What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-05-09 · 1741 added, 858 removed, 400 unchanged (87% of the section changed)

2 unchanged sentences

Unaudited Condensed Consolidated Balance Sheets

September 30,

(In thousands, except share data)

1 unchanged sentence

Cash and cash equivalents

Restricted cash related to ATM funding and credit facilities (Note 8)

Restricted cash related to ATM funding

and credit facilities (Note 8)

Accounts receivable, net and other receivables (Note 2)

4 unchanged sentences

Total current assets

PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - March:

$ 37,220 June:

PLANT AND EQUIPMENT, net of accumulated depreciation of - September:

OPERATING LEASE RIGHT-OF-USE (Note 16)

EQUITY-ACCOUNTED INVESTMENTS (Note 5)

EQUITY-ACCOUNTED INVESTMENTS

GOODWILL (Note 6)

20 unchanged sentences

COMMON STOCK (Note 10)

200,000,000 with $ 0.001 par value;

Issued and outstanding shares, net of treasury - March:

63,743,900 June:

Issued and outstanding shares, net of treasury - September:

PREFERRED STOCK

Authorized shares:

50,000,000 with $ 0.001 par value;

Issued and outstanding shares, net of treasury:

ADDITIONAL PAID-IN-CAPITAL

TREASURY SHARES, AT COST:

24,994,799 June:

ACCUMULATED OTHER COMPREHENSIVE LOSS (Note 11)

TREASURY SHARES, AT

ACCUMULATED OTHER

COMPREHENSIVE LOSS (Note 11)

RETAINED EARNINGS

7 unchanged sentences

Three months ended

Nine months ended

(In thousands, except per share data)

September 30,

(In thousands, except per

REVENUE (Note 15)

2 unchanged sentences

Depreciation and amortization

Reorganization costs (Note 1) (1)

Transaction costs related to Connect acquisition

OPERATING LOSS

GAIN RELATED TO FAIR VALUE ADJUSTMENT TO CURRENCY OPTIONS (Note 4)

LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT (Note 5)

GAIN ON DISPOSAL OF EQUITY SECURITIES

OPERATING INCOME (LOSS)

REVERSAL OF (ALLOWANCE) OF EMI

DOUBTFUL DEBT (Note 2 and 5)

NET GAIN ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENTS (Note 5)

INTEREST INCOME

INTEREST EXPENSE

LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE

INCOME TAX (BENEFIT) EXPENSE (Note 18)

NET LOSS BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS

EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS (Note 5)

NET LOSS ATTRIBUTABLE TO LESAKA

Net loss per share, in United States dollars (Note 13):

LOSS BEFORE INCOME TAX EXPENSE

INCOME TAX EXPENSE (Note 18)

NET LOSS BEFORE LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

Net loss per share, in United States dollars

Basic loss attributable to Lesaka shareholders

Diluted loss attributable to Lesaka shareholders

(1) Reorganization costs have been increased by $ 42,000 and selling, general and administration has been decreased by $ 42,000 during the three and nine months ended March 31, 2022, to adjust for a misallocation between the two captions.

See Notes to Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

Three months ended

Nine months ended

(In thousands)

September 30,

(In thousands)

1 unchanged sentence

Movement in foreign currency translation reserve

Release of foreign currency translation reserve related to disposal of Finbond equity securities (Note 11)

Movement in foreign currency translation reserve related to equity-accounted investments

Total other comprehensive (loss) income, net of taxes

Comprehensive (loss) income

Comprehensive (loss) income attributable to Lesaka

Movement in foreign currency translation reserve related to equity-accounted

Release of foreign currency translation reserve related to disposal of Finbond

Total other comprehensive

loss, net of taxes

Comprehensive loss

Add comprehensive loss attributable to non-controlling interest

Comprehensive loss attributable to Lesaka

See Notes to Unaudited Condensed Consolidated Financial Statements

2 unchanged sentences

Lesaka Technologies, Inc.

Number of Shares

Number of Treasury Shares

Treasury Shares

Number of shares, net of treasury

Additional Paid-In Capital

Retained Earnings

Accumulated other comprehensive loss

Total Lesaka Equity

Non-controlling Interest

Redeemable common stock

For the three months ended March 31, 2022 (dollar amounts in thousands)

Balance – January 1, 2022

( 24,891,292 )

Restricted stock granted (Note 12)

Exercise of stock options

Stock-based compensation charge (Note 12)

Reversal of stock-based compensation charge (Note 12)

Stock-based compensation charge related to equity-accounted investment (Note 5)

Other comprehensive income (Note 11)

Balance – March 31, 2022

( 24,891,292 )

For the nine months ended March 31, 2022 (dollar amounts in thousands)

shares, net of

comprehensive

For the three months ended September 30, 2022 (dollar amounts

in thousands)

Balance – July 1, 2022

( 24,891,292 )

Restricted stock granted

Shares repurchased (Note 12)

Restricted stock granted (Note 12)

Exercise of stock options

Stock-based compensation charge (Note 12)

Reversal of stock-based compensation charge (Note 12)

Stock-based compensation charge related to equity-accounted investment

Other comprehensive income (Note 11)

Balance – March 31, 2022

Stock-based compensation charge

related to equity-accounted investment

Other comprehensive loss (Note 11)

Balance – September 30, 2022

( 24,926,752 )

See Notes to Unaudited Condensed Consolidated Financial Statements

LESAKA TECHNOLOGIES, INC.

1 unchanged sentence

Lesaka Technologies, Inc.

Number of Shares

Number of Treasury Shares

Treasury Shares

Number of shares, net of treasury

Additional Paid-In Capital

Retained Earnings

Accumulated other comprehensive loss

Total Lesaka Equity

Non-controlling Interest

Redeemable common stock

For the three months ended March 31, 2023 (dollar amounts in thousands)

Balance – January 1, 2023

( 24,956,854 )

Shares repurchased (Note 12)

Restricted stock granted (Note 12)

Exercise of stock option (Note 12)

Stock-based compensation charge (Note 12)

Reversal of stock-based compensation charge (Note 12)

Stock-based compensation charge related to equity-accounted investment (Note 5)

Other comprehensive loss (Note 11)

Balance – March 31, 2023

( 24,994,799 )

See Notes to Unaudited Condensed Consolidated Financial Statements

For the nine months ended March 31, 2023 (dollar amounts in thousands)

shares, net of

comprehensive

For the three months ended September 30, 2023 (dollar amounts

in thousands)

Balance – July 1, 2023

( 25,244,286 )

Shares repurchased (Note 12)

Restricted stock granted

Exercise of stock option (Note 12)

Stock-based compensation charge (Note 12)

Reversal of stock-based compensation charge (Note 12)

Stock-based compensation charge related to equity-accounted investment (Note 5)

Stock-based compensation charge

Reversal of stock-based compensation

charge (Note 12)

Stock-based compensation charge

related to equity-accounted investment

Other comprehensive loss (Note 11)

Balance – March 31, 2023

Balance – September 30, 2023

( 25,244,286 )

See Notes to Unaudited Condensed Consolidated Financial Statements

See Notes to Unaudited Condensed Consolidated Financial

LESAKA TECHNOLOGIES, INC.

1 unchanged sentence

Three months ended

Nine months ended

(In thousands)

September 30,

(In thousands)

1 unchanged sentence

Depreciation and amortization

Movement in allowance for doubtful accounts receivable

Movement in interest payable

(Gain) Loss related to fair value adjustment to currency options (Note 4)

Movement in allowance for doubtful accounts receivable and finance loans receivable

Loss from equity-accounted investments (Note 5)

Movement in allowance for doubtful loans to equity-accounted investments

Fair value adjustment related to financial liabilities

Gain on disposal of equity securities (Note 5)

Loss on disposal of equity-accounted investments (Note 5)

(Earnings) Loss from equity-accounted investments

Profit on disposal of property, plant and equipment (1)

Interest payable

Facility fee amortized

Net gain on disposal of equity-accounted investments (Note 5)

Profit on disposal of property, plant and equipment

Stock-based compensation charge (Note 12)

Dividends received from equity-accounted investments

Increase in accounts receivable

(Increase) Decrease in finance loans receivable (2)

Increase in accounts receivable and other receivables

Increase in finance loans receivable

Increase in inventory

(Decrease) Increase in accounts payable and other payables

Increase (Decrease) in accounts payable and other payables

Increase in taxes payable

Decrease in deferred taxes

Net cash used in operating activities

Net cash provided by (used in) operating activities

Cash flows from investing activities

1 unchanged sentence

Proceeds from disposal of property, plant and equipment

Proceeds from disposal of equity-accounted investment (Note 5)

Acquisition of intangible assets

Proceeds from disposal of equity securities (Note 5)

Proceeds from disposal of equity-accounted investment - Bank Frick, net of expenses

Loan to equity-accounted investment (Note 5)

Proceeds from disposal of equity-accounted investments (Note 5)

Loan to equity-accounted investment

Repayment of loans by equity-accounted investments

Net change in settlement assets

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash flows from financing activities

5 unchanged sentences

Proceeds from exercise of stock options

Guarantee fee

Net change in settlement obligations

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net cash provided by financing activities

Effect of exchange rate changes on cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash – beginning of period

Cash, cash equivalents and restricted cash – end of period (Note 14)

(1) Impairment (reversals) losses of $( 27,000 ) and $ 198,000 respectively, previously reported in a separate caption during the three and nine months ended March 31, 2022, have been included in the caption profit on disposal of property, plant and equipment for the three and nine months ended March 31, 2022

(2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption.

Previous periods have been restated.

See Notes to Unaudited Condensed Consolidated Financial Statements

1 unchanged sentence

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three and nine months ended March 31, 2023 and 2022

for the three months ended September 30, 2023 and 2022

(All amounts in tables stated in thousands or thousands of U.S.

dollars, unless otherwise stated)

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements include all majority-owned subsidiaries over which the Company exercises control and have been prepared in accordance with U.S.

generally accepted accounting principles (“GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for Quarterly Reports on Form 10-Q and include all of the information and disclosures required for interim financial reporting.

The results of operations for the three and nine months ended March 31, 2023 and 2022, are not necessarily indicative of the results for the full year.

The Company believes that the disclosures are adequate to make the information presented not misleading.

These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair representation of financial results for the interim periods presented.

References to “Lesaka” are references solely to Lesaka Technologies, Inc.

References to the “Company” refer to Lesaka and its consolidated subsidiaries, collectively, unless the context otherwise requires.

Fiscal 2022 reorganization charge - financial services restructuring

The Company has incurred significant losses since its contract to distribute social grants expired in September 2018.

A strategic imperative for the Company has been to return its South African financial services business (the Consumer division) to a breakeven position and then profitability as soon as possible.

As part of a cost optimization process completed in late calendar 2021, the Company performed a review of its labor structure and determined that a number of its defined employee roles would need to be terminated due to redundancy.

The Company embarked on a retrenchment process pursuant to Section 189A of the South African Labour Relations Act (“Labour Act”) on January 10, 2022.

The Company incurred cash costs of approximately $ 6.7 million (ZAR 103.4 million) during the three and nine months ended March 31, 2022, principally consisting of severance and related payments and the payment of unutilized leave days.

The Company has recorded an expense of $ 5.9 million in the caption reorganization costs in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended March 31, 2022.

The primary difference between the reorganization charge amount and the total cash paid relates to leave pay which was accrued in prior periods.

The accompanying

unaudited condensed

consolidated financial

statements include

all majority-owned

subsidiaries over

the Company exercises

control and have been

prepared in accordance with

generally accepted accounting

principles (“GAAP”)

States Securities

include all of

the information and

disclosures required for

interim financial reporting.

The results of

operations for the

September 30,

not necessarily

indicative of

believes that

disclosures are adequate to make the information presented not misleading.

accounting policies and financial notes thereto included in the

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

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

representation of financial results for the

interim periods presented.

References to “Lesaka” are references

solely to Lesaka Technologies,

References to the “Company” refer

to Lesaka and its

consolidated subsidiaries, collectively,

unless the context otherwise requires.

Recent accounting pronouncements adopted

In October 2021, the Financial Accounting Standards Board (“FASB”) issued guidance which amends guidance in Business Combinations (Topic 805) regarding the recognition and measurement of contract assets and liabilities in a business combination.

These items are recognized at fair value on acquisition under current guidance.

The new guidance requires an acquiring entity to apply guidance in Revenue Recognition (Topic 606) to recognize and measure contract assets and contract liabilities in a business combination.

In June 2016, the Financial Accounting Standards Board issued guidance regarding

Measurement of Credit Losses on Financial

loss impairment

expected credit

losses and requires

consideration of

a broader range

of reasonable

and supportable

information to inform

forward-looking

expected loss

than the incurred

loss model for

recognizing credit

losses, which reflects

losses that are

losses relating to

available-for-sale debt securities will

recorded through an

allowance for credit

losses rather than

in the amortized cost basis of the securities.

The guidance became effective for the Company beginning July 1, 2023.

The adoption of this guidance did not have a material impact on the Company’s financial statements and related disclosures.

Recent accounting pronouncements not yet adopted as of March 31, 2023

In June 2016, the FASB issued guidance regarding Measurement of Credit Losses on Financial Instruments .

The guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates.

For trade and other receivables, loans, and other financial instruments, an entity is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable.

Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities.

This guidance is effective for the Company beginning July 1, 2023.

The Company is currently assessing the impact of this guidance on its financial statements and related disclosures, but does not expect the impact on its financial results to be material.

Basis of Presentation and Summary of Significant Accounting Policies (continued)

Recent accounting pronouncements not yet adopted as of March 31, 2023 (continued)

In November 2019, the FASB issued guidance regarding Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).

The guidance provides a framework to stagger effective dates for future major accounting standards and amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities, including Smaller Reporting Companies.

The Company is a Smaller Reporting Company.

Specifically, the guidance changes some effective dates for certain new standards on the following topics in the FASB Codification, namely Derivatives and Hedging (ASC 815);

Leases (ASC 842);

Financial Instruments — Credit Losses (ASC 326);

and Intangibles — Goodwill and Other (ASC 350).

The guidance defers the adoption date of guidance regarding Measurement of Credit Losses on Financial Instruments by the Company from July 1, 2020 to July 1, 2023.

The Company is currently assessing the impact of this guidance on its financial statements and related disclosures, but does not expect the impact on its financial results to be material.

