LESAKA TECHNOLOGIES INC

Description of Business

Lesaka Technologies, Inc. (“Lesaka” and collectively

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

UEPS

Inc.,

was incorporated

in

the

State

of

Florida

on

May

8,

solutions to underserviced

consumers, merchants and

enterprises, improving the

way they manage

their daily financial

activities and

increasing

in

the

markets

in

which

we

operate.

In

plain

terms,

the

Company

helps

its

pay,

receive,

borrow, insure and grow

: the Company enables them to make

and accept payments, receive income such as wages

and welfare grants,

access credit, protect their families and assets through insurance, and grow their businesses and financial

lives. The Company delivers

these

capabilities

through

three

divisions:

which

payment

acceptance,

cash

lending and alternative digital product

solutions to merchants across our two

channels; Community and Corporate. Consumer,

which

provides banking,

insurance solutions

to consumers,

principally recipients

of social welfare

grants in

South Africa;

and

Enterprise, which provides payment processing, prepaid solutions and

bill payment infrastructure connecting enterprises to consumers

Basis of presentation

The accompanying

statements include

subsidiaries over

which Lesaka

exercises control

and have

been

prepared in accordance with accounting principles generally accepted

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

Implications of reverse acquisition concluded in June 2004

On June 7, 2004,

Lesaka and the former

shareholders of Net 1 Applied

Technology

Holdings Limited (“Aplitec”) implemented

a transaction

under which

the former

of Aplitec

a majority

voting interest

in Lesaka.

Aplitec was

a holding

company established and

existing under the

laws of Republic

of South Africa

and was liquidated

and deregistered following

of the transaction.

GAAP requires that

the company whose

shareholders retain

a majority interest

in a combined

business be treated

as the acquirer for accounting purposes. Consequently, this transaction was accounted for as a reverse acquisition. For

the period from

June 7, 2004,

the financial information

reported for the

Company represents the

consolidated results of

Lesaka and Aplitec

with Lesaka

as the acquired entity.

Although Aplitec is

deemed to be

the acquiring company

for financial and

reporting purposes, the

legal status of the

the surviving corporation did not change.

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

as

well

as

the

totals

for

cost

and

by

$

6.5

million

in

the

notes

to

the

audited

and 2024.

The carrying

reported as of

was not impacted

by the error. The

Company has recast

the amounts of

cost and accumulated

for

as

well

as

the

totals

for

cost

and

by

$

6.5

million

in

the

Property,

Plant

and

Equipment,

net note, refer to Note 7.

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

in

the

Current

Year

Statements.”

Based

on

this

the

Company has concluded

that previously issued

financial statements were

not materially misstated

based upon overall

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

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,

loss, consolidated

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

claimed

in

monthly

tax

submission

to

the

taxing

authority

and

were

from

cost of

goods

sold, IT

in the

and

other

payables

and

retained

in

the

balance

sheet.

The

presentation

in

the

revised

certain

taxes

in

cost

of

goods

sold,

IT processing,

and

support

in

the

c

onsolidated statements of operations and other payables and retained

earnings in the consolidated balance sheet.

Understatement of cost

of goods sold,

support due to

incorrect claim of indirect taxes

also determined that

it may also

be liable for

penalties and interest

related to the

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 consolidated financial statements related

to the correction of this error.

revised the previous

presentations on the

consolidated statements of

operations for the

2024, and

corrected them

in this

filing. The

Company has

also included

the impact

of the

correction for

months

ended September 30, 2025, in the consolidated statements of operations for the year June 30, 2026, included in this filing. The impact

of these revisions has increased

cost of goods sold,

support,

selling, general and administration

expense

and interest expense, and all subtotals from operating income to net income (loss)

attributable to Lesaka for the affected periods.

The Company has revised the consolidated balance sheet as of June 30, 2025, 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.

Specifically, for the year ended

0.2

Selling, general and administration expense increased by $

0.06

million, Operating income decreased by $

0.2

million, Interest expense

0.1

million, and Net

income attributable

to Lesaka decreased

by $

0.4

million, as a

correction to amounts

reported for the three months ended September 30, 2025. Basic and Diluted earnings per share for the year ended June 30, 2026, were

not impacted by the correction to amounts reported for the three months

ended September 30, 2025.

Correction of deferred tax

asset included in deferred income taxes due

to correction of intercompany

While

preparing

its

Annual

Report

on

Form

10-K

for

the

year

ended

June

30,

2026,

the

Company

that

certain

intercompany transactions processed in previous periods were incorrectly recorded which resulted in the incorrect amount of deferred

income

taxes

in

its

balance

sheet,

of

of

loss,

of

changes

in

equity,

of

cash

flows

and

related

notes

to

the

statements included

in its Annual

Reports on Form

10-K and Quarterly

Reports on Form

10-Q since June

30,

2025, and these

filings were incorrect.

The deferred tax

assets, net included

in the Company’s

consolidated balance sheet

30, 2025, and

subsequently presented balance

sheets, were overstated

by $

2.2

million and retained

earnings were overstated

by $

2.2

million. Income tax benefit

for the year ended

June 30, 2025, included

in the consolidated statement

of operations was overstated

by

$

2.2

million. The

corrected presentation

in the

revised consolidated

includes adjustments

for deferred

taxes in

benefit in the

consolidated statements

and deferred

income taxes and

retained earnings

balance sheet.

has revised

the previous presentations

operations for

30,

2025,

and

them

in

this filing.

The

impact

of

these

has

income

taxes

benefit,

and

all

subtotals

from

income

to

net

income

(loss)

attributable

to

Lesaka

for

the

periods.

The

Company

has

revised

the

2025, and corrected it

in this filing

where these amounts

are presented as

comparative prior period amounts

in deferred tax assets, net and retained earnings and affected

subtotals and totals.

The Company assessed

the materiality of

these errors and

presentation on prior

period consolidated financial

in

with

SAB

No.

99“Materiality”

and

SAB

No.

108,

“Considering

the

Effects

of

Prior

Year

when

Misstatements in

the Current

Year

Financial Statements.”

this assessment,

has concluded

that

issued

were

not

misstated

based

upon

overall

of

both

quantitative

and

qualitative factors.

The

tables

below

present

the

impact

of

the

to

to

the

balance

sheet

and

consolidated statements of operations for the periods identified.

Consolidated balance sheet

Deferred tax assets, net

$

12,554

$

(2,216)

$

10,338

72,079

3,956

76,035

Accumulated other comprehensive loss

(185,664)

(2,216)

Retained earnings

$

222,719

$

(3,994)

$

216,509

Consolidated statement of operations

Year

$

486,546

$

$

487,186

Selling, general and administration, exclusive of depreciation and amortization

(A)

131,512

131,738

21,453

21,824

$

(18,198)

$

2,216

$

Basic earnings (loss) per share attributable to Lesaka shareholders

$

(1.14)

$

(0.05)

$

(1.19)

Diluted earnings (loss) per share attributable to Lesaka shareholders

$

(1.14)

$

(0.05)

$

(1.19)

(A) As

reported for

selling, general

and administration,

exclusive of

depreciation and

movement in

allowance for credit losses of $

8,011

, which is now presented separately on the consolidated statement of operations.

Consolidated statement of operations

Year

$

442,673

$

$

443,293

Selling, general and administration, exclusive of depreciation and amortization

(A)

91,969

92,185

18,932

19,171

Basic earnings (loss) per share attributable to Lesaka shareholders

$

(0.27)

$

(0.02)

$

(0.29)

Diluted earnings (loss) per share attributable to Lesaka shareholders

$

(0.27)

$

(0.02)

$

(0.29)

(A)

for

general

and

administration,

exclusive

of

and

the

movement

in

allowance for credit losses of $

5,158

, which is now presented separately on the consolidated statement of operations.

capital

Subsequent to

the issuance

of the

Quarterly Report

on Form

10-Q for

March 31,

2026, it

determined that the presentation

of the number of

shares and amounts used

for common stock and

treasury shares and the

additional paid-in

capital in

its consolidated

balance sheets

and consolidated

statement of changes

in equity

and related notes

to the

statements included

in previously

filed Annual

Reports on

Form 10-K

and Quarterly

Reports on

Form 10-Q

since June 30,

2006, were

incorrect. In these

previous filings, shares

of Lesaka’s common stock

repurchased by

Lesaka were

as

shares.

Under

the

Florida

Corporation

Act,

shares

directly

by

the

issuing

corporation

are

restored by operation

of Florida law

to the status

of authorized but

unissued shares.

However, shares

repurchased by a

company are

as

shares

if

(i)

there

is

a

in

a

corporation’s

articles

of

incorporation

designating

the

of

a

corporation’s shares as treasury shares,

or (ii) in

the case of

a corporation whose

shares are registered

on a national

securities exchange,

the

repurchased

shares

that

have

been

designated

as

shares

in

the

corporation’s

bylaws

or

in

resolutions

of

its

board

of

directors. Shares repurchased by Lesaka were not designated as treasury shares under (i) or

(ii) as described in the preceding sentence.

Guidance

under

U.S.

GAAP

that

the

of

shares

by

a

company

should

conform

with

law

and

therefore the repurchase of shares of its common stock by Lesaka should have reduced

the number of common stock and amount and

the amount of additional paid-in capital

presented. The corrected presentation in the

revised consolidated financial statements includes

the repurchases

of common

stock by

a reduction

of the

and amount

and reduces

the

additional paid-in

capital.

Total

Lesaka equity

and the

issued and

shares are

not affected

by this

revision.

Acquisition of shares of

Lesaka’s common

stock by its subsidiaries

are

not affected by

the aforementioned rules

and these

shares will continue to be presented as treasury shares in these consolidated financial

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

Misstatements in

the Current

Year

Financial Statements.”

this assessment,

has concluded

that

issued

were

not

misstated

based

upon

overall

of

both

quantitative

and

qualitative factors.

The Company has revised the previous

presentations on the consolidated balance

sheet as of June 30, 2025, and corrected

them

in this filing.

The Company has also

included the impact

of the correction

for the years ended

June 30, 2025 and

statement of changes

in equity for the

included in this filing.

The impact of

these revisions has decreased the amount for common stock, treasury shares,

at cost, and additional paid-in capital on the

2025. The impact

of these revisions

has decreased the

and amount for

the

number

of

shares

and

amount

of

shares,

and

the

amount

of

paid-in

capital

on

the

consolidated statement of changes in equity for the years ended June 30, 2025

and 2024, respectively.

capital (continued)

the impact of the revisions to specific captions to the Company’s consolidated balance sheet as of June

Consolidated balance sheet

$

$

(19)

$

Treasury shares, cost

(298,523)

291,464

(7,059)

Additional paid-in capital

$

426,950

$

(291,445)

$

135,505

The table below presents the impact of the revisions to specific captions to the Company’s

consolidated statement of changes in

equity for the periods identified.

Consolidated statement of changes in equity

Year

Common stock:

89,836,051

Amount

$

$

(19)

$

111,183,141

(25,934,995)

Amount

$

$

(19)

$

Treasury shares:

25,563,808

Amount

$

(289,733)

$

289,733

$

(5,462,597)

371,187

(5,091,410)

Amount

$

$

1,731

$

(11,929)

(29,934,044)

25,934,995

Amount

$

(298,523)

$

291,464

$

(7,059)

Additional paid-in capital:

$

343,639

$

(289,714)

$

53,925

$

$

(1,731)

$

(1,731)

$

426,950

$

(291,445)

$

135,505

capital (continued)

The table below presents the impact of the revisions to specific captions to the Company’s

consolidated statement of changes in

equity for the periods identified.

Consolidated statement of changes in equity

Year

Common stock:

88,884,532

(25,244,286)

Amount

$

$

(19)

$

89,836,051

Amount

$

$

(19)

$

Treasury shares:

(25,244,286)

25,244,286

Amount

$

(288,238)

$

288,238

$

319,522

Amount

$

(1,495)

$

1,495

$

25,563,808

Amount

$

(289,733)

$

289,733

$

Additional paid-in capital:

$

335,696

$

(288,219)

$

47,477

$

$

(1,495)

$

(1,495)

$

343,639

$

(289,714)

$

53,925

SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The financial statements of

entities which are controlled

by Lesaka, referred to as

subsidiaries, are consolidated. Inter-company

accounts and transactions are eliminated upon consolidation.

