LESAKA TECHNOLOGIES INC

OUR OPERATIONS

AND FINANCIAL

RESULTS

ARE SUBJECT

TO VARIOUS

RISKS AND

UNCERTAINTIES,

INCLUDING

THOSE

DESCRIBED

BELOW,

THAT

COULD

ADVERSELY

AFFECT

OUR

BUSINESS,

FINANCIAL

CONDITION, RESULTS

OF OPERATIONS,

CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOC

K

Risks Relating to Our Business

To

achieve our mission, our

strategy is to build

and operate the leading

South African full-service

fintech platform offering

cash management,

payment and

financial services.

Our future

success, and

to sustain

profitability and

positive cash

flow, is substantially dependent on our ability to complete

the implementation of this strategy successfully.

Our board conducted an extensive

review of our business strategy

and operations in July 2020,

and decided to focus on

our South

African

business opportunities

Africa and,

to a

lesser extent,

the rest

of the

African continent.

Over

recent years, we have pursued strategic acquisitions, technology investments, business

integration initiatives, and the expansion of our

financial services offering. These

have included the integration

of Lesaka Cash

Management Pty Ltd, Adumo

(RF) Pty Ltd,

Utilities Pty

Ltd, as

well as

growth across

the Group’s

Merchant, and

Enterprise divisions.

The proposed

Bank Zero described herein remains subject to the fulfilment or waiver

of applicable conditions precedent. The successful realization

of anticipated

benefits remains

various internal

and external

factors, including

market conditions,

competitive pressures,

regulatory developments, technology advancements, integration execution, and customer

adoption of products and services.

we cannot assure you that we will be able to complete our strategy successfully

and sustain profitability and positive cash flow.

Even where we are

profitable, achieving net income

does not necessarily ensure

positive cash flow.

Failure to effectively execute

on our strategy, achieve

targeted synergies, sustain revenue

growth, manage costs,

or maintain positive

cash generation could

impact

performance,

objectives,

and

shareholder

value.

We

cannot

assure

you

that

we

will

sustain or increase profitability in the future and if we do not, our business will be materially

and adversely affected.

We

have a significant

amount of indebtedness

that requires us

with restrictive and

financial covenants.

If we are

unable to comply with these covenants,

we could default on this debt,

which would have a material adverse effect

on our business

and financial condition.

As of June 30,

2026, we had

aggregate borrowings outstanding

of ZAR 3.5 billion

($210.7 million translated

at exchange rates

30, 2026). We partially funded

certain of our

acquisitions through South

African bank borrowings.

We, together with Lesaka

Technologies Proprietary

Limited (“Lesaka SA”) and the majority of Lesaka SA’s

directly and indirectly wholly-owned subsidiaries,

have

agreed

to guarantee

the obligations

SA and

of the

other

borrowers

under certain

of the

to the

lenders.

Certain of these borrowings contain customary covenants

which include a requirement for Lesaka SA to maintain

specified Net Debt

to EBITDA and Interest

Cover Ratios (as defined

in the lending agreements)

and restricts the ability

of Lesaka SA, and certain

of its

subsidiaries to make certain distributions with respect to their capital stock,

prepay other debt, encumber their assets, incur additional

indebtedness,

make

above

levels,

engage

in

certain

combinations

and

engage

in

other

activities.

The borrowings through our merchant lending operations, through Lesaka Capital Proprietary Limited (formerly known as Cash

Connect Capital

Proprietary Limited)

(“Lesaka Capital”)

Fuel Proprietary

Limited (formerly

K2020 Connect

Proprietary Limited) (“Lesaka Fuel”), include a ZAR 400 million revolving credit

facility agreement. This facility contains customary

covenants that require the

borrowing parties to

collectively maintain a

specified capital adequacy ratio,

restrict the ability of

the entities

to make certain

distributions with respect

to their capital

stock, encumber their

assets, incur additional

indebtedness, make investments,

engage in certain business combinations and engage in other corporate activities.

These security arrangements and covenants may

reduce our operating flexibility or

our ability to engage in

other transactions that

may

be

beneficial

to

us.

If

we

are

unable

to

comply

with

the

covenants,

we

could

be

in

default

and

the

indebtedness

could

be

accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as

a result, our business, financial condition and stock price would suffer.

Failure to complete,

or delays in completing,

the Bank Zero acquisition,

could materially and adversely

affect our results

of

operations and stock price.

The

of the

Bank

Zero

to

a

number

of

precedent,

receipt

of

approvals and certain third-party consents. Some of these conditions are

outside our control.

To

the

we

must

make

certain

filings

with,

and

obtain

certain

consents

and

approvals

from,

various

governmental and regulatory authorities.

The regulatory approval processes may

take a lengthy period of time to complete,

and there

can be no assurance

as to the outcome

of the approval processes,

including the undertakings

and conditions that

may be required for

approval, or whether the regulatory approvals will be obtained at all.

the completion

of the

acquisition is

conditional

on, among

other things,

no action

or circumstance

occurring that

w

ould result in a material adverse effect on the Bank Zero’s

business operations or financial results.

We cannot

provide any assurance regarding if or

when all conditions precedent to the acquisition

will be satisfied or waived. If,

for any reason, the acquisition is

not completed, or its completion is

materially delayed and/or the transaction agreement is terminated,

the market price of our common stock may be materially and adversely

affected.

In addition, if the acquisition is not completed for any reason, there are risks that (i) the announcement of the acquisition and (ii)

the dedication

of management’s

attention and other

of our resources

to the completion

thereof, could have

a negative impact

on our

relationships with our stakeholders

and could have a material

adverse effect on

our current and future operations,

financial condition

and prospects.

We

may not realize

some or all

of the anticipated

benefits from the

Bank Zero acquisition

or we may

fail to realize

some or

all of the expected benefits of certain recently integrated acquisitions, including Adumo

and Utilities

Even

if

we

the

Bank

Zero

we

may

unforeseen

events,

changes

or

circumstances

that

may

adversely affect us. For

example, we may

incur unexpected costs,

charges or expenses resulting

from the transaction,

including charges

to

future

if

Bank

does

not

perform

as

expected.

Our

expectations

Bank

and

prospects

may not

be realized,

as a

condition of

the markets

that Bank

Zero serves.

In

addition, there are risks associated with Bank Zero’s product and service offerings or

results of operations, including the risk of failing

to comply with certain regulatory rules required to operate its business.

Further,

there

are numerous

challenges, risks

and

costs involved

with integrating

the operations

of Bank

Zero with

ours. For

example, integrating

into our

company will

require significant

attention from

our senior

management which

may divert

their attention from our day-to-day business. The difficulties of

integration may also be increased by cultural differences between our

two organizations and the necessity of retaining and integrating

personnel, including Bank Zero’s

key employees.

Our Sarbanes-Oxley

Act of

2002 (“Sarbanes”)

management certification

and auditor

attestation regarding

of

our internal

control over financial

reporting as of

includes the operations

of Adumo and

Utilities as these

entities are

now in scope

for this attestation.

However, the

aforementioned entities are

still in the process

of becoming SOX

compliant. Refer to

Item 9A for further

detail. The requirement to

evaluate and report on our

internal controls also applies to

companies that we acquire,

Bank

Zero.

The future

of

Bank

Zero into

our

control

is expected

to

require

significant time and resources from

our management and other personnel

and is expected to increase

our compliance costs. If we

fail

to

successfully

integrate

the

of

Bank

Zero

into

our

control

over

our

control

over

financial reporting may not be effective.

As such, if some or

all of the aforementioned

risks materialize, our ability to

successfully integrate Bank Zero’s

operations into

and realize

the associated

benefits of

that acquisition

could be

adversely impacted.

This could

lead to

the recording

of

material impairments, and as a result, our financial condition, results of

operations, cash flows and stock price could suffer.

We may undertake

acquisitions that could increase our costs or liabilities or be disruptive to our business.