Accounts receivable, net and other receivables and finance loans receivable, net

The adoption of

this guidance did not have a material impact on the Company’s

financial statements and related disclosures, refer to Note 2.

issued guidance

Instruments—Credit

Losses (Topic

Derivatives and

implementation

certain types

including Smaller

Reporting Companies.

Reporting Company.

Specifically,

guidance changes some effective

dates for certain

new standards on

the following topics

in the FASB Codification, namely Derivatives

Instruments —

Credit Losses

and Intangibles

became effective

Company beginning

this guidance

material impact

financial statements

refer to Note 2.

The Company’s updated accounting

policy regarding allowance for credit losses is as follows:

Allowance for doubtful accounts receivable

Allowance for doubtful finance loans receivable

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

The allowance for credit losses related

to Consumer finance loans receivables is calculated by multiplying the

lifetime loss rate

of outstanding

from borrowers

adjusted its allowance based on management’s estimate of the recoverability

of the finance loans receivable.

The Company writes off

microlending finance

loans receivable and

related service fees

and interest if

a borrower is

in arrears with

repayments for more

Company writes

capital finance

receivables and

evident that reasonable recovery procedures, including where deemed necessary,

formal legal action, have failed.

Basis of Presentation and Summary of Significant Accounting

Policies (continued)

Allowance for doubtful accounts receivable (continued)

Allowance for doubtful accounts receivable

The Company uses a lifetime loss rate by expressing write-off experience as a percentage of corresponding

invoice amounts (as

opposed to outstanding balances).

The allowance for credit

losses related to these

receivables has been calculated

by multiplying the

invoice/origination

considered likely that all or

a portion of the

amount due from

customers renting safe assets,

point of sale (“POS”)

equipment, receiving

support and maintenance

or transaction services or

purchasing licenses or

SIM cards from the

Company will not be

recoverability

by management

of outstanding

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

Recent accounting pronouncements not yet adopted

as of September 30, 2023

There are no recent accounting pronouncements that have not yet been adopted

as of September 30, 2023.

Accounts receivable, net and other receivables and

finance loans receivable, net

Accounts receivable, net and other receivables

The Company’s accounts receivable, net, and other receivables as of March 31, 2023, and June 30, 2022 , are presented in the table below:

The Company’s accounts receivable, net, and other receivables as of September 30, 2023, and June 30, 2023, are presented in

the table below:

September 30,

Accounts receivable, trade, net

6 unchanged sentences

Foreign currency adjustment

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

Loans provided to Carbon, net of allowance:

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

September 2023:

Current portion of total held to maturity investments

Investment in 7.625 % of Cedar Cellular Investment 1 (RF) (Pty) Ltd 8.625 % notes

Investment in

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

Other receivables

Total accounts receivable, net and other receivables

(1) Represents reallocation of a portion of the Merchant allowance for doubtful finance loans receivable as of June 30, 2022, which was included in the allowance for doubtful accounts receivable as of June 30, 2022.

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”), an equity-accounted investment of $ 0.25 million, net of an allowance for doubtful loans receivable of $ 0.25 million and an amount due related to the sale of the loan (refer below), with a face value of $ 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 5 for additional information .

The loan of $ 3.0 million provided to Carbon was scheduled to be repaid before June 30, 2020, however, Carbon requested a payment holiday as a result of the impact of the COVID-19 pandemic on its business.

The parties had not agreed to new repayment terms as of June 30, 2022.

In June 2021, the Company determined to create an allowance for doubtful loans receivable of $ 3.0 million due to these circumstances and the ongoing operating losses incurred by Carbon.

Investment in 7.625 % of Cedar Cellular Investment 1 (RF) (Pty) Ltd 8.625 % notes represents the investment in a note which was due to mature in August 2022 and forms part of Cell C’s capital structure.

The carrying value as of each of March 31, 2023, and June 30, 2022, respectively was $ 0 (zero).

Other receivables includes prepayments, deposits, income taxes receivable and other receivables.

As of March 31, 2023, other receivables also includes approximately a $ 5.6 million prepayment made to a reseller of prepaid airtime vouchers, which the Company expects to receive during the three months ended June 30, 2023.

As of June 30, 2022, other receivables also includes transactions-switching funds receivable of $ 3.3 million which was received in full in November 2022.

Accounts receivable, net and other receivables and finance loans receivable, net (continued)

Total accounts receivable,

net and other receivables

Trade receivables include amounts

due from customers

which generally have

a very short-term

date of invoice

provided to settlement.

is less than a year in all cases and

generally less than 30 days in many

The short-term

disproportionately

operational timing issues and

the fact that a balance

is outstanding at month-end is

not necessarily an indication of

increased risk but

rather a matter of operational timing.

Credit risk in respect of trade receivables are generally not

significant and the Company has not developed a sophisticated model

for these basic

credit exposures.

Company determined to

use a lifetime

expressing write-off experience as

of corresponding

invoice amounts

to outstanding

allowance for credit

losses related to

these receivables

invoice/origination

performance of these

receivables over short periods

balances have different

rules to identify an

account in distress

Subsequent recovery from distressed accounts are generally limited.

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Accounts receivable, net and other receivables (continued)

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”), an equity-accounted investment of $

million, net of an

allowance for doubtful loans receivable of $

million as of June 30, 2023, and an amount due related to the sale of the loan, with a

face value of $

million, which was sold in

September 2022 for $

million, net of an allowance for

doubtful loans receivable of

million, refer

to Note 5 for

additional information.

The Company received

the outstanding $

million related to

the equity-accounted investment in

October 2023, and has

reversed the allowance for

doubtful loans receivable of

million during

the three months ended September 30, 2023.

Investment in

% of Cedar Cellular

Investment 1 (RF) (Pty) Ltd

% notes represents the

investment in a note which was

due to mature in

August 2022 and forms

part of Cell C’s

capital structure.

value as of each of

September 30, 2023,

June 30, 2023, respectively was $

Other receivables includes prepayments, deposits, income taxes receivable

and other receivables.

Contractual maturities of held to maturity investments

Summarized below is the contractual maturity of the Company’s held to maturity investment as of March 31, 2023:

Estimated fair value (1)

Summarized below is the contractual maturity of the Company’s

held to maturity investment as of September 30, 2023:

Due in one year or less

2 unchanged sentences

Due after ten years

(1) The estimated fair value of the Cedar Cellular note has been calculated utilizing the Company’s portion of the assets held by Cedar Cellular, namely, Cedar Cellular’s investment in Cell C.

(2) The cost basis is zero ($ 0.0 million).

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

Company’s portion of the assets held by

Cedar Cellular, namely,

Cedar Cellular’s investment in Cell C.

(2) The cost basis is zero ($

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Finance loans receivable, net

The Company’s finance loans receivable, net, as of March 31, 2023, and June 30, 2022, is presented in the table below:

The Company’s finance

loans receivable, net, as of September 30, 2023, and June 30, 2023, is presented

in the table below:

September 30,

Microlending finance loans receivable, net

13 unchanged sentences

Foreign currency adjustment

Total finance loans receivable, net

Total finance loans receivable, net, comprises microlending finance loans receivable related to the Company’s microlending operations in South Africa as well as its merchant finance loans receivable related to Connect’s lending activities in South Africa.

Certain merchant finance loans receivable have been pledged as security for the Company’s revolving credit facility (refer to Note 8).

The Company’s inventory comprised the following categories as of March 31, 2023, and June 30, 2022 :

Total finance

loans receivable, net

finance loans

receivable related

lending activities

Certain merchant finance loans receivable have been pledged as security for the Company’s revolving

credit facility (refer to Note 8).

Allowance for credit losses

Microlending finance loans receivable

Microlending finance

loans receivable

the Company’s

microlending operations

Africa whereby

unsecured short-term

loans to qualifying

Loans to customers

, with the majority

originated having

analyses this lending

single portfolio

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 4 related to the Company risk management process related to

these receivables.

The Company has operated this lending book for more than

and uses historical default experience over the lifetime of

loans in order

to calculate a

lifetime loss rate

for the lending

The allowance

for credit losses

related to these

microlending finance

loans receivables

is calculated

by multiplying

outstanding lending

lifetime loss

September 30, 2023,

The performing

component (that is,

outstanding loan payments

not in arrears) of the book exceeds more than

% of outstanding lending book as of September 30, 2023.

Merchant finance loans receivable

finance loans

receivable related

lending activities

Africa whereby

short-term loans

to qualifying

twelve months

loans originated having a tenor of

approximately

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

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Finance loans receivable, net (continued)

Allowance for credit losses (continued)

Microlending finance loans receivable (continued)

experience over

the lifetime of

loans generated thus

to calculate a

lifetime loss rate

for the lending

The allowance

for credit losses related to these merchant finance loans receivables

is calculated by adding together actual receivables in default

multiplying the lifetime

loss rate with the

month-end outstanding lending

The lifetime loss

rate as of each

of July 1, 2023

September 30, 2023, was approximately

The performing component (that is, outstanding loan payments not in arrears),

component (that

is, outstanding

loan payments

and non-performing

component (that

is, outstanding

book represents

approximately

respectively,

outstanding lending book as of September 30, 2023.

The Company’s inventory

comprised the following categories as of September 30, 2023, and June 30, 2023:

September 30,

Raw materials

1 unchanged sentence

Finished goods

As of March 31, 2023 and June 30, 2022, finished goods includes $ 9.2 million and $ 13.7 million, respectively, of Cell C airtime inventory that was previously classified as finished goods subject to sale restrictions.

In support of Cell C’s liquidity position and pursuant to Cell C’s recapitalization process, the Company limited the resale of this airtime to its own distribution channels.

On September 30, 2022, Cell C concluded its recapitalization process and the Company and Cell C entered into an agreement under which Cell C agreed to repurchase, from October 2023, up to ZAR 10 million of Cell C inventory from the Company per month.

The amount to be repurchased by Cell C will be calculated as ZAR 10 million less the face value of any sales made by the Company during that month.

The Company continued to sell a minimum amount of Cell C airtime through its internal channels in late fiscal 2022/ early fiscal 2023 in support of Cell C’s liquidity position.

However, its ability to sell this airtime has increased significantly since the acquisition of Connect because Connect is a significant reseller of Cell C airtime.

As a result, the Company has sold higher volumes of airtime through this channel than it did prior to the Cell C recapitalization, however, continued sales at these volumes is dependent on prevailing conditions continuing in the airtime market.

If the Company is able to sell at least ZAR 10 million a month through this channel from October 1, 2023, then Cell C would not be required to repurchase any airtime from the Company during any specific month.

The Company has agreed to notify Cell C prior to selling any of this airtime, however, there is no restriction placed on the Company on the sale of the airtime.

2023, finished

goods includes

million, respectively,

airtime inventory that was previously

classified as finished goods subject

to sale restrictions.

In support of

Cell C’s liquidity

and pursuant to

recapitalization process, the

Company limited the

resale of this

airtime to its own

distribution channels.

September 30, 2022, Cell C

concluded its recapitalization process and

the Company and Cell C

entered into an agreement under which

Cell C agreed to repurchase, from October

2023, up to ZAR

million of Cell C inventory from the

Company per month.

to be repurchased by Cell C is calculated as ZAR

million less the face value of any sales made by the Company during that month.

The Company’s ability to sell this airtime has increased significantly since the acquisition of Connect because Connect is

a significant

Cell C airtime.

airtime through

recapitalization,

these volumes

on prevailing

continuing in

If the Company is able to sell at least ZAR

million a month through this channel from October 1, 2023, then Cell C would

repurchase any

specific month.

prior to selling any of this airtime, however, there

is no restriction placed on the Company on the sale of the airtime.

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.

Financial instruments

are recognized

Company becomes

measurements are

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.

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 safe assets, that the Company assembles, and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S.

The Company 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.

assembles, and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S.

to fluctuations

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 reporting currency, but it earns a significant amount of its revenues and incurs a significant amount of its expenses in ZAR.

dollar to the ZAR exchange rate has fluctuated significantly over the past three years.

As exchange rates are outside the Company’s control, there can be no assurance that future fluctuations will not adversely affect the Company’s results of operations and financial condition.

Translation risk relates to

the risk that

the Company’s results of operations

will vary significantly

dollar is its

but it earns a

significant amount of its

revenues and incurs a

significant amount of its

expenses in ZAR.

exchange rate

has fluctuated

significantly over

there can be no

assurance that future fluctuations will

not adversely affect the Company’s results of operations and

financial condition.

Interest rate risk

As a result of its normal borrowing activities, the Company’s operating results are exposed to fluctuations in interest rates, which it manages primarily through regular financing activities.

Interest rates in South Africa are trending upwards and the Company expects higher interest rates in the foreseeable future which will increase its cost of borrowing.

The Company periodically evaluates the cost and effectiveness of interest rate hedging strategies to manage this risk.

The Company generally maintains surplus cash in cash equivalents and held to maturity investments and has occasionally invested in marketable securities.

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 regular financing

Interest rates in

South Africa are trending upwards and

the Company expects

higher interest rates

in the foreseeable future

which will increase its

cost of borrowing.

The Company periodically

evaluates the cost

effectiveness

equivalents and held to maturity investments and has occasionally

invested in marketable securities.

non-performance

counterparties.

counterparties

counterparty’s

management deems appropriate.

to credit risk on

financial instruments, the

Company maintains a

transactions only

financial institutions

equivalent) or better, as determined by credit

rating agencies such as Standard & Poor’s, Moody’s

and Fitch Ratings.

Consumer microlending credit

microlending activities,

which provides

unsecured short-term

qualifying customers.

Credit bureau

an affordability

the origination

process, both

which are in line with local regulations.

The Company considers this

policy to be appropriate because the affordability test it

takes into account

as other debts

and total expenditures

on normal household

and lifestyle expenses.

allowances may

its customers

payments when

due deteriorate

judgment is required

to assess the

ultimate recoverability

of these finance

loan receivables,

including ongoing

of the creditworthiness of each customer.

Merchant lending

The Company maintains an allowance for

doubtful finance loans receivable related to

its Merchant services segment with

to short-term loans to qualifying merchant customers.

Company’s risk management procedures include adhering to its proprietary

lending criteria which uses

an online-system loan application

process, obtaining necessary customer transaction-history

data and credit

bureau checks.

The Company considers

these procedures

to be appropriate

because it takes

the customer’s credit capacity and customer-specific

risk factors when originating a loan.

Fair value of financial instruments (continued)

Risk management (continued

Credit risk relates to the risk of loss that the Company would incur as a result of non-performance by counterparties.

