025 and 2024. Accordingly,

the two-

class method presented below does not include the impact of

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

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

its Annual Report on Form 10-K for

the year ended

Basic earnings (loss) per share

includes shares of restricted stock that

meet the definition of a

participating security because these

shares are eligible

to receive non

-forfeitable dividend

equivalents at the

same rate as

common stock.

Basic earnings (loss)

has been calculated using the two-class method and basic earnings (loss) per share

for the three months ended December 31, 2025 and

2024,

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

share excludes the net loss attributable

to shares of unvested

restricted stock (participating

non-vested restricted stock)

from the numerator

and excludes the dilutive

impact

of these unvested shares of restricted stock from the denominator.

Diluted earnings

(loss) per

share has

been

calculated

to give

effect

to the

number

of additional

common

stock that

would have

been outstanding

if the

potential dilutive

instruments had

been issued

in each

period. Stock

options are

the

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

stock method and are not considered to be

participating securities,

as the

stock options

do not

contain non-forfeitable

dividend rights.

has excluded

employee stock

options to

257,445

calculation of

diluted loss

31, 2024

because the effect would be antidilutive. The Company has excluded employee stock options to purchase

138,158

and

338,725

shares

of common stock from the calculation of diluted loss per share during the six months ended December 31, 2025 and 2024 because the

effect would be antidilutive.

The

calculation

of diluted

(loss)

includes the

dilutive

effect

of

a portion

of the

stock granted

to

employees as

these shares

of restricted

stock are

considered contingently

returnable shares

for the

purposes of

the diluted

(loss) per share calculation and the vesting conditions in respect of a portion

of the restricted stock had been satisfied.

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

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

Earnings (Loss) per share (continued)

The

table

net

loss

attributable

to

Lesaka

and

the

share

data

used

in

the

basic

and

diluted

loss

per

share

computations using the two-class method:

(in thousands except

(in thousands except

percent and

percent and

per share data)

per share data)

Numerator:

Net income (loss) attributable to Lesaka

(A)

$

3,645

$

$

(1,013)

$

Undistributed earnings (loss)

(A)

3,645

(1,013)

Percent allocated to common shareholders

(Calculation 1)

97%

97%

97%

97%

Numerator for earnings (loss) per share: basic

and diluted

$

3,524

$

(31,345)

$

(983)

$

(36,038)

Denominator

Denominator for basic earnings (loss) per share:

Weighted-average

common shares outstanding

79,002

77,024

79,048

69,589

Effect of dilutive securities:

Related to acquisitions

Stock options

Denominator for diluted earnings (loss)

per share: adjusted weighted average

common shares outstanding and assuming

conversion

80,119

77,024

79,048

69,589

Earnings (Loss) per share:

Basic

(A)

$

0.04

$

(0.40)

$

(0.01)

$

(0.52)

Diluted

(A)

$

0.04

$

(0.40)

$

(0.01)

$

(0.52)

(Calculation 1)

Basic weighted-average common shares

outstanding (A)

79,002

77,024

79,048

69,589

Basic weighted-average common shares

outstanding and unvested restricted shares

expected to vest (B)

81,719

79,753

81,435

72,037

Percent allocated to common shareholders

(A) / (B)

97%

97%

97%

97%

(A) Net income (loss) attributable to Lesaka and Undistributed earnings (loss)

for the three and six months ended December 31,

2024, have

$

0.3

$

0.6

as a

Note 1.

and Undistributed

earnings (loss)

for the

has decreased

by $

0.4

million, as a

result of the

correction, as discussed

in Note 1,

to the amount

attributable to

Lesaka and Undistributed

earnings (loss) for

The correction of

the error did not

impact

Basic and Diluted

loss per share for

December 31, 2024,

or the six months

ended December 31, 2025.

Basic

and Diluted loss per share for the six months ended December 31, 2024, each decreased

by $

0.01

(one U.S. cent).