The Company, if it is the primary beneficiary,

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

The primary beneficiary is considered

to be the entity that will absorb a

majority of the entity's expected losses,

receive a majority of

the entity's expected residual

returns, or both. The

Company has an obligation

to absorb the financial

losses of the Lesaka

Employee

Share Trust (“Lesaka ESOP Trust”)

and also has the ability to control this trust and therefore it has been consolidated. This trust does

not generate significant losses or residual returns.

Business combinations

The

Company

for

its

under

the

method

of

accounting.

The

total

value

of

the

consideration paid

for acquisitions is

the underlying

net assets acquired,

based on their

respective estimated fair

values.

The Company uses a number

of valuation methods to determine

the fair value of assets and

liabilities acquired, including discounted

cash

flows,

market

values,

valuations

on

recent

or

a

thereof,

and

that

it

uses

the

most

measure

or

a

of

measures

to

value

each

asset

or

liability.

measurement-period

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

Use of estimates

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

that

affect

the

amounts

of

assets

and

and

of

contingent

assets

and

at

the

date

of

the

and

the reported

amounts

of revenues

and

expenses during

the reporting

period.

Actual results

could

differ

from

those

Translation of foreign

currencies

The primary

functional currency

of the

consolidated entities

is the

Rand (“ZAR”)

and the

currency is the U.S. dollar.

Assets and liabilities are translated

at the exchange rates in effect

at the balance sheet date. Revenues

and

expenses are translated at average

rates for the period. Translation

gains and losses are reported in

accumulated other comprehensive

income in total

equity.

The Company releases the

foreign currency translation

reserve included in accumulated

income attributable

to a foreign

entity upon sale

or complete, or

substantially complete,

liquidation of the

investment in that

foreign

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

liquidation of the foreign entity.

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

spot rate

at the

balance sheet

date. Transactional

gains and

losses are

in selling,

general and

expense on the Company’s consolidated

statement of operations for the period.

Cash, cash equivalents and restricted cash

include cash on hand and funds

deposited in bank accounts with

financial institutions that are liquid,

unrestricted and

readily available.

represents cash

legally or

contractually restricted

as to

use and

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

as well cash in certain bank accounts that have been

ceded to under certain of the Company’s

borrowings.

Allowance for credit losses

The Company uses historical default experience over

the lifetime of loans in

order to develop an expected loss

rate for its lending

books. The

credit losses related

to Consumer

multiplying the

rate with

the month-end

outstanding lending

book. The

credit losses

Merchant finance

loans receivables

is

calculated

by adding

together actual

receivables in

default plus

multiplying

the

rate with

the month-end

lending book. The Company

writes off microlending

finance loans receivable and

related service fees and interest

if a borrower is

in

arrears with

repayments for

more than

three months

or is

deceased. The

Company writes

off merchant

and working

capital finance

receivables and related

fees when it is

evident that reasonable

recovery procedures,

including where deemed

necessary, formal

legal

a

ction, have failed.

Allowance for credit losses (continued)

For

receivables,

the

Company

uses

a

lifetime

loss

rate

by

expressing

write-off

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. Non-recoverability

is assessed based on

a quarterly

review by

management of

the ageing

of outstanding

amounts, the

location

and the

payment

history

of the

in

relation to those specific amounts.

is valued

at the

lower of

cost and

net realizable

value. Cost

is determined

on a

first-in,

first-out basis

and includes

transport and handling costs.

Property, plant

and equipment

Property,

equipment are

shown at

cost less accumulated

depreciation. Property,

equipment are

depreciated

on the straight-line basis at rates which

are estimated to amortize the assets to

their anticipated residual values over their useful

lives.

Within the following asset classifications,

the expected economic useful lives are approximately:

Vaults

years

to

years

Office equipment

to

years

Vehicles

to

years

Furniture and fittings

to

years

The gain or loss arising

on the disposal or retirement

of an asset is determined

as the difference between

the sales proceeds and

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

Leases

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

Operating leases are included in operating lease right-

of-use assets (“ROU”),

operating lease liability

• current, and

operating lease liability

– long term

in its consolidated

balance sheets.

have any

significant finance

leases as

of June

but its

policy is

to include

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

long-term liabilities in its consolidated balance sheets.

A ROU asset

represents the

right to use

an underlying

asset for the

lease term and

the lease liabilities

represent its

obligation to

make lease

payments arising

lease arrangement.

Operating lease

ROU assets

and liabilities

are recognized

at

commencement date based on

the present value of

lease payments over the

lease term. As

most of the

Company’s leases do not provide

an implicit rate,

the Company generally

uses its incremental

borrowing rate

the estimated rate

of interest for

collateralized

borrowing over

a similar term

of the lease

payments at commencement

date. The operating

lease ROU asset

also includes any

lease

prepayments made

and excludes lease

incentives. The terms

lease arrangements may

include options to

extend or

terminate

the

lease

when

it is

certain

that

will exercise

that

option.

Lease

expense

for

lease payments

is

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

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

less. The Company

accounts for all

components in a

lease arrangement as

a single combined

lease component. Costs

incurred in the

adaptation of leased properties to

serve the requirements of

the Company (leasehold improvements) are

capitalized and amortized over

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

the lease.

Equity-accounted investments

The Company uses the equity

method to account for

investments in companies when

it has significant influence but

not control

over

the operations

of the

company.

equity method,

initially records

the investment

at cost

and

thereafter

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

In addition, when an investment qualifies for the equity

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

interest or degree

of influence),

the cost

of acquiring

the additional

the investee

is added

to the

current basis

of the

held interest and the equity method would be

applied subsequently from the date on which

the Company obtains the ability to exercise

significant influence over the investee.

releases a

pro rata

the foreign

currency translation

reserve related

to an

equity-accounted investment

that is

in accumulated

income to

earnings upon

the sale

of a

its ownership

the

investment.

The

release

of

the

pro

rata

portion

of

the

foreign

reserve

is

in

the

measurement of

the gain

or loss

on sale

of a

ownership interest

in the

equity-accounted investment.

The

Company does not recognize cumulative losses in excess of its investment or loans in

an equity-accounted investment except if it has

an obligation to provide additional financial support.

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

of the Company’s investment. The Company

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

This election

requires the Company to evaluate

each distribution received on the

basis of the source of the

payment and classify the distribution

as

either

cash

inflows

or

investing

cash

inflows.

The

Company

reviews

its

for

whenever events or circumstances indicate that the carrying amount of

the investment may not be recoverable.

the

excess

of

the

price

of

an

enterprise

over

the

fair

values

of

the

assets

acquired and liabilities assumed based

upon their estimated fair

value at the date

of purchase. The Company

reviews the carrying value

of goodwill annually or more frequently if circumstances indicate impairment

has occurred.

Circumstances that

could trigger

an impairment test

include but are

not limited to:

a significant adverse

change in the

climate or legal

factors; an adverse

action or assessment

by a regulator;

unanticipated competition; loss

of key personnel;

the likelihood

that a reporting unit or

significant portion of a reporting

unit will be sold

or otherwise disposed; and results

of testing for recoverability

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

and the carrying amount of the reporting

unit exceeds

of that reporting

unit, an impairment

loss is recorded

in the statement

Measurement of

the

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

future cash flows.

Intangible assets are shown at

cost less accumulated amortization. Intangible assets

are amortized over the following

useful lives:

Customer relationships

to

years

Software, integrated platform and unpatented technology

to

years

FTS patent

years

Exclusive licenses

years

Brands and trademarks

0.5

to

years

are periodically

evaluated for

recoverability,

and those

evaluations take

events or

circumstances

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

exists.

Debt and equity securities

Debt securities

The Company is required to

classify all applicable debt securities

as either trading securities, available

for sale or held

to maturity

upon investment in the security.

Held to maturity

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

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

securities are carried at amortized cost. The amortized cost

of held to maturity debt securities

is adjusted for amortization of premiums

and accretion of discounts to maturity.

Interest received from the held to

maturity security together with this amortization

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

a held to maturity security as of

2025. The Company uses

historical default experience over

the lifetime of debt

securities in order to

calculate a lifetime loss rate

for

its held to

maturity debt

securities. The Company

had

no

held to maturity

debt securities as

the carrying value of the Company’s

held to maturity debt securities was $

.

Impairment of debt securities

With regard

to held

to maturity

debt securities,

considers (i)

the ability

and intent

to hold

the debt

security for

a

period of time to allow

for recovery of value

(ii) whether it is more

likely than not that

the Company will be required

to sell the debt

security; and (iii)

whether it expects to recover

the entire carrying amount

of the debt security.

The Company records an

loss in its consolidated

statement of operations representing

the difference between

the debt securities carrying

value and the

current

fair value as of the date of the impairment if the Company determines that it intends to sell the debt security or if that it is more

likely

than not that it

will be required to

sell the debt security

before recovery of the

amortized cost basis. However,

the impairment loss

is

split between a credit loss and a non-credit loss for debt securities that the Company determines that it does not intend to sell or that it

is more likely than not that it will not be required to sell the debt securities before the recovery of the amortized

cost basis. The credit

loss portion, which is measured

as the difference between

the debt security’s

cost basis and the present value

of expected future cash

flows, is

recognized in

The non-credit

loss portion,

measured as

the

between

the

debt

security’s

cost

basis

and

its

current

fair

value,

is

in

other

income,

net

of

applicable taxes.

Equity securities

Equity

are

measured

at

fair

value.

Changes

in

the

fair

value

of

equity

are

in

the

of operations within

the caption titled

“change in fair

value of equity

securities”. The

Company may elect

to

measure equity securities without readily determinable fair

values at its cost

minus impairment, if any, plus or minus changes resulting

from observable price changes in orderly transactions for the identical or

a similar investment of the same issuer (“cost minus changes

in observable

prices equity

securities”). Changes

in the fair

cost minus

observable prices

equity

securities are discussed in Note 9. The Company performs a qualitative assessment on a quarterly basis and recognizes an impairment

loss if there are sufficient indicators that the fair value of the equity security

is less than its carrying value.

Policy reserves and liabilities

Reserves for policy benefits and claims payable

determines its

reserves for

policy benefits

under its

life insurance

products using

models which

estimate claims

incurred that have not been reported, expenses

that are expected to be incurred when settling

these claims, and the total present value

of

disability

claims-in-payment

at

the

balance

sheet

date.

These

models

allow

for

best

estimate

based

on

(where sufficient) plus a risk adjustment for non-financial risk, as required in the markets in which these products are offered, namely

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

(ii) expense assumptions based on the expected claims handling cost and (iii) claim

reporting delays reflecting Company specific and

industry experience. The

disability claims-in-payment

reserve is largely

reinsured and the

reported values were

reserve

held by the relevant reinsurer.

The values of matured guaranteed endowments are increased by late payment

interest.

Deposits on investment contracts

For the Company’s interest-sensitive

life contracts, liabilities approximate the policyholder’s account

value.

Reinsurance contracts held

The Company enters into reinsurance

contracts with reinsurers under

which the Company is compensated

for the entire amount

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

The expected benefits to which the Company is

entitled under its reinsurance contracts held are recognized as reinsurance

assets.

These assets consist

of short-term

balances due from

reinsurers (classified within

Accounts receivable,

net and other

receivables) as

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

related reinsurance

contracts. Amounts

recoverable from

or due

to reinsurers

are measured

consistently with

the amounts

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

for impairment at

each balance sheet

date. If there

is reliable

objective evidence that

amounts due may

not be recoverable,

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

statement of operations. Reinsurance premiums are recognized when

due for payment under each reinsurance contract.

Redeemable common stock

that is

redeemable (1)

at a

fixed or

determinable price

on a

fixed or

determinable date,

(2) at

the option

of the

holder,

or (3)

upon the

occurrence of

an event

that is

not solely

within the

control of

Company is

presented outside

of total

Lesaka

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

initially recognized at issuance date fair value and

the Company does not

adjust

the

issuance date

if redemption

is not

probable.

re-measures

the redeemable

common

stock

to the

maximum

amount

at

the

balance

sheet

date

once

is

probable.

Reduction

in

the

amount

of

the

redeemable common stock is

only appropriate to the

extent that the Company

has previously recorded increases

in the carrying amount

of the

as the

redeemable common

stock may

not be

carried at

an amount

that is

less than

the initial

amount reported outside of permanent equity.

Redeemable common stock is reclassified as permanent equity when presentation outside

permanent equity is no longer required

(if, for example, a redemption

feature lapses, or there

is a modification of the

terms of the instrument). The

existing carrying amount

of the redeemable common

stock is reclassified to permanent

equity at the date of

the event that caused the

reclassification and prior

period consolidated financial statements are not adjusted.