The Company maintains credit risk policies in respect of its counterparties to minimize overall credit risk.

These policies include an evaluation of a potential counterparty’s financial condition, credit rating, and other credit criteria and risk mitigation tools as the Company’s management deems appropriate.

With respect to credit risk on financial instruments, the Company maintains a policy of entering into such transactions only with South African and European financial institutions that have a credit rating of “B” (or its equivalent) or better, as determined by credit rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings.

Consumer microlending credit risk

The Company is exposed to credit risk in its Consumer microlending activities, which provides unsecured short-term loans to qualifying customers.

Credit bureau checks as well as an affordability test are conducted as part of the origination process, both of which are 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.

Additional allowances may be required should the ability of its customers to make payments when due deteriorate in the future.

A significant amount of judgment is required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer.

Merchant lending

The Company maintains an allowance for doubtful finance loans receivable related to its Merchant services segment with respect to short-term loans to qualifying merchant customers.

The Company’s risk management procedures include adhering to its proprietary lending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks.

The Company considers these procedures to be appropriate because it takes into account a variety of factors such as the customer’s credit capacity and customer-specific risk factors when originating a loan.

Equity price and liquidity risk

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

The market price of these securities may fluctuate for a variety of reasons and, consequently, the amount that the Company may obtain in a subsequent sale of these securities may significantly differ from the reported market value.

Equity liquidity risk relates to the risk of loss that the Company would incur as a result of the lack of liquidity on the exchange on which those securities are listed.

The Company may not be able to sell some or all of these securities at one time, or over an extended period of time without influencing the exchange-traded price, or at all.

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

these securities

may fluctuate

consequently,

amount that the Company may obtain in a subsequent sale of these securities may significantly differ

from the reported market value.

Equity liquidity risk

relates to the risk

of loss that the

Company would incur as

a result of the lack

of liquidity on the

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

Financial instruments

The following section describes the valuation methodologies the Company uses to measure its significant financial assets and liabilities at fair value.

In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value.

This pricing methodology would apply to Level 1 investments.

If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly.

These investments would be included in Level 2 investments.

In circumstances in which inputs are generally unobservable, values typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques.

Investments valued using such techniques are included in Level 3 investments.

Fair value of financial instruments (continued)

Financial instruments (continued)

Asset measured at fair value using significant unobservable inputs – investment in Cell C

The Company’s Level 3 asset represents an investment of 75,000,000 class “A” shares in Cell C, a significant mobile telecoms provider in South Africa.

The Company used a discounted cash flow model developed by the Company to determine the fair value of its investment in Cell C as of March 31, 2023 and June 30, 2022, respectively, and valued Cell C at $ 0.0 (zero) and $ 0.0 (zero) as of March 31, 2023, and June 30, 2022, respectively.

The Company incorporates the payments under Cell C’s lease liabilities into the cash flow forecasts and assumes that Cell C’s deferred tax assets would be utilized over the forecast period.

The Company has increased the marketability discount from 10 % to 20 % and the minority discount from 15 % to 30 % due to the reduction in our shareholding percentage from 15 % to 5 % as well as current market conditions.

The Company utilized the latest revised business plan provided by Cell C management for the period ended December 31, 2025, for the March 31, 2023, and June 30, 2022 valuations.

Adjustments have been made to the WACC rate to reflect the Company’s assessment of risk to Cell C achieving its business plan.

The following key valuation inputs were used as of March 31, 2023 and June 30, 2022:

Weighted Average Cost of Capital ("WACC"):

Between 20 % and 31 % over the period of the forecast

The following

section describes

the valuation

methodologies the

its significant

financial assets

liabilities at fair value.

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

active markets for identical assets or liabilities

methodology would

active markets

for identical

liabilities are

not available

then the Company

similar assets

liabilities or

circumstances

unobservable,

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

The fair values are therefore determined using model-

based techniques that include

option pricing models,

discounted cash flow models,

and similar techniques.

such techniques are included in Level 3 investments.

Asset measured at fair value using significant unobservable inputs – investment

The Company’s

Level 3 asset represents

an investment of

class “A” shares in Cell

C, a significant

mobile telecoms

provider in South Africa.

The Company used a discounted cash flow model developed by the Company to determine

the fair value of

its investment in Cell C as of September 30, 2023 and June 30, 2023, respectively,

and valued Cell C at $

of September 30, 2023, and June 30, 2023, respectively.

The Company incorporates the payments under Cell C’s

lease liabilities into

flow forecasts

forecast period.

marketability

shareholding percentage

market conditions.

utilized the latest

business plan

management for

ended December

September 30,

2023, valuations.

Adjustments have been made to the WACC

rate to reflect the Company’s

assessment of risk to Cell C achieving its

business plan.

The following key valuation inputs were used as of September 30, 2023

and June 30, 2023:

Weighted Average

Cost of Capital ("WACC"):

% over the period of the forecast

Long term growth rate:

4 unchanged sentences

% as of June 30, 2023)

Net adjusted external debt - March 31, 2023:

ZAR 8 billion ($ 0.4 billion), no lease liabilities included

Net adjusted external debt - September 30, 2023:

billion), no lease liabilities included

Net adjusted external debt - June 30, 2023:

ZAR 13.5 billion ($ 0.8 billion), no lease liabilities included

billion), no lease liabilities included

(1) translated from ZAR to U.S.

dollars at exchange rates applicable as of March 31, 2023.

dollars at exchange rates applicable as of

September 30, 2023.

(2) translated from ZAR to U.S.

dollars at exchange rates applicable as of June 30, 2022.

The following table presents the impact on the carrying value of the Company’s Cell C investment of a 1.0% increase and 1.25% decrease in the WACC rate and the EBITDA margins respectively used in the Cell C valuation on March 31, 2023, all amounts translated at exchange rates applicable as of March 31, 2023:

dollars at exchange rates applicable as of

June 30, 2023.

The following table presents the impact on the carrying value of the Company’s

Cell C investment of a

% increase and

decrease in the

EBITDA margins

respectively used in

valuation on September

30, 2023, all

translated at exchange rates applicable as of September 30, 2023:

Sensitivity for fair value of Cell C investment

2 unchanged sentences

EBITDA margin

The fair value of the Cell C shares as of March 31, 2023, represented 0 % of the Company’s total assets, including these shares.

The Company expects to hold these shares for an extended period of time and that there will be short-term equity price volatility with respect to these shares particularly given that Cell C remains in a turnaround process.

Derivative transactions - Foreign exchange contracts

As part of the Company’s risk management strategy, the Company enters into derivative transactions to mitigate exposures to foreign currencies using foreign exchange contracts.

These foreign exchange contracts 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.

The Company uses quoted prices in active markets for similar assets and liabilities to determine fair value (Level 2).

The Company has no derivatives that require fair value measurement under Level 1 or 3 of the fair value hierarchy.

The Company had no outstanding foreign exchange contracts as of March 31, 2023, and June 30, 2022.

September 30,

2023, represented

the Company’s

total assets,

The Company expects

to hold these

shares for an

extended period of

time and that

be short-term equity

price volatility

with respect to these shares particularly given that Cell C remains in a turnaround

Fair value of financial instruments (continued)

Financial instruments (continued)

Derivative transactions – Fiscal 2022 foreign exchange option contracts

The Company held a significant amount of U.S.

dollars in early fiscal 2022 and intended to use a portion of these funds to settle part of the purchase consideration related to the Connect acquisition.

The purchase consideration was expected to be settled in ZAR.

Accordingly, the Company entered into foreign exchange option contracts with FirstRand Bank Limited acting through its Rand Merchant Bank division (“RMB”) in November 2021 in order to manage the risk of currency volatility and to fix the ZAR amount to be utilized for part of the purchase consideration settlement.

These foreign exchange option contracts, also known as synthetic forwards, were over-the-counter derivative transactions (Level 2).

RMB’s long-term credit rating is “BB”.

The Company used quoted prices in active markets for similar assets and liabilities to determine fair value of the foreign exchange option contracts (Level 2).

The Company marked-to-market the synthetic forwards as of December 31, 2021, using a Black-Scholes option pricing model which determined the respective fair value of the options utilizing appropriate market parameters, and recorded an unrealized loss of $ 2.4 million during the three months ended December 31, 2021.

These currency options matured on February 24, 2022.

The Company generated a realized gain of $ 3.7 million upon maturity.

During the three and nine months ended March 31, 2022, the Company recorded a net gain of $ 6.1 million (which includes the reversal of the $ 2.4 million unrealized loss which was previously recorded) and $ 3.7 million, respectively.

The net gain is included in the caption gain related to fair value adjustment to currency options in the Company’s unaudited condensed consolidated statements of operations for the three and nine months ended March 31, 2022.

The following table presents the Company’s assets measured at fair value on a recurring basis as of March 31, 2023, according to the fair value hierarchy:

Quoted Price in Active Markets for Identical Assets

Significant Other Observable Inputs

Significant Unobservable Inputs

Financial instruments

Derivative transactions - Foreign exchange contracts

over-the-counter

transactions.

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

(or equivalent)

active markets

assets and liabilities

The Company has no derivatives that require fair value measurement

under Level 1 or 3 of the fair value hierarchy.

The Company had

outstanding foreign exchange contracts as of September 30, 2023, and June

according to the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Investment in Cell C

Related to insurance business:

Cash, cash equivalents and restricted cash (included in other long-term assets)

Fixed maturity investments (included in cash and cash equivalents)

Foreign exchange contracts

Related to insurance

Cash, cash equivalents and

restricted cash (included

in other long-term assets)

Fixed maturity

investments (included in

cash and cash equivalents)

Foreign exchange

Total assets at fair value

Fair value of financial instruments (continued)

The following table presents the Company’s assets measured at fair value on a recurring basis as of June 30, 2022, according to the fair value hierarchy:

Quoted Price in Active Markets for Identical Assets

Significant Other Observable Inputs

Significant Unobservable Inputs

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2023, according to

the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Investment in Cell C

Related to insurance business

Cash and cash equivalents (included in other long-term assets)

Fixed maturity investments (included in cash and cash equivalents)

Cash and cash equivalents

(included in other long-term

Fixed maturity investments

(included in cash and cash

Total assets at fair value

There have been no transfers in or out of Level 3 during the three and nine months ended March 31, 2023 and 2022, respectively.

There was no movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level 3, during the three and nine months ended March 31, 2023 and 2022.

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 nine months ended March 31, 2023:

There have been

transfers in or out of Level 3 during the three months ended September 30, 2023 and 2022,

respectively.

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

3, during the three months ended September 30, 2023 and 2022.

Fair value of financial instruments (continued)

Summarized below is the movement in the carrying value of

assets and liabilities measured at fair value on a recurring

categorized within Level 3, during the three months ended September

Carrying value

1 unchanged sentence

Foreign currency adjustment

Balance as of March 31, 2023

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

dollar on the carrying value.

Balance as of September 30, 2023

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

South African rand against the U.S.

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 three months ended September

Carrying value

1 unchanged sentence

Foreign currency adjustment

Balance as of March 31, 2022

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

dollar on the carrying value.

Balance as of September 30, 2023

foreign currency

adjustment represents the

the fluctuations

South African rand

against the U.S.

on the carrying value.

Assets measured at fair value on a nonrecurring basis

The Company 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 determined to be other-than-temporary.

Refer to Note 5 for impairment charges recorded during the reporting periods presented herein.

The Company has no liabilities that are measured at fair value on a nonrecurring basis.

measures equity

investments without

readily determinable

at fair value

nonrecurring basis.

fair values of

these investments

are determined

valuation techniques

using the best

information available

and may include

quoted market prices, market comparables, and discounted cash flow

An impairment charge is recorded when the cost

other-than-temporary.

recorded during the

reporting periods presented

liabilities that

are measured at

Equity-accounted investments and other long-term assets

Refer to Note 9 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022, for additional information regarding its equity-accounted investments and other long-term assets.

Refer to Note 9 to the Company’s audited consolidated

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

year ended June 30, 2023, for additional information regarding its equity-accounted

investments and other long-term assets.

Equity-accounted investments

The Company’s ownership percentage in its equity-accounted investments as of March 31, 2023, and June 30, 2022, was as follows:

The Company’s ownership

percentage in its equity-accounted investments as of September 30, 2023,

and June 30, 2023, was as

September 30,

Finbond Group Limited (“Finbond”)

Sandulela Technology (Pty) Ltd ("Sandulela")

Carbon Tech Limited (“Carbon”)

Sandulela Technology

(Pty) Ltd ("Sandulela")

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

As of March 31, 2023, the Company owned 221,160,966 shares in Finbond representing approximately 27.8 % of its issued and outstanding ordinary shares.

Finbond is listed on the Johannesburg Stock Exchange (“JSE”) and its closing price on March 31, 2023, the last trading day of the month, was ZAR 0.30 per share.

The market value, using the March 31, 2023, closing price, of the Company’s holding in Finbond on March 31, 2023, was ZAR 66.3 million ($ 3.7 million translated at exchange rates applicable as of March 31, 2023).

The Company sold 17,357,346 and 24,818,937 shares in Finbond for cash during the three and nine months ended March 31, 2023, respectively, and recorded a loss of $ 0.3 million and $ 0.4 million, which is included in the caption net gain on disposal of equity-accounted investments in the Company’s unaudited condensed consolidated statements of operations.

The following table presents the calculation of the loss on disposal of Finbond shares during the three and nine months ended March 31, 2023:

Three months ended March 31,

Nine months ended March 31,

As of September 30, 2023, the Company owned

shares in Finbond representing approximately

% of its issued

and outstanding

ordinary shares.

the Johannesburg

Stock Exchange

its closing price

29, 2023, the last trading

day of the month, was ZAR

The market value,

using the September 29, 2023,

closing price,

applicable as of September 30, 2023).

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

Equity-accounted investments (continued)

Finbond (continued)

August 2023 agreement to sell entire

stake in Finbond

agreement with Finbond to

sell its remaining

shareholding to Finbond for

a cash consideration of

million using

otherwise the transaction will lapse.

Sale of Finbond shares during the three

months ended September 2022

The Company sold

shares in Finbond for cash during the three months ended September 30, 2022, and recorded a loss of

million which

equity-accounted

investments in

the Company’s

condensed consolidated statements of operations.