Options to

6,493,683

at prices

ranging from

$

4.87

to $

14.00

were

outstanding during the three

and six months ended December

31, 2025, but were not

included in the computation of

diluted earnings

(loss) per share

because the options’

exercise price was

greater than the

average market price

of the Company’s common

stock. Options

to purchase

4,743,500

at prices

ranging from

$

6.00

to $

14.00

were outstanding

during the three and

December 31, 2024, but

were not included in

the computation of diluted

(loss) per share

because

the options’ exercise

price was greater

than the average market

price of the Company’s

common stock. The options,

which expire at

v

arious dates through February 3, 2032, were still outstanding as of December

Supplemental cash flow information

table presents

supplemental

cash flow

disclosures

for the

and

2024:

Cash received from interest

$

$

$

1,036

$

1,297

Cash paid for interest

$

5,928

$

4,242

$

11,929

$

7,513

Cash paid (refund) for income taxes

$

4,428

$

3,253

$

5,138

$

3,208

Disaggregation of cash, cash equivalents and restricted

cash

Cash, cash equivalents and restricted

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

cash flows

includes restricted

cash related

to cash

withdrawn from

debt facilities

to fund

ATMs.

This facility

was cancelled

in

November 2024.

was only permitted

to use this

cash to

fund ATMs

and this cash

was considered

restricted as

to use

and therefore was classified

as restricted cash.

Cash, cash equivalents

and restricted cash also

includes cash in certain

bank accounts

that has been

ceded to Nedbank.

As this cash has

been pledged and

ceded it may

not be drawn

and is considered

restricted as to

use

and

therefore is

classified as

cash as

well. The

table presents

the disaggregation

of cash,

cash equivalents

and

restricted cash as of December 31, 2025 and 2024, and June 30,

2025:

June 30, 2025

$

69,474

$

60,625

$

76,520

Restricted cash

Cash, cash equivalents and restricted cash

$

69,601

$

60,737

$

76,639

Leases

table presents supplemental

cash flow disclosure

related to leases

for the

31, 2025 and 2024:

Cash paid for amounts included in the measurement of

lease liabilities

Operating cash flows from operating leases

$

1,464

$

1,212

$

2,826

$

2,216

Right-of-use assets obtained in exchange for lease

obligations

Operating leases

$

3,187

$

$

4,223

$

1,218

Revenue recognition

Disaggregation of revenue

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the three months ended December 31, 2025:

Total

$

37,551

$

10,007

$

11,854

$

59,412

35,252

10,007

11,854

57,113

2,299

2,299

8,639

9,567

8,553

9,481

82,023

1,648

83,717

73,694

1,648

75,388

8,329

8,329

7,169

7,169

2,104

5,323

7,427

7,943

7,943

2,270

2,270

Other

1,229

1,051

131,142

33,118

14,474

178,734

120,250

33,118

14,474

167,842

$

10,892

$

$

$

10,892

The

table

the

revenue

by

major

revenue

a

to

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

Total

$

35,794

$

7,862

$

5,825

$

49,481

33,931

7,862

5,825

47,618

1,863

1,863

8,121

1,187

9,373

8,057

1,187

9,309

98,188

1,660

99,871

91,409

1,660

93,092

6,779

6,779

7,376

7,376

1,610

1,730

4,868

4,868

1,765

1,765

Other

1,752

1,695

144,615

22,929

8,672

176,216

135,852

22,929

8,672

167,453

$

8,763

$

$

$

8,763

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

table

the

revenue

by

major

revenue

a

to

reportable segments for the six months ended December 31, 2025:

Total

$

72,014

$

19,423

$

23,601

$

115,038

67,866

19,423

23,601

110,890

4,148

4,148

15,160

1,817

17,142

15,013

1,817

16,995

164,076

3,327

167,486

148,031

3,327

151,441

16,045

16,045

14,023

14,023

4,391

10,237

14,628

14,815

14,815

4,418

4,418

Other

1,814

2,632

1,491

2,309

257,455

63,694

29,033

350,182

236,792

63,694

29,033

329,519

$

20,663

$

$

$

20,663

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

table

the

revenue

by

major

revenue

a

to

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

Total

$

60,164

$

15,392

$

12,338

$

87,894

56,499

15,392

12,338

84,229

3,665

3,665

9,966

2,478

12,511

9,829

2,478

12,374

192,063

3,238

195,341

179,404

3,238

182,682

12,659

12,659

14,332

14,332

3,286

3,406

9,208

9,208

3,464

3,464

Other

2,199

1,378

3,628

2,085

1,378

3,514

267,678

44,001

18,105

329,784

251,103

44,001

18,105

313,209

$

16,575

$

$

$

16,575

Leases

The

Company

has

entered

into leasing

classified

as operating

leases under

guidance.