Revenue recognition

The

Company

revenue

upon

transfer

of

control

of

promised

or

to

in

an

amount

that

reflects

the

the

Company

expects

to

receive

in

for

those

or

The

Company

enters

into

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

for as

separate performance

obligations based

on observable

standalone selling

prices. Revenue

is recognized

net of

allowances for

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

to governmental authorities.

Nature of products and services

The Company provides

its customers with

acquiring processing services

that involve the

collection, transmittal and

retrieval of

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

point in time.

In certain instances,

the Company also

provides a funds

collection and settlement

service for its

customers and recognizes

revenue from these activities at a point in time.

ADP

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

a principal in these transactions. Airtime purchased

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

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

The Company negotiates and agrees sales prices for airtime sales

with its customers and revenue is measured at the agreed

price. The Company recognizes revenue when the airtime is delivered to the customer.

The

as

a

processor

and

in

the

capacity

of

an

agent,

facilitates

the

delivery

of

ADP

to

its

prepaid

airtime

vouchers,

prepaid

and

gaming

vouchers)

and

earns

a

once

these

are

delivered to the customer.

The Company recognizes revenue from these activities at

a point in time. Revenue from these transactions

fluctuates based on the volume of ADP services distributed.

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

all

data

related

to

bill

payments)

in

for

upon

of

the

and

revenue from

these activities

at a

point in

time. In

certain instances,

also provides

a funds

collection and

settlement service for its customers and recognizes revenue from these activities

at a point in time.

Cash

The

Company

with

cash

and

digitization

which

enables

its

to

deposit

cash into

digital vaults

by the

after which

the funds

are then

electronically

accessible by

to

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

a point in time.

The Company considers

each of these services

as a single performance

obligation. The Company’s

contracts specify

a transaction price for

services provided. Cash revenue

fluctuates based on the

type and the

volume of transactions processed. Revenue

is recognized on the completion of the processed transaction and recognizes

revenue at a point in time.

The Company provides

rental and support

services under a

master rental agreement

with customers. Control

of the rental

asset

is transferred through the right of

use on a monthly basis as per

the master rental agreement terms. Customers

are required to pay the

monthly

rental and

support fee

in advance.

The performance

obligation

for the

service component

is provided

month and

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

from these activities over time.

Revenue recognition (continued)

Nature of products and services (continued)

Lending

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

not charge

these customers

up-front initiation

fees or

monthly service

fees. Interest

earned from

customers is

recognized using

the

effective interest

rate method,

which requires

the utilization

of the

rate of

return implicit

in the

loan, that

is, the

contractual interest

rate adjusted

for any net

deferred loan

fees or

costs, premium,

or discount

existing at

or acquisition

of the

loan. The

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

African Reserve Bank (“SARB”).

The

Company

also

loans

to

(consumers)

in

South

Africa

and

charges

up-front

initiation

fees,

interest and monthly service fees.

Interest earned from customers is

recognized using the effective interest rate method,

which requires

the utilization of the rate of return implicit in the loan, that is, the contractual

interest rate adjusted for any net deferred loan initiation

fees or

costs, premium,

or discount

existing at

or acquisition

of the

loan. Monthly

service fee

revenue is

under the contractual terms of the loan. The monthly service fee are earned over time and is fixed upon initiation and does not change

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

Customers serviced

by the

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 point of sale device

(“POS”). The Company

also earns transaction

fees from transactions

processed for these

customers. The Company’s

contracts specify a

transaction price for

each service

provided (for

instance, ATM

withdrawal, balance

enquiry,

etc.). Transaction

revenue fluctuates

the type

and

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

time.

The

Company

also

bank

to

and

this

service

is

underwritten

by

a

regulated

banking

institution

because the Company is not

a bank. The Company

charges its customers a fixed

monthly bank account administration fee

for all active

bank

regardless

of

whether

the

account

holder

has transacted

or

not.

The

Company

account

holder fees

on

a

monthly basis on all active bank

accounts, which are earned over time

and billed on a monthly basis. Revenue

from account holders’

fees fluctuates based on the number of active bank accounts.

The Company writes

life insurance contracts, and

policy holders pay

the Company a

monthly insurance premium at

the beginning

of each month. Premium revenue

is recognized on a monthly basis net of

policy lapses. Policy lapses are provided

for on the basis of

expected non-payment of policy premiums.

The Company facilitates the delivery of prepaid electricity tokens to

its customers

and earns a commission from the delivery of

these tokens. The Company recognizes revenue from these activities at a point in

time.

Other

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

technology. Hardware includes the sale of

POS devices, SIM cards and other consumables which

can occur on an ad

hoc basis. The Company recognizes revenue from hardware

at

the

price

in

the contract

as the

is delivered

to the

customer.

Licenses

include

the right

to access

certain technology developed by the Company and the associated revenue

is recognized ratably over the license period.

Accounts Receivable, Contract Assets and Contract Liabilities

The

Company

when

its

right

to

under

its

with

becomes

u

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

Research and development expenditure

Research and

development expenditure

is charged

to net

income in

the period

it is

incurred. During

ended

2025 and 2024, the

Company incurred research

and development expenditures

of $

0.8

0.5

0.5

Computer software development

Product

costs in

respect

of

for

sale

to

licensees

are

expensed

as

until

technological

feasibility is attained.

Technological

feasibility is attained

when the Company’s

software has completed

system testing and has

been

to

be

viable

for

its

use.

Once

technological

feasibility

is

reached,

the

Company

capitalized

such

costs

and

amortizes

these costs over

the products’

estimated life. The

time between

the attainment

of technological feasibility

and completion

of software development is generally short with insignificant amounts of development

costs incurred during this period.

Costs in

respect of

the development

of software

for the

internal use

are expensed

as incurred,

except to

the extent

that

these

costs

are

during

the

application

stage.

All

other

costs

those

in

the

project

development and post-implementation stages are expensed as incurred.

Income taxes

provides for income

taxes using the

asset and liability

method. This

approach recognizes

the amount of

income

taxes payable or refundable

for the current year,

as well as deferred

tax assets and liabilities for

the future tax consequence

of events

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

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

in the

enactment. The

majority of

income

taxes and

balances arise

in the

The

Company used the enacted statutory tax rate of

% for the years ended June 30, 2026, 2025 and 2024 to measure current

(benefit) and

Africa. The

Company measured

its South

African current

for the

and 2025

and its South

African deferred tax

2026 and 2025, using

the

enacted statutory tax rate in South Africa of

%.

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

assets, and based on all available evidence, both positive

and negative, determines whether it is more likely than not

that the deferred

tax

assets

or

a

portion

thereof

will

be

realized.

The

Company

does

not

future

reversals

of

taxable

temporary

differences associated with indefinite lived assets

where the timing of the

reversal cannot be predicted as

a source of income to

support

deferred tax assets for carryforward that do not expire.

Unrecognized tax

benefits are recorded

in the financial

statements for positions

which are not

considered more likely

than not,

the technical

merits of the

position, of being

sustained upon

examination by

the taxing authorities.

For positions that

meet

the more likely than not

standard, the measurement of

the tax benefit recognized

in the financial statements is based

upon the largest

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

realized based on a cumulative probability

of

the possible

outcomes.

The

policy

is to

include

related

to

income

taxes

in

interest expense

and

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

operations.

The Company has elected the period cost method

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

intangible low

taxed income (“GILTI”)

as a current-period expense when incurred.

Stock-based compensation

Stock-based compensation represents the

cost related to

stock-based awards granted.

The Company measures

equity-based stock-

based compensation cost at

the grant date, based on

the estimated fair value of

the award, and recognizes the

cost as an expense on

a

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

service period. In respect of awards with only service

conditions that

have a graded

vesting schedule, the

Company recognizes compensation

cost on a straight-line

basis over the

requisite service period

for the

entire award.

The forfeiture

rate is

estimated using

historical trends

of the

awards forfeited

vesting.

The

expense is recorded in

the statement of operations and

classified based on the recipients’

respective functions. The Company

records

assets for awards

that result in

deductions on the

income tax returns,

amount of compensation

cost recognized and the Company’s

statutory tax rate in the jurisdiction

in which it will receive a deduction.

Differences between the

assets recognized

for financial

reporting purposes

and the

actual tax

deduction reported

on the

r

eturn are recorded in income tax expense in the consolidated statement

Equity instruments issued to third parties

Equity

instruments issued

to third

parties

for services

represents the

cost related

to equity

instruments granted.

The

Company measures

this cost at

the grant date,

estimated fair value

of the award,

and recognizes the

cost as an

expense

on a

straight-line basis

(net of

estimated forfeitures)

requisite service

period. The

forfeiture rate

is estimated

the

expectation of the

number of awards

that will be forfeited

prior to vesting.

The Company records

for

awards that

deductions on

returns, based

on the

cost recognized and the Company’s

statutory tax rate in the jurisdiction

in which it will receive a deduction.

Differences between the

assets recognized

for financial

reporting purposes

and the

actual tax

deduction reported

on the

return are recorded in the statement of operations.

Settlement assets and settlement obligations

The

Company

with

cash

and

digitization

which

enable

its

to

deposit

cash into

digital vaults

by the

after which

the funds

are then

electronically

accessible by

to

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

Settlement assets comprise (1) cash received from merchant customers from cash deposits into the Company’s

vaults, which are

then electronically accessible by customers to either transfer

to their nominated bank account or to pay certain

pre-selected suppliers,

(2)

cash received

from credit

card

companies (as

well as

other

types of

payment

services) which

have

business relationships

with

merchants selling

goods and

services that

are the

customers and

on whose

behalf it

processes the

transactions between

various parties,

and (3) cash received from gift card customers.

Settlement

comprise

(1)

amounts

that

the

Company

is

obligated

to

disburse

to

or

to

their

nominated pre-selected suppliers, (2) amounts

that the Company is obligated to disburse to merchants

selling goods and services that

are the Company’s customers and on whose behalf it processes the transactions between various parties and settles the funds from

the

credit card companies

to the Company’s

merchant customers, and

(3) amounts that the

Company is obliged

to pay to various

parties

as a result of transaction performed using gift cards.

The balances

at each reporting

date may vary

widely depending on

the timing of

the receipts and

payments of these

obligations.

Recent accounting pronouncements adopted

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

statutory income

tax rate).

This guidance

was effective

for the

Company beginning

July 1,

2025 for

its year

ended June 30, 2026. Refer to Note 18.

Recent accounting pronouncements not yet adopted

as of June 30, 2026

In

2024,

the

FASB

issued

Income

Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

Disclosures

(Subtopic

220-40)

which

of

income

for

public

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

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

it

disaggregation

of

certain

expense

into

categories

in

disclosures

within

the

footnotes

to

the

statements. This guidance

is effective for

the Company beginning July

1, 2027, and

interim reporting periods

during that fiscal year.

Early adoption

is permitted.

is currently

assessing the

this guidance

on its

disclosures.

In

July

2025,

the

FASB

issued

Instruments-Credit

Losses

(Topic

Measurement

of

Credit

Losses for Accounts Receivable and Contract Assets

which amends current guidance to provide a practical

expedient (for all entities)

and an accounting

policy election (for

all entities, other than

public business entities,

that elect the practical

expedient) related to

the

estimation of expected credit

losses for current accounts receivable

and current contract assets that

arise from transactions accounted

for under

Revenue From Contracts With

Customers (Topic

606).

This guidance is effective for

the Company beginning July 1, 2026,

and

interim

periods

during

that

fiscal

year.

will

apply

the

from

the

date

and

elect

the

practical expedient.

expect the

this guidance

to be material

on its financial

statements and

related

d

isclosures.

Recent accounting pronouncements not yet adopted

as of June 30, 2026 (continued)

On

18,

2025,

the

FASB

issued

Intangibles—Goodwill

and

Other—

Internal-Use

(Subtopic 350-40)

which amends certain

aspects of the

accounting for and

disclosure of software

costs under ASC

350-40. The new

makes

targeted

to

but

does

not

fully

align

the

for

for

internally

developed software

costs that

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

prospective

method.

The

prospective

would

allow

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

to improve

the

navigability

of the

in ASC

and clarify

when it

applies.

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 or retrospectively.