The following table presents the

calculation of the loss on disposal of

Finbond shares during the three months

ended September

Loss on disposal of Finbond shares:

1 unchanged sentence

carrying value of Finbond shares sold

release of foreign currency translation reserve from accumulated other comprehensive loss

release of stock-based compensation charge related to equity-accounted investment

release of foreign currency translation reserve from accumulated other

comprehensive loss

release of stock-based compensation charge related to

equity-accounted investment

Loss on sale of Finbond shares

The Company did not identify any impairment indicators as of March 31, 2023.

The Company considered the combination of the ongoing losses incurred and reported by Finbond and its lower share price as impairment indicators as of September 30, 2022.

The Company performed an impairment assessment of its holding in Finbond as of September 30, 2022.

The Company recorded an impairment loss of $ 1.1 million during the nine months ended March 31, 2023, related to the other-than-temporary decrease in Finbond’s value, which represented the difference between the determined fair value of the Company’s interest in Finbond and the Company’s carrying value (before the impairment).

There continues to be limited trading in Finbond shares on the JSE because a small number of shareholders own approximately 80 % of its issued and outstanding shares between them.

The Company calculated a fair value per share for Finbond by applying a liquidity discount of 25 % to the September 30, 2022, Finbond closing price of ZAR 0.49 .

The Company increased the liquidity discount from 15 % (used in the previous impairment assessment) to 25 % (used in the September 30, 2022 assessment) as a result of the ongoing limited trading activity observed on the JSE.

Finbond impairments recorded

during the three months ended September 30, 2023

As noted earlier, the Company has entered into an agreement to exit its position in Finbond and the Company considered this an

impairment indicator.

Company is required to include any foreign currency translation reserve

and other equity account amounts

in its impairment assessment if it considers exiting an equity method investment.

The Company performed an impairment assessment

Finbond, including

currency translation

account amounts,

as of September

The Company recorded an impairment loss of $

million during the quarter ended September 30, 2023, which represented the

difference between

the determined fair value

of the Company’s

interest in Finbond and

the Company’s

carrying value, including

foreign currency

translation reserve

referenced in

2023 agreement referred to above to calculate the determined fair

value for Finbond.

Finbond impairments recorded

during the three months ended September 30, 2022

The Company considered

the combination of

the ongoing losses incurred

and reported by

Finbond and its

lower share price

impairment indicators.

Company performed an

impairment assessment of its

holding in Finbond

as of September 30,

temporary decrease in Finbond’s value, which represented the difference between the determined fair value of the Company’s interest

in Finbond and the Company’s

carrying value (before the impairment).

The Company observed continued

limited trading in Finbond

shares on the JSE during the

three months ended September 30, 2022,

because a small number of shareholders

owned approximately

and outstanding

shares between

Company calculated

liquidity discount of

the September 30,

2022, Finbond closing

Company increased the

liquidity discount

previous impairment

assessment) to

ongoing limited

trading activity

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

Equity-accounted investments (continued)

In September 2022, the Company, through its wholly-owned subsidiary, Net1 Applied Technologies Netherlands B.V.

(“Net1 BV”), entered into a binding term sheet with the Etobicoke Limited (“Etobicoke”) to sell its entire interest, or 25 %, in Carbon to Etobicoke for $ 0.5 million and a loan due from Carbon, with a face value of $ 3 million, to Etobicoke for $ 0.75 million.

Both the equity interest and the loan had a carrying value of $ 0 (zero) at June 30, 2022.

The parties have agreed that Etobicoke pledge the Carbon shares purchased as security for the amounts outstanding under the binding term sheet.

The Company received $ 0.25 million on closing and the outstanding balance due by Etobicoke is expected to be paid as follows:

(i) $ 0.25 million on September 30, 2023, and (ii) the remaining amount, of $ 0.75 million in March 2024.

Both amounts are included in the caption accounts receivable, net and other receivables in the Company’s unaudited condensed consolidated balance sheet as of March 31, 2023.

The Company has allocated the $ 0.25 million received to the sale of the equity interest and will allocate the funds received first to the sale of the equity interest and then to the loans.

The Company currently believes that the fair value of the Carbon shares provided as security is $ 0 (zero), which is in line with the carrying value as of June 30, 2022, and has created an allowance for doubtful loans receivable related to the $ 1.0 million due from Etobicoke.

The Company did not incur any significant transaction costs.

The Company 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 unaudited condensed consolidated statements of operations.

The following table presents the calculation of the gain on disposal of Carbon in September 2022:

Three months ended September 30,

wholly-owned subsidiary,

Netherlands B.V.

(“Etobicoke”)

Etobicoke for

carrying value

Etobicoke pledge

Carbon shares purchased as security for the amounts outstanding

under the binding term sheet.

The Company received $

million on closing and the outstanding balance due by Etobicoke is expected to be paid

million on September 30, 2023 (the

amount was received in October 2023),

and (ii) the remaining amount,

in March 2024.

amounts are included

in the caption accounts

receivable, net and other

receivables in the Company’s

condensed consolidated balance sheet as of September 30, 2023.

The Company has allocated the $

million received to the sale of

the equity interest and will allocate the funds received first to the sale of the equity

interest and then to the loans.

The Company currently

believes that the fair

value of the Carbon

shares provided as security

(zero), which is in

the carrying value as of June 30, 2022, and has created an allowance for

doubtful loans receivable related to the $

million due from

The Company did not incur any significant

transaction costs.

The Company has included the gain of $

million related

the Carbon equity

interest in the

caption net gain

on disposal of

equity-accounted investments

Company’s unaudited

condensed consolidated statements of operations.

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

in September 2022:

ended September

Gain on disposal of Carbon shares:

2 unchanged sentences

Gain on disposal of Carbon shares:

(1) The Company does not expect to pay taxes related to the sale of Carbon because the base cost of its investment exceeds the sales consideration received.

The Company does not believe that it will be able to utilize the loss generated because Net1 BV does not generate taxable income.

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

Equity-accounted investments (continued)

Summarized below is the movement in equity-accounted investments and loans provided to equity-accounted investments during the nine months ended March 31, 2023:

(1) The Company does

not expect to pay taxes

related to the sale of

Carbon because the base cost

of its investment exceeds

sales consideration received.

The Company does not believe that it will be able to utilize the

loss generated because Net1 BV does not

generate taxable income.

Summarized below is the

movement in equity-accounted investments and

loans provided to equity-accounted

investments during

the three months ended September 30, 2023:

Investment in equity

5 unchanged sentences

Share of net (loss) earnings

Dividends received

Disposal of Finbond shares

Foreign currency adjustment

Balance as of March 31, 2023

Investment in loans:

Balance as of June 30, 2022

Loans granted

Foreign currency adjustment (2)

Balance as of March 31, 2023

Carrying amount as of :

June 30, 2022

March 31, 2023

(1) Includes Carbon, Sandulela, and SmartSwitch Namibia;

(2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR, Nigerian naira and Namibian dollar, against the U.S.

Balance as of September 30, 2023

(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

dollar on the carrying value.

1 unchanged sentence

Other long-term assets

Summarized below is the breakdown of other long-term assets as of March 31, 2023, and June 30, 2022:

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

30, 2023, and June 30, 2023:

September 30,

Total equity investments

Investment in 5 % of Cell C (June 30, 2022:

Investment in

% of Cell C (June 30, 2023:

%) at fair value (Note 4)

Investment in 10 % of MobiKwik (June 30, 2022:

Investment in 87.5 % of CPS (June 30, 2022:

Investment in

% of MobiKwik (June 30, 2023:

Investment in

% of CPS (June 30, 2023:

%) at fair value

1 unchanged sentence

Reinsurance assets under insurance contracts (Note 7)

Total other long-term assets

(1) The Company determined that MobiKwik and CPS do not have readily determinable fair values and therefore elected to record these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

(2) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that CPS be placed into liquidation.

Cell C - reduced effective percentage holding following recapitalization

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 has reduced from 15 % to 5 % following the recapitalization.

Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of March 31, 2023:

Unrealized holding

Total other long-term

record these investments

at cost minus impairment,

plus or minus changes

resulting from observable

price changes in orderly

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

(2) On October 16, 2020,

the High Court of

South Africa, Gauteng Division, Pretoria

ordered that CPS be

placed into liquidation.

Summarized below

are the components

of the Company’s

equity securities without

readily determinable

fair value and

maturity investments as of September 30, 2023:

Equity securities:

3 unchanged sentences

Investment in Cedar Cellular notes (Note 2)

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, 2022:

Unrealized holding

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, 2023:

Equity securities:

4 unchanged sentences

Goodwill and intangible assets, net

Summarized below is the movement in the carrying value of goodwill for the nine months ended March 31, 2023:

Accumulated impairment

Carrying value

Summarized below is the movement in the carrying value of goodwill

for the three months ended September 30, 2023:

Balance as of June 30, 2023

Foreign currency adjustment

Balance as of March 31, 2023

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

Balance as of September 30, 2023

(1) – The foreign currency adjustment represents the effects

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

dollar on the carrying value.

Refer to Note 17 for additional information regarding changes to the Company’s reportable segments during the nine months ended March 31, 2023.

Goodwill has been allocated to the Company’s reportable segments as follows:

Goodwill has been allocated to the Company’s

reportable segments as follows:

Carrying value

1 unchanged sentence

Foreign currency adjustment

Balance as of March 31, 2023

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

dollar on the carrying value.

Balance as of September 30, 2023

(1) The foreign

currency adjustment represents

of the fluctuations

against the U.S.

on the carrying value.

Intangible assets, net

Carrying value and amortization of intangible assets

Summarized below is the carrying value and accumulated amortization of intangible assets as of March 31, 2023, and June 30, 2022:

As of March 31, 2023

Summarized below is

the carrying value and

accumulated amortization of

intangible assets as of

September 30, 2023, and

As of September 30, 2023

As of June 30, 2023

Gross carrying value

Accumulated amortization

Net carrying value

Gross carrying value

Accumulated amortization

Net carrying value

Finite-lived intangible assets:

Customer relationships

Software, integrated platform and unpatented technology

Software, integrated

platform and unpatented

Brands and trademarks

Total finite-lived intangible assets

Aggregate amortization expense on the finite-lived intangible assets for the three months ended March 31, 2023 and 2022, was approximately $ 3.8 million and $ 0.1 million, respectively.

Aggregate amortization expense on the finite-lived intangible assets for the nine months ended March 31, 2023 and 2022, was approximately $ 11.6 million and $ 0.1 million, respectively.

Future estimated annual amortization expense for the next five fiscal years and thereafter, assuming exchange rates that prevailed on March 31, 2023, is presented in the table below.

Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors.

Fiscal 2023 (three months ended June 30, 2023)

Total future estimated annual amortization expense

Assets and policyholder liabilities under insurance and investment contracts

Total finite-lived

Aggregate amortization

expense on the

finite-lived intangible assets

for the three

months ended September

was approximately $

million and $

million, respectively.

Future estimated annual

amortization expense for

the next five fiscal

amortization expense in future periods could differ from this estimate

as a result of acquisitions, changes in useful

lives, exchange rate

fluctuations and other relevant factors.

Fiscal 2024 (three months ended September 30, 2023)

estimated annual amortization expense

Assets and policyholder liabilities under insurance and investment

Reinsurance assets and policyholder liabilities under insurance contracts

Summarized below is the movement in reinsurance assets and policyholder liabilities under insurance contracts during the nine months ended March 31, 2023:

Reinsurance Assets (1)

Insurance contracts (2)

Summarized below is the movement in reinsurance

assets and policyholder liabilities under insurance contracts

during the three

months ended September 30, 2023:

Balance as of June 30, 2023

2 unchanged sentences

Foreign currency adjustment

Balance as of March 31, 2023

Balance as of September 30, 2023

(1) Included in other long-term assets (refer to Note 5);

1 unchanged sentence

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

The Company has agreements with reinsurance companies in order to limit its losses from various insurance contracts, however, if the reinsurer is unable to meet its obligations, the Company retains the liability.

The value of insurance contract liabilities is based on the best estimate assumptions of future experience plus prescribed margins, as required in the markets in which these products are offered, namely South Africa.

The process of deriving the best estimate assumptions plus prescribed margins includes assumptions related to claim reporting delays (based on average industry experience).

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

if the reinsurer is unable

to meet its obligations, the

Company retains the liability.

The value of insurance

contract liabilities is based

on the best estimate assumptions of future experience plus prescribed

margins, as required in the markets in which these

best estimate

assumptions plus

prescribed margins

includes assumptions

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

Assets and policyholder liabilities under investment contracts

Summarized below is the movement in assets and policyholder liabilities under investment contracts during the nine months ended March 31, 2023:

and policyholder

liabilities under

investment contracts

ended September 30, 2023:

Balance as of June 30, 2023

Increase in policy holder benefits under investment contracts

Claims and decrease in policyholders’ benefits under investment contracts

Foreign currency adjustment

Balance as of March 31, 2023

Balance as of September 30, 2023

(1) Included in other long-term assets (refer to Note 5);

1 unchanged sentence

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

The Company does not offer any investment products with guarantees related to capital or returns.

Refer to Note 12 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022, for additional information regarding its borrowings.

The amounts below have been translated at exchange rates applicable as of the dates specified.

RMB Facilities, as amended, comprising a short-term facility (Facility E) and long-term borrowings

The Company does not offer any investment products with guarantees

related to capital or returns.

audited consolidated

financial statements

the year ended June 30, 2023, for additional information regarding

its borrowings.

Interbank Agreed Rate (“JIBAR”) on September 30, 2023, was

The prime rate on September 30, 2023, was

RMB Facilities, as amended, comprising a short-term facility (Facility E) and long-term

Long-term borrowings - Facility G and Facility H

On March 16, 2023, the Company, through Lesaka Technologies (Pty) Ltd (“Lesaka SA”), entered into a Fifth Amendment and Restatement Agreement, which includes, among other agreements, an Amended and Restated Common Terms Agreement (“CTA”), an Amended and Restated Senior Facility G Agreement (“Facility G Agreement”) and an Amended and Restated Senior Facility H Agreement (“Facility H Agreement”) (collectively, the “Loan Documents”) with FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB” or the “Lenders”).

Amendments to the CTA include an amendment to the asset cover ratio to change the Covenant Equity Value (as defined in the CTA) definition to include 90 % of the book value of the Moneyline Financial Service Proprietary Limited receivables, and to deduct the net debt (as defined in the CTA) of Cash Connect Management Solutions Proprietary Limited (“CCMS”) and K2021 Proprietary Limited (“K2021”) from the respective CCMS and K2021 valuations.