These leasing

relate

to

the

lease

of

its

corporate

head

office

and

sales

and

offices

of

its

Merchant,

and

Enterprise businesses. The Company’s operating leases have remaining lease terms of between

one

and

. The Company also

operates parts

of its

consumer business

from locations

which it

leases for

a period

of less

than

one year

. The

lease

expense

during

the

three

months

ended

31,

and

was

$

1.5

million

and

$

1.2

The

operating lease

expense during

the six

2025 and

2024 was

$

2.8

$

2.2

The

Company

has

also

entered

into

short-term

leasing

arrangements,

for

the

lease

of

branch

and

other

locations,

to operate its consumer

business in South Africa.

short-term lease expense during

2025 and 2024,

was $

0.4

$

1.2

short-term lease

expense during

the

six months ended December 31, 2025 and 2024, was $

0.9

2.3

In December

Company,

through Lesaka

SA, entered

into a

leasing arrangement

for

a new

corporate head

office

in

Rosebank, Gauteng,

with Oxford

Parks Proprietary

Limited, a

limited liability

private company

incorporated in

South

Africa. The lease

commences on July 1,

2026 and is

for a period

of

10 years

with

two

renewal options of

each. The Company

has secured

beneficial occupation

from April

1, 2026,

and is required

to deliver

a bank

guarantee or

cash of

$

0.4

7.0

million, translated at exchange rates applicable as of December 31, 2025). The Company expects

to pay an annual basic lease expense

of $

1.5

25.1

million, translated at

exchange rates applicable

as of December

31, 2025), which

increases by

6.25

% per

annum.

The following table presents supplemental balance

sheet disclosure related to the

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

lease liabilities as of December 31, 2025 and June 30, 2025:

Right of use assets obtained in exchange for lease obligations:

Weighted average

remaining lease term (years)

3.0

2.8

Weighted average

discount rate (percent)

8.5

9.8

The maturities of the Company’s

operating lease liabilities as of December 31, 2025, are presented below:

Maturities of operating lease liabilities

Year

ended June 30,

2026 (excluding six months to December 31, 2025)

$

3,214

5,011

3,262

1,899

1,207

Thereafter

Total undiscounted

operating lease liabilities

14,781

Less imputed interest

1,961

Total operating lease liabilities,

12,820

Operating lease liability - current

5,015

Operating lease liability - long-term

$

7,805

The Company discloses segment information as reflected in the management

information systems reports that its chief operating

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

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

Note 21 to

audited consolidated

its Annual Report

on Form 10-K

for the year

ended

chief operating decision maker

(“CODM”) is the Company’s

Executive Chairman. The

Company currently has

three

reportable segments: Merchant, Consumer and Enterprise. The CODM analyzes

the Company’s operating performance primarily

based on these three operational lines, namely,

(i) Merchant, which focuses on

both formal and informal sector

merchants. Formal sector merchants are generally in

urban areas,

have higher

revenues and

have access

to multiple

service providers.

Informal sector

merchants, which

are often

sole proprietors

and

usually

have lower

revenues compared

with formal

section merchants,

operate in

rural areas

or in

informal urban

areas and

do not

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

(ii) Consumer,

which primarily

focuses on

individuals who

have historically

been excluded

from traditional

financial services

and to whom we offer

transactional accounts (banking), insurance,

lending (short-term loans), payments solutions

(digital wallet) and

various value-added services; and

(iii) Enterprise, which comprises large-scale corporate

and government organizations, including but not

limited to banks, mobile

network operators (“MNOs”) and municipalities, and,

through Recharger, landlords

utilizing Recharger’s prepaid electricity

metering

solution.

Types of products

and services from which each segment derives its revenues

The

segment

revenue

generated

from

the

sale

of

Alternative

Digital

Products

(“ADP”)

(select

prepaid

solutions, supplier-enabled payments, international

money transfer and

other) and card-acquiring services

to informal sector

merchants.

It also includes activities related to the provision of goods and

services provided to corporate and other juristic entities. The

Company

earns fees

from

processing activities

performed

(including card

acquiring

and

the provision

of a

payment

gateway

services) for

its

customers, and rental and

license fees from the provision

of point of sales (“POS”)

hardware and software

to the hospitality industry.

The Company also provides cash management and payment services to merchant customers through a digital vault

which is located at

the customer’s

premises and through

which the Company

is able to

provide the services

which generate

processing fee revenue.

The

Merchant segment includes interest earned from the provision of loans to

its customers, refer to Note 16.

The Consumer segment

includes activities related

to the provision

of financial services

to customers,

including a bank

account,

loans and

insurance products.

charges monthly

administration fees

for all

bank accounts.