ACQUISITIONS AND DISPOSITIONS

The cash paid, net

of cash received related to

the Company’s acquisition

during the years ended

June 30, 2026, 2025 and

2024,

is summarized in the table below:

Total cash paid

$

13,294

$

24,161

$

2,248

Less: cash acquired

2,177

11,215

Total cash paid, net

of cash received

$

11,117

$

12,946

$

1,583

Acquisitions

Proposed acquisitions of Bank Zero

On

June

26,

2025,

Lesaka

SA

entered

into

a

(the

“Transaction

Agreement”) with

Zero Research

(“Zero Research”),

Mutual Bank

(“Bank Zero”),

parties

identified in

Annexure A

to the

Implementation Agreement

(being all

of the

of Bank

Zero save

for Zero

Research and

Naught

Holdings Ltd,

the “Bank

Zero Sellers”),

the parties

listed in

Annexure

B to

the Transaction

Agreement (being

all of the

shareholders of

Zero Research save

for Naught

Holdings Ltd, the

“Zero Research

Sellers”) and Naught

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

17.76

as of June 30, 2025.

The

payable

by

Lesaka

SA

in

for

the

relevant

shares

in

Bank

Zero

and

the

consideration payable by

Lesaka SA in exchange

the subscription shares will be

settled through a combination

of delivery of Lesaka

and up

to ZAR

91.0

5.1

in cash.

Zero Research

will apply

the cash

shares

received by it to settle

the repurchase consideration due to the

Zero Research Sellers. Following implementation of

each of these steps,

and subject to the below

adjustment, the Bank Zero Sellers,

Zero Research Sellers and

Naught Holdings Ltd will own

% of Lesaka's

fully diluted shares

at the time

of completion of

the proposed transaction.

The Transaction Implementation Agreement

allows a

mechanism (in

certain circumstances)

pursuant to which

the Bank

Zero Sellers and

the Zero

Research Sellers

may acquire

fewer shares in Lesaka and a larger cash consideration.

The

customary

interim

period

undertakings

which

each

of

Zero

Research

and

Bank

Zero,

among

other

things

(i)

to

conduct

their

in

the

ordinary

course

during

the

period

between

the

execution of the

Transaction Implementation Agreement and the

closing of the

transaction contemplated thereby, and (ii)

not to engage

in certain kinds of transactions during

such period. The Transaction

Implementation Agreement is subject to

the fulfilment of certain

precedent.

The

will

lapse

if

all

of

the

are

not

met

or

not

waived by January 31, 2027 (or such later date as may be agreed).

Bank

Zero

and

Lesaka

SA

have

agreed

to

implement

a

of

the

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

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

dividing

ZAR

70.0

million

($

3.9

by

an

agreed

value

(as

defined

in

the

Agreement)

(the

“Retention LTIP

Shares”) and (ii) dividing

ZAR

30.0

1.7

million) by such agreed

value (the “Performance

LTIP

Shares”).

The

Retention

LTIP

Shares

will be

subject

to

time

and

certain

performance-based

vesting

conditions.

The

terms

of the

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

committee.

incurred transaction-related

expenditures of $

0.4

0.6

and 2025, respectively, related to the proposed acquisition of Bank Zero. The Company’s accruals presented in Note 13 of as June 30,

2026, includes an accrual of

transaction related expenditures of $

0.4

million and the Company

expects to incur further

transaction costs

of $

0.2

million during the 2027 fiscal year.

2026 Acquisitions

Atom Operations Proprietary Limited

On November

10, 2025,

wholly

owned

Prism Holdings

Limited

(“Prism”),

entered

into

a

Sale

of

Shares

(the

“Atom

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

December 1, 2025

exchange rates)

in

cash and

76,716

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

r

elated to this acquisition.

ACQUISITIONS AND DISPOSITIONS (continued)

2026 Acquisitions (continued)

Mobilemart Proprietary Limited

On

January

30,

2026,

the

through

Prism,

entered

into

a

Sale

of

Shares

(the

“Mobilemart

Agreement”) with BASA Ventures

Proprietary Limited (“BASA”) and

Mobilemart Proprietary Limited (“MobileMart”).

Pursuant to

the Mobilemart Purchase Agreement and subject to its terms and conditions, Prism agreed to acquire,

and BASA agreed to sell, all of

the

equity

interests in

MobileMart

for

a

total

of $

2.5

million

(ZAR

40.0

at

February 6,

2026 exchange

rates) in

cash. The

transaction closed

on February

6, 2026.

did not

incur any

transaction costs related to this acquisition.

These acquisitions were allocated to our Enterprise operating segment.

to acquisitions

Pro forma results of operations have not been presented for the acquisitions of Atom and MobileMart because the effect of these

individually

and

in

aggregate,

are

not

to

the

Since

the

closing

of

these

they

have

contributed revenue and net loss of $

10.9

0.2

million, respectively, for the

year ended June 30, 2026.

Acquisitions

October 2024 acquisition of Adumo

On May 7,

2024, the Company

Sale and Purchase

Agreement (the “Purchase

Agreement”) with Lesaka

SA, and

Crossfin Apis Transactional

Solutions (Pty) Ltd

and Adumo ESS

(Pty) Ltd (“the

Sellers”). Pursuant to

the Purchase Agreement

and

subject to its terms and

conditions, Lesaka, through its

Lesaka SA, agreed to

acquire, and the Sellers agreed

to sell, all of

the

equity

and

certain

claims

in

the

Adumo

(RF)

Limited

(“Adumo”).

The

closed

on

October 1, 2024.

Adumo is an

independent payments and commerce

enablement platform in Southern

Africa, with operations across

Namibia, Botswana and

Kenya. For more

than two decades,

Adumo facilitated physical

and online commerce

between retail merchants

and end-consumers by

offering a unique

combination of payment

processing and integrated

software solutions, which

currently include

embedded payments, integrated

payments, reconciliation services,

merchant lending, customer

engagement tools, card

issuing program

management and data analytics.

Adumo operated across three businesses, which provided

payment processing and integrated software solutions to different

end

markets:

●

The

Adumo

offers

payment

and

to

small-and-

medium (“SME”)

merchants in

Namibia and

Botswana, and

Payouts Proprietary

Limited, formerly

Adumo Payouts

, (“Lesaka

Payouts”), business

provides card

issuing program

management to

corporate clients

such as Anglo

American and

Coca-Cola (Lesaka Payments

formerly known

as Adumo

Limited

(“Lesaka

Payments”)

was allocated

to

segment

and

Lesaka

Payouts

was

allocated to the Consumer operating segment);

●

The Adumo ISV business, Lesaka

Hospitality Proprietary Limited, formerly known as

GAAP Point of Sale Proprietary

Limited

(“Lesaka Hospitality”), has operations in South Africa, Botswana and Kenya, and clients in a number of other countries, and is

the leading provider

of integrated point-of-sales

software and hardware

to the hospitality

industry in Southern

Africa, serving

clients such

as KFC,

McDonald’s,

Pizza Hut,

Nando’s

and Krispy

Kreme (Adumo

ISV was

Merchant operating

segment);

and

●

The

Adumo

Ventures

offers

online

commerce

(Lesaka

Online

known

as

Adumo Online Proprietary Limited, (“Lesaka Online”)),

cloud-based, multi-channel point-of-sales solutions (Humble Software

Proprietary Limited (“Humble”)

and an aggregated payment and credit platform

for in-store and online commerce (SwitchPay

Proprietary Limited (“SwitchPay”) to SME merchants and corporate clients in South Africa

and Namibia (Adumo Venture was

allocated to the Merchant operating segment).

Acquisitions (continued)

October 2024 acquisition of Adumo (continued)

The total purchase

consideration was ZAR

1.67

96.2

million) and comprised

the issuance of

17,279,803

(“Consideration Shares”)

with a

$

82.8

million (

17,279,803

multiplied by

$

4.79

per share)

and

cash of $

13.4

million. The purchase consideration was settled through

the combination of the Consideration Shares and a ZAR

232.2

13.4

million, translated at the prevailing

rate of $1: ZAR

17.3354

as of October 1, 2024)

payment in cash. The Company’s

closing price on

Stock Exchange on

October 1, 2024,

was ZAR

83.05

($

4.79

using the October

1, 2024, $1:

ZAR

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

These shareholders ultimately

an aggregate

of

at a

$

4.79

common stock (refer to Note 14).

The closing

of the

transaction was

customary closing

conditions which

we fulfilled

closing. The

Company

agreed to file a resale registration statement with the United States Securities and Exchange Commission (“SEC”) covering the resale

of the Consideration Shares by the Sellers. The resale registration statement was declared effective by the SEC on December 6, 2024.

The Company incurred transaction-related expenditures of $

0.003

1.6

2.3

million during the years ended

related to the acquisition of Adumo.

March 2025 acquisition of Utilities

On November

19, 2024,

into a

Sale of

Shares Agreement

(the “Utilities

with

Imtiaz

Dhooma

(Utilities’

former

chief

officer)

and

Ninety

Nine

Limited

(“the

Seller”).

Pursuant to the

Utilities Purchase Agreement and

subject to its

terms and conditions, Lesaka,

through its subsidiary, Lesaka SA,

agreed

to acquire, and

the Seller agreed

to sell, all

of the outstanding

equity interests in

Lesaka Utilities Proprietary

Limited, previously known

as Recharger Proprietary Limited (“Utilities”). The transaction

closed on March 3, 2025.

At

the

same

time,

also

entered

into

contractor

with

Utilities’

former

chief

officer

which had

a term

of

months and

required him,

things, to

support operational

activities of

the Utilities

business, in

consultation with

Company representatives,

facilitate the

handover process

and assist

Utilities in

transitioning ownership

SA, avail himself for important

customer and vendor meetings,

attend scheduled weekly management

committee meetings regarding

operational and business activities of the Utilities

business, and providing support on an ad-hoc

basis to Company representatives with

regard to operational matters and in facilitating the hand over,

as and when reasonably required.

This acquisition has

been reported

as part

of the

Company’s Enterprise operating segment

and demonstrates positive

advancement

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

the South African private utilities space while augmenting Enterprise’s

alternative payment offering.

The transaction consideration per the Utilities Purchase Agreement was ZAR

503.4

27.0

million) and comprised ZAR

328.4

17.6

million) in cash and

ZAR

175.0

9.4

million) in shares of

common stock, to

be settled

in two tranches. The share price applied to determine the number of shares of

common stock to be issued for the equity consideration

is based on the volume-weighted

average price of the Company’s

common shares for the three-month period

prior to the disbursal of

each tranche. Lesaka SA extended

a ZAR

43.1

2.3

million) loan to Utilities at closing

which was exclusively used to

repay

an existing loan due by Utilities to the Seller.

The first tranche,

comprising ZAR

153.4

8.2

million) in cash

and

with a value of ZAR

98.3

5.3

million), was settled at closing. The value of the shares of common stock was calculated using

the shares issued multiplied

by the Company’s

closing price on the Johannesburg

Stock Exchange on March

3, 2025, of ZAR

90.00

,

and translated to U.S.

dollars at the

exchange rate of $1:

ZAR

18.63

. Lesaka SA

delivered

stock from a pool of shares it purchased in October 2024, and the Company

recognized a gain in additional paid-in-capital during

the

year ended June 30, 2025, of $

0.4

million related to the difference between in the value on

March 3, 2025, and the price paid per

share

in October 2024.

March 2025 acquisition of Utilities (continued)

The second

and final

tranche was

settled on

March 3,

comprised a

contractual cash

payment of

ZAR

175.0

million

($

10.4

million) and the delivery of shares of Lesaka’s common stock with a contractual value of

ZAR

75.0

4.6

to be delivered

was calculated as

shares of Lesaka’s

common stock using

the contractual value

of ZAR

75.0

million divided by

the volume-weighted

average price of

common shares on

Stock Exchange

for the

three-month period

February 24,

2026. Lesaka

SA delivered

the

from a pool

of shares it purchased

in October 2024,

and the Company

recognized a loss

in additional paid-in-capital

during the year

ended June 30, 2026,

of $

0.1

million related to the

difference between in

the value on March

3, 2026, and the price

paid per share in

October 2024.

The total purchase consideration

was ZAR

294.8

15.8

million) and comprised the

issuance of the

the

common

stock

with

a

value

of

ZAR

98.3

million

($

5.3

the

settlement

of

the

pre-existing

shareholder loan of ZAR

43.1

2.3

million) and cash of ZAR

153.4

8.2

) million.