When determining the Covenant Equity Value, the value of the aggregate of the CCMS Equity Value (as defined in the CTA) and the K2021 Equity Value (as defined in the CTA) must be at least 50 per cent of the Covenant Equity Value.

To the extent that the value of the aggregate of the CCMS Equity Value and the K2021 Equity Value is not at least 50 per cent of the Covenant Equity Value, the Covenant Equity Value will be reduced so that the aggregate of the CCMS Equity Value and the K2021 Equity Value is 50 per cent of the Covenant Equity Value.

The amendments also include the removal of a requirement to maintain a minimum group cash balance.

Pursuant to the Facility G Agreement, Lesaka SA may borrow up to an aggregate of approximately ZAR 708.6 million.

Facility G now includes a term loan of ZAR 508.6 million and a revolving credit facility of up to ZAR 200 million.

Pursuant to the Facility H Agreement, Lesaka SA may borrow up to an aggregate of approximately ZAR 357.4 million.

Interest on Facility G and Facility H (together, the “Facilities”) is based on the 3-month Johannesburg Interbank Agreed Rate (“JIBAR”) in effect from time to time plus a margin, as a result of the amendment, from January 1, 2023 of:

(i) 5.50 % for as long as the aggregate balance under the Facilities is greater than ZAR 800 million;

(ii) 4.25 % if the aggregate balance under the Facilities is equal to or less than ZAR 800 million, but greater than ZAR 350 million;

or (iii) 2.50 % if the aggregate balance under the Facilities is less than ZAR 350 million.

Interest on the Facilities may be capitalized to each of the facilities, and will be repaid on the maturity date, provided that the sum of the outstanding facility (including interest and fees) plus any accrued interest does not exceed 1.2 times of the Facilities outstanding balance.

Any interest that exceeds this cap must be settled in full on a quarterly basis.

Lesaka SA will pay a quarterly commitment fee computed at a rate of 35 % of the Applicable Margin (as defined in the CTA) on the amount of the revolving credit facility outstanding and such commitment fee will also be capitalized, subject to the cap discussed above.

Available short-term facility - Facility E

As of March 31, 2023, the aggregate amount of the Company’s short-term South African overdraft facility with RMB was ZAR 1.4 billion ($ 78.7 million).

As of March 31, 2023, the Company had utilized approximately ZAR 0.7 billion ($ 37.7 million) of this overdraft facility.

This overdraft facility may only be used to fund ATMs and therefore the overdraft utilized and converted to cash to fund the Company’s ATMs is considered restricted cash.

The interest rate on this facility is equal to the prime rate.

The prime rate on March 31, 2023, was 11.25 %.

revolving credit facility.

The interest rate on this facility as of September 30, 2023, was JIBAR plus

Available short-term facility -

As of September

30, 2023, the

aggregate amount of

the Company’s

short-term South African

overdraft facility with

As of September 30, 2023, the Company had utilized approximately ZAR

of this overdraft facility.

This overdraft facility may only be used to

and therefore the overdraft utilized and converted

cash to fund the Company’s ATMs

is considered restricted cash.

The interest rate on this facility is equal to the

Connect Facilities, comprising long-term borrowings and a short-term facility

As of March 31, 2023, the Connect Facilities include (i) an overdraft facility (general banking facility) of ZAR 205.0 million (of which ZAR 170.0 million has been utilized);

(ii) Facility A of ZAR 700.0 million;

(iii) Facility B of ZAR 550.0 million (both fully utilized);

and (iv) an asset-backed facility of ZAR 200.0 million (of which ZAR 139.2 million has been utilized).

In February 2023, the Company, through CCMS, obtained a ZAR 175.0 million temporary increase in its overdraft facility for a period of four months to specifically fund the purchase of prepaid airtime vouchers.

This temporary increase is repayable in four equal monthly instalments of ZAR 43.8 million and which commenced in March 2023.

Interest at the South Africa prime rate less 0.1 % is payable on a monthly basis.

Borrowings (continued)

South Africa (continued)

Connect Facilities, comprising long-term borrowings and a short-term facility (continued)

On March 22, 2023, the Company, through CCMS, entered into a First Amendment and Restatement Agreement, which includes, among other agreements, an Amended and Restated Facilities Agreement (“CCMS Facilities Agreement”) with RMB.

The CCMS Facilities Agreement was amended to increase the Facility B available under the CCMS Facilities Agreement by ZAR 200 .0 million to ZAR 550.0 million.

The final maturity date has been extended to December 31, 2027, and scheduled principal repayments have been amended, with the first scheduled repayment commencing from March 31, 2026.

CCC Revolving Credit Facility, comprising long-term borrowings

On November 29, 2022, the Company, through its indirect South African subsidiary Cash Connect Capital (Pty) Limited (“CCC”), entered into a Revolving Credit Facility Agreement (the “Loan Document”) with RMB and other Company subsidiaries within the Connect Group of companies listed therein, as guarantors.

The transaction closed on December 1, 2022.

The Loan Document contains customary covenants that require CCC and K2020 to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities.

Pursuant to the Loan Document, CCC may borrow up to an aggregate of ZAR 300.0 million (“CCC Revolving Credit Facility”) for the sole purposes of funding CCC’s consumer lending business, providing a limited recourse loan to K2020, settling up to ZAR 35.0 million related to an intercompany loan to CCC’s direct parent, and paying the structuring and execution fee and legal costs.

The Revolving Credit Facility replaces K2020’s existing lending arrangement and increases the borrowings available to facilitate further growth of the business.

Interest on the Revolving Credit Facility is payable on the last business day of each calendar month and is based on the South African prime rate in effect from time to time plus a margin of 0.95 % per annum.

The Company paid a non-refundable structuring and execution fee of ZAR 1.7 million, or $ 0.1 million, including value added taxation, to the Lenders on closing.

As of March 31, 2023, the amount of the CCC Revolving Credit Facility was ZAR 300.0 million (of which ZAR 245.5 million has been utilized).

As of September 30, 2023, the

Connect Facilities include (i) an overdraft facility (general

banking facility) of ZAR

(of which ZAR

million has been utilized);

(ii) Facility A of

(iii) Facility B of ZAR

million (both fully

and (iv) an asset-backed facility of ZAR

million (of which ZAR

million has been utilized).

CCC Revolving Credit Facility, comprising

long-term borrowings

CCC Revolving

Credit Facility

million has been utilized).

Interest on the Revolving Credit Facility

is payable on the last business

day of each calendar month

based on the South African prime rate in effect from time to time plus

RMB facility, comprising indirect facilities

As of March 31, 2023, the aggregate amount of the Company’s short-term South African indirect credit facility with RMB was ZAR 135.0 million ($ 7.6 million), which includes facilities for guarantees, letters of credit and forward exchange contracts.

As of March 31, 2023 and June 30, 2022, the Company had utilized approximately ZAR 33.1 million ($ 1.9 million) and ZAR 5.1 million ($ 0.3 million), respectively, of its indirect and derivative facilities of ZAR 135.0 million (June 30, 2022:

ZAR 135.0 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19).

As of September

30, 2023, the aggregate

amount of the Company’s

short-term South African

indirect credit facility

million), which includes facilities for guarantees, letters of credit and forward exchange contracts.

approximately

million), respectively,

of its indirect and derivative facilities of

million (June 30, 2023:

to enable the bank to issue guarantees, letters of credit and forward exchange

contracts (refer to Note 19).

Nedbank facility, comprising short-term facilities

As of March 31, 2023, the aggregate amount of the Company’s short-term South African credit facility with Nedbank Limited was ZAR 156.6 million ($ 8.8 million).

The credit facility represents indirect and derivative facilities of up to ZAR 156.6 million ($ 8.8 million), which include guarantees, letters of credit and forward exchange contracts.

As of March 31, 2023 and June 30, 2022, the Company had utilized approximately ZAR 2.1 million ($ 0.1 million) and ZAR 92.1 million ($ 5.7 million), respectively, of its indirect and derivative facilities of ZAR 156.6 million (June 30, 2022:

ZAR 156.6 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19).

September 30, 2023,

the aggregate amount

of the Company’s short-term

South African

credit facility with

Nedbank Limited

The credit facility represents indirect and derivative facilities

million), which include guarantees, letters of credit and forward exchange

As of September 30, 2023 and June 30, 2023, the Company had utilized approximately ZAR

million) and ZAR

respectively,

million) to enable the bank to issue guarantees, letters of credit and forward

exchange contracts (refer to Note 19).

Borrowings (continued)

Movement in short-term credit facilities

Summarized below are the Company’s short-term facilities as of March 31, 2023, and the movement in the Company’s short-term facilities from as of June 30, 2022 to as of March 31, 2023:

Short-term facilities available as of March 31, 2023

Overdraft restricted as to use for ATM funding only

Summarized below are the

Company’s short-term facilities as of

September 30, 2023, and

the movement in

the Company’s short-

term facilities from as of June 30, 2023 to as of September 30, 2023:

Short-term facilities available as of September 30, 2023

Overdraft restricted as to use for ATM

Indirect and derivative facilities

Movement in utilized overdraft facilities:

Restricted as to use for ATM funding only

Restricted as to use for ATM

No restrictions as to use

1 unchanged sentence

Foreign currency adjustment

Balance as of March 31, 2023

Restricted as to use for ATM funding only

Balance as of September 30, 2023

Restricted as to use for ATM

No restrictions as to use

Interest rate as of March 31, 2023 (%) (2)

Interest rate as of September 30, 2023 (%)

Movement in utilized indirect and derivative facilities:

Balance as of June 30, 2023

Guarantees cancelled (3)

Foreign currency adjustment

Balance as of March 31, 2023

(1) Represents the effects of the fluctuations between the ZAR and the U.S.

Balance as of September 30, 2023

(1) Represents the effects of the fluctuations between the

ZAR and the U.S.

(2) Facility E interest set at prime and the Connect facility at prime less

(3) Represents the cancellation of the guarantee with supplier amounting to ZAR 90 million ($ 5.2 million) which is no longer required due the reduction in the volume and value of transactions processed.

(4) The amount available under this facility excludes the ZAR 175.0 million temporary facility obtained in February 2023.

The balance outstanding as of March 31, 2023, includes the outstanding balance of ZAR 131.25 million (or $ 7.4 million utilizing the exchange rate as of March 31, 2023) related to this temporary facility.

Borrowings (continued)

Movement in long-term borrowings

Summarized below is the movement in the Company’s long-term borrowing from as of as of June 30, 2022 to as of March 31, 2023:

Summarized below is

the movement in the

Company’s long-term

borrowing from as of

as of June 30, 2023

to as of September

Included in current

8 unchanged sentences

Foreign currency adjustment

Closing balance as of March 31, 2023

Closing balance as of September 30, 2023

Included in current

5 unchanged sentences

Due within 5 years

Interest rates as of March 31, 2023 (%):

Interest rates as of September 30, 2023 (%):

Base rate (%)

Footnote number

(1) Represents the effects of the fluctuations between the ZAR and the U.S.

(2) Prior to the amendment in March 2023, interest on Facility G was calculated based on the 3-month JIBAR in effect from time to time plus a margin of (i) 3.00 % per annum until January 13, 2023;

and then (ii) from January 14, 2023, (x) 2.50 % per annum if the Facility G balance outstanding is less than or equal to ZAR 250.0 million, or (y) 3.00 % per annum if the Facility G balance is between ZAR 250.0 million to ZAR 450.0 million, or (z) 3.50 % per annum if the Facility G balance is greater than ZAR 450.0 million.

The interest rate shall increase by a further 2.00 % per annum in the event of default (as defined in the Loan Documents).

(3) Prior to the amendment in March 2023, interest on Facility H is calculated based on JIBAR in effect from time to time plus a margin of 2.00 % per annum which increases by a further 2.00 % per annum in the event of default (as defined in the Loan Documents).

(4) Interest on Facility G and Facility H is calculated based on the 3-month JIBAR in effect from time to time plus a margin of, from January 1, 2023:

(i) 5.50 % for as long as the aggregate balance under the Facilities is greater than ZAR 800 million;

(ii) 4.25 % if the aggregate balance under the Facilities is equal to or less than ZAR 800 million, but greater than ZAR 350 million;

or (iii) 2.50 % if the aggregate balance under the Facilities is less than ZAR 350 million

(5) Interest on Facility A and Facility B is calculated based on JIBAR plus a margin, of 3.75 %, in effect from time to time.

(6) Interest is charged at prime plus 0.95 % per annum on the utilized balance.

(7) Interest is charged at prime plus 0.75 % per annum on the utilized balance.

Interest expense incurred under the Company’s South African long-term borrowings and included in the caption interest expense on the condensed consolidated statement of operations during the three and nine months ended March 31, 2023, was $ 3.0 million and $ 9.2 million, respectively.

There was no interest expense incurred during the three and nine months ended March 31, 2022.

Prepaid facility fees amortized included in interest expense during the three and nine months ended March 31, 2023, were $ 0.2 million and $ 0.6 million, respectively.

There was no prepaid facility fee amortization during the three and nine months ended March 31, 2022.

Interest expense incurred under the Company’s K2020 and CCC facilities relates to borrowings utilized to fund a portion of the Company’s merchant finance loans receivable and this interest expense of $ 0.3 million and $ 1.0 million, respectively, is included in the caption cost of goods sold, IT processing, servicing and support on the condensed consolidated statement of operations for the three and nine months ended March 31, 2023.

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

(2) Interest on Facility G

and Facility H is calculated based

on the 3-month JIBAR in

effect from time to time

plus a margin of,

from January 1, 2023:

% for as long as

the aggregate balance under

the Facilities is greater

if the aggregate balance under the Facilities is equal to or less than ZAR

million, but greater than ZAR

if the aggregate balance under the Facilities is less than ZAR

(3) Interest on Facility A and Facility B is calculated based on JIBAR plus a margin,

%, in effect from time to time.

(4) Interest is charged at prime plus

% per annum on the utilized balance.

(5) Interest is charged at prime plus

% per annum on the utilized balance.

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

caption interest expense

on the condensed consolidated statement of operations during the three months ended September 30, 2023 and

million, respectively.

Prepaid facility fees amortized

included in interest expense

during the three months

ended September

respectively,

million, respectively.