Customers that

have a

bank

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

earns processing

fees from

transactions processed

for these

customers. The

Company also

earns fees

on transactions

performed

by

other

banks’

customers

utilizing

its

ATM

(until

June

30,

or

POS. The

Company

provides

short-term

loans

to

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

2025,

refer to

Note 16.

writes life

insurance contracts,

funeral-benefit

policies, and

policy holders

pay the

Company a monthly

insurance premium. The

Company also earns

fees from the

provision of physical

and digital prepaid

and secure

payout solutions for South African businesses.

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

processing services that involve

the collection,

transmittal and

retrieval of

transaction data.

offers

landlords access

to Recharger’s

prepaid electricity

metering

solution through

which Enterprise

earns commission

revenue

from prepaid

electricity voucher

sales to

tenants recharging

prepaid meters.

This segment also

includes sales of

hardware and

licenses to customers.

Hardware includes

the sale of

POS devices,

SIM cards and other consumables

which can occur on an ad hoc

basis. Licenses include the right to

use certain technology developed

by the Company.

Segment measure of profit or loss

The

Company

segment

based

on

segment

before

tax,

and

for

items

mentioned

in

the

sentences

below

(“Segment

EBITDA”),

the

reportable

segments’ measure of profit or loss.

The Company obtained

a general

lending facility in

February 2025, which

partially used to

fund a

its Consumer

lending during

and six

2025, and

interest related

to these

have been

allocated to

Consumer.

also included

an intercompany

interest expense

in its

Consumer Segment

for the

three

and six months ended December 31, 2024.

The Company does not allocate once-off items, stock-based compensation charges, depreciation and amortization, impairment of

goodwill or other intangible

assets, other items (including

gains or losses on

disposal of investments, fair

value adjustments

to equity

securities), interest

income, certain

interest expense,

income tax

expense or

loss from

equity-accounted investments

to its reportable

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

to managing

the US-listed

entity; expenditures

related

to compliance

Sarbanes-Oxley

Act of

2002; non-employee

directors’

fees;

legal

fees;

group

and

US-listed

related

audit

fees;

and

directors

and

officer’s

insurance

premiums.

items

represent non-recurring expense items, including costs related to acquisitions and

transactions consummated or ultimately not pursued.

(loss)

gain

for

foreign

mark-to-market

on

certain

accounts.

the

expense

in

the

Segment

EBITDA

during fiscal 2025.

The Stock-based compensation

adjustments reflect stock-based

compensation expense

and are excluded

calculation

of

Segment

EBITDA

and

are

therefore

as

reconciling

items

to

reconcile

the

reportable

segments’

Segment Adjusted EBITDA to the Company’s

loss before income tax expense.

Our CODM does

not review the

components of segment selling,

general and administration

expenses and is

presented with reports

which include revenue, net revenue (a non-GAAP measure) and Segment Adjusted

EBITDA.

presents the reconciliation

of revenue from

external customers

to the reportable

segment’s revenue,

expenditures, the Company’s reportable segment’s measure of

profit or loss,

and certain other

segment information for

the three months

ended December 31, 2025 and 2024, respectively,

is as follows:

Three months ended December 31, 2025

Total

$

131,142

$

33,118

$

14,474

$

178,734

1,099

(z)

131,919

33,118

14,796

179,833

(y)

101,613

10,533

10,792

122,938

(1)(2)

11,422

4,782

1,312

17,516

$

18,884

$

17,803

$

2,692

$

39,379

$

2,104

$

5,323

$

$

7,427

$

$

1,295

$

$

1,776

Total

$

3,688

$

$

$

9,481

$

13,568

$

4,148

$

$

$

$

4,930

Total

$

144,615

$

22,929

$

8,672

$

176,216

(z)

145,209

22,929

8,933

177,071

(y)(A)

104,703

8,373

9,702

122,778

(A)(1)(3)

30,417

10,214

(738)

39,893

(A)

$

10,089

$

4,342

$

(31)

$

14,400

$

1,610

$

$

$

1,730

$

$

$

$

1,131

Total

$

3,027

$

$

$

4,867

$

8,223

$

5,899

$

$

$

$

6,746

(A) Cost of goods

sold, IT processing, servicing

and support and Selling,

general and administration for

Merchant and Total

for

each increased

by $

0.17

$

0.06

of the

correction discussed

in Note 1.

EBITDA for

Merchant and

Total

have each decreased by $

0.23

(1)

general

and

human

capital-related

base

salary

and

bonus),

IT-related

software licenses,

hardware

maintenance,

hosting,

and communication

expenses), professional

fees (including

audit, legal,

consulting and

other fees),

lease and

utilities expenses,

the allowance

losses and

other operating

expenses.