Pursuant to the Utilities Purchase Agreement,

payment of the second tranche in March 2026 was contingent on Utilities’ former

chief executive officer’s

ongoing service under the independent

contractor agreement until June 30,

2025. The second tranche would

not

have

been

paid if

he

failed to

provide

the requisite

service,

except

if

failure

to

provide

future

is due

to

expiry

of the

contract, mutual agreement or death of the former chief executive officer. The former chief executive officer was also a director of the

Seller,

and

signed

the

on

behalf

of

himself,

and

the

Seller.

He

also

signed

an

contractor agreement under which he is required to provide post-combination

service to Utilities until March 2026 (but the vesting of

the shares is only for services to June 30, 2025). The Company has

determined that as the payment of the second tranche is contingent

on these post-combination services, the value

of the second tranche is not

treated as purchase consideration and rather,

under GAAP,

represents compensation

for post-combination

In late

May 2025,

an addendum

was signed

to reduce

the post-combination

period from twelve months to four months (i.e. from March 2025

to June 2025).

The post-combination

services for the

of $

13.6

million was calculated

as the sum

of the future

cash

payment and the

future shares to

be provided. The

the future shares

to be

provided was calculated

using the

value of ZAR

75.0

million divided by

the volume-weighted average price

of the Company’s common shares

for the three-month

period

prior

to June

30,

at the

rate. The

compensation charge

in the

caption

transaction costs related to Adumo,

Utilities and Bank Zero acquisitions and certain compensation costs included

statement of operations.

The

Company

records

charges

that

are

cash-settled

awards

payables.

The

liability for

the

future payments

was included in

the caption

of June

30, 2025, refer

to Note 13.

There

was

no

unrecognized

costs

related

to

the

charge

as

of

June

30,

The

a fair

value loss

of $

0.4

the settlement

of the

shares of Lesaka’s common

stock under the

caption change in

equity securities in

The fair

value loss

was calculated

as the

of the

transferred on

March 3,

2026, and the amount recorded in

other payables as of June 30, 2025.The

fair value of the shares of common

stock in U.S. dollars on

March 3, 2026, was

calculated using the shares

issued multiplied by the

Company’s closing price on the

Johannesburg Stock Exchange

on March 3, 2026, of ZAR

75.37

, and translated to U.S. dollars at the exchange rate of $1: ZAR

16.35

.

The Company incurred transaction-related expenditures of $

0.01

0.4

0.03

during the years ended June 30,

2026, 2025 and 2024, respectively,

related to the acquisition of Utilities.

Other acquisitions

Effective

November 1,

2024, the

wholly owned

subsidiary Lesaka

Merchant Technologies

Limited, formerly known

as Adumo Technologies

Proprietary Limited, (“Lesaka

MT”), acquired the

remaining shares (representing

% of the issued and outstanding

shares) it did not own in Lesaka

Merchant Technologies

Namibia, formerly known as

Innervation

Value Added Services Namibia Pty Ltd, (“Lesaka Nam”) for $

0.4

6.0

million, translated at November 1, 2024 exchange

rates). Lesaka Nam was accounted for using

the equity method prior to the

acquisition of a controlling interest in the

company. Lesaka

MT paid ZAR

2.0

million of the purchase price prior

to the acquisition of Adumo by

the Company and the balance of

ZAR

4.0

million

will be paid

in

two

equal tranches, one

in March 2025

and the other

in September 2025.

The Company did

not incur any

transaction costs related to this acquisition.

Other acquisitions (continued)

The Company, through Lesaka SA, acquired

% of Lesaka Digital Risk

Proprietary Limited, formerly known as Genisus Risk

Proprietary Limited (“Lesaka Digital

Risk”), for a cash

consideration of ZAR

2.0

0.1

million). The Company did

not incur

any significant transaction costs related to this acquisition.

The Company,

wholly owned

subsidiary Lesaka

Cash Management

formerly known

as Cash

Connect Management Solutions Proprietary

Limited, (“LCM”), acquired

% of Lesaka

Fuel Software Proprietary Limited,

known as Master Fuel Proprietary

Limited (“Lesaka Fuel Software”) for

a cash consideration of ZAR

2.0

0.1

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

The purchase price allocation for all acquisitions closed during the year ended June 30, 2025, were finalized as of June

except for Utilities. The Company

completed the purchase price allocation related to

the Utilities acquisition during the three

months

ended

September 30,

There were

no changes

to the

Utilities preliminary

purchase price

as of

The

purchase price

allocation of acquisitions

year ended June

translated at the

foreign exchange

rates applicable on

the date of acquisition, is provided in the table below:

Acquisitions during fiscal 2025

Adumo

Other

Total

Final

Final

Final

$

9,227

$

1,720

$

$

11,215

Accounts receivable

6,799

7,544

5,122

5,319

Property, plant and equipment

9,170

9,237

Operating lease right of use asset

1,025

1,426

Equity-accounted investment

71,992

3,614

76,114

28,806

16,171

45,046

Deferred income taxes assets

1,061

1,197

2,809

2,809

Current portion of long-term borrowings

(1,178)

(1,178)

(3,266)

(149)

(440)

(3,855)

(28,116)

(1,439)

(252)

(29,807)

Operating lease liability - current

(948)

(185)

(1,133)

(150)

(4)

(42)

(196)

Deferred income taxes liabilities

(7,107)

(4,366)

(19)

(11,492)

(326)

(269)

(595)

(7,308)

(7,308)

Other long-term liabilities

(140)

(140)

Settlement assets

8,603

8,603

Settlement liabilities

(8,530)

(8,530)

Fair value of assets and liabilities on acquisition

$

88,022

$

15,825

$

$

104,753

The

fair

value

of

the

non-controlling

was $

7.6

The

fair

value

of

the

non-controlling

was

determined as

the non-controlling

interests respective

the equity value

of the entity

acquired by

and which

was adjusted for a

% minority discount.

to acquisitions

Pro forma results of operations have not been presented for the acquisition of Lesaka

Nam, Lesaka Digital Risk and Lesaka Fuel

Software because the effect of these acquisitions, individually and in aggregate, are not material to the Company.

Since the closing of

these acquisitions,

the entities

have contributed

revenue and

net income

of $

0.8

$

0.1

for the

year

ended June 30, 2025.

to acquisitions (continued)

The results

of the

Utilities’ operations

are reflected

in the

from October

and March 3, 2025, respectively.

The following unaudited pro forma revenue

and net income information has been

prepared as if the

acquisitions of Adumo and Utilities had occurred on July 1, 2023, using the applicable average foreign exchange rates for the periods

presented:

Year

Revenue

$

673,536

$

630,672

$

(68,367)

$

(37,324)

The unaudited pro forma financial

information presented above includes the

business combination accounting and

other effects

acquisitions including

(1) amortization

expense related

to acquired

intangibles and

the related

deferred tax;

(2) the

loss of

interest income, net of

taxation, as a

result of funding a

purchase price in

cash; (3) an

adjustment to exclude all

transaction-related costs recognized in the Company’s consolidated statement of operations for year ended June 30, 2025, and include

the applicable transaction-related costs for the

2024; an adjustment to exclude

the post-combination compensation

expenses related to the Utilities acquisition recognized in the

Company’s consolidated statement of operations for year ended June 30,

include the

2024. The

unaudited pro

forma net

income presented

above does not

include any cost savings or other synergies that may result from

the acquisition.

The unaudited pro forma

information as presented above

is for information purposes

only and is not indicative

of the results of

operations that would have been achieved if the acquisition had occurred on

these dates.

Since

the

closing

of

the

Adumo

and

have

contributed

revenue

of $

48.6

million

and

attributable to

including intangible

assets amortization

assets acquired,

net of

deferred taxes,

and the

post-

combination compensation charge, of $

16.4

2024 Acquisitions

April 2024 acquisition of Insights

In

April

the

Company

closed

the

of

Lesaka

known

as

Touchsides

Proprietary Limited, (“Insights”). Insight

s

has been allocated to our

Merchant operating segment. The final

purchase price allocation

of the Insights acquisition, translated at the

foreign exchange rates applicable on the date

of acquisition, is provided in the

$

Accounts receivable

Property, plant and equipment

1,106

Operating lease right of use asset

(53)

(279)

Operating lease liability – current

(63)

Deferred income taxes liabilities

(9)

(52)

Fair value of assets and liabilities on acquisition

$

2,248

Pro

forma

results

of

have

not

been

because

the

effect

of

the

is

not

to

the

Company. During

the year ended June 30, 2024, the Company

incurred acquisition-related expenditure of

$

0.1

million related to this

acquisition.

Since

the

closing

of

the

it

contributed

revenue

and

net

loss

of

$

0.9

million

and

$

0.2

r

espectively, for the year ended

June 30, 2024.

ACQUISITIONS AND DISPOSITIONS (continued)

Transaction costs and certain compensation costs

The Company did

no

t incur any transaction costs related to the Bank Zero acquisitions during the year ended June 30, 2024. The

table below presents transaction costs incurred related to the acquisition of Adumo and Utilities,

and the proposed acquisition of Bank

Zero, as well as certain post-combination compensation costs expensed during

the years ended June 30, 2026, 2025 and 2024:

Year

Bank Zero transaction costs

$

$

$

Utilities transaction costs

Adumo transaction costs

1,564

2,293

Total transaction

costs

2,573

2,325

Utilities post-combination services expensed

13,586

Total

$

$

16,159

$

2,325

Dispositions

Dispositions

December 2025 disposal of Humble

On

1,

2025,

Adumo

(RF)

a wholly

-owned

of the

disposed

of its

entire

Humble Software

(“Humble”) and

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 non-controlling 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

to the capital loss generated.

net

Accounts receivable, net and other receivables

accounts receivable,

net, and other

receivables as of

2026, and June

30, 2025, are

Accounts receivable, trade, net

$

19,329

$

16,433

Accounts receivable, trade, gross

22,536

18,186

Allowance for credit losses, end of period

3,207

1,753

1,753

1,241

(388)

(521)

2,109

1,856

(526)

(847)

Deconsolidation

(4)

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

net of

allowance of: 2026: $

, 2025: $

Amount due from VantagePay,

net of allowance of: 2026: $

, 2025: $

1,500

2,010

Other receivables

22,426

26,092

Total accounts receivable,

net

$

43,765

$

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

that

are

disproportionately

small

compared

to

the

total

invoiced

amounts.

The

are

more

volatile

than

the

monthly

invoice

amounts

because

they

are

by

operational timing issues and

the fact that a balance

is outstanding at month-end

is not necessarily an indication

of increased risk but

rather a matter of operational timing.

Current portion of amount outstanding related to sale of interest in Carbon represents the amount due from the purchaser related

to the sale of

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

which was accounted for

as an equity-accounted investment,

of $

0.25

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

0.25

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

the sale of

the loan,

with a face

$

3.0

million, which was

sold in September

2022 for

$

0.75

million, net of

an allowance for

doubtful loans

receivable of

$

0.75

million, refer

to Note 9

information. The Company

received the

outstanding $

0.25

million

related

to the

sale of

the equity

-accounted

October

2023,

and

has reversed

the allowance

for

loans

receivable of

$

0.25

30, 2024.

has not

yet received

the outstanding

$

0.75

million

related to the sale of the $

3.0

million loan, and continues to engage with the purchaser to recover

the outstanding balance.

The Company previously provided

Vantage

Africa Limited (“VantagePay”)

with a working capital facility

of $

1.5

million. The

Company created an allowance for

credit losses related to

loans receivable of $

1.5

million during the year

ended June 30, 2021, related

to the full amount outstanding as of June 30, 2021. This amount was still outstanding as of June 30, 2025. In May 2026, the Company

entered

into a

binding head

of terms

with VantagePay

which outlines

the steps

to recover

outstanding.

The

Company believes

that there is

sufficient evidence

to support the

recoverability of

the amount due

from VantagePay.

recorded a reversal of the allowance for credit losses of $

1.5

million previously recognized during the

year ended June 30, 2026. The

Company also recognized outstanding interest of $

0.5

million during the year ended June 30, 2026.

O

ther receivables include prepayments, deposits, income taxes receivable and

other receivables.

net

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of June 30, 2026, and June 30, 2025, is presented in the table

below:

Microlending finance loans receivable, net

$

80,584

$

52,492

Microlending finance loans receivable, gross

85,265

56,140

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

4,681

3,648

3,648

1,947

(161)

7,261

4,301

(6,600)

(2,499)

Merchant finance loans receivable, net

23,226

21,618

Merchant finance loans receivable, gross

28,664

23,214

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

5,438

1,596

1,596

2,697

(117)

(22)

3,931

2,576

(459)

(3,709)

Total finance

loans receivable, net

$

103,810

$

74,110

Total finance

loans receivable, net, comprises

the Consumer operating

segment’s microlending

finance loans receivable related

to

the

microlending

in

South

Africa

as

well

as

its

Merchants

segment’s

finance

loans

receivable lending activities in South Africa. Certain merchant finance loans receivable with an aggregate balance of $

22.5

of June 30, 2026 have been pledged as security for the Company’s

revolving credit facility (refer to Note 12).

Allowance for credit losses

Microlending finance loans receivable

Microlending finance loans receivable is related to the Company’s

microlending operations in South Africa whereby it provides

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

have a tenor of up to

nine months

, with the majority of loans

originated having

a tenor of

six months

. The Company

analyses this lending

book as a

single portfolio

because the

loans within the

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

the credit risk of the lending book.

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

these receivables.

The Company has operated this lending book for more than

and uses historical default experience over the lifetime of

loans in

develop an

the lending

book. The

credit losses

these microlending

finance loans receivables is calculated

by multiplying the expected loss

rate with the month end outstanding

lending book. Default is

defined as loans in 90 days in arrears or greater and is primarily driven by missed

or disrupted customer payments, as a result of non-

receipt

of

social

grant

income

and

broader

affordability

pressures.

Loss

outcomes

are

further

influenced

by

limited

post-default

recoveries. The Company continues to undertake recovery activity

for up to six months post

write-off; however, recoveries during this

period are minimal. After six months, collection activity ceases and recoveries

are considered negligible.

net

Finance loans receivable, net (continued)

In June

30,

2026, the

Company

reassessed the

loss rate

related

to its

microlending

losses. The

the

of

the

lending

portfolio,

loss

experience,

trends,

sensitivity

analyses relating

to larger

loan amounts

and longer

loan terms.

this review,

rates should

be reduced

from

6.5

% to

5.5

%.

The review

indicated that,

despite the

introduction of

larger loan

amounts and

longer

repayment

terms,

the

to

perform

broadly

in

line

with

expectations

and

the

model-derived

credit

loss

requirement

below

the

loss

ratio,

during

periods

of

elevated

delinquency

and

disruptions. The reduction in the expected loss ratio resulted in a

decrease in the allowance for credit losses of $

0.9

14.0

exchange rates applicable as

2026. which is

included in the

caption selling, general and

to the consolidated

statement of operations

2026. The underlying

model methodology,

including the use

of historical lifetime loss experience as the foundation of the expected credit loss estimate, remained

unchanged.

The expected

loss rate as

of June

and 2025, was

5.50

% and

6.50

The performing

component (that is,

outstanding loan payments not in arrears) of the book exceeds more than

99.0

% and

98.0

% of outstanding lending book as of June 30,

2026 and 2025, respectively.

Merchant finance loans receivable

Merchant finance loans

receivable is related

to the Company’s

Merchant lending activities

whereby it provides

unsecured

short-term loans

customers. Loans

to customers

have a

tenor of

up to

twelve months

, with

of

loans originated having a tenor of approximately

eight months

. The Company analyses this lending book as a single portfolio because

the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk

of the lending book.

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

The Company uses historical default experience over the lifetime of

loans generated thus far in order to develop an

rate for the lending book.

A loan is classified as being

in default where a client has

missed seven or more instalments, at

which point

a

full

for outstanding

capital and

accrued

interest is

raised

as a

top-up

to the

general

level. Upon

default,

the

Company commences

recovery procedures

including the

use of

external debt

collectors, asset

attachment through

the Sheriff

of the

High Court, and judgements against

clients in both their

personal and entity capacities.

An account is

only written off once all

recovery

procedures have failed and management confirms no further recovery

is possible.

The allowance

losses related

adding together

(i) actual

receivables in default plus (ii) the month-end outstanding lending book multiplied by the

expected loss rate. The expected loss rate as

of June 30, 2026 and

2025, was approximately

3.21

% and

1.14

The performing component (that

is, outstanding loan

payments not

in arrears),

under-performing

loan payments

that are

in arrears)

and non-performing

loans for

which payments

appeared to

have ceased)

of the book

represents approximately

%,

%

and

%, respectively, of the outstanding lending book as of June

The performing component, under-performing component

and non-performing component of the book represents approximately

%,

% and

%, respectively, of the outstanding lending book

as of June 30, 2025.

INVENTORY

The Company’s inventory

comprised the following categories as of June 30, 2026, and 2025.

Raw materials

$

2,378

$

2,963

Work in progress

Finished goods

17,531

20,295

$

20,113

$

23,551

OF FINANCIAL INSTRUMENTS

Fair value of financial instruments

Initial recognition and measurement

Financial instruments

are recognized

when the

Company becomes

a party

to the

transaction. Initial

measurements are

at cost,

which includes transaction costs.

Risk management

The Company manages its exposure

to currency exchange, translation, interest rate,

credit, microlending credit and equity price

and liquidity risks as discussed below.

Currency exchange risk

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

for its vaults, that the Company assembles,

and inventories

that it is

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

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

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 primarily through its

financing activities. In May

2026, the SARB increased the

repurchase rate by 25

basis points to 7.00%

against a backdrop of heightened inflation risks, including

higher oil and fuel prices

associated with the ongoing conflict in the

Middle

East. The SARB subsequently maintained

the repurchase rate at 7.00% in July 2026. Inflation

risks nevertheless remain elevated and

further increases in interest rates remain possible should inflationary

pressures persist or intensify.

assuming no changes

in the margins

applicable to the

borrowings (refer to

Note 12) or

the amount of

borrowings outstanding,

in benchmark

would result

in a

corresponding increase

in the

cost of

borrowing.

The

Company

periodically

evaluates

the

cost

and

of

rate

hedging

strategies

to

manage

this

risk.

The

Company

maintains

surplus

cash

in

cash

equivalents

and

held-to-maturity

and

has

occasionally

invested

in

marketable securities.

Credit risk

Credit

risk

relates

to

the

risk

of

loss

that

the

Company

would

incur

as

a

result

of

non-performance

by

counterparties.

The

Company

maintains

credit

risk

in

respect

of

its

counterparties

to

minimize

overall

credit

risk.

These

include

an

of

a

counterparty’s

credit

rating,

and

other

credit

and

risk

tools

as

the

management deems

With

respect to

credit risk

on certain

financial instruments,

maintains a

policy of entering

into such transactions only

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

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

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.

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.

Risk management (continued)

The Company maintains an allowance for

doubtful finance loans receivable related to

its Merchant services segment with

respect

to short-term loans to qualifying merchant customers. The

Company’s risk management procedures include adhering to its proprietary

lending criteria which uses

an online-system loan application

process, obtaining necessary customer transaction-history

data and credit

bureau checks.

The Company considers

these procedures

because it takes

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

securities that

it holds

to time.

The market

these securities

may fluctuate

for a

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 exchange

on

which

those

are

listed.

The

Company

may

not be

able

to

sell some

or

all

of

these

at

one

time,

or

over

an

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

or at all.

Financial instruments

Fair value

is defined

as the price

that would

be received

upon sale

of an

asset or

paid upon

transfer of

a liability

in an orderly

transaction between

market participants

at the

measurement date

and in

the principal

or most

advantageous market

for that

asset or

liability. The

fair value should be calculated based

on assumptions that market participants

would use in pricing the asset

or liability,

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

including the Company’s own credit

risk.

Fair value measurements and inputs are categorized into a

fair value hierarchy which prioritizes the inputs into

three levels based

on the

extent to which

inputs used

in measuring

are observable

in the

market. Each fair

value measurement

is reported in

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

to the fair value measurement in its entirety.

These levels are:

●

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

traded in active markets.

●

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

instruments in

markets that

are not

active, and

model-based valuation

techniques for

which all

significant assumptions

are

observable

in the

market or

can be

corroborated

by observable

market

data for

substantially the

full term

of the

assets or

liabilities.

●

Level

–

inputs

are

unobservable

and

typically

reflect

of

that

market

participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques

that include option pricing models, discounted cash flow models, and

similar techniques.

section describes

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

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

disposed of its entire holding,

comprising

6,215,620

equity shares, in MobiKwik in

late June 2025. MobiKwik

listed on the National Stock

Exchange of India (“NSE”) on December

18, 2024. Up until its listing

MobiKwik did not have a

readily

determinable fair

value and

elected to

measure its

MobiKwik at

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 reported on

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

periods

through

March

31,

to

determine

the

fair

value

of

the

equity

owned

by

the

Refer

to

Note

for

additional information.

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

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

(“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 were met. Under the terms of the agreement,

if:

●

the listing

occurred by

November 30,

the value

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

to determine

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

0.5

billion), no lease liabilities included

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

June 30, 2025.

Derivative transactions - Foreign exchange contracts

As part

of the

risk management

strategy,

enters into

derivative transactions

to mitigate

exposures to

foreign

currencies

using

foreign

contracts. These

foreign

are

over-the-counter

derivative

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

(or equivalent)

or better.

uses quoted

prices in

active markets

for similar

to determine

(Level 2). The

Company has

no derivatives

that require

measurement under

Level 1,

Level 2

or Level

3 of

value

hierarchy.

The Company had

no

outstanding foreign exchange contracts as of June 30, 2026 and June 30,

2025, respectively.

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2026, according to

the fair value hierarchy:

Quoted Price in

Active Markets for

Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

Total

Assets

Related to insurance business:

$

$

$

$

Mutual fund (included in cash,

cash equivalents and restricted

cash)

3,688

3,688

Cash, cash equivalents and

restricted cash (included in other

long-term assets)

Mutual fund

(included in other

long-term assets)

4,598

4,598

Total assets at fair value

$

$

8,286

$

$

8,427

The following table presents the Company’s

assets measured at fair value on a recurring basis as of

June 30, 2025, according to

the fair value hierarchy:

Quoted Price in

Active Markets for

Identical Assets

(Level 1)

Significant Other

Observable Inputs

(Level 2)

Significant

Unobservable

Inputs

(Level 3)

Total

Assets

Investment in Cell C

$

$

$

$

Related to insurance business

(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

ended

2026,

the

Company

transferred

its investment

in

Cell C

Listco

out

of

Level 3

the

disposal of these

equity securities. During

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 have been

no

transfers in or out of Level 3 during

the year ended June 30, 2025. There was

no

movement in the carrying value of assets measured at fair value on a recurring basis, and

categorized within Level 3, during the year ended June 30, 2025.

Summarized below is

the movement in the carrying

value of assets measured

at fair value on a

recurring basis, and categorized

within Level 3, during the year ended June 30, 2026:

Assets

$

Gain on fair value re-measurement

2,971

Disposal of investment in Cell C

(2,971)

(1)

$

(1) The

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

U.S. dollar

on the carrying value.

Summarized below is the movement in the carrying value of

assets and liabilities measured at fair value on a recurring

basis, and

categorized within Level 3, during the year ended June 30, 2025:

Assets

Balance as at June 30, 2024

$

(1)

$

(1) The

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

U.S. dollar

on the carrying value.

Trade, finance loans and other receivables

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

stated at cost less allowance for credit losses. The fair

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

value due to their short-term nature.

Trade and other payables

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

to their short-term nature.

Assets and liabilities measured at fair value on a nonrecurring basis

measures equity

investments without

readily determinable

fair values

at fair

value on

a nonrecurring

basis. The

fair values of

these investments are

determined based on

valuation techniques using

the best information

available, and may

include

quoted market prices, market comparables, and discounted cash flow

projections. An impairment charge is recorded when the cost

of

the

asset

exceeds

its

fair

value

and

the

excess

is

to

be

other-than-temporary.

Refer

to

Note

for

charges

recorded during the

reporting periods presented

herein. The Company

has

no

liabilities that

are measured at

on a

nonrecurring

basis.

The fair value of long-term borrowings approximates its carrying amounts

because they represent the carrying amounts of

variable-rate borrowings that are reset quarterly.

PROPERTY,

PLANT AND EQUIPMENT,

net

is the cost,

accumulated depreciation

and carrying amount

of property,

equipment as of

2026 and 2025:

Cost

Vaults

$

41,427

$

33,276

(A)

60,214

52,047

11,141

9,723

7,053

4,873

119,978

100,010

Accumulated depreciation:

Vaults

17,806

11,911

(A)

39,935

34,158

8,130

7,225

3,815

1,747

69,766

55,086

Carrying amount:

Vaults

23,621

21,365

20,279

17,889

3,011

2,498

3,238

3,126

$

50,212

$

44,924

(A) Cost and accumulated

depreciation for computer equipment

and totals for cost and

accumulated depreciation as of

2025, have each been increased by $

6.5

million to correct the error discussion in Note 1.

LEASES

The

Company

has

leasing

as operating

leases under

guidance.

These leasing

relate primarily

to the

lease of

its corporate

head

office,

offices,

a manufacturing

facility,

and branch

locations through which the

Company operates its financial services

business in South Africa.

operating leases have

a remaining

lease term

of between

one year

to

ten years

. The

Company

also operates

parts of

its financial

business from

locations which it leases for a period of less than

one year

.

operating lease expense

during the years

2026, 2025 and

2024, was $

5.9

4.8

and $

3.2

million, respectively. The Company does

not have any

significant leases that

have not commenced as

2026, except

for a new regional office in Cape Town

,

Western Cape, South Africa

(refer below).

has entered into

short-term leasing

arrangements, primarily

for the lease

of branch

locations and other

locations

its financial

services business

Africa.

short-term lease

30,

2026, 2025 and 2024, was $

1.9

4.7

3.6

New corporate head office and other leases obtained

into a

leasing arrangement

for

a new

corporate head

office

in

Dunkeld,

Gauteng, South

Africa with

Oxford Parks

a limited

liability private

company incorporated

Africa. The lease

commenced on July

1, 2026 and

is for a

10 years

with

two

renewal options of

each. The Company

secured beneficial

occupation from

April 1,

ROU asset

and an

operating lease

liability related

to this

lease in

April 2026 upon

taking beneficial occupation.

The Company was

required to provide

a bank guarantee

or cash totaling

$

0.5

million

(ZAR

7.5

million, translated

as of

2026. to

the lessor

and on

May 29,

2026, it

procured

and

delivered a bank guarantee

to the lessor. The

Company expects to

pay an annual

basic lease expense

of $

1.5

25.1

translated at exchange rates applicable as of June 30, 2026), which increases

by

6.25

LEASES (continued)

New corporate head office and other leases obtained (continued)

In April 2026,

through Lesaka SA,

binding offer

to lease for a

new regional office

in Cape Town,

Western

Cape,

South

Africa

with

Growthpoint

Securitisation

Warehouse

Trust,

a

trust

in

South

Africa.

The

lease

commences on October 1, 2026 and is for a

10 years

. The Company secured beneficial occupation from August 1, 2026, and

a ROU

asset and

an

lease liability

related

to this

lease

in August

upon taking

beneficial occupation.

The

Company expects to

pay an annual basic

lease expense of $

0.7

11.3

million, translated at exchange

rates applicable as

of June 30, 2026), which increases by

7.50

Impairment of previous corporate head office

lease and other leases

In March 2026, the

Company determined that its

existing operating lease arrangements

for its corporate head

office and certain

related

leased

will no

longer

be

as originally

as a

result

of

the

new

lease

and

the

planned

transition of its corporate

head office and other

operating activities to the

new premises. In June

2026, the Company determined

that

other

lease

arrangements,

in

Cape

Town,

for

leased

will

no

longer

be

as

originally

as

a

result

of

the

new

lease

in

April

the

Company

indicators

of

impairment for these related ROU assets and certain items of property,

plant and equipment during the year ended June 30, 2026.

The

Company

evaluated

the

impacted

ROU

assets

for

in

March

and

again

in

June

The

asset groups

consisted of operating lease

ROU assets and related leasehold

improvements associated with the

affected locations as well

as certain

items of property,

plant and equipment, including

furniture and office

equipment. The recoverability

tests indicated that the

amounts of these asset groups

were not recoverable, as

the undiscounted future cash flows

were insufficient to

recover their carrying

values.

The

Company

initially

measured

these

lease

ROU

assets

and

related

leasehold

at

fair

value

on

a

non-recurring basis during

the nine months ended

March 31, 2026, as

a result of impairment.

In June 2026, the

Company reassessed

the initial measurement

of the fair

value exercises

performed in

March 2026,

and remeasured the

operating lease

ROU assets and related

leasehold improvements

at fair value

using updated information

2026. The Company

updated

its inputs

for the

remaining lease

terms, expected

sublease income

and market

rental rates

with current

information available

as of

June 30, 2026. The

Company also measured

other operating lease ROU

assets and related leasehold

improvements at fair value

on a

non-recurring

basis

during

the

three

months

ended

June

30,

2026,

as

a

result

of

impairment.

These

fair

value

measurements

are

within

Level

of

the

fair

value

hierarchy.

Fair

value

was

using

a

discounted

cash

flow

methodology,

which

incorporates significant

unobservable inputs,

including assumptions

related to remaining

lease terms, expected

sublease income

and

market rental rates.

LEASES (continued)

As a result, the

Company recorded an

impairment charge of $

2.6

2026, representing the

excess of

the carrying

the affected

ROU assets

leasehold improvements

over their

estimated fair

value.

The

impairment charge

in the

caption impairment

loss (refer

to Note

10. in

operations for

the

year ended June 30, 2026. The impairment did not impact the related

operating lease liabilities.

table presents

supplemental

balance sheet

disclosure related

to our

right-of-use assets

and our

operating leases

liabilities as of June 30, 2026 and 2025:

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

Weighted average

remaining lease term (years)

6.59

2.84

Weighted average

discount rate

10.1

%

9.8

%

Maturities of operating lease liabilities

$

6,946

5,413

3,693

3,252

2,760

12,396

Total undiscounted

operating lease liabilities

34,460

Less imputed interest

10,714

Total operating lease liabilities,

23,746

Operating lease liability - current

4,408

$

19,338

INVESTMENTS AND OTHER LONG-TERM ASSETS

Equity-accounted investments

The Company’s ownership percentage

in its equity-accounted investments as of June 30, 2026 and 2025, was as follows:

Sandulela Technology

Proprietary Limited ("Sandulela")

%

%

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

%

%

SmartSwitch Namibia

The Company recorded

a loss

on impairment of

equity-accounted investment of

$

0.6

nine months ended

March

31, 2026, which primarily includes the release of accumulated other

comprehensive loss (refer to Note 15).

Finbond

2023, the

Company sold

its entire

remaining equity

Finbond which

comprised of

220,523,358

shares,

and which represented approximately

27.8

% of Finbond’s issued and

outstanding ordinary shares immediately

prior to the

sale. Lesaka

SA had pledged, among other things, its entire equity interest in Finbond

as security for its previous South African facilities.

Sale of Finbond shares during the year ended

June 30, 2024

On

August

10,

2023,

the

through

its

wholly

owned

Net1

Finance

(Pty)

Ltd,

entered

into

an

agreement with Finbond to sell its remaining shareholding to Finbond for a cash consideration of ZAR

64.2

3.5

million), or

ZAR

0.2911

per share. The transaction closed in December 2023. The Company did

no

t record a gain or loss on the disposal because

the sale

proceeds were

equivalent to

the net

carrying value,

including accumulated

reserves, of

the investment

in Finbond

as of

the

date.

The

cash

of

ZAR

64.2

million

($

3.5

were

used

to

repay

capitalized

under

our

b

orrowing facilities, refer to Note 12.

Equity-accounted investments (continued)

Finbond (continued)

Sale of Finbond shares during the year ended

June 30, 2024 (continued)

The following table presents the calculation of the loss on disposal of Finbond shares

during the year ended June 30, 2024:

Year

ended

Loss on disposal of Finbond shares:

Consideration received in cash

$

3,508

Less: carrying value of Finbond shares sold

(2,112)

Less: release of foreign currency translation reserve from accumulated other

comprehensive loss

(1,543)

Add: release of stock-based compensation charge related

to equity-accounted investment

Loss on sale of Finbond shares

$

Finbond impairments

recorded during

the year ended June 30, 2024

The Company performed an impairment assessment of its holding in Finbond, including the foreign currency translation reserve

and other equity

account amounts, as

of September

30, 2023. The

1.2

quarter ended September

30, 2023, which

represented the difference

between the determined

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

used the

ZAR

0.2911

referenced in

the August

2023 agreement

referred to

above to

calculate the

determined fair

value for

Finbond.

Carbon

In September 2022, the Company

entered into a binding term sheet to

sell its entire interest, or

%, in Carbon for $

0.5

million

and a

loan due from

Carbon, with a

face value of

$

million, for $

0.75

million. Both

the equity

interest and

the loan had

a carrying

$

(zero) at June

30, 2022.

received $

0.25

million on closing

and the outstanding

balance due by

Etobicoke

was expected to be paid

as follows: (i) $

0.25

million on September 30,

2023 (the amount was received

in October 2023), and (ii)

the

amount, of

$

0.75

March 2024

(the amount

has not

been received

as of

2026 (refer

to Note

4)). The

Company

has

the $

0.25

million

on closing

to the

sale of

the

equity interest

and

the subsequent

funds

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

believed that

of the Carbon

shares provided

as security was

$

(zero), which

was in line

carrying value as

of June 30, 2022,

and created an allowance

for doubtful loans receivable

related to the $

1.0

million previously due

from Etobicoke.

did not

incur any significant

transaction costs.

has included

the gain of

$

0.25

million

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

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

c

onsolidated statements of operations.

Equity-accounted investments (continued)

Summarized

below is

the movement

in equity-accounted

investments during

which

includes the investment in equity and the investment in loans provided

to equity-accounted investees:

Other

(1)

Total

Investment in equity

$

$

Comprehensive income:

Other comprehensive income

Equity accounted earnings

Share of net income

Dividends received

(96)

(96)

Sale of shares in equity-accounted investment

(507)

(507)

Equity-accounted investment acquired in business combination (Note

(2)

Comprehensive income:

Other comprehensive income

Equity accounted earnings

Share of net income

Dividends received

(105)

(105)

Impairment

(34)

(34)

(2)

$

$

(1) Includes Sandulela and SmartSwitch Namibia;

(2) The foreign currency

adjustment represents the

effects of the fluctuations

of the ZAR and

Namibian dollar, against

the U.S.

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

2026, and June 30, 2025:

Total equity investments

$

$

Investment in

% of Cowdi at fair value and loan

(1)

Investment in Cell C (June 30, 2025:

%) at fair value (Note 6)

(2)

Investment in

87.50

% of CPS (June 30, 2025:

87.50

%) at fair value

(1)(3)

Insurance investments

4,598

Policy holder assets under investment contracts (Note 11)

Reinsurance assets under insurance contracts (Note 11)

2,416

1,837

2,092

1,847

Total other long-term

assets

$

9,697

$

3,809

(1) The Company

determined that Cowdi

and CPS do

not have readily

determinable fair values

and therefore elected

to record

its investments at cost

minus impairment, if any, plus or

minus changes resulting from

observable price changes in orderly

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

(2) The Company disposed of its entire shareholding in Cell C in December 2025,

refer to Note 6 for additional information.

(3) On October 16, 2020, the

High Court of South Africa, Gauteng Division,

Pretoria ordered that Cash Paymaster Services (Pty)

Ltd (“CPS”) be placed into liquidation.

Other long-term assets (continued)

Cowdi

During the year ended June 30, 2026, the

Company invested $

0.3

million to acquire a

% interest in Cowdi Limited (“Cowdi”),

an entity

in England

and Wales,

with operations

through

a Kenyan

wholly-owned subsidiary

digital loans

to

customers in that country. The Company also extended a $

0.75

million credit facility to Cowdi and they withdraw $

0.2

June 30, 2026. Cowdi

had utilized $

0.2

million of the

facility as of

and this amount was

repaid in full

in July 2026.

MobiKwik

signed a

subscription agreement

with MobiKwik,

one of

India’s

largest independent

mobile payments

networks and buy now

pay later businesses.

Pursuant to the

subscription agreement, the Company agreed

to make an

equity investment

of up to $

40.0

million in MobiKwik over a

-month period. The Company made an

initial $

15.0

million investment in August 2016

and a

further

$

10.6

million investment

in June

2017,

under this

agreement.

2019,

the

Company

paid

$

1.1

million

to

subscribe

for

shares

in

MobiKwik.

The

Company

owned

6,215,620

equity

shares

in

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

% of MobiKwik’s issued share capital.

Refer to 6 for additional

information regarding the determination

of the fair value of

Company’s investment

in MobiKwik. The

Company disposed

of its

entire equity

MobiKwik for

$

16.4

59.8

million. This loss comprised

of (i) fair value

adjustments to decrease the

carrying value of its

investment by $

54.2

million

from $

76.3

million as of June 30, 2024, to $

22.1

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

5.6

million upon disposal in the

fourth quarter of

fiscal 2025. The

loss is included

in the

caption “Change in

equity securities” in

of operations for the year ended June 30, 2025.

The

Company

did

not

identify any

observable

during

ended

2024,

and

there was

no

MobiKwik during

that year.

2021, MobiKwik

a number

of

separate agreements

with new

shareholders to

raise additional

capital through

the issuance

of additional

Company used

from MobiKwik’s

June 2021

capital raise

as the

basis for

its fair

value determination

of $

76.3

of June

30,

Cell C

On

August

2,

2017,

the

through

its

Net1SA,

purchased

class

“A”

shares

of

Cell

C

for

an

aggregate purchase price of ZAR

2.0

151.0

million) in cash. The Company funded the transaction through

a combination of

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

C as security for the previous

facilities described

in Note 12.

On September 30,

2022, Cell C

completed its

recapitalization process

which included

the issuance of additional equity instruments by Cell C. The Company’s effective

percentage holding in Cell C’s equity reduced from

% to

% following the recapitalization. The Company’s investment in Cell C was carried at fair value as of June 30, 2025. Refer to

Note 6 for additional information regarding changes in the fair value of Cell C.

CPS

deconsolidated

its investment

in CPS

in May

2020. As

of June

owned

87.5

% of CPS’ issued share capital.

Other long-term assets (continued)

are the components

without readily

determinable fair

value and held

to

maturity investments as of June 30, 2026:

Cost basis

holding gains

holding losses

Carrying

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 gains

holding losses

Carrying

value

Equity securities:

Investment in CPS

$

$

$

$

Held to maturity:

Investment in Cedar Cellular notes

ASSETS,

net

Summarized below is the movement in the carrying value of goodwill

for the years ended June 30, 2026, 2025 and 2024:

Gross value

$

152,619

$

(18,876)

$

133,743

(1)

5,280

(472)

4,808

157,899

(19,348)

138,551

(2)

76,114

76,114

(1)

2,096

(325)

1,771

236,109

(36,714)

199,395

(388)

(388)

Acquisition (Note 3)

(3)

1,586

1,586

Deconsolidation of Humble (Note 3)

(1,515)

(1,515)

(1)

18,770

(2,550)

16,220

$

254,950

$

(39,652)

$

215,298

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

(2) – Represents goodwill

arising from the acquisition

of Adumo, Utilities, Lesaka

Nam and Lesaka Fuel

Software and translated

at the foreign

exchange rates applicable

on the date

the transactions became

effective. This goodwill

has been allocated

to the Merchant

(a

portion

Adumo,

Lesaka

Nam

and

Lesaka

Fuel

Software),

(a

portion

of

Adumo)

and

(Utilities)

operating segments.

(3) – Represents goodwill arising from the acquisition

of MobileMart and translated at the foreign exchange rates applicable

on

the date the transactions became effective. This goodwill has been

allocated to the Enterprise reportable operating segment.

Goodwill associated with

the acquisitions represents the

excess of cost

over the fair value

of net assets

acquired. Goodwill arising

from

these

is not

deductible

for

tax

See

Note

for

the

of

the

price

to

value

of

a

cquired net assets.

ASSETS,

The Company assesses the carrying

value of goodwill for impairment

annually, or

more frequently,

whenever events occur and

circumstances change indicating

potential impairment. The Company

performs its annual impairment

test as at June 30

of each year.

The Company did not perform a qualitative assessment during the years ended June 30, 2026, 2025 and 2024, respectively.

Except as

discussed below, no goodwill

has been impaired during the years ended June 30, 2026, 2025 and 2024, respectively.

In order to determine the amount of

the goodwill impairments, the estimated fair value of

our reporting units’ business assets and

liabilities were compared to the carrying value of

their assets and liabilities. The Company

used a discounted cash flow model in

order

to determine the

of the

businesses (this is

a Level-3 fair

value measurement). Based

on this

analysis, the Company

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

their fair value at the reporting date.

In

determining

the

fair

value

of

the

units,

the

Company

key

judgements

related

to

the

units’

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

applicable to peer and industry comparables of the reporting units,

and

the

forecast

periods

used.

The

Company

may

record

an

loss in

future

if

actual

growth

rates

are

lower

than

those

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

also result

in an impairment loss in the future.

June 30, 2026 goodwill impairment loss

0.4

impairment analysis performed

as of March

31,

2026, related

to goodwill

its SwitchPay

reporting unit

within its

Merchant segment.

The impairment

within

the caption impairment loss in the consolidated statement of operations

for the year ended June 30, 2026.

At June 30, 2025, the fair value of the SwitchPay reporting

unit exceeded its carrying value by

%. The impairment loss in the

SwitchPay reporting unit

resulted from the termination

of its sole customer

contract during fiscal 2026

which adversely impacted

its

future cash flows, growth prospects and its ability to continue as a going concern.

June 30, 2025 goodwill impairment loss

17.0

result of its

annual impairment

analysis related to

allocated to its LCM and Lesaka MT reporting units within its Merchant segment, its Lesaka Payouts reporting unit within Consumer

segment and its Lesaka

Alternative Digital Products

Proprietary Limited, formerly

known as EasyPay Proprietary

Limited, (“Lesaka

ADP”)

unit

within

its

segment.

The

impairments

are

within

the

caption

loss

in

the

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

At June 30, 2024, the fair value of the LCM reporting unit exceeded its carrying value

by

%.The impairment loss in the LCM

unit

from

a

reassessment

of

the

business’

growth

prospects

in

the

context

of

its

market

positioning,

optimized capital expenditures and increase WACC

over prior years.

The impairment loss in the Lesaka MT reporting unit resulted from a reassessment of the business’ growth prospects, a strategic

decision to exit low return and sub-optimal merchants’ contracts.

The impairment loss in the

Lesaka Payouts reporting unit

resulted from a reassessment of

the business’ growth prospects of

the

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

price allocation.

Lesaka ADP was acquired in fiscal

2006. At June 30, 2024, the fair

value of the Lesaka ADP reporting unit

exceeded its carrying

value

by

%.

The

loss

in

the

Lesaka

ADP

unit

during

the

year

ended

June

30,

2025,

from

a

reassessment of

the business’

growth and

the expected

impact on

its future

as a

result the

cash outflows

expected from

initiatives to modernize its existing technology platform to retain and expand its

product offering and customer base.

The fair

Hospitality and

Humble reporting

units

(both allocated

to Merchant)

Adumo did

not substantially exceed

the carrying

value of their

respective reporting

unit. The

Hospitality reporting unit exceeded the carrying value by

2.4

% and Humble exceeded the carrying value by

%. As of June 30, 2025,

carrying value

Lesaka Hospitality

and Humble

was $

34.0

$

1.5

All other

reporting units’ fair value exceeded the carrying value of the reporting unit by

at least

%.

ASSETS,

Impairment loss (continued)

June 30, 2025 goodwill impairment loss (continued)

presents the impairment

per reporting unit

2025 and the

revenue growth rates,

WACC

and forecast period for

reporting units used

in the discounted

cash flow models

30, 2025 and June

30, 2024, and

for entities

acquiring during the current fiscal year, the information

used in the purchase price allocation:

Segments and reporting units

with impairments

Impairment

Remaining

Range of

revenue

growth rates

(%)

Terminal

revenue

growth rates

(%)

WACC

(%)

Forecast

period

(years)

$

9,268

$

22,283

Lesaka Cash Management

5,688

22,283

3.2

6.0

15.6

Used at June 30, 2024

13.9

5.0

14.7

Lesaka MT

3,580

(

) -

(10.0)

18.5

Used at acquisition

6.7

14.9

N/A

18.9

2,197

6,027

Lesaka Payouts

2,197

6,027

7.5

40.2

6.0

18.2

Used at acquisition

11.8

26.6

N/A

18.9

5,576

3,533

Lesaka ADP

5,576

3,533

65.6

6.0

22.5

Used at June 30, 2024

(

21.7

) -

6.9

6.0

14.7

Total

$

17,041

$

31,843

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

businesses, this

may lead

to impairments

in future

periods. Furthermore,

the difficulties

of integrating

acquired businesses

may be

the

necessity of integrating personnel with disparate

business backgrounds and combining different corporate cultures. The

Company also

may

not

be

able

to

retain

key

of

an

or

realize

cost

or

synergies

or

other

benefits

that

it

anticipated when selecting its acquisition candidates. These factors

may also lead to impairments in future periods.

ASSETS,

Goodwill has been allocated to the Company’s

reportable segments as follows:

$

119,117

$

$

14,626

$

133,743

(1)

4,279

4,808

123,396

15,155

138,551

(9,268)

(2,197)

(5,576)

63,808

8,423

3,883

76,114

(1)

1,698

(199)

1,771

179,634

6,027

13,734

199,395

(388)

(388)

1,586

1,586

Deconsolidation of Humble (Note 3)

(1,515)

(1,515)

(1)

14,635

1,090

16,220

$

192,366

$

6,522

$

16,410

$

215,298

(1) – The foreign currency adjustment

represents the effects of the fluctuations between

the South African Rand, against the

U.S.

The table presents the components of impairment loss for the years ended June

30, 2026 and 2025:

Goodwill impairment loss

$

$

17,041

Impairment of right-of-use assets (Note 8)

2,623

Impairment of property,

plant and equipment

(1)

Impairment of intangible assets

1,822

Total

$

4,035

$

18,863

(1) During the

nine months ended

March 31, 2026,

the Company commenced

the process to

wind down its

ATM

related to ATMs

recorded in property,

plant and equipment to

reduce the carrying amounts

of these assets

to their

estimated recoverable

values. The

recoverable values

were determined

estimated proceeds

be realized

through

the

piecemeal

of

the

assets.

The

the

recoverable

values

based

on

observable market

pricing for

similar assets,

adjusted for

the condition,

age and

expected timing

of sale.

These estimates

management’s best estimate of fair

value less costs

to sell. The

fair value measurements associated

with the impairment were

within

Level

of

the

fair

value

hierarchy,

as

the

incorporates

unobservable

inputs,

selling

prices and

market

demand

for

used ATM

equipment.

Actual proceeds

may

differ

from

these estimates

a

rising from changes in market conditions or the timing and manner of

disposal.

ASSETS,

net

Intangible assets acquired

is the

of intangible

assets acquired,

translated at

the exchange

rate applicable

as of

the relevant

acquisition dates, and the weighted-average amortization period:

Fair value as of

acquisition date

Weighted-average

period (in years)

Finite-lived intangible asset:

Acquired during the year ended June 30, 2025:

Adumo – technology assets

$

13,998

Adumo – customer relationships

11,185

Adumo – brands

3,623

Utilities – technology assets

1,161

Utilities – customer relationships

15,010

Lesaka Digital Risk – technology assets

$

0.1

On acquisition of

these businesses, the

Company recognized an

aggregate deferred

tax liability of approximately

$

12.2

million

related to the acquisition of intangible assets during the year ended

June 30, 2025.

Impairment loss during the years

ended June 30, 2026 and 2025

assesses the carrying

for impairment

whenever events

occur or

circumstances change

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

No

intangible assets have been impaired during the

30, 2026, 2025

and 2024, respectively,

except for intangible

assets of $

0.04

1.8

related to Lesaka

MT which were

fully impaired during

and 2025. The

impairment was

identified during the Company’s annual goodwill impairment testing. The method for determining fair value is discussed above under

Goodwill—Impairment

loss.

The

loss

related

to

the

of

the

assets

is

in

the

caption

Impairment loss in the consolidated statements of operations.

ASSETS,

Intangible assets (continued)

Summarized below is the carrying value and accumulated amortization of the intangible assets as of June 30, 2026, and June 30,

2025:

As of June 30, 2026

As of June 30, 2025

Gross

value

and

Net

value

Gross

value

Net

value

Finite-lived intangible assets:

Software, integrated

platform and unpatented

(1)

$

153,867

$

(62,220)

$

91,647

$

137,099

$

(41,925)

$

95,174

Customer relationships

(1)

57,862

(26,084)

31,778

53,369

(18,568)

34,801

FTS patent

2,335

(2,335)

2,158

(2,158)

Brands and trademarks

(1)(2)

19,732

(19,732)

18,233

(8,993)

9,240

Total finite-lived

$

233,796

$

(110,371)

$

123,425

$

210,859

$

(71,644)

$

139,215

(1) June

balances include

the intangible

as part

of the

Adumo acquisition