Interest expense

incurred under

the Company’s

CCC facilities

borrowings utilized

merchant finance

loans receivable

respectively,

servicing and support on

the condensed consolidated statement

of operations for the

three months ended September

Other payables

Summarized below is the breakdown of other payables as of March 31, 2023, and June 30, 2022:

Value-added tax payable

Summarized below is the breakdown of other payables as of September

30, 2023, and June 30, 2023:

September 30,

-added tax payable

Payroll-related payables

Participating merchants' settlement obligation

Vendor consideration due to sellers of Connect

Other includes transactions-switching funds payable, deferred income, client deposits and other payables.

Other includes transactions-switching funds payable, deferred income, client

deposits and other payables.

Capital structure

Issue of shares to Connect sellers pursuant to April 2022 transaction

The total purchase consideration pursuant to the Connect acquisition in April 2022 includes 3,185,079 shares of the Company’s common stock.

These shares of common stock will be issued in three equal tranches on each of the first, second and third anniversaries of the April 14, 2022 closing.

The Company legally issued 1,061,693 shares of its common stock, representing the first tranche, to the Connect sellers in April 2023, and this had no impact on the number of shares, net of treasury, presented in the unaudited condensed consolidated statement of changes during the nine months ended March 31, 2023 because the 3,185,079 shares are included in the number of shares, net of treasury, as of June 30, 2022, and March 31, 2023.

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

The following table presents a reconciliation between the number of shares, net of treasury, presented in the unaudited condensed consolidated statement of changes in equity during the nine months ended March 31, 2023 and 2022, respectively, and the number of shares, net of treasury, excluding non-vested equity shares that have not vested as of March 31, 2023 and 2022, respectively:

The following table presents a

reconciliation between the number of

shares, net of treasury, presented in the

unaudited condensed

consolidated statement of changes in equity as of September 30, 2023

and 2022, respectively:

September 30,

Number of shares, net of treasury:

1 unchanged sentence

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

Number of shares, net of treasury, excluding non-vested equity shares that have not vested

Number of shares, net of treasury,

excluding non-vested equity shares that have not

Accumulated other comprehensive loss

The table below presents the change in accumulated other comprehensive loss per component during the three months ended March 31, 2023:

below presents

in accumulated

other comprehensive

September 30, 2023:

Three months ended

March 31, 2023

Accumulated foreign currency translation reserve

Balance as of January 1, 2023

Release of foreign currency translation reserve related to the disposal of Finbond equity securities (Note 5)

Movement in foreign currency translation reserve related to equity-accounted investment

September 30, 2023

Balance as of July 1, 2023

Movement in foreign currency translation reserve related to equity-accounted

Movement in foreign currency translation reserve

Balance as of March 31, 2023

Balance as of September 30, 2023

Accumulated other comprehensive loss (continued)

The table below presents the change in accumulated other comprehensive loss per component during the three months ended March 31, 2022:

below presents

in accumulated

other comprehensive

component during

September 30, 2022:

Three months ended

March 31, 2022

Accumulated foreign currency translation reserve

Balance as of January 1, 2022

Release of foreign currency translation reserve related to disposal of Finbond equity securities

Movement in foreign currency translation reserve

Balance as of March 31, 2022

The table below presents the change in accumulated other comprehensive loss per component during the nine months ended March 31, 2023:

Nine months ended

March 31, 2023

Accumulated foreign currency translation reserve

Balance as of July 1, 2022

Release of foreign currency translation reserve related to disposal of Finbond equity securities (Note 5)

Movement in foreign currency translation reserve related to equity-accounted investment

Movement in foreign currency translation reserve

Balance as of March 31, 2023

The table below presents the change in accumulated other comprehensive loss per component during the nine months ended March 31, 2022:

Nine months ended

March 31, 2022

Accumulated foreign currency translation reserve

September 30, 2022

Balance as of July 1, 2022

Release of foreign currency translation reserve related to disposal of Finbond equity securities

Movement in foreign currency translation reserve related to equity-accounted investment

Release of foreign currency translation reserve related to disposal of Finbond

Movement in foreign currency translation reserve related to equity-accounted

Movement in foreign currency translation reserve

Balance as of March 31, 2022

During the three and nine months ended March 31, 2023, the Company reclassified $ 0.2 million and $ 0.3 million, respectively, from accumulated other comprehensive loss (accumulated foreign currency translation reserve) to net loss related to the disposal of shares in Finbond (refer to Note 5).

During the three and nine months ended March 31, 2022, the Company reclassified $ 0.6 million from accumulated other comprehensive loss (accumulated foreign currency translation reserve) to net loss related to the disposal of shares in Finbond.

Balance as of September 30, 2022

reclassifications from accumulated other

comprehensive loss to net (loss) income

during the three months ended

September 30, 2023.

During the three months ended September 30, 2022, the Company reclassified $

million from accumulated

other comprehensive

loss (accumulated

foreign currency

translation reserve)

(refer to Note 5).

Stock-based compensation

The Company’s Amended and Restated 2015 Stock Incentive Plan (“2015 Plan”) and the vesting terms of certain stock-based awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

On September 7, 2022, the Company’s Board further amended and restated the Company’s 2015 Plan, and on November 16, 2022, the Company’s shareholders approved the Amended and Restated 2022 Stock Incentive Plan (“2022 Plan”).

Amendments included:

(1) increasing the number of shares available for issuance by 2,500,000 ;

(2) extending the term of the plan to September 7, 2032;

(3) addressed the treatment of equity awards upon a change in control;

(4) clarified that all equity awards will generally have a vesting period of at least one year;

(5) included an explicit prohibition on the payment of dividends and dividend equivalents on unvested full value awards;

(6) clarified and updated repricing restrictions;

(7) included mandatory application of our clawback policy to equity awards under the 2022 Plan;

and (8) removed deadwood provisions related to the “performance based compensation” exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended.

The Company’s

Amended and Restated

Incentive Plan (“20

and the vesting

terms of certain

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

Form 10-K for the year ended June 30, 2023.

Stock option and restricted stock activity

The following table summarizes stock option activity for the nine months ended March 31, 2023 and 2022:

Number of shares

Weighted average exercise price

Weighted average remaining contractual term

Aggregate intrinsic value

Weighted average grant date fair value

The following table summarizes stock option activity for the three months

ended September 30, 2023 and 2022:

Outstanding - June 30, 2023

Outstanding - March 31, 2023

Outstanding - September 30, 2023

Outstanding - June 30, 2022

Granted – February 2022

Outstanding - March 31, 2022

No stock options were awarded during the three and nine months ended March 31, 2023.

The Company awarded 137,620 stock options to employees during the three and nine months ended March 31, 2022.

Employees forfeited 66,959 and 94,404 stock options during the three months ended March 31, 2023 and 2022, respectively.

Employees forfeited 66,959 and 188,332 stock options during the nine months ended March 31, 2023 and 2022, respectively.

During the three and nine months ended March 31, 2023, an employee delivered 23,934 shares of the Company’s common stock to exercise 37,500 stock options with an aggregate strike price of $ 0.1 million.

These 23,934 shares of common stock have been included in the Company’s treasury stock.

The employee also elected to deliver 6,105 shares of the Company’s common stock to settle income taxes arising upon exercise of the stock options, and these shares have also been included in the Company’s treasury stock.

During the nine months ended March 31, 2023, the Company received approximately $ 0.4 million from the exercise of 147,326 stock options.

During the three and nine months ended March 31, 2022, the Company received approximately $ 0.02 million and $ 0.8 million from the exercise of , 6668 and 249,521 stock options, respectively.

The following table presents stock options vested and expected to vest as of March 31, 2023:

Weighted average exercise price

Weighted average remaining contractual term

Aggregate intrinsic value

Vested and expecting to vest - March 31, 2023

These options have an exercise price range of $ 3.01 to $ 11.23 .

Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Options (continued)

The following table presents stock options that are exercisable as of March 31, 2023:

Weighted average exercise price

Weighted average remaining contractual term

Aggregate intrinsic value

Exercisable - March 31, 2023

During the three months ended March 31, 2023, 35,649 stock options became exercisable.

No stock options became exercisable during the three months ended March 31, 2022.

During the nine months ended March 31, 2023 and 2022, respectively, 327,965 and 376,348 stock options became exercisable.

The Company issues new shares to satisfy stock option exercises.

Outstanding - September 30, 2022

stock options were

awarded during each of

the three months ended

September 30, 2023 and

ended September

and 2022, respectively,

received approximately

million and $

stock options.

Employees and

a non-employee

director forfeited

stock options

ended September

stock options

were forfeited

ended September

Stock-based compensation

Stock option and restricted stock activity

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

September 30, 2023:

and expecting to vest - September 30, 2023

These options have an exercise price range of $

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

Exercisable - September 30, 2023

stock options became exercisable during each of the three months ended September 30, 2023 and 2022.

The Company issues

new shares to satisfy stock option exercises.

Restricted stock

The following table summarizes restricted stock activity for the nine months ended March 31, 2023 and 2022:

Number of shares of restricted stock

Weighted average grant date fair value

The following table summarizes restricted stock activity for the three

months ended September 30, 2023 and 2022:

Non-vested – June 30, 2023

Total granted

Granted – July 2022

Granted – August 2022

Granted – November 2022

Granted – December 2022

Granted – January 2023

Granted – December 2022, with performance conditions

Vested – July 2022

Vested – November 2022

Vested – December 2022

Vested – February 2023

Vested – March 2023

Total granted and vested - December 2022

Granted - December 2022

Vested - December 2022

Non-vested – March 31, 2023

Non-vested – September 30, 2023

Non-vested – June 30, 2022

2 unchanged sentences

Granted – August 2021

Granted – November and December 2021

Granted – December 2021

Granted – February 2022

Granted – March 2022

Total granted and vested - November and December 2021

Granted - November and December 2021

Vested - November and December 2021

Non-vested – March 31, 2022

Non-vested – September 30, 2022

Stock-based compensation (continued)

1 unchanged sentence

Restricted stock (continued)

In July 2022, December 2022 and January 2023, the Company awarded 32,582 , , 430399 , and 11,806 shares of restricted stock, respectively, to employees and an executive officer which have time-based vesting conditions.

In December 2022, the Company awarded 257,868 shares of restricted stock to executive officers which contained time and performance-based (market conditions related to share price performance) vesting conditions.

The Company also agreed to match, on a one -for-one basis, (1) an employee’s purchase of up to $ 1.0 million worth of the Company’s shares of common stock in open market purchases, and in August 2022, the Company granted 179,498 shares of restricted stock to the employee, and (2) another employee’s purchase of up to 150,000 shares of the Company’s common stock, and in November 2022, the Company granted 150,000 shares of restricted stock to the employee.

These shares of restricted stock contain time-based vesting conditions.

The Company awarded 300,000 shares to an executive officer on December 31, 2022, which vested on the date of the award.

The 257,868 shares of restricted stock awarded to executive officers are subject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditions are satisfied:

(1) a compounded annual 10 % appreciation in the Company’s stock price off a base price of $ 4.94 over the measurement period commencing on December 1, 2022 through December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is met.

If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited.

The Company’s closing price on December 1, 2022, was $ 4.08 .

The appreciation levels (times and price) and vesting percentages as of each period ended are as follows:

restricted stock was awarded during the three months ended September 30, 2023.

In July 2022, the Company granted

shares of restricted

stock to employees

which have time

-based vesting conditions.

The Company agreed

basis, an employee’s

purchase of up to

million worth of the Company’s

shares of common stock

in open market purchases,

restricted stock

of restricted

stock contain

time-based vesting conditions.

In October 2023, the

Company awarded

shares of restricted stock to

an executive officer

which vest on June 30,

except if the executive officer is terminated for cause,

in which case the award will be forfeited.

The Company also awarded

shares of restricted stock

of its executive officers

which are subject to a time-based

vesting condition and a market

and vest in full only on

the date, if any,

that the following conditions are

(1) a compounded

% appreciation in the

Company’s stock price off a base price of $

over the measurement period commencing on September 30,

2023 through November

the recipient

the condition

conditions is not satisfied, then none of the shares of restricted stock will vest and they

will be forfeited.

The Company’s closing price

on September 30, 2023, was $

The appreciation levels (times and price) and vesting percentages as of each

period ended are as follows:

Prior to the first anniversary of the grant date:

Fiscal 2024, stock price as of December 1, 2023 is 1.1 times higher (i.e.

weighted-average

approximately

times higher (i.e.

or higher) than $

Fiscal 2025, stock price as of December 1, 2024 is 1.21 times higher (i.e.

Fiscal 2026, the Company’s

November 17, 2025 is

times higher (i.e.

or higher) than $

Fiscal 2026, stock price as of December 1, 2025 is 1.331 times higher (i.e.

$ 6.57 ) than $ 4.94 :

The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation.

In scenarios where the shares do not vest, the final vested value at maturity is zero.

In scenarios where vesting occurs, the final vested value on maturity is the share price on vesting date.

In its calculation of the fair value of the restricted stock, the Company used an equally weighted volatility of 50.1 % for the closing price (of $ 4.08 ), a discounting based on U.S.

dollar overnight indexed swap rates for the grant date, and no future dividends.

The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date.

On July 1, 2021, the Company granted its Group Chief Executive Officer, 117,304 shares of restricted stock, which are subject to time-based vesting conditions and vest in full on June 30, 2024, subject to Mr.

Meyer’s continued service to the Company through June 30, 2024.

Meyer was also awarded 117,304 shares of restricted stock which include performance-based conditions and which only vest on June 30, 2024 if the performance conditions are met and Mr.

Meyer remains employed with the Company through June 30, 2024.

Vesting of half of these awards, or 58,652 shares of restricted stock, is subject to the Company achieving its three-year financial services plan during the specific measurement period from June 30, 2021, to June 30, 2024, and the other half is subject to share price growth targets, and only vest if the Company’s share price is $ 8.14 or higher on June 30, 2024.

In August 2021, the Company awarded 44,986 shares of restricted stock to an employee which contained time and performance-based (market conditions related to share price performance) vesting conditions.

In August 2021, December 2021, February 2022 and March 2022, the Company awarded 44,986 , 50,300 , 29,920 and 207,859 shares of restricted stock, respectively, to employees which have time and performance-based (market conditions related to share price performance) vesting conditions.

Upon joining the Company, each of Messrs.

Meyer and Lincoln C.

Mali, were entitled to receive an award of shares of restricted stock which were subject to them purchasing an agreed value of shares (“matching awards”) in the market during a prescribed period of time.

The executives acquired shares during November and December 2021, and the Company granted the executives 326,158 matching awards and 71,647 top up awards.