Acquisitions are

an integral part

of our new

growth strategy

as we seek

to expand our

business and deploy

our technologies

in

new markets

in Southern

Africa. However,

we may

not be

able to

locate suitable

candidates at

prices that

we consider

If

we

do

identify an

candidate,

we

may

not be

able to

successfully

negotiate

the

terms

of

the

transaction, finance it

or, if the

transaction occurs, integrate the

new business into

our existing business.

These transactions may

require

debt financing or additional equity financing, resulting in additional leverage

or dilution of ownership.

Acquisitions of businesses

or other material

operations and the

integration of these

acquisitions or their

businesses will require

significant attention

from members

of our senior

management team,

which may

divert their

attention from

our day-to-day

The difficulties

of integration

may be

the necessity

of integrating

personnel with

disparate business

backgrounds

and

combining

different

corporate cultures.

We

also may

not be

able to

retain key

employees or

of an

acquired business

or

realize

cost

or

synergies

or

other

benefits

that

we

anticipated

when

selecting

our

candidates.

Acquisition

candidates may have liabilities or adverse operating issues that we fail to

discover through due diligence prior to the acquisition.

We

may

need

to record

write-downs

from future

impairments of

goodwill or

other intangible

assets, which

could reduce

our

future reported earnings.

We

may

identify

errors

related

to

our

Value

Added

Tax

(VAT)

tax

positions,

or

similar

transaction-level tax matters, which could require future adjustments to

our financial statements.

During

the

second

quarter

of

fiscal

2026,

we

errors

in

the

VAT

treatment

of

certain

gaming

voucher

transactions within our Merchant business. Although we

have completed an initial review of the matter and

determined to correct the

identified errors through revisions to our previously issued financial statements, our review is ongoing. Refer to Note 1 to our audited

additional information.

The error

arose from

the incorrect

application of

indirect tax

rules, the

configuration of underlying systems, and operational practices involving

downstream vendors.

While we have

implemented remedial actions,

including enhancing our

system of internal

control and conducting

further analyses

with our external

advisors, there is

a risk that

we have not

identified all errors

associated with this

matter.

Additional issues

may be

discovered

as

we

to

evaluate

periods,

refine

our

technical

tax

conclusions,

or

from

updates

to

our

systems. Moreover,

similar errors

could exist

in accounting

and reporting

for other

indirect tax

transactions particularly

where

our

involves

complex

multi-party

arrangements,

voucher

commissions,

or

involving

non-registered

VAT

vendors.

Identification

of

errors

may

require

us

to

record

further

adjustments,

amend

or

restate

issued

statements, update our tax filings,

make additional payments of tax,

penalties, or interest, or

make further enhancements to our internal

control processes. Any such developments could result in increased compliance costs,

additional administrative burdens, diversion of

attention,

or

investor

perceptions

of

in

our

or

tax

processes.

If

material,

additional errors could

also adversely affect

our financial condition,

results of operations,

liquidity,

or internal control

reporting.

Geopolitical conflicts,

including the

conflict between

Russia and

Ukraine and

in the Middle

East, may

our

business and results of operations.

Global economic and geopolitical

conditions continue to influence

the environment in which

we operate. Heightened geopolitical

tensions, including the conflict between Russia and Ukraine and ongoing conflicts in the Middle East,

have contributed to volatility in

global financial

markets and increased

macroeconomic uncertainty.

We

have no direct

operations, assets or

revenue exposure

in the

affected regions. However, the indirect effects of these developments may adversely impact the South African operating

environment,

our

primary

market,

through

foreign

volatility,

inflationary

pressures,

tighter

funding

conditions,

and

reduced

consumer affordability.

While we

do not

currently believe

these developments

have had

a material

effect on

position,

results

or

cash flows,

geopolitical

remain

fluid

and

their broader

consequences

are uncert

ain.

A

continuation

or escalation

conflicts,

or their

expansion to

surrounding

areas, could

affect

our business,

and

any

material changes to our risk profile or financial position will be disclosed in

accordance with applicable regulatory requirements.

A prolonged economic slowdown or lengthy or severe recession in South

Africa or elsewhere could harm our operations.

A prolonged economic

downturn or recession

could materially

impact our results

from operations, particularly

in light

of electricity

disruptions, a

significantly weak

USD/ ZAR

previous periods,

and our

decision to

focus on

our South

African operations.

In October

2025, South

Africa exited

the Financial

Action Task

Force grey

list

after completing

the required

reforms. The

removal from

the grey

list was widely

viewed as

positive for

investor sentiment,

capital

flows, funding costs, and international business confidence in South Africa.

However, economic confidence in South Africa, our main

operating environment, has been historically low and, as a result, there is a risk of a prolonged economic downturn, which could have

a negative impact

on merchants and

retailers; mobile phone

operators; our account

holders; the level

of transactions we

process; the

take-up of

services we

offer and

the ability

of our

customers to

repay our

loans or

to pay

their insurance

premiums. If

institutions

and

retailers

demand

for

their

and

services,

our

hardware,

related

technology sales and processing revenue could decrease.

Our consumer microlending

loan book and

merchant lending book

expose us to

credit risk and

our allowance for

finance loans receivable may not be sufficient to absorb future write-offs.

All of our microfinance loans made are for a period of nine months or less and all of our merchant

lending is for a period of less

than

months.

We

have

created

an

for

finance

loans

related

to

these

books.

When

creating

the

allowance, management considered factors including the period

of the finance loan outstanding, creditworthiness

of the customers and

the past payment

history of the borrower.

We

consider this policy

as it takes into

account factors such

as historical

bad debts, current

economic trends and

changes in our customer

payment patterns. However,

additional allowances may

be required

should the ability of our customers to make

payments when due deteriorate in the future. A

significant amount of judgment is required

to assess the ultimate recoverability of these microfinance loan receivables.

We

may face competition

from other companies

that offer innovative

payment technologies and

payment processing, which

could result

in the

loss of

adversely impact

to successfully

market additional

Our primary competitors in

the payment processing

market include other independent

processors, as well

as financial institutions,

sales

new

digital

and

fintech

entrants

and,

potentially

card

networks.

Many

of

our

are

companies who

are larger

than we

are and

have greater

financial and

operational resources

than we

have. These

factors may

allow

them to offer better pricing

terms or incentives to customers, which

could result in a loss of our potential

or current customers and/or

force us to lower our prices. Either of these actions could have a significant effect

on our revenues and earnings.

Our future success will depend in part

on our ability to attract, integrate, retain

and incentivize key personnel and a sufficient

number of skilled employees, particularly in the technical, sales and senior management

areas.

We believe our management team has the right experience

and skills to execute on our strategy. However,

in order to succeed in

our product

development and

marketing efforts,

we may

need to identify

and attract new

qualified technical

and sales personnel,

as

well as motivate and retain our

existing employees. As a result, an

inability to hire and retain such

employees would adversely affect

our ability to

achieve our strategic

goals and maintain

our technological relevance.

We may face difficulty in

assimilating, transitioning

and integrating

newly-hired

personnel or

management of

any future

acquisitions into

management team,

and this

may

our business. Competitors

may attempt

to recruit

our top

management and

employees. In

attract and retain

personnel in

a competitive

marketplace, we

must provide

competitive pay

packages, including

cash and equity

-based compensation

and

the

volatility

in

our

stock

price

may

from

time

to

time

affect

our

ability

to

recruit

or retain

employees.

We

do

not

any

“key

person”

life

policies.

If

we

fail

to

attract,

integrate,

retain

and

incentivize

key

personnel

and

skilled

employees, our ability to manage and grow our

business could be harmed and our product

development and marketing activities could

be negatively affected.

Cybersecurity breaches and other system disruptions pose a significant threat to business

operations.

As a fintech organization reliant on digital infrastructure, we

are highly susceptible to cybersecurity incidents involving sensitive

data

such

as personally

(“PII”),

payment

card

(“PCI”),

and

business records.

Our

exposure

the

risk

of data

breaches,

ransomware,

denial-of-service

attacks,

and

unauthorised

system

access.

we

follow the National Institute

of Standards and

Technology (“NIST”) Cybersecurity Framework in our

security controls, evolving cyber

threats mean

no system

is invulnerable.

A successful

breach,

especially

with increased

of AI

technologies,

could result in

financial losses, regulatory

penalties, reputational damage, operational

interruptions, and legal

consequences. Prolonged

or

frequent

breaches

or

system

may

diminish

trust,

potentially

leading

to

our

systems

unreliable, which could impact

adoption and harm brand

reputation. Addressing breaches or system

disruptions can significantly strain

staff resources and delay new service launches. Furthermore, if customers rely on our

products for critical transactions, a breach could

disrupt their

businesses and

lead to

claims for

compensation. Even

if unsuccessful,

this type

of claim

could be

time-consuming and

costly for us to address.

Although certain of our systems

have been designed to reduce

downtime in the event of

outages or catastrophic occurrences, they

remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication

failures, terrorist attacks,

computer viruses, computer denial-of-service attacks and similar events. Some of

our systems are not fully

redundant, and our disaster

recovery planning may not be sufficient for all eventualities.

Protection against fraud is of key

importance to the purchasers and end

users of our solutions. We

incorporate security features,

including encryption

software, biometric

identification and

secure hardware,

into our solutions

to protect

against fraud in

electronic

transactions and to provide for the privacy and integrity of

cardholder data. Our solutions and systems may be vulnerable to

breaches

in security due to

defects in the security mechanisms,

the operating system, applications

or the hardware platform

as well as through

risk introduced

into our

environment through

third party

suppliers, which

the group

relies heavily

on. Security

vulnerabilities could

jeopardize the security of

information transmitted using our solutions.

If the security of our

solutions is compromised, our

reputation

and marketplace acceptance of

our solutions may be

adversely affected, which would cause

our business to

suffer, and we may become

subject to damages claims. We

have not yet experienced any significant security breaches affecting

Despite

robust

measures,

unforeseen

cyber

incidents

or natural

disasters

could

trigger

lengthy

service

interruptions.

Existing

business interruption insurance may not adequately compensate for losses stemming

from cybersecurity failures.

Our use of artificial

intelligence (“AI”) may

present risks that could

adversely affect our

business, results of operations

and

reputation.

While our use of AI is not currently material, we may increasingly incorporate AI technologies into

our systems, operations and

product offerings. The development,

deployment and use of AI present

a number of risks and uncertainties.

AI systems may produce

inaccurate, unreliable

or otherwise flawed

outputs, including

of limitations

in model

design, training

data quality,

bias or

other technical constraints. Any such issues could impair the effectiveness

of our products and services or expose us to liability.

The use of AI is expected

to increase cybersecurity,

privacy, intellectual

property and operational risks. For example,

the use of

AI is likely

to involve the

processing of sensitive

data, reliance on

third-party tools,

or the generation

of outputs that

are misused or

misinterpreted. In addition, AI technologies are expected to introduce new or evolving vulnerabilities that could be exploited, and our

risk management processes may not be effective in identifying

or mitigating all such risks.

The legal and regulatory landscape relating to AI is rapidly evolving and uncertain. We

may be subject to existing and emerging

laws, regulations and regulatory

expectations in the United States

and other jurisdictions (including

South Africa) relating to,

among

other things, data protection,

consumer protection, intellectual

property and the use

of automated decision-making.

Compliance with

such requirements

may increase our

costs, limit the

use or effectiveness

of AI in

our business, or

require changes to

our products

or

operations. Failure to comply with

applicable requirements, or the perception

that our use of

AI is inappropriate or controversial,

could

r

esult in regulatory scrutiny,

litigation, reputational harm or competitive disadvantage.

As AI technologies

continue to develop,

we may not

anticipate or effectively

manage all

associated risks, especially

cybersecurity related risks. If any of these risks were to materialize, they

could have a material adverse effect on our business, results

of operations and financial condition.

Defending

our intellectual

rights or

defending

ourselves in

infringement

suits

that

may

be brought

against us

is

expensive and time-consuming and may not be successful.

Litigation to enforce our trademarks or other intellectual property rights or

to protect our trade secrets could result in substantial

costs

and

may

not

be

successful.

Any

loss

of,

or

inability

to

protect,

in

our

could

diminish

our

advantage and

also seriously

harm our

business. In

the laws

foreign

countries may

not protect

our

intellectual property rights to the same extent as do the laws in countries where we currently have protection. Our means of protecting

our intellectual property rights in countries where we currently have protection, or any other country in which we operate, may not be

adequate to

fully protect

our intellectual

property rights.

Similarly,

if third

parties claim

that we

infringe their

rights, we

may be

required to

incur significant

costs and

devote substantial

resources to

the defense

of such

claims, to

discontinue

using and

selling any

infringing technology

and services,

to expend

resources to

develop non-infringing

technology or

to purchase

licenses or pay royalties

for other technology.

In addition, if we

are unsuccessful in

defending any such third-party

claims, we could

suffer costly judgments and injunctions that

could materially adversely affect our business,

results of operations or financial

condition.

We may incur material losses

in connection with our movement of cash through our infrastructure in South Africa.

In our merchant

business we collect

and process large

volumes of cash

from our customers,

risk of loss

moment that cash is

deposited into our vaults.

We are then responsible for its

collection and transportation to

processing centers, which

we outsource to various cash-in-transit service providers. These services extend

across all areas of South Africa.

South Africa suffers

from high levels

of crime and

in particular cash-in-transit

heists. We

cannot insure against

certain risks of

loss or theft

of cash from

our delivery and

collection vehicles, and

we will therefore

bear the full

cost of certain

uninsured losses

or

theft in

connection with

the cash

handling process.

Such losses

could

materially and

condition, cash

flows and results of operations. We

have not incurred any material losses

resulting from cash distribution in recent

years, but there is

no assurance that we will not incur any such material losses in the future.

We

depend upon

third-party suppliers,

making us

vulnerable to

supply shortages

and price

fluctuations, which

could harm

We

obtain

our

smart

cards,

electronic

payment

and

POS

for

our

vaults,

to

repair

the

ISV

(independent

software vendor)

division’s

POS hardware,

and the

other hardware

we use

in our

business from

a limited

suppliers, and do not manufacture

this equipment ourselves. We

generally do not have long-term

agreements with our manufacturers

or component suppliers.

If our suppliers

become unwilling or

unable to provide

us with adequate

supplies of parts

or products when

we need them,

or if they

increase their prices,

we may not

find alternative

sources in a

timely manner

and could be

faced

with a critical shortage. This

could harm our ability to meet customer

demand and cause our revenues

to decline. Even if we are

able

to secure alternative sources in a timely manner,

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

may lead

to an

increase in

the prices

of goods

and services

from third

parties. A

supply interruption,

such as

the previous

global shortage

of

semiconductors, or

in demand

beyond current

suppliers’ capabilities

could harm

to distribute

our equipment

and thus to

acquire new customers

who use our

technology. Any

interruption in the

supply of the

hardware necessary to

operate our

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

manner, could impair our ability to meet the

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

Our Lesaka Life business exposes us to risks typically experienced by life assurance companies.

Lesaka Life Limited

(formerly known as

EasyPay Insurance Limited)

(“Lesaka Life”) is

a life insurance

company and exposes

us to risks typically experienced by life assurance companies. Some of these risks include

the extent to which we are able to continue

to reinsure our

risks at acceptable

costs, reinsurer

counterparty risk, maintaining

regulatory capital

adequacy,

solvency and liquidity

requirements, our ability to

price our insurance

products appropriately, the risk that

actual claims experience

may exceed our

estimates,

the ability to recover

policy premiums from

our customers and

the competitiveness of

the South African insurance

market. If we

are

unable to maintain

our desired level of

reinsurance at prices that

we consider acceptable,

we would have

to either accept an

in our risk exposure or reduce our insurance writings. If our reinsurers are unable to meet their

commitments to us in a timely manner,

or at all, we may be

unable to discharge

our obligations under our

insurance contracts. As such,

we are exposed to

counterparty risk,

including credit risk, of these reinsurers.

Our

product

pricing

returns,

mortality,

morbidity,

persistency

and

costs

and

of

the

Using

the

wrong

to

price

our

could

and

adversely affect our financial

position, results of

operations and cash flows.

If our actual

claims experience is

higher than our

estimates,

our financial position, results of

operations and cash flows could be

adversely affected. Finally,

the South African insurance industry

is

highly

competitive.

Many

of

our

are

well-established,

represented

nationally

and

market

similar

and

we

therefore may not be able to effectively penetrate the South

African insurance market.

Risks Relating to Operating in South Africa and Other Foreign

Markets

Operating in

Southern and

East Africa, both

emerging markets,

subjects us to

greater risks

than those

we would face

if we

operated in more developed markets.

Emerging markets such as

Southern Africa are subject

to greater risks

than more developed markets.

While we focus

on

markets

because

that

is

where

we

perceive

the

greatest

opportunities

to

market

our

and

successfully, the

political, economic and market conditions

in these markets present risks that

could make it more difficult

our business successfully.

Some of these risks include:

•

Political, legal and economic instability,

including higher rates of inflation and currency fluctuations;

•

High levels of corruption, including bribery of public officials;

•

Loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection;

•

A lack

of well-developed legal

systems which could

make it

difficult for us

to enforce our

intellectual property and

rights;

•

Logistical, utilities (including electricity and water supply) and communications

challenges;

•

Potential adverse changes in laws and regulatory

practices, including import and export license requirements

and restrictions,

tariffs, legal structures and tax laws;

•

Difficulties in staffing and managing operations

and ensuring the safety of our employees;

•

Restrictions on the right to convert or repatriate currency or export assets;

•

Greater risk of uncollectible accounts and longer collection cycles;

•

Indigenization and empowerment programs;

•

Exposure to liability under the UK Bribery Act; and

•

Exposure to liability under U.S. securities and foreign trade laws, including the Foreign Corrupt Practices Act, or FCPA, and

regulations established by the U.S. Department of Treasury’s

Office of Foreign Assets Control, or OFAC.

If we do not achieve applicable

Broad-Based Black Economic Empowerment

objectives in our South African businesses,

we

may

be

subject

to

fines

and

we

risk

losing

our

and/or

private

contracts.

In

it

is

possible

that

we

may

be

to

the Black

shareholding

of our

company

in a

manner that

could dilute

your

ownership

and/or

change

the

companies from which we purchase goods or procure services (to companies with a better

BEE Status Level).

The legislative framework for the promotion of Broad-Based Black Economic Empowerment (“BEE”) in South Africa has been

established through

the Broad-Based

Black Economic

Empowerment

Act, No.

53 of

2003, as

amended from

time to

time, and

the

Amended

BEE

Codes

of

Good

Practice,

2013,

or

BEE

Codes,

and

any

sector-specific

codes

of

good

practice,

or

Sector

Codes,

published pursuant

thereto. Sector

Codes are

fully binding

between and

among businesses

operating in

a sector

for which

a Sector

Code has been

published. Achievement

of BEE objectives

is measured by

a scorecard which

establishes a weighting

for the various

elements. Scorecards

are independently

reviewed by

accredited BEE

verification agencies

which issue

a verification

certificate that

presents an

entity’s

BEE Status

Level. This

BEE verification

process must

be conducted

on an

annual basis,

and the

resultant BEE

verification certificate is only valid for a

period of 12 months from

the date of issue. Under

our consolidated scorecard, which includes

all South African businesses, we currently hold a BEE Status Level 3.

Two of our South African businesses, being Lesaka Financial Services (Pty) Ltd, formerly known as EasyPay Financial Services

Proprietary Limited, (“LFS”) and Lesaka Life, are subject to

the Amended Financial Sector Code, or the FS

Sector Code, and all other

businesses are consolidated under the Department of Trade and Industry

(DTI) Generic Codes. The FS Sector

Code has been amended

and aligned

new BEE

Codes and

were promulgated

2017. Licensing

and/or regulatory

authorities overseeing

these South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating

license to

trade. The

minimum requirement

Financial Sector

Code is Level

8. We

currently have

a BEE Status

Level 2

for LFS and

BEE Status Level 4 for Lesaka Life.

The BEE scorecard includes

a component relating to management

control, which serves to determine

the participation of Black

people in the board, as

well as at various

levels of management within a

measured entity (including, inter alia,

Executive Management,

Senior Management,

Middle Management

and Junior

Management). The

BEE Codes

and/or Sector

Codes define

"Senior

Management", "Middle

Management" and

"Junior Management"

as those occupational

categories as determined

in accordance

with

the

Employment

Equity

Regulations,

with

emphasis

on

improving

participation

in

proportion

to

the

demographics

of

the

Economically

Active

Population

of

South

Africa,

as published

by

Statistics South

Africa,

from

time

to

time.

Employment

Equity

legislation seeks to

drive the alignment

of the workforce

with the racial

composition of the

economically active population

of South

Africa

and

accelerate

the

achievement

of

equity

targets,

introducing

monetary

fines

for

non-compliance

with

the

Employment Equity legislation and misrepresented submissions. Annexure EEA9 to the Employment

Equity Regulations sets out the

various occupational levels which are determined in accordance with the relevant grading systems applied by the measured entity and

referred to in said Annexure.

During fiscal 2026, we made cash contributions to 61 community-based organizations and enterprises to enable them to

promote

growth

and strengthen

their capacity

to develop

innovative platforms

or provide

services to

the markets

they

serve. We

were also

involved in disaster relief efforts for 601 families who were affected

by disasters such as floods and fires.

However, it

is possible that these

and other actions

may not be sufficient

to enable us to

achieve the applicable

BEE objectives

set out for specific financial years. In that event, in order to maintain competitiveness in the South African marketplace, we may have

to seek to

increase compliance through other means,

including by selling or

placing additional shares

of Lesaka or

of our South African

subsidiaries to Black

South Africans (either directly

or indirectly), over

and above what has already

been approved, and/or

changing

to suppliers that

have higher BEE Status

Levels. Such sales

or placements of

shares could have a

dilutive impact on

your ownership

interest, which could cause the market price of our stock to decline.

We expect

that our BEE Status Level

will be important in order

for us to remain

competitive in the South

African marketplace.

We continually seek

ways to improve our BEE Status Level, especially the ownership (so-called “equity”) and procurement elements

thereof.

We

may

not

be able

to

effectively

and

efficiently

manage the

disruption

to

as

a

erratic

supply in South Africa, which could adversely affect our,

financial position, cash flows and future growth.

Our businesses in

South Africa are

dependent on electricity

generated and supplied

by the state-owned

utility,

Eskom, in order

to operate, and,

in recent years, Eskom

has been unable to

consistently generate and

supply the amount of

electricity required by

the

South

African

economy

which

has

in

and

often

unpredictable

supply

disruptions.

Eskom

has

a number

of short-

and

plans

to

correct

these

issues, but

supply

to occur

regularly and with no predictability, although consistency of electricity supply has improved significantly since April 2024. As part of

our

business continuity

programs, we

have

installed back-up

diesel generators

for

us to

our

core data

in

the

event

of

intermittent

to

our

supply.

We

have

to

perform

regular

and

maintenance of these

generators and also

source and manage

diesel fuel levels.

We

may also be

required to replace

these generators

on a more frequent basis due to the additional burden placed on them.

Our results of operations, financial position, cash flows

and future growth could be adversely affected if Eskom is

unable to raise

sufficient funding to operate

and/or commission new electricity-generating

power stations in accordance with its

plans, or at all, or if

we are unable to effectively and efficiently test, maintain,

source fuel for, and replace, our generators.

Fluctuations in the value of the South African rand have had, and will

continue to have, a significant impact on our reported

operations, which

may make

it difficult

to evaluate

our business performance

between reporting

periods and

may also

adversely affect our stock price.

The South

African rand,

or ZAR,

is the

primary operating

currency for

operations while

results are

reported in U.S. dollars. Therefore, any depreciation in

the ZAR against the U.S. dollar, would negatively impact

our reported revenue

and net

income. The

U.S. dollar/ZAR

has historically

been volatile

and we

expect this

volatility to

continue (refer

to

Item

7—“Management’s

Discussion

and

Analysis

of

Condition

and

Results

of

Operations—Currency

Rate

Information.”).

Due

to

the

fluctuation

in

the

value

of

the

ZAR

and

its

impact

on

our

results,

you

may

find

it

difficult to

compare our results

of operations between

financial reporting periods

even though we

provide supplemental information

about our

operations determined

on a

ZAR basis.

Similarly,

depreciation in

the ZAR

may negatively

impact the

prices at

which our stock trades.

We generally do not engage in any currency hedging

transactions intended to reduce the

effect of fluctuations in foreign currency

exchange rates on our results of

operations, other than economic hedging

using forward contracts relating to

our inventory purchases

which are settled in U.S.

dollars or euros. We

cannot guarantee that we will

enter into hedging transactions

in the future or,

if we do,

that these transactions will successfully protect us against currency fluctuations.

South Africa’s

high levels of

poverty, unemployment

and crime may

increase our costs

and impair our

ability to maintain a

qualified workforce.

While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment,

relative to peer

countries in Africa

and other emerging

economies, and there

are significant differences

in the level

of economic and

social development among its people,

with large parts of the population,

particularly in rural areas, having limited

access to adequate

education, healthcare, housing and other

basic services, including water

and electricity. In addition, South Africa has

a high prevalence

of

HIV/AIDS

and

tuberculosis,

the

impact

of

which

may

be

exacerbated

in

the

by

the

discontinuation

of

the

U.S.

government’s funding of certain HIV/AIDS

research and outreach programs.

Government policies

aimed at

alleviating and

redressing the

disadvantages suffered

by the majority

of citizens

under previous

governments may

increase our

costs and

reduce our

all of

which could

negatively affect

These problems

may prompt

emigration of

skilled workers,

hinder investment

into South

Africa and

impede economic

growth. As

a result,

we may

have difficulties attracting and retaining qualified employees.

The

economy

of

South

Africa

is

exposed

to

high

rates

of

inflation,

and

tax,

which

could

our

operating costs

and thereby

reduce our

profitability.

Furthermore, the

government requires

additional income

to

fund future government

expenditures and

may be required,

things, to increase

existing income tax

rates, including

the corporate income tax rate, amend existing tax legislation or introduce additional

taxes.

The economy of

South Africa in the

past has been, and

in the future may

continue to be, characterized

by rates of inflation

and

interest that

are substantially

higher than

those prevailing

in the United

States and

other highly-developed

economies. High

rates of

inflation could increase our South African-based costs and decrease our operating margins. High interest rates increase the cost of our

debt financing, though conversely, they also

increase the amount

of income we

earn on any

cash balances. The

South African corporate

income tax rate, of 27%, is higher than the

U.S. federal income tax rate, of 21%. Any

increase in the effective South African corporate

income tax rate would adversely impact our profitability and cash flow generation.

Risks Relating to Government Regulation

We are required to comply with certain laws and regulations, including economic and trade sanctions, which could adversely

impact our future growth.

We

are

subject

to U.S.

and

other

trade

economic sanctions

and

similar

those in

the

where

we

operate.

Our

failure

to

comply

with

these

laws

and

could

subject

us

to

civil,

criminal

and

administrative

and

harm

our

reputation.

These

place

on

our

trade

practices,

and

decisions.

In particular,

to U.S.

and

foreign

trade

control laws

and

including various export controls and economic sanctions programs, such as those administered by OFAC. We monitor compliance in

the 10

principles as

set out

in the

United Nations

Global Compact

Principles, the

Organisation

for Economic

Co-

operation and

Development recommendations

relating to

corruption, and

the International

Labor Organization

Protocol in

terms of

certain of the items to be

monitored. As a result of doing business

in foreign countries and with foreign

partners, we are exposed to a

heightened risk of violating trade control laws as well as sanctions regulations.

Violations

of

trade

control

sanctions

are

punishable

by civil

penalties,

fines,

denial

of export

privileges,

injunctions,

asset seizures,

debarment

from

and revocations

or restrictions

of licenses,

as

well

as

criminal fines and imprisonment.

We have

developed policies and procedures as

part of a company-wide compliance

program that is

designed to

assist our compliance

with applicable

U.S. and international

trade control laws

and regulations,

including trade controls

and sanctions programs administered

by OFAC,

and provide regular training

to our employees to create awareness

about the risks of

violations of trade

control laws and

sanctions regulations and

to ensure compliance

with these laws

and regulations.

However, there

can be no assurance that all of our employees, consultants,

partners, agents or other associated persons will not act in violation

of our

policies and these laws and regulations, or that our policies and

procedures will effectively prevent us from violating these regulations

in every transaction in which we may engage or provide a defense to

any alleged violation. In particular, we may be held liable for the

actions that our local, strategic

or joint venture partners take inside

or outside of the United States,

even though our partners may

not

be subject to

these laws. Such

a violation, even if

our policies prohibit it,

could materially and adversely

affect our reputation, business,

results of operations and financial condition. Any expansion into developing

countries, and our development of new partnerships and

joint venture relationships, could increase the risk of OFAC

violations in the future.

our payment

processing and

activities are

extensive regulation.

Compliance with

the

requirements under the various

regulatory regimes may cause

us to incur significant

additional costs and failure

to comply with such

requirements could result in the shutdown of

the non-complying facility, the imposition of liens, fines and/or civil or

criminal liability.

We

are

to

comply

with

anti-corruption

laws

and

the

FCPA

and

UK

Bribery

Act,

in

the

jurisdictions in which we operate our business, which could adversely impact

our future growth.

The FCPA prohibits

us from providing anything of value to foreign

officials for the purposes of obtaining or retaining business,

or

securing

any

improper

advantage,

and

us

to

keep

books

and

records

that

accurately

and

fairly

reflect

our

transactions.

As part

of

our

we

may

deal

with

state-owned

enterprises,

the

of

which

are

foreign

officials

for

the FCPA.

The UK

Bribery

Act includes

provisions

that extend

beyond bribery

of foreign

public

officials and also apply to

transactions with individuals not employed

by a government and

the act is also

more onerous than the FCPA

in a number of other respects, including

jurisdiction, non-exemption of facilitation

payments and penalties. Some of the international

locations in which we operate or have investments lack a developed

legal system and have higher than normal levels of corruption.

Any

failure

by

us

to

adopt

and

ensure

that

our

employees,

agents

and

the anti-corruption

regulations could

subject us

to substantial

penalties, and

the requirement

that we

comply

with these laws could

put us at a

competitive disadvantage against

companies that are not

required to comply.

For example, in many

markets,

there

may be

levels

of official

corruption,

and

thus, bribery

of public

officials

may

be

a comm

only

accepted cost

of doing

business. Our

refusal to

engage in

illegal behavior,

such as

paying bribes,

may result

in us not

being able

to

obtain business that we

might otherwise have been able

to secure or possibly

even result in unlawful,

selective or arbitrary action being

t

aken against us.

Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, as well as criminal fines and

imprisonment. We

have developed policies

and procedures as part

of a company-wide

compliance program that

is designed to assist

our compliance with applicable U.S.,

South African and other international

anti-corruption laws and regulations,

and provide regular

training to our

employees to comply

with these laws

and regulations. However,

there can be

no assurance that

all of our

employees,

consultants, partners, agents or other associated persons will not take actions in violation of our policies or these laws

and regulations,

or that our

policies and procedures

will effectively prevent

us from violating

these regulations in every

transaction in which

we may

engage, or

provide a defense

to any alleged

violation. In

particular,

we may be

held liable

for the actions

that our

local, strategic

or

joint venture

partners take inside

or outside

of the United

States, even though

our partners may

not be subject

laws. Such

a

violation,

even

if

our

prohibit

it,

could

and

affect

our

reputation,

results

of

and

We

do not

have a South

African banking

license and,

therefore, we provide

our banking

offering through

an arrangement

with a third-party bank, which limits our

control over this business and the economic benefit

we derive from it. If this

were to be

terminated, we would not

operate our Lesaka

EasyPay business without

alternate means of

access to a

banking

license. We are also required to comply with

the requirements of payment schemes, including VISA

and Mastercard. Furthermore,

we provide certain

of our services

under partnerships

banks. We

will be unable

to provide our

payments and

card-acquiring businesses if we

fail to comply with payment

scheme rules, and/or fail

to maintain certain regulatory

licenses and

registrations, and/ or

if we

were unable to

continue to partner

banks to provide

our payments and

The South

African retail

banking market

is highly regulated.

Under current

law and

regulations, our

Lesaka EasyPay

activities require us

to be registered

as a bank

or to have

access to an

existing banking license.

We

are not currently

so

registered,

but

we

have

an

with

African

Bank

Limited

(“African

Bank”),

that

enables

us

to

implement

our

Lesaka

EasyPay program in compliance with the relevant laws and regulations. If this agreement were

to be terminated, we would not be able

to operate these services

unless we were able to obtain

access to a banking license

through alternate means. Furthermore,

we have to

comply

with

the

South

African

Centre

Act,

and

money

laundering

and

terrorist

control

regulations, when we open new bank

accounts for our customers and when

they transact. Failure to effectively implement and

monitor

responses to the legislation and regulations may result in significant fines

or prosecution of African Bank and ourselves.

The South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries between

financial product suppliers and consumers in

South Africa to register as

financial service providers. Lesaka Life and LFS

were granted

a Financial Service Provider

(“FSP”) licenses on June

9, 2015, and July

11, 2017, respectively.

If our FSP licenses are

withdrawn or

suspended, we

may be

stopped from

continuing our

businesses in

unless we

are able

to enter

into a

representative arrangement with a third party FSP.

Furthermore,

the

Conduct

of

Bill

(“COFI

Bill”)

will

overhaul

the

current

and

legislative

framework by replacing

the rules-based approach

with an

outcomes-driven and principles-based

model, and the

adoption of

an activity-

based licensing and

authorization regime. It

aims to establish a

single, modern conduct

architecture aligned to

emerging risks across

the financial services

sector, and embed

fair outcomes across

the value chain,

thereby simplifying and

rationalizing existing fragmented

conduct rules, and strengthening

governance, culture and accountability.

While the COFI Bill is

expected to significantly

change the

manner in

which we operate

our business, including

the conversion of

existing licenses for

the relevant

Lesaka subsidiaries

through

transitional arrangements and other

financial services activities which

may require licensing, it

is also likely to substantially

costs as

we seek

to meet

regulatory expectations.

timing remains

uncertain, the

COFI Bill

was introduced

in

Parliament in April 2026.

We

requirements of

payment schemes,

including VISA

and Mastercard.

We

have deployed

a

significant number of devices, and any

mandatory compliance upgrades to our deployed POS

devices would require significant capital

expenditure and/or

be disruptive

to our customer

base. Failure

payment schemes’

rules may

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

We provide card acquiring services

to our customers

by partnering with

Nedbank Limited and

ABSA Bank Limited,

and payment

processing services

in partnership

largest banks

Africa. If

these agreements

were to

be terminated,

our

business would

not be

able to

operate

their payment

services unless

they

were able

to enter

or payment

processing agreements with other

partners or obtain a direct

designation license with the

schemes and regulatory

bodies. In addition,

any loss of or failure to renew our current authorizations would result in

an inability to operate its payment services.

Compliance with the requirements under these various regulatory regimes may

cause us to incur significant additional costs and

failure to

such requirements

could result

in the

shutdown of

the non-complying

facility,

the imposition

of liens,

fines

and/or civil or criminal liability.

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

payments industry.

It may change

the manner in

which we conduct

likely lead

to increased operating

costs for our

business as we work to ensure compliance with the new legislative

and regulatory framework, which may have a material

adverse

effect on our business.

On March

3, 2025,

the South

African Reserve

Bank (“SARB”)

published

certain draft

regulatory documents

for commentary

that

are

to have

a substantial

impact

on how

we conduct

our

business namely:

(i)

a draft

directive

“Directive

in

respect

of specific

payment

activities within

the

national

payment

system”

(the “Directive”);

(ii) a

draft

exemption

notice

“Designation by the

Prudential Authority of

specific activities conducted

in the national

payment system which

shall be deemed

not

to constitute

‘the business

of a

bank’ under

paragraph (cc)

in section

1(1) of

the Banks

Act, 1990”

(the “Exemption

Notice”); and

(iii) the

Payment

System

Bill

(“NPS

Bill”),

which

seeks

to

replace

the

Payment

System

Act,

Following the initial

publication of the

proposed regulations, for

which we submitted

detailed comments through

our industry body,

the Association

of South

African Payment

Providers (“ASAPP”),

revised versions

of the

Directive and

the Exemption

Notice were

published for commentary on May 20, 2026, and detailed comments were submitted

to ASAPP.

The key objectives of the proposed regulations are to

clarify the mandate and objectives of the

SARB with respect to the national

payment

system

(“NPS”);

and

establish

a

robust

regulatory,

oversight,

and

supervisory

for

the

NPS.

The

regulations also aim

to promote financial

inclusion, competition, the

prevention of financial

crime, and the

fair treatment and

of

customers,

while

introducing

an

activity-based

licensing

and

regime.

In

this

regard,

the

Directive

defines

seven

“payment

activities”

and

that

a

person,

which

can

be

a

bank

or

a

non-bank,

a

“payment

activity"

must

obtain

authorisation from the

SARB to undertake

such activity.

Under the Exemption

Notice, certain payment

activities are exempted

from

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

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

to the

Exemption

Notice, these

activities can

be undertaken

by non-banks,

certain conditions.

Certain of

our businesses

currently undertake

activities which

would qualify

as “payment

activities” under

the Directive

and the

NPS Bill. Under

the current

framework,

these activities

are undertaken

in partnership

with a

sponsoring

bank and

the sponsoring

bank is

regulation by the SARB.

In other words, the

business undertaking the “payment

activity” is not

subject to direct

regulation with respect

to such payment activities.

It is

uncertain if

and when

the proposed

regulations will

enter into

effect and

the extent

to which

we as

a non-bank

may elect

whether to conduct an exempted

payment activity by partnering with

a bank to do so, or on its own,

if it is authorised by the

SARB -

i.e. whether both options will be available to a non-bank. Should

our businesses be subject to direct regulation under this new regime

(i.e., if our current sponsorship

model is no longer available), we

expect that we will incur significant operating

costs to comply with

the new requirements, and to

obtain authorization with respect thereto.

Furthermore, while some requirements may already

exist under

other current

regulatory frameworks

for certain

of our businesses,

we will likely

need to invest

in additional

resources, systems

and

processes to satisfy

the regulatory requirements

contemplated in the

proposed regulations, which

may also lead

to increased

costs, which may have a material adverse effect on our business.

We may be subject

to regulations regarding privacy, data use and/or security,

which could adversely affect our business.

We

are subject to regulations

in a number of

the countries in which

we operate relating to

the processing (which includes,

inter

alia, the collection, use, retention, security and transfer) of personal information about the people (whether natural or juristic) who use

our products

and services.

The interpretation

and application

of user

data protection

laws are

in a

state of

flux. These

laws may

be

interpreted

and

applied

inconsistently

from

country

to

country

and

our

current

data

and

practices

may

not

be

consistent with those interpretations and applications.

Complying with these varying requirements could cause us to

incur substantial

costs or

require us

to change

practices in

a manner

adverse to

Any failure,

or perceived

failure, by

us to

comply with any regulatory requirements or

international privacy or consumer protection-related laws and regulations

could result in

proceedings

or

actions

against

us

by

governmental

or

others,

subject

us

to

and

negative

publicity.

In

addition, as

noted above,

we are

the possibility

of security

breaches, which

themselves may

a violation

laws.

Amendments

to

the

NCA

were

signed

into

law in

South

Africa

in

August

Compliance

with

these

amendments

may

adversely impact our micro-lending operations in South Africa.

In August 2019, the National Credit Amendment Bill, or debt-relief bill, was signed into law in South Africa.

The effective date

of the debt-relief

bill has not

yet been announced

and has been

significantly delayed.

We

believe that the

debt-relief bill will

restrict

the ability of financial services providers to provide lending

products to certain low-income earners and will increase the

cost of credit

to

these

As a

result,

with

the debt

-relief

bill

may

impact

our

micro-lending

in

South

Africa. Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement

this new legislation

in our lending processes

and practices. Non-compliance

with the provisions of

this new legislation may

financial loss and penalties, reputational loss or other administrative punishment.

Risks Relating to our Common Stock

Our failure to prepare

and timely file

our periodic reports

with the SEC limits

our access to

the public markets

to raise debt

or equity capital.

Form S-3 permits eligible

issuers to conduct registered

offerings using a short

form registration statement that

allows the issuer

to incorporate

by reference its

past and future

filings and reports

made under the

Securities Exchange

Act of 1934,

as amended

(the

“Exchange Act”).

Form S-3

enables eligible

issuers to

conduct primary

offerings “off

the shelf”

under Rule

415 of

the

Act

of

1933,

as

amended

(the

“Securities

Act”).

The

shelf

registration

process,

with

the

ability

to

forward

incorporate information, allows issuers to avoid delays and

interruptions in the offering process and to access the capital markets

in a

more expeditious

and efficient

manner than

raising capital

in a

standard registered

offering pursuant

to a

Registration Statement

on

Form S-1. The ability to register securities for resale may also be limited as a result

of the loss of Form S-3 eligibility.

We

did

not

file

our

Form

10-K

within

the

timeframe

by

the

SEC;

thus,

we

have

not

current

in

our

reporting requirements

SEC. Although

we regained

status as

a current

filer by

filing our

Form 10-K/A

to amend

our 2025

Form 10-K,

as of

of this

Annual Report,

we are

ineligible to

file new

short form

registration statements

on Form

S-3 and,

absent a

waiver of

the Form

S-3 eligibility

requirements, we

are no

longer permitted

to use

registration statements

on

Form S-3. If

we wish

to pursue

an offering now, we

would be

required to conduct

the offering on

an exempt

basis, such

as in

with Rule

144A, or

file a

registration statement

on Form

S-1. Using

a Form

S-1 registration

statement for

a public

would

likely take

significantly longer

than using

a registration

statement on

Form S-3

and increase our

transaction costs,

and could,

to the

extent

we

are

not

able

to

conduct

offerings

using

methods,

impact

our

ability

to

raise

capital

or

acquisitions of other companies in a timely manner.

Our stock price has periodically experienced significant volatility. During the 2026 fiscal

year, our stock price ranged from a low

of $3.62 to a high of $5.54. We

expect that the trading price of our common stock may

continue to be volatile as a result of a number

of factors, including, but not limited to the following:

•

Any adverse developments in litigation or regulatory actions in which we are

involved;

•

Fluctuations in currency exchange rates, particularly the U.S. dollar/ZAR exchange

rate;

•

Announcement of additional BEE

transactions, especially one involving

the issuance or

potential issuance of equity

or dilution or sale of our existing business in South Africa;

•

Quarterly variations in our operating results;

•

Significant fair value adjustments or impairment in respect of investments

or intangible assets;

•

Announcements of acquisitions or disposals;

•

The timing of, or delays in the commencement, implementation or completion

of major projects;

•

Large purchases or sales of our common stock; and

•

General conditions in the markets in which we operate.

Additionally,

our common

stock can

be expected

to be

volatility resulting

from purely

market forces

over

which we have no control.

The put right we granted to the IFC Investors

on the occurrence of certain triggering events may have adverse impacts on us.

In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors. Certain IFC Investors were

also investors in Adumo and on October 1, 2024, we issued an aggregate of 1,989,162 additional shares of our common stock to these

IFC Investors pursuant to the

Adumo transaction agreement. As of

June 30, 2026, the

IFC Investors held 8,430,676 shares.

We granted

the IFC Investors certain rights, including the

right to require us to

repurchase any share held by the

IFC Investors pursuant to the May

2016 and

October 2024

transactions upon

the occurrence

of specified

triggering events,

which we

refer to

as a

“put right.”

The put

share will

be the

higher of

the price

paid to

us by

the IFC

Investors and

the volume-weighted

average price

per

share prevailing for the 60 trading days preceding the triggering event, except

that with respect to a put right triggered by rejection of

a bona

fide offer,

the put

share will

be the

highest price

offered

by the

offeror.

If a

put triggering

event occurs,

it could

adversely impact

our liquidity

and capital

resources. In

addition, the

existence of

the put

right could

also affect

whether or

on what

terms a

third

party

might

in the

future

offer

to purchase

our

company.

Our response

to any

such offer

could also

be complicated,

delayed or otherwise influenced by the existence of the put right.

Approximately 29% of our outstanding common stock is owned by two shareholders. The interests of these shareholders may

conflict with those of our other shareholders.

There is a concentration of ownership

of our outstanding common stock because

approximately 29% of our outstanding common

stock is owned by two

shareholders. Based on their most

recent SEC filings disclosing

ownership of our shares, Value Capital Partners

(Pty) Ltd, or VCP,

and IFC Investors, beneficially own approximately 19% and 10% of our outstanding common

stock as of June 30,

2026, respectively.

The interests of

VCP and the

IFC Investors may

be different

from or conflict

with the interests

of our other

shareholders. As a

the significant

combined ownership

by VCP

and the

IFC Investors,

they may

be able,

if they

act together,

to significantly

influence the

voting outcome

of all

matters requiring

shareholder approval.

This concentration

of ownership

may have

the effect

of

delaying or preventing

a change of control of

our company,

thus depriving shareholders

of a premium for

their shares, or facilitating

a change of control that other shareholders may oppose.

We

may seek

to raise

additional financing

by issuing

new securities

with terms

or rights

superior to

those of

our

common stock, which could adversely affect the market price of

such shares.

We

may require

additional financing

to fund future

operations, including

expansion in

current and new

markets, programming

development and acquisition,

capital costs and

the costs of any

necessary implementation of

technological innovations or

technologies, or to fund acquisitions. We may also wish to raise additional equity funding to

reduce the amount of debt funding on our

balance sheet. Because of the exposure to market risks associated

with economies in emerging markets, we may not

be able to obtain

financing on favorable terms or at all.

If we raise additional funds by

issuing equity securities, the percentage ownership of

our current

shareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of

which could

the market

price and

voting power

of common

stock. If

we raise

funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior

to those of the

holders of

shares of common stock, and the terms of these debt securities could impose restrictions on operations and

create a significant interest

expense for us.

Issuances of significant amounts of stock in the

future could potentially dilute your equity ownership and adversely affect the

price of our common stock.

We

it is necessary

to maintain

a sufficient

available authorized

shares of our

to

provide

us

with

the flexibility

to

issue shares

for

purposes

that

may

arise

to

time.

For example,

we

could

sell

additional shares to raise

capital to fund our

operations, to reduce debt

or to acquire other

businesses, issue shares in

a BEE transaction,

issue additional shares under our stock incentive plan or declare a stock dividend. Our board may authorize

the issuance of additional

shares of common stock without notice to, or further

action by, our shareholders, unless shareholder approval is required by law or the

rules of the NASDAQ Stock

Market. The issuance of additional

shares could dilute the equity

ownership of our current shareholders

and any such additional shares would likely be freely tradable, which could

adversely affect the trading price of our common stock.

We have identified

material weaknesses in our internal control over financial reporting which, if not timely

remediated, may

the accuracy

and reliability

of our

financial statements,

and our

reputation, business

and stock

price, as

well as

lead to a loss of investor confidence in us.

As described

under Item

9A—“Controls and

Procedures.”, we

our disclosure

controls and

procedures were

not

as of

that we

had, as

of such

date, material

weaknesses in

our internal

related to:

●

Our

and

Group

payroll

risk

and

to

changes

in

or

of

systems

and

over

and

from

service

and

design

and

of

Technology

General

Controls

(“ITGCs”),

over

service

organizations

and

process

level

in

ineffective process level controls, including a

lack of validation of

the completeness and accuracy

of information used within

the process;

●

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

controls including

insufficient controls

over information

resulting in

ineffective process

level controls

including a

lack of

validation of the

completeness of the

journal entry population

and inadequate validation

of the completeness

and accuracy

●

The failure

of our

Utilities, Lesaka

Hospitality Proprietary

Limited (formerly

GAAP-Point-Of-Sale

Limited) (“Lesaka

Hospitality”),

Lesaka Merchant

Payments businesses

our

Sarbanes

program,

risk

and

to

systems

and

over

and

from

service

and

design

and

of

ITGCs controls

over

service

organizations

and

process

level

in

process

level controls, including a lack of validation of the completeness and accuracy

●

An insufficient number of experienced and trained resources to execute

on their internal control responsibilities resulting in

risk

design,

and

of

process

level

for

in the scope of our internal control over financial reporting evaluation.

A material weakness is a deficiency,

or a combination of deficiencies, in internal control over financial reporting such that there

is

a

possibility

that

a

of

our

annual

or

interim

would

not

be

or

detected

on

a

timely

basis.

The

in

Item

9A—“Controls

and

Procedures.”,

in

immaterial misstatements of prior period amounts, which have

been corrected through revision of the

prior period financial statements

as described

in Note 1

to our consolidated

financial statements, and

in a corrected

immaterial current period

misstatement related

to

revenue; they did not require amendment of any previously filed report.

We

intend to remediate

these material weaknesses.

While we believe

the steps we

take to remediate

these material weaknesses

will improve

of our

and will

remediate the

identified deficiencies,

if our

efforts

are

to

address the

weakness

or

we identify

weaknesses in

our

control over financial reporting in the future, our ability

to analyze, record and report financial information

accurately, to prepare our

financial statements within

the time periods

specified by the rules

and forms of the

SEC and to otherwise

comply with our

under

the federal

laws may

be

affected.

The occurrence

of,

or failure

to remediate,

these material

weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect

the accuracy and

reliability of our financial

statements and have other

consequences that could

materially and adversely affect

our business, including

an

adverse

impact

on

the

market

price

of

our

common

stock,

actions

or

investigations

by

the

SEC

or

other

authorities, shareholder lawsuits, a loss of investor confidence and

damage to our reputation.

Failure to maintain effective internal control over financial reporting in accordance

with Section 404 of the Sarbanes-Oxley

Act, especially over companies that we may acquire, could have a material

adverse effect on our business and stock price.

Under

Section

of

Sarbanes,

we

are

to

furnish

a

certification

and

auditor

attestation

the

effectiveness of our

internal control over

financial reporting. We

are required to

report, among other things,

control deficiencies that

constitute

a

“material

weakness”

or

changes

in internal

control

that materially

affect,

or are

likely to

affect,

internal control over financial reporting.

A “material

weakness” is

a deficiency,

or a

deficiencies, in

reporting such

that

there is a reasonable possibility that

a material misstatement of annual or

interim financial statements will not be

on a timely basis.

The requirement to evaluate and report on our internal controls

also applies to companies that we acquire. While we continue

to

dedicate resources

and management

time to

ensuring that

we have effective

controls over

financial reporting,

failure to achieve

and

maintain an effective internal control environment could have a material adverse effect on

the market’s perception of our business and

our stock price.

The restatement of our prior

quarterly financial statements may affect shareholder and

investor confidence in us or

harm our

reputation, and may subject us

to additional risks and uncertainties, including increased costs

and the increased possibility of legal

proceedings and regulatory inquiries, sanctions or investigations.

We

misstatements

in

the

original

filings

of

our

Quarterly

Report

on

Form

10-Q

for

the

quarters

ended

September 30, 2024, December 31, 2024 and March 31, 2025 (“Original Filings”) and withdrew reliance on these Original Filings on

September 10, 2025. We filed amended quarterly reports on November 5, 2025 which

include restatement(s), refer to the section titled

“Restatement” in Note 1 to the

unaudited condensed consolidated financial statements in each of

the amended filings on Form 10-Q/A

for

the

quarters

ended

30,

2024,

31,

and

March

31,

2025,

for

the

restatement(s).

also

in

our

control

over

to

the

evaluation of information that was known or knowable at the time of the transaction or event included in the Original

Filings, refer to

Item 9A—“Controls and Procedures.”

As a result of the restatement

described above, we have

incurred, and may continue to

incur, unanticipated costs

for accounting

and

legal

fees

in

connection

with,

or

related

to,

such

restatement.

In

such

restatement

could

subject

us

to

a

number

of

additional risks and uncertainties, including the increased possibility of legal proceedings and inquiries, sanctions or investigations by

the SEC

or other

regulatory authorities.

Any of

the foregoing

may adversely

affect

our reputation,

the accuracy

and timing

of our

or

our

results

of

liquidity

and

or

cause

shareholders,

investors

and

customers to lose confidence in the accuracy and completeness

of our financial reports or cause the market price of

our common stock

to decline.

You may experience some difficulties in

effecting service of legal

process, enforcing U.S

and/or foreign judgments

or bringing

original actions based upon U.S. laws,

including federal securities laws or other foreign

laws, against us or certain of

our directors

and officers and experts.

While Lesaka is incorporated

in the state of

Florida, United States, substantially

all of the company’s

assets are located outside

States. For

this reason,

of Lesaka’s

directors and

all its

officers reside

outside of

States and

the

majority of our experts, including our independent registered public accountants,

are based in South Africa.

As a

result, even

though you

could effect

service of

legal process

upon Lesaka,

as a

Florida corporation,

in the

United States,

you may not be able

to collect any judgment obtained

against Lesaka in the United

States, including any judgment based

on the civil

liability provisions of U.S. federal securities laws, because substantially all of

our assets are located outside the United States.

Any legal processes initiating action in the United States against Lesaka's directors, officers, and experts who are

located outside

of the United States, will need to be served on them in that country, in accordance with the procedures prescribed by the relevant U.S.

court. South

Africa is

not a

party to

any treaties

regarding the

enforcement of

foreign commercial

judgments. In

be able

to

enforce a foreign judgment,

it is required for

the South African courts to

first "recognize" the U.S. judgment

– in the absence of

this,

the

foreign

has no

automatic

extra

territorial

effect.

The foreign

constitutes a

"cause

of action"

which

may

be

recognized and enforced by South African courts. In order to

achieve this, legal proceedings must be commenced in the

courts.

is a party

to the New

York

Convention on

the Recognition

and Enforcement

of Foreign

Arbitral Awards,

and its

International

Arbitration

Act

of

that

foreign

arbitral

awards

must

be

recognised

and

enforced

in

South

Africa.

However, application

must still be made

to the South African

High Court in order

for the award to

be recognised and

enforceable in

Additional,

practical,

to

the enforcement

of foreign

judgments

and arbitration

awards in

South

Africa

include the following:

●

If a foreign judgment is enforced by a South African court,

the approval of the SARB (or an Authorised Dealer of

SARB) is

(i) before

a

defendant

resident

in

South

Africa

may

pay

money

to

a

non-resident

plaintiff;

and

(ii) to

settle

the

judgement in a currency other than South African Rand; and

●

A plaintiff who is not resident

in South Africa may be required

to provide security for costs

when initiating court proceedings

i

n South Africa (including for the enforcement of foreign judgments and

awards).