(2) Segment

for the

2025, includes

retrenchment costs

for Merchant

of $

0.2

3.7

(3) Segment

for the

31, 2024,

includes retrenchments

Consumer of

$

0.01

0.1

presents the reconciliation

of revenue from

external customers

to the reportable

segment’s

revenue, significant

expenditures, the Company’s reportable segment’s

measure of profit or loss, and certain other segment information for the six months

ended December 31, 2025 and 2024, respectively,

is as follows:

Six months ended December 31, 2025

Total

$

257,455

$

63,694

$

29,033

$

350,182

1,414

2,030

(z)

258,869

63,694

29,649

352,212

(y)(A)

200,026

20,970

21,313

242,309

(A)(1)(2)

39,959

24,921

5,644

70,524

(A)

$

18,884

$

17,803

$

2,692

$

39,379

$

4,391

$

10,237

$

$

14,628

$

$

2,367

$

$

3,339

Total

$

7,053

$

$

$

18,615

$

26,462

$

8,473

$

$

1,208

$

$

10,049

Total

$

267,678

$

44,001

$

18,105

$

329,784

1,182

2,711

3,893

(z)

268,860

44,001

20,816

333,677

(y)(A)

221,137

17,040

16,908

255,085

(A)(1)(3)

30,304

18,223

3,577

52,104

(A)

$

17,419

$

8,738

$

$

26,488

$

3,286

$

$

$

3,406

$

$

1,588

$

$

2,354

Total

$

5,254

$

$

$

8,614

$

14,499

$

9,785

$

$

$

$

10,884

(A) Cost of goods sold, IT processing, servicing and support and

Selling, general and administration for Merchant and Total

for

the six

months

ended

each increased

by $

0.34

million

and

$

0.12

as a

the

correction discussed in Note 1. Segment Adjusted EBITDA

for Merchant and Total for the six months ended December 31,

each decreased by $

0.45

Cost of goods sold, IT

processing, servicing and support and

for Merchant and Total

for the

have each increased

by $

0.18

0.06

million, respectively, as a

result of the

correction,

as discussed in

Note 1, to

the amount included

in the captions

support and Selling,

general and

administration for the

Segment Adjusted EBITDA

for Merchant

for

2025 have each

decreased by $

0.25

as discussed in Note

1,

to the amount included in the caption Segment Adjusted EBITDA for

the three months ended September 30, 2025.

general

and

human

capital-related

base

salary

and

bonus),

IT-related

software

licenses,

hardware

maintenance,

hosting,

and

communication

expenses),

professional

fees

audit, legal,

consulting and

other fees),

lease and

utilities expenses,

the allowance

losses and

other operating

expenses.

(2) Segment Adjusted EBITDA

for the six months

ended December 31, 2025,

includes retrenchment costs for

Merchant of $

0.4

7.4

million) and Consumer of $

0.1

2.6

(3) Segment Adjusted EBITDA for the six months ended December 31,

2024, includes retrenchments costs for Consumer of $

0.1

1.2

million) and Enterprise of $

0.0

0.2

The reconciliation of the reportable segments’ measures of profit or loss to income (loss) before income tax expense for the three

and six months ended December 31, 2025 and 2024, is as follows:

Reportable segments' measure of profit or loss

(A)

$

20,673

$

14,400

$

39,379

$

26,488

Operating loss: Group costs

(2,896)

(2,820)

(6,507)

(5,769)

Once-off costs

(247)

(488)

(514)

(2,293)

Interest adjustment

1,588

Unrealized Gain (Loss) FV for currency adjustments

(435)

(216)

Stock-based compensation charge adjustments

(1,945)

(2,644)

(3,806)

(5,021)

(13,568)

(8,223)

(26,462)

(14,499)

Loss on disposal of equity-accounted investments

(161)

(584)

(161)

2,971

2,971

3,883

3,883

(730)

(730)

1,047

1,307

(A)

(4,591)

(6,266)

(9,604)

(11,382)

Income (Loss) before income tax expense

(A)

$

4,191

$

$

(730)

$

(A) Reportable

segments’ measure of

profit or loss

2024, have decreased

by

$

0.23

0.45

as a result of

the correction discussed

in Note 1.

Interest expense for

the three and

six

months

ended

31,

2024,

have

by

$

0.09

million

and

$

0.18

as

a

result

of

the

correction

discussed in Note 1. Net

income (loss) before taxes for

the three and six months ended

December 31, 2024, have decreased

by $

0.63

0.63

as a result of the correction discussed in Note 1.

Reportable segments’ measure of profit or loss and Net income (loss) before taxes for the six months ended December 31, 2025,

have decreased by $

0.25

0.36

million, as a result of the correction, as discussed in Note 1, to the amount

Reportable segments’ measure of profit or loss and Net income (loss) before taxes for the three months ended September 30,

2025. Interest expense

for the six months

2025, has increased

by $

0.12

million, as a result

as

discussed in Note 1, to the amount included in the caption Interest expense

for the three months ended September 30, 2025.

The segment

information as

reviewed by

the chief operating

decision maker

does not include

a measure of

segment assets per

segment as all of

the significant assets are

used in the operations

of all, rather than

any one, of the

segments. The Company does

not

have dedicated assets

assigned to a

particular operating segment.

Accordingly,

it is not meaningful

to attempt an arbitrary

and segment asset allocation is therefore not presented.

Income tax

Income tax in interim periods

For the purposes of interim

financial reporting, the Company

determines the appropriate income

tax provision by first applying

the effective

expected to

be applicable

for the

full fiscal

year to

ordinary income.

This amount

is then

adjusted for

the tax

effect

of

unusual

items,

for

instance,

changes

in

tax

law,

valuation

allowances

and

non-deductible

transaction-related

expenses that

are reported

separately,

and have an

impact on the

tax charge.

The cumulative effect

of any change

in the enacted

tax

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

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

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

For

the

three

and

six

months

ended

31,

2025,

tax

rate

by

the

tax

expense

recorded by

non-taxable income

(including the

adjustment on

equity

securities and

other income)

and non-deductible

and expenses

(including transaction-related

expenditures). The

income

was impacted by

a higher deferred

tax benefit as

a result of

the reduction in

the useful lives

of certain of

brand and trademark intangible assets which has

resulted in an increase in

amortization expense during the three and

December 31, 2025.

For

the

three

and

six

months

ended

31,

2024,

tax

rate

by

the

tax

expense

recorded by the

Company’s profitable South African operations,

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

the on-going

losses incurred

by certain of

South African

businesses and the

associated valuation

allowances created

related to the deferred tax assets recognized regarding net operating losses incurred

by these entities.

Uncertain tax positions

As of

2025 and

Company had

no

unrecognized tax

benefits. The

Company files

income tax

returns mainly

Africa, Botswana,

Namibia and

in the

U.S. federal

jurisdiction. As

South African subsidiaries are no

longer subject to income tax examination

by the South African Revenue Service

for periods before

June

30,

is subject

to

income

tax

in

other

jurisdictions

outside

South

Africa,

none

of

which

are

individually

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

Commitments and contingencies

Guarantees

The South African

Revenue Service and

certain of the

Company’s customers,

suppliers and other

business partners have

asked

to provide

them with

guarantees, including

standby letters

of credit,

issued by

South African

banks. The

Company is

required to procure these guarantees for these third parties to operate

its business.

RMB has

issued

guarantees

to

these

third

parties

amounting

to

ZAR

31.8

million

($

1.9

at

rates

applicable as of December 31, 2025) thereby utilizing part of the Company’s

short-term facilities.

Nedbank has

issued guarantees

to these

third parties

amounting to

ZAR

2.1

0.1

rates

applicable as of December 31, 2025) thereby utilizing part of the Company’s

short-term facilities. The Company pays commission of

between

0.47

% per annum to

1.84

% per annum of the face

value of these guarantees and does

not recover any of the commission

from

third parties.

The Company has not recognized any obligation related to these guarantees in its consolidated balance sheet as of December 31,

2025. The maximum

potential amount that

the Company could

pay under these

guarantees is ZAR

35.1

2.0

rates applicable

as of

2025). The

Company has

ceded and

pledged certain

bank accounts

to Nedbank

as

security

for

the guarantees

issued by

them with

an aggregate

value

of ZAR

2.1

0.1

rates

applicable as of December 31, 2025).

Contingencies

The

Company

is

subject

to

a

variety

of

insignificant

claims

and

suits

that

arise

from

time

to

time

in

the

ordinary

course

of

business. Management

currently believes

that the

resolution of

these other

matters, individually

or in

the aggregate,

will not

have a

m

aterial adverse impact on the Company’s

financial position, results of operations or cash flows.