The shares vest ratably over three years on the applicable vesting date based on the anniversary of each executive’s date of joining the Company.

As fully described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022, the Company granted 32,405 and 19,443 shares to an advisor during the nine months ended March 31, 2023 and 2022, respectively, which were ineligible for transfer until the earlier of December 31, 2022, or the occurrence of the agreed event.

Fiscal 2027, the Company’s

November 1, 2026 is

times higher (i.e.

approximately

employees continued

employment with

vesting dates.

The Company has not yet determined the fair value of these shares of restricted

stock awarded in October 2023.

As fully described in Note 17 to

the Company’s audited consolidated financial statements included in its Annual Report on Form

year ended June

30, 2023, the

Company granted

advisor during the

three months ended

30, 2022 which were ineligible for transfer until the earlier of December

31, 2022, or the occurrence of the agreed event.

In July 2023,

shares of restricted

stock granted to

Meyer vested.

shares of restricted

stock granted

the withholding

tax liability

shares have been included in the Company’s

treasury shares.

termination of employment with the Company.

shares of restricted stock were forfeited during the three months ended September

Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

In July 2022, 78,801 shares of restricted stock granted to Mr.

Meyer vested and he elected for 35,460 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares.

In November, December 2022 and February 2023, an aggregate of 86,072 shares of restricted stock granted to employees vested and they elected for 38,008 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares.

These 73,468 ( 35,460 plus 38,008 ) shares have been included in our treasury shares.

During the three and nine months ended March 31, 2023, employees forfeited 18,798 shares of restricted stock following their termination of employment with the Company.

During the three and nine months ended March 31, 2022, 30,000 shares of restricted stock were forfeited by an executive officer as the market condition (related to share price performance) was not achieved.

Stock-based compensation charge and unrecognized compensation cost

The Company recorded a stock-based compensation charge, net during the three months ended March 31, 2023 and 2022, of $ 1.6 million and $ 0.6 million, respectively, which comprised:

Allocated to cost of goods sold, IT processing, servicing and support

Allocated to selling, general and administration

Three months ended March 31, 2023

Stock-based compensation charge

Reversal of stock compensation charge related to stock options and restricted stock forfeited

Total - three months ended March 31, 2023

Three months ended March 31, 2022

Stock-based compensation charge

Reversal of stock compensation charge related to stock options and restricted stock forfeited

Total - three months ended March 31, 2022

The Company recorded a stock-based compensation charge, net during the nine months ended March 31, 2023 and 2022, of $ 6.0 million and $ 1.7 million respectively, which comprised:

Allocated to cost of goods sold, IT processing, servicing and support

Allocated to selling, general and administration

Nine months ended March 31, 2023

Stock-based compensation charge and unrecognized compensation

The Company recorded a stock-based compensation charge, net during the three months ended September 30, 2023 and 2022, of

million and $

million, respectively,

which comprised:

Allocated to cost

of goods sold, IT

servicing and

selling, general

administration

Three months ended September 30, 2023

Stock-based compensation charge

Reversal of stock compensation charge related to stock options forfeited

Total - nine months ended March 31, 2023

Nine months ended March 31, 2022

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

Total - three months

ended September 30, 2023

Three months ended September 30, 2022

Stock-based compensation charge

Reversal of stock compensation charge related to stock options and restricted stock forfeited

Total - nine months ended March 31, 2022

The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the relevant employees.

Stock-based compensation (continued)

As of March 31, 2023, the total unrecognized compensation cost related to stock options was approximately $ 0.3 million, which the Company expects to recognize over approximately two years .

As of March 31, 2023, the total unrecognized compensation cost related to restricted stock awards was approximately $ 11.5 million, which the Company expects to recognize over approximately three years .

As of March 31, 2023, and June 30, 2022, respectively, the Company recorded a deferred tax asset of approximately $ 0.5 million and $ 0.3 million, related to the stock-based compensation charge recognized related to employees of Lesaka.

As of March 31, 2023, and June 30, 2022, respectively, the Company recorded a valuation allowance of approximately $ 0.5 million and $ 0.3 million, related to the deferred tax asset because it does not believe that the stock-based compensation deduction would be utilized as it does not anticipate generating sufficient taxable income in the United States.

The Company deducts the difference between the market value on the date of exercise by the option recipient and the exercise price from income subject to taxation in the United States.

Total - three months

ended September 30, 2022

The stock-based compensation charges

have been allocated to selling,

general and administration based

on the allocation of the

cash compensation paid to the relevant employees.

September 30,

total unrecognized

compensation cost

stock options

was approximately

approximately

compensation cost related

to restricted stock

awards was approximately

million, which the

Company expects to

recognize over

approximately

September 30,

2023, respectively,

approximately $

million and $

million, related to the stock-based compensation charge recognized related to employees of Lesaka.

As of September

respectively,

approximately

million, related to the deferred tax asset because it does not believe that the stock-based

compensation deduction would be utilized as

the difference

market value on the date

of exercise by the

option recipient and the exercise price

from income subject to taxation

in the United States.

(Loss) Earnings per share

The Company has issued redeemable common stock which is redeemable at an amount other than fair value.

Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable common stock and is reflected in basic earnings per share using the two-class method.

There were no redemptions of common stock, or adjustments to the carrying value of the redeemable common stock during the nine months ended March 31, 2023 and 2022.

Accordingly, the two-class method presented below does not include the impact of any redemption.

The Company’s redeemable common stock is described in Note 14 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

Basic (loss) earnings per share includes shares of restricted stock that meet the definition of a participating security because these shares are eligible to receive non-forfeitable dividend equivalents at the same rate as common stock.

Basic (loss) earnings per share has been calculated using the two-class method and basic (loss) earnings per share for the nine months ended March 31, 2023 and 2022 , reflects only undistributed earnings.

The computation below of basic (loss) earnings per share excludes the net loss attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator.

Diluted (loss) earnings per share has been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period.

Stock options are included in the calculation of diluted (loss) earnings per share utilizing the treasury stock method and are not considered to be participating securities, as the stock options do not contain non-forfeitable dividend rights.

The Company has excluded employee stock options to purchase 105,169 and 130,758 shares of common stock from the calculation of diluted loss per share during the nine months ended March 31, 2023 , because the effect would be antidilutive.

The Company has excluded employee stock options to purchase 185,902 and 172,113 shares of common stock from the calculation of diluted loss per share during the three and nine months ended March 31, 2022, because the effect would be antidilutive.

The calculation of diluted (loss) earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted (loss) earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied.

The vesting conditions for all awards made are discussed in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

has issued redeemable

which is redeemable

Redemption of

value increases

the redeemable

reflected in basic earnings

per share using the two-class

redemptions of common stock, or

adjustments to the

carrying value of the redeemable common stock during

the three months ended September 30, 2023 and 2022.

class method presented below does not include the impact of

any redemption.

The Company’s redeemable common stock is described

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

its Annual Report on Form 10-K for

the year ended

June 30, 2023.

Basic (loss) earnings per share

includes shares of restricted stock that

meet the definition of a

participating security because these

shares are eligible

to receive non

-forfeitable dividend

equivalents at the

common stock.

Basic (loss) earnings

has been calculated using the two-class

method and basic (loss) earnings per share

for the three months ended September

reflects only undistributed earnings.

The computation below of basic (loss) earnings per

share excludes the net loss attributable

to shares of unvested

restricted stock (participating

non-vested restricted stock)

from the numerator

and excludes the dilutive

of these unvested shares of restricted stock from the denominator.

Diluted (loss)

of additional

been outstanding

potential dilutive

instruments had

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

stock method and are not considered to be

participating securities,

stock options

contain non-forfeitable

dividend rights.

employee stock

shares of common stock

from the calculation of

diluted loss per share during

the three months ended

30, 2023 and 2022, because the effect would be antidilutive.

(loss) earnings

stock granted

earnings per share calculation and

the vesting conditions in respect of a portion

of the restricted stock had been satisfied.

conditions for

audited consolidated

financial statements

Annual Report on Form 10-K for the year ended June 30, 2023.

(Loss) Earnings per share (continued)

The following table presents net loss attributable to Lesaka and the share data used in the basic and diluted loss per share computations using the two-class method:

computations using the two-class method:

Three months ended

Nine months ended

(in thousands except

September 30,

(in thousands except

per share data)

Net loss attributable to Lesaka

Undistributed loss

Percent allocated to common shareholders

(Calculation 1)

Numerator for loss per share:

Undistributed (loss) earnings

Percent allocated to common shareholders (Calculation 1)

Numerator for (loss) earnings per share:

basic and diluted

Denominator for basic (loss) earnings per share:

weighted-average common shares outstanding

Effect of dilutive securities:

Weighted-average

common shares outstanding

Denominator for diluted (loss) earnings per share:

adjusted weighted average common shares outstanding and assuming conversion

Loss per share:

adjusted weighted

common shares outstanding and assuming conversion

(Loss) Earnings per share:

(Calculation 1)

Basic weighted-average common shares outstanding (A)

Basic weighted-average common shares outstanding and unvested restricted shares expected to vest (B)

Basic weighted-average common shares outstanding and unvested restricted

expected to vest (B)

Percent allocated to common shareholders

Options to purchase 293,949 shares of the Company’s common stock at prices ranging from $ 4.87 to $ 11.23 per share were outstanding during the three and nine months ended March 31, 2023, respectively, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock.

Options to purchase 408,252 shares of the Company’s common stock at prices ranging from $ 6.20 to $ 11.23 per share were outstanding during the three and nine months ended March 31, 2022, respectively, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock.

The options, which expire at various dates through February 3, 2032, were still outstanding as of March 31, 2023.

the Company’s

prices ranging

outstanding during

the three months

ended September

included in the

computation of

diluted (loss) earnings

per share because the

options’ exercise price was

greater than the average

market price of the Company’s

common stock.

shares of the Company’s

common stock at prices

ranging from $

per share were outstanding

the three months ended September

30, 2022, respectively, but were not included in

the computation of diluted (loss)

earnings per share

options’ exercise

price was greater

than the average

market price of

the Company’s

common stock.

The options, which

expire at various dates through February 3, 2032, were still outstanding

as of September 30, 2023.

Supplemental cash flow information

The following table presents supplemental cash flow disclosures for the three and nine months ended March 31, 2023 and 2022:

The following table presents supplemental cash flow disclosures for

the three months ended September 30, 2023 and 2022:

Three months ended

Nine months ended

September 30,

Cash received from interest

2 unchanged sentences

Supplemental cash flow information (continued)

As discussed in Note 12, during the three and nine months ended March 31, 2023, an employee exercised stock options through the delivery of 23,934 shares of the Company’s common stock at the closing price on March 7, 2023 of $ 4.76 under the terms of their option agreements.

These shares are included in the Company’s total share count and the amount is reflected as treasury shares on the unaudited condensed consolidated balance sheet as of March 31, 2023 and unaudited condensed consolidated statement of changes in equity for the three and nine months ended March 31, 2023.

Disaggregation of cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash included on the Company’s unaudited condensed consolidated statement of cash flows includes restricted cash related to cash withdrawn from the Company’s debt facilities to fund ATMs.

This cash may only be used to fund ATMs and is considered restricted as to use and therefore is classified as restricted cash.

Cash, cash equivalents and restricted cash also includes cash in certain bank accounts that has been ceded to Nedbank.

As this cash has been pledged and ceded it may not be drawn and is considered restricted as to use and therefore is classified as restricted cash as well.

Refer to Note 8 for additional information regarding the Company’s facilities.

The following table presents the disaggregation of cash, cash equivalents and restricted cash as of March 31, 2023 and 2022, and June 30, 2022:

March 31, 2023

March 31, 2022

June 30, 2022

Cash and cash equivalents

Restricted cash

Cash, cash equivalents and restricted cash

The following table presents supplemental cash flow disclosure related to leases for the three and nine months ended March 31, 2023 and 2022:

Three months ended March 31,

Nine months ended March 31,

The following table presents supplemental cash flow disclosure related to leases for the three months ended September 30, 2023

Three months ended

September 30,

Cash paid for amounts included in the measurement of lease liabilities

4 unchanged sentences

Disaggregation of revenue

The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended March 31, 2023:

disaggregated

reconciliation

reportable segments for the three months ended September 30, 2023:

Processing fees

Rest of world

Technology products

Rest of world

Telecom products and services

Telecom products

Rest of world

4 unchanged sentences

Rest of world

Total revenue, derived from the following geographic locations

Rest of world

The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended March 31, 2022:

Processing fees

Rest of world

Technology products

Telecom products and services

Lending revenue

Insurance revenue

Account holder fees

Total revenue, derived from the following geographic locations

Total revenue, derived

from the following geographic locations

Rest of world

Revenue recognition (continued)

Disaggregation of revenue (continued)

The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the nine months ended March 31, 2023:

disaggregated

reconciliation

reportable segments for the three months ended September 30, 2022:

Processing fees

Rest of world

Technology products

Rest of world

Telecom products and services

Telecom products

Rest of world

4 unchanged sentences

Rest of world

Total revenue, derived from the following geographic locations

Rest of world

The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the nine months ended March 31, 2022:

Processing fees

Rest of world

Technology products

Telecom products and services

Lending revenue

Insurance revenue

Account holder fees

Total revenue, derived from the following geographic locations

Total revenue, derived

from the following geographic locations

Rest of world

The Company has entered into leasing arrangements classified as operating leases under accounting guidance.

These leasing arrangements relate primarily to the lease of its corporate head office, administration offices and branch locations through which the Company operates its financial services business in South Africa.

The Company’s operating leases have remaining lease terms of between one and five years .

The Company also operates parts of its financial services business from locations which it leases for a period of less than one year .

The Company’s operating lease expense during the three months ended March 31, 2023 and 2022 was $ 0.7 million and $ 0.9 million, respectively.

The Company’s operating lease expense during the nine months ended March 31, 2023 and 2022 was $ 2.3 million and $ 2.7 million, respectively.

The Company does not have any significant leases that have not commenced as of March 31, 2023 .

The Company has also entered into short-term leasing arrangements, primarily for the lease of branch locations and other locations, to operate its financial services business in South Africa.

The Company’s short-term lease expense during the three months ended March 31, 2023 and 2022 , was $ 1.0 million and $ 1.3 million, respectively.

The Company’s short-term lease expense during the nine months ended March 31, 2023 and 2022 , was $ 3.0 million and $ 3.9 million, respectively.

The following table presents supplemental balance sheet disclosure related to the Company’s right-of-use assets and its operating lease liabilities as of March 31, 2023 and June 30, 2022 :

These leasing

arrangements relate primarily

to the lease of

its corporate head office,

administration offices and

branch locations through

Company operates

South Africa.

The Company’s

operating leases

have remaining

The Company also operates parts

of its consumer business from

locations which it leases for a period

The Company’s operating lease expense during the three months ended September 30, 2023 and 2022 was $

million, respectively.

arrangements,

to operate its consumer

business in South Africa.

The Company’s

short-term lease expense during

the three months ended

September 30, 2023 and 2022, was $

million and $

million, respectively.

The following table presents supplemental balance

sheet disclosure related to the

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

lease liabilities as of September 30, 2023 and June 30, 2023:

September 30,

Right of use assets obtained in exchange for lease obligations:

Weighted average remaining lease term (years)

Weighted average discount rate (percent)

The maturities of the Company’s operating lease liabilities as of March 31, 2023, are presented below:

Weighted average

remaining lease term (years)

Weighted average

discount rate (percent)

The maturities of the Company’s

operating lease liabilities as of September 30, 2023, are presented below:

Maturities of operating lease liabilities

Year ended June 30,

2023 (excluding nine months to March 31, 2023)

Total undiscounted operating lease liabilities

ended June 30,

2024 (excluding three months to September 30, 2023)

Total undiscounted

operating lease liabilities

Less imputed interest

Total operating lease liabilities, included in

Total operating lease liabilities,

Operating lease liability - current

2 unchanged sentences

Operating segments

The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in which the entity holds material assets or reports material revenues.

A description of the Company’s operating segments is contained in Note 21 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

The Company analyzes its business and operations in terms of two inter-related but independent operating segments:

The Company discloses segment information as reflected in the management

information systems reports that its chief operating

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

which the entity holds material assets or reports material revenues.

A description of the Company’s operating segments is contained in

to the Company’s

audited consolidated

financial statements

its Annual Report

June 30, 2023.

inter-related

(1) Consumer Division (“Consumer”) and (2) Merchant Division (“Merchant

Reallocation of certain activities in Other to Merchant

During the second quarter of fiscal 2023, certain processing activities performed outside South Africa which were within the Company’s Other operating segment commenced reporting to management within its Merchant operating segment as part of the integration of Connect.

The Company has allocated these operations from its Other reporting segment to Merchant in its reportable segments during the second quarter of fiscal 2023.

Previously reported information has been restated.

The reconciliation of the reportable segment’s revenue to revenue from external customers for the three months ended March 31, 2023 and 2022, is as follows:

Reportable Segment

Inter-segment

From external customers

Total for the three months ended March 31, 2023

Total for the three months ended March 31, 2022

The reconciliation of the reportable segment’s revenue to revenue from external customers for the nine months ended March 31, 2023 and 2022, is as follows:

Reportable Segment

Inter-segment

From external customers

Total for the nine months ended March 31, 2023

Total for the nine months ended March 31, 2022

The Company evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the next sentence (“Segment Adjusted EBITDA”).

The Company does not allocate once-off items, stock-based compensation charges, certain lease charges (“Lease adjustments”), depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to its reportable segments.

Operating segments

Operating segments (continued)

The reconciliation of the

reportable segment’s revenue to revenue from external

customers for the three

months ended September

30, 2023 and 2022, is as follows:

Total for the three

months ended September 30, 2023

Total for the three

months ended September 30, 2022

(“EBITDA”), adjusted for items mentioned

in the next sentence

(“Segment Adjusted EBITDA”).

does not allocate

off items, stock-based compensation

charges, certain lease

charges (“Lease adjustments”), depreciation

and amortization, impairment

of goodwill or other intangible

assets, other items (including gains

or losses on disposal

of investments, fair value adjustments

securities), interest income, interest expense, income tax

expense or loss from equity-accounted investments

to its reportable segments.

Group costs generally include:

employee related costs in relation to employees specifically hired for group roles and related directly to managing the US-listed entity;

expenditures related to compliance with the Sarbanes-Oxley Act of 2002;

employee related costs in relation to employees specifically hired for group roles and related directly to

managing the US-listed entity;

expenditures related

to compliance with the Sarbanes-Oxley

non-employee directors’ fees;

group and US-listed related audit fees;

and directors and officer’s insurance premiums.

Once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued.

The Lease adjustments reflect lease charges and the Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to the Company’s loss before income tax expense.

Operating segments (continued)

The reconciliation of the reportable segments measure of profit or loss to loss before income taxes for the three and nine months ended March 31, 2023 and 2022, is as follows:

recurring expense

items, including

costs related

to acquisitions

and transactions

consummated or

ultimately not

for currency adjustments

represents foreign currency

mark-to-market adjustments on

certain intercompany accounts.

adjustments reflect

lease charges

compensation adjustments

reflect stock-based

compensation expense

the calculation

as reconciling

reportable segments’ Segment Adjusted EBITDA to the Company’s

loss before income tax expense.

The reconciliation of

the reportable segments’

measures of profit or

loss to loss before

income tax expense for

the three months

ended September 30, 2023 and 2022, is as follows:

Three months ended

Nine months ended

September 30,

Reportable segments measure of profit or loss

Operating loss:

Once-off items

Once-off costs

Unrealized Loss FV for currency adjustments

Lease adjustments

1 unchanged sentence

Depreciation and amortization

Gain related to fair value adjustment to currency options

Gain on disposal of equity securities

Loss on disposal of equity-accounted investment

Reversal of allowance of EMI doubtful debt

Gain on disposal of equity-accounted investments

Interest income

Interest expense

Loss before income taxes

The following tables summarize supplemental segment information for the three and nine months ended March 31, 2023 and 2022:

Loss before income tax expense

Operating segments (continued)

The following

tables summarize

in accordance

September 30, 2023 and 2022:

Three months ended

Nine months ended

September 30,

Total reportable segment

Segment Adjusted EBITDA

Total Segment Adjusted EBITDA

Total Segment Adjusted

Depreciation and amortization

2 unchanged sentences

Operating segments

(1) Consumer Segment Adjusted EBITDA for the three and nine months ended March 31, 2022, includes reorganization costs of $ 5.9 million (refer also Note 1).

The segment information as reviewed by the chief operating decision maker does not include a measure of segment assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments.

The Company does not have dedicated assets assigned to a particular operating segment.

Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented.

Change in South African tax law

The South African corporate income tax rate has reduced from 28 % to 27 % and is effective from July 1, 2022, for all of the Company’s South African subsidiaries with income tax years commencing on July 1, 2022.

The change in the income tax rate was enacted on January 5, 2023, and accordingly all deferred taxes assets and liabilities have been remeasured to the new tax rate.

This has resulted in the inclusion of an income tax benefit of $ 1.3 million in the Company’s income tax (benefit) expense line in its unaudited condensed consolidated statements of operations for each of the three and nine months ended March 31, 2023 as a result of the reversal of a portion of the deferred tax assets and liabilities recognized as of December 31, 2022.

There were no changes to the enacted tax rate during the three and nine months ended March 31, 2022.

includes retrenchment costs of $

million) for the three months ended September 30, 2023.

information as

the chief operating

decision maker

does not include

segment assets per

segment as all of

the significant assets are

used in the operations

of all, rather than

any one, of the

The Company does

have dedicated assets

assigned to a

particular operating segment.

it is not meaningful

to attempt an arbitrary

and segment asset allocation is therefore not presented.

Income tax in interim periods

For the purposes of interim financial reporting, the Company determines the appropriate income tax provision by first applying the effective tax rate expected to be applicable for the full fiscal year to ordinary income.

This amount is then adjusted for the tax effect of significant unusual items, for instance, changes in tax law, valuation allowances and non-deductible transaction-related expenses that are reported separately, and have an impact on the tax charge.

The cumulative effect of any change in the enacted tax rate, if and when applicable, on the opening balance of deferred tax assets and liabilities is also included in the tax charge as a discrete event in the interim period in which the enactment date occurs.

For the three and nine months ended March 31, 2023, the Company’s effective tax rate was impacted by a reduction in the enacted South African corporate income tax rate from 28 % to 27 % from January 2023 (but backdated to July 1, 2022), the tax expense recorded by the Company’s profitable South African operations, non-deductible expenses, the on-going losses incurred by certain of the Company’s South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities.

For the three and nine months ended March 31, 2022, the Company’s effective tax rate was impacted by the tax expense recorded by the Company’s profitable South African operations, non-deductible expenses, the on-going losses incurred by certain of the Company’s South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities.

Uncertain tax positions

The Company had no significant uncertain tax positions during the three and nine months ended March 31, 2023, and therefore, the Company had no accrued interest related to uncertain tax positions on its balance sheet.

The Company does no t expect changes related to its unrecognized tax benefits will have a significant impact on its results of operations or financial position in the next 12 months.

The Company has no unrecognized tax benefits.

The Company files income tax returns mainly in South Africa, Germany, Hong Kong, India, the United Kingdom, Botswana and in the U.S.

For the purposes of interim

financial reporting, the Company

determines the appropriate income

tax provision by first

the effective

be applicable

ordinary income.

non-deductible

transaction-related

expenses that

impact on the

The cumulative effect

of any change

in the enacted

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

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

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

For the three months ended September 30, 2023, the Company’s

effective tax rate was impacted by the tax expense recorded

non-deductible

South African

businesses and

the associated

allowances created

regarding net operating losses incurred by these entities.

For the three months ended September 30, 2022, the Company’s

effective tax rate was impacted by the tax expense recorded

non-deductible

South African

businesses and

the associated

allowances created

regarding net operating losses incurred by these entities.

Income tax (continued)

Uncertain tax positions (continued)

The Company had

significant uncertain

tax positions during

the three months

ended September 30,

2023, and therefore,

accrued interest related to uncertain tax positions

on its balance sheet.

The Company does

t expect changes related

to its unrecognized tax benefits will have a significant impact on its results of operations

or financial position in the next 12 months.

unrecognized tax benefits.

files income tax

returns mainly

in South Africa,

federal jurisdiction.

As of March 31, 2023, the Company’s South African subsidiaries are no longer subject to income tax examination by the South African Revenue Service for periods before June 30, 2018.

The Company is subject to income tax in other jurisdictions outside South Africa, none of which are individually material to its financial position, statement of cash flows, or results of operations.

As of September 30, 2023, the Company’s

South African subsidiaries are no longer subject to income

tax examination

South African

Revenue Service

before June 30, 2019.

other jurisdictions outside

South Africa, none

individually material to

its financial position,

statement of cash

results of operations.

Commitments and contingencies

The South African Revenue Service and certain of the Company’s customers, suppliers and other business partners have asked the Company to provide them with guarantees, including standby letters of credit, issued by South African banks.

The Company is required to procure these guarantees for these third parties to operate its business

RMB has issued guarantees to these third parties amounting to ZAR 33.1 million ($ 1.9 million, translated at exchange rates applicable as of March 31, 2023) thereby utilizing part of the Company’s short-term facilities.

The Company pays commission of between 3.42 % per annum to 3.44 % per annum of the face value of these guarantees and does not recover any of the commission from third parties.

Nedbank has issued guarantees to these third parties amounting to ZAR 2.1 million ($ 0.1 million, translated at exchange rates applicable as of March 31, 2023) thereby utilizing part of the Company’s short-term facilities.

The Company pays commission of between 0.4 % per annum to 1.84 % per annum of the face value of these guarantees and does not recover any of the commission from third parties.

The Company has not recognized any obligation related to these guarantees in its consolidated balance sheet as of March 31, 2023.

The maximum potential amount that the Company could pay under these guarantees is ZAR 35.2 million ($ 2.0 million, translated at exchange rates applicable as of March 31, 2023).

As discussed in Note 8, the Company has ceded and pledged certain bank accounts to Nedbank as security for the guarantees issued by them with an aggregate value of ZAR 3.0 million ($ 0.2 million, translated at exchange rates applicable as of March 31, 2023).

The guarantees have reduced the amount available under its indirect and derivative facilities in the Company’s short-term credit facilities described in Note 8.

The South African

Revenue Service and

certain of the

Company’s customers,

suppliers and other

business partners have

guarantees, including

standby letters

South African

required to procure these guarantees for these third parties to operate

its business.

applicable as of September 30, 2023) thereby utilizing part of the Company’s short-term facilities.

The Company pays commission of

% per annum to

% per annum of the face

value of these guarantees and does

not recover any of the commission

third parties.

issued guarantees

third parties

million, translated

applicable as of September 30, 2023) thereby utilizing part of the Company’s short-term facilities.

The Company pays commission of

% per annum to

% per annum of the face

value of these guarantees and does

not recover any of the commission

third parties.

The Company has not recognized any obligation related to these

guarantees in its consolidated balance sheet as of September 30,

potential amount that

the Company could

pay under these

guarantees is ZAR

million, translated

rates applicable

September 30,

accounts to Nedbank as

security for the guarantees

issued by them

with an aggregate value

million, translated

The guarantees

derivative facilities in the Company’s

short-term credit facilities described in Note 8.

Contingencies

The Company is subject to a variety of insignificant claims and suits that arise from time to time in the ordinary course of business.

Management currently believes that the resolution of these other matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial position, results of operations or cash flows.

2022 Acquisitions

April 2022 acquisition of Connect

On October 31, 2021, the Company entered into a Sale of Shares Agreement (the “Sale Agreement”) with the Sellers (as defined in the Sale Agreement), Cash Connect Management Solutions Proprietary Limited (“CCMS”), Ovobix (RF) Proprietary Limited (“Ovobix”), Luxiano 227 Proprietary Limited (“Luxiano”) and K2021477132 (South Africa) Proprietary Limited (“K2021” and together with CCMS, Ovobix and Luxiano, “Connect Entities”).

Pursuant to the Sale Agreement, and subject to its terms and conditions, the Company’s wholly-owned subsidiary, Lesaka SA, agreed to acquire, and the Sellers agreed to sell, all of the outstanding equity interests and certain claims in the Connect Entities.

The transaction closed on April 14, 2022.

The purchase price allocation related to the acquisition of the Connect Entities was finalized in February 2023, following the completion of the allocation of the goodwill identified in the transaction to the underlying identified reporting units.

insignificant

currently believes

resolution of

matters, individually

the aggregate,

material adverse impact on the Company’s

financial position, results of operations or cash flows.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements