LESAKA TECHNOLOGIES INC 10-K

form10k UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934 For the transition period from To Commission file number: 000-31203 LESAKA TECHNOLOGIES, INC. (Exact name of registrant as specified in its charter) Florida 98-0171860 (State or other jurisdiction (IRS Employer of incorporation or organization) Identification No.) President Place , 4th Floor , Cnr. Jan Smuts Avenue and Bolton Road Rosebank, Johannesburg 2196 , South Africa (Address of principal executive offices, including zip code) Registrant’s telephone number, including area code: 27 - 11 - 343-2000 Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading Symbol(s) Name of each exchange on which registered Common stock, par value $0.001 per share LSAK NASDAQ Global Select Market Securities registered pursuant to Section 12(g) of the Act: Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act (check one): ☐ Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☒ Smaller reporting company ☐ Emerging growth company If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☒ Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ The aggregate market value of the registrant’s common stock held by non-affiliates of the registrant as of December 31, 2024 (the last business day of the registrant’s most recently completed second fiscal quarter), based upon the closing price of the common stock as reported by The NASDAQ Global Select Market on such date, was $ 288,493,330 . This calculation does not reflect a determination that persons are affiliates for any other purposes. As of September 29, 2025, 83,673,097 shares of the registrant’s common stock, par value $0.001 per share, net of treasury shares, were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Certain portions of the definitive Proxy Statement for our 2025 Annual Meeting of Shareholders are incorporated by reference into Part III of this Form 10-K. 1 LESAKA TECHNOLOGIES, INC INDEX TO ANNUAL REPORT ON FORM 10-K Year Ended June 30, 2025 Page PART I Item 1. Business 2 Item 1A. Risk Factors 13 Item 1B. Unresolved Staff Comments 27 Item 1C Cybersecurity 27 Item 2. Properties 28 Item 3. Legal Proceedings 28 Item 4. Mine Safety Disclosures 28 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 29 Item 6. [ Reserved] 30 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 31 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 57 Item 8. Financial Statements and Supplementary Data 59 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 60 Item 9A. Controls and Procedures 60 Item 9B. Other Information 64 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 64 PART III Item 10. Directors, Executive Officers and Corporate Governance 65 Item 11. Executive Compensation 65 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 65 Item 13. Certain Relationships and Related Transactions, and Director Independence 65 Item 14. Principal Accountant Fees and Services 65 PART IV Item 15. Exhibits and Financial Statement Schedules 66 Item 16. Form 10-K Summary 71 Signatures 72 Financial Statements F-1 2 PART I FORWARD LOOKING STATEMENTS In addition to historical information, this Annual Report on Form 10-K (“Annual Report”) contains forward-looking statements that involve risks and uncertainties that could cause our actual results to differ materially from those projected, anticipated or implied in the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in Item 1A—“Risk Factors.” In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “intends,” “anticipates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of such terms and other comparable terminology. You should not place undue reliance on these forward- looking statements, which reflect our opinions only as of the date of this Annual Report. We undertake no obligation to release publicly any revisions to the forward-looking statements after the date of this Annual Report. You should carefully review the risk factors described in other documents we file from time to time with the Securities and Exchange Commission (the “SEC”), including the Quarterly Reports on Form 10-Q to be filed by us during our 2026 fiscal year, which runs from July 1, 2025 to June 30, 2026. All references to “the Company,” “we,” “us,” or “our” are references to Lesaka Technologies, Inc. and its consolidated subsidiaries, collectively, and all references to “Lesaka” are to Lesaka Technologies, Inc. only, except as otherwise indicated or where the context indicates otherwise. ITEM 1. BUSINESS Overview Lesaka enables underserviced consumers and businesses in the southern cone of Africa to manage their daily financial activities in a better way, improving people's lives and increasing financial inclusion in the markets in which we operate. We have developed a unique ecosystem of communities that provides: (1) over 2 million consumers with specialized banking, credit, insurance and payout solutions to help them manage their evolving financial needs; (2) over 125,000 merchants of all sizes with payment acceptance solutions to facilitate their daily commercial activities more efficiently and effectively; and (3) over 750 enterprises with proprietary network capabilities to facilitate payments between consumers and businesses in a fast and secure manner. We bring these communities together within the Lesaka ecosystem by enabling them to engage and transact with each other in a better, more convenient and safe manner. For example, we offer bill payment solutions to consumers, merchants and enterprises by: (1) connecting over 620 enterprise service providers to our proprietary biller network so that they can offer their customers a convenient channel to pay their respective bills; (2) enabling over 95,000 merchants to offer our Alternative Digital Products (“ADP”) at their locations and then digitizing any cash payments they receive through one of our cloud-connected cash vaults or recycling the cash via an ATM that we may place in their store to drive foot-traffic; and (3) offering consumers the convenience of paying their bills at a nearby merchant where they may already shop frequently, using cash withdrawn from one of our ATMs or paying with a debit card linked to a digital-bank account that we provided to them to deposit and manage the funds from their employer payrolls or welfare grants from the South African government. To build and maintain our valuable and growing ecosystem, we have over 3,500 employees operating on the ground in five countries, including South Africa (our primary market), Namibia, Botswana, Zambia, and Kenya, and we have the ability to reach deeper and more broadly into adjacent markets through a variety of strategic partnerships. This enables us to target and serve a market with approximately 250 million people and an estimated serviceable addressable market of approximately $12 billion in net revenue by 2030 according to reports by Global Data Analytics, McKinsey & Company, BDO, Genesis Analytics, the International Monetary Fund, the Population Reference Bureau and internal management estimates. According to a report by Boston Consulting Group, favorable secular tailwinds, have helped position Africa as the fastest growing fintech market globally, that projects growth in the total African fintech revenue pool to grow by 13 times between 2021 and 2030, as illustrated below. 3 Our Strategy To build our unique ecosystem and capture this large and attractive market opportunity, we developed a 5-phase strategy to win and serve customers across a diversified range of channels and markets. These phases include: 1. Address - First, we develop or acquire a platform to address and serve the specialized financial needs of a specific customer segment. Today, we have three core platforms allocated to each of our reported business segments (or divisions), Consumer, Merchant and Enterprise; 2. Position - Second, we position ourselves in the market to gain access to data that gives us valuable insights into our customer base. We develop solutions that enable us to learn from the flow of funds and financial behaviours in our customers daily lives to better understand their needs. For example, our banking solutions enable us to see the sources and frequency of consumer income deposits as well as their spending behaviours, while our merchant solutions enable us to see a merchant’s cash flows and selected spending such as inventory purchases and supplier payments; 3. Develop – Third, we develop and foster differentiation in the market by combining financial, software and hardware technologies to create integrated, end-to-end fintech solutions that have superior functionality and convenience relative to available alternatives. Competitor offerings are typically provided by (i) legacy banks with poor track records of customer service for the underserviced, (ii) government entities, such as the post office, with limited capabilities and R&D budgets to invest in solutions, or (iii) a fragmented universe of single-solution vendors who provide more narrow services, forcing a customer to spend more and manage multiple relationships to meet their end-to-end needs; 4. Combine – Fourth, we combine our data-driven insights with our suite of solutions to sell, cross-sell and serve our customers in an advantaged way. We use the advantages embedded in our strategy to (i) drive client acquisition and retention with targeted offers that may best meet their needs, (ii) bundle or cross-sell new solutions that may be suitable for their evolving financial journeys, (iii) underwrite and manage risk effectively; and 5. Consolidate – Fifth, we identify and execute on attractive consolidation opportunities with potential revenue synergies to grow our customer base, extend our capabilities and expand our ecosystem into new areas, and potential cost synergies to scale our ecosystem and improve our operating efficiencies. For example, in fiscal 2025 we closed and are integrating two acquisitions which expanded our customer base, broadened our suite of solutions, and provided additional cross- selling opportunities, including: a. Adumo – a payments and commerce enablement platform that provides payment processing and integrated software solutions to approximately 29,000 active merchants (as of June 30, 2025) in a variety of business verticals across South Africa, Namibia, Botswana and Kenya. This acquisition has enabled us to extend our reach into larger merchants with more sophisticated point-of-sale (“POS”) software needs. Adumo was integrated into our Merchant Segment and has contributed to our fiscal 2025 financial results since October 1, 2024. b. Recharger – a prepaid electricity platform that provides submetering administration and payment processing solutions to an installed base of over 500,000 registered prepaid electricity meters across South Africa. This acquisition has enabled us to enter the private utilities market and extend our payment solutions into a large, new customer base. Recharger was integrated into our Enterprise Segment and has contributed to our fiscal 2025 financial results since March 3, 2025. Our Go- To -Market Model To go-to-market, we created a proprietary business model to reach, engage and serve our Merchant, Consumer and Enterprise Segments’ customers over time. The five elements of our go-to-market model include: 1. Wide-Breadth of Solutions – We have a large and growing suite of solutions that we sell to our customers at different stages of their financial journeys using a Land and Expand approach. We start by offering critical financial services needed to win a customer relationship at a relatively stable customer acquisition cost (“CAC”). These include our government grant and bill payment solutions for consumers, and our card acquiring and cash management solutions for merchants. Then we offer a growing range of complementary services to expand our share of wallet, bundling or cross- selling complementary or adjacent services as a customer’s needs grow. We believe this increases the lifetime value (“LTV”) of our customer base with very little incremental CAC, increasing our LTV/CAC ratio and compounding value over time. We organize our solutions across our customers’ financial lifecycles including: (1) Receive Money , Manage Money , Borrow Money , and Protect Assets for our consumers, and (2) Accept Payments , Manage Money , Grow Revenue, and Access Capital for our merchants. 4 2. Differentiated Reach in the Market – Instead of relying on online sales or using expensive bank branches, we reach our customers close to where they live or close to government offices that disburse grant payments by deploying on-the ground sales teams and low-cost retail offices, or hubs. Our salespeople are trained to engage in-person and educate customers on the value and advantages of our solutions in a friendly and respectful manner. 3. A Digital Engagement Approach – After our initial sale, we want to utilize technology to engage more efficiently and effectively with our customers, so we train and steer them to use our digital apps to manage and grow their financial services over time. We have developed a variety of digital apps for our customers to use when engaging with our different solutions including a digital banking app for our consumers and a payments management account app for our merchants. 4. Proprietary Access to Data – We leverage our solutions to gain access to data that provides us with unique insights into our customers, which we use to serve them more effectively. For example, we can often see the timing, amount and frequency of a consumer’s income deposits and how they spend their money and pay their bills. We believe this is rare in Africa, particularly among the underserviced, and provides a competitive advantage in the market. 5. Leading Brand Value – Based on our market penetration and length of time in the market, we have established several strong brands and brand equity in the market across our three business segments and different product lines. We believe these brands are valuable touch points, with which to evolve a unified leading brand, that helps us attract new customers, build trust, and facilitate the roll-out and adoption of new solutions over time. Our Business Segments We go-to- market and operate through three business segments including our Merchant Segment (“Merchant”), our Consumer Segment (“Consumer”) and our Enterprise Segment (“Enterprise”). 1. Our Merchant Segment Our Merchant Market We serve merchants of all sizes, ranging from micro -merchants to small-to-medium merchants. Currently, we serve over 125,000 merchants across Southern Africa, of which more than 100,000 merchants are in South Africa. Approximately 95,000 of the merchants are micro merchants who range from local kiosks and spaza shops (corner stores) to sole proprietors, including taverns, marketplaces and the businesses and suppliers that serve them. These merchants typically have lower payment volume, and a lower proportion of merchants accepting digital payments given a larger dominance of cash in rural areas. However, as the secular shift from cash to digital payments continues to progress, we believe these merchants will increase adopt new digital payment solutions and complementary services. Approximately 30,000 of the merchants are small-to-medium merchants, who are larger and more formal businesses. They can range from small local retailers to merchants with multi-lane stores, franchises and online storefronts. These merchants are more professional businesses with sophisticated business needs with a greater need for more advanced business solutions that can help them run and grow their businesses more efficiently. Our Merchant Solutions Our merchant solutions serve merchants of all sizes offering a wide breadth of capabilities across their financial lifecycles to help them Accept Payments , Manage Money , Grow Revenue, and Access Capital , as illustrated below. 5 Our Merchant solutions and products comprise: ● Merchant acquiring: Merchant acquiring solutions for micro-merchants and small-to-medium sized merchants. ● Software: Integrated POS software and hardware to the hospitality industry. ● Cash: Cash management and digitalization solutions helps merchants manage their money and effectively “puts the bank” in micro-merchants’ and small-to-medium sized businesses’ stores. We provide them with digital accounts so merchants can track their deposits and supplier payment services to order and pay for more inventory. ● Lending: Access to capital to small-to-medium merchants by providing small cash advances or business credit utilizing our proprietary visibility into their business activity. ● ADP : This solution comprises 4 categories including prepaid solutions (airtime, data, electricity and gaming), bill payments, International Money Transfers (“IMT”) and supplier enabled payments. Our supplier enabled payments product suite has specifically been developed for the micro-merchants. Merchant Competitive Landscape and Market Share We estimate an addressable revenue pool of approximately of $2.8 billion of which we believe we have approximately 7.0% market share of the revenue in the market (according to Global Data Analytics 2024, Genesis Analytics 2024, South African Reserve Bank Interchange Rate 2021, IFC MSME Opportunity in South Africa 2019, Electrum Value Added Services in South Africa 2020, peer company public quarterly results from 2024 and management’s best estimates). A key component of our strategy is to differentiate ourselves by being a customer-led provider rather than a product-led company by evolving our product offerings to meet the various needs of our customers, being merchants. While the rest of the industry is highly fragmented with companies providing 1-2 products on their platforms, we have positioned ourselves to provide an integrated suite of solutions for merchants. No single competitor offers the range of solutions we provide in the market. In this respect we face a different competitive environment dependent on the specific product. For example, while traditional South African banks may dominate the core merchant acquiring market, they do not offer software or alternative digital products for which we face a different universe of competitors. 2. Our Consumer Segment Our Consumer Market Through our Consumer Division we focus on individuals who have historically been excluded from traditional financial services. Our products are designed for consumers at the lower socioeconomic end of the market within Living Standards Measures (“LSMs”) 1 to 6, which comprises approximately 26 million people as of 2023 (according to a report by Genesis Analytics). LSM is a research tool used in South Africa to segment the population based on living standards rather than income alone. It considers factors like access to services and durable goods (for example electricity, running water, appliances) to classify consumers into different groups, typically from LSM 1 (lowest) to LSM 10 (highest). 6 There are approximately 12.1 million permanent grant beneficiaries in South Africa, in addition approximately 9.0 million people receive a Social Relief of Distress (“SRD”) grant each month (according to the South African Social Security Agency (“SASSA”) as of June 30, 2025). As of the date of this Annual Report, we have approximately 2.1 million active consumer customers comprising 1.9 million grant beneficiaries (approximately 90% permanent grant beneficiaries and the balance SRD grant beneficiaries) and 0.2 million EasyPay Payouts cardholders. We believe that for those consumers receiving welfare grants from the South African government, there are no other providers able to provide a transactional account, lending and insurance product under one ecosystem. Our proposition has a unique ‘last mile’ service and distribution model whereby we go to the rural and peri urban geographies across the country to bring our services to the customer. Through digitally enabled onboarding, we can open accounts and issue a physical card at the point of application. Our Consumer Solutions Our consumer solutions serve to provide a wide breadth of banking, credit and insurance capabilities across their financial lifecycles to help them Receive Money , Manage Money , Borrow Money , and Protect Assets , as illustrated below. Our Consumer product offering is targeted at underserviced South African consumers, and includes: ● Transactional accounts: Low-cost EasyPay Everywhere (“EPE”) transactional bank account with access to banking via card, mobile application, web integration and unstructured supplementary service data (“USSD”). To contextualize the value of USSD for our consumers - consumers often have no data nor access to WiFi, so USSD is a very effective channel for them. USSD is a communication protocol used by mobile phones to interact with a mobile network operator’s system, including real-time interaction (no need for internet) and works on any mobile phone, including basic feature phones. Consumers can manage and use the funds they receive with a complementary debit card and a mobile app, through which they can withdraw cash at ATMs, make purchases at points of sale, and pay bills. This helps us build a relationship with our consumers and cross-sell additional financial services over time. 7 ● Lending: We utilize our access to data on money flowing in and out of our consumers’ deposit accounts to provide access to short-term, unsecured personal loans to qualifying EPE consumers. For many of our consumers, we provide their first-time access to regulated credit. ● Insurance: We help our EPE consumers protect their assets with our funeral insurance offering, leveraging our relationship with our consumers, and access to data. ● Payouts: Secure payout solutions for consumers, being corporate employees who receive work-related payments from their employers (South African businesses) through us. Consumer Competitive Landscape and Market Share The consumer market we address today is focused on South African grant beneficiaries and other payout cardholders. We estimate an addressable revenue pool of approximately $1.4 billion of which we believe we have approximately 6.5% market share of the revenue in the market (according to SASSA grant data and management’s best estimates in 2024). We have a different subset of competitors depending on the product offering. While banks are the principal competitors for transactional accounts, the lending market is dominated by micro-finance companies and the insurance market by insurance companies. 3. Enterprise Segment Our Enterprise Market Our Enterprise Division serves more than 750 Enterprise clients with large ecosystems of billpayers, tenants, employees or constituents. The Enterprise Division is focused on providing strategic and targeted solutions that facilitate payments between consumers and businesses. Our target market primarily focuses on our network of more than 620 billers across South Africa and over 100 corporate clients. We have deep integrations across municipal councils, utility providers, banks and mobile operators who leverage our technology to create readily scalable solutions. 8 Our Enterprise Solutions Instead of a financial lifecycle, our enterprise solutions organized by platforms which provide hardware, software and services to different constituents, as illustrated below. Our Enterprise product offering is focused across three core verticals and includes: ● ADP: By providing the integration technology to enable any customer in South Africa to purchase a prepaid solution (e.g. airtime, electricity or gaming) and/or pay a bill through channels such as retailer distribution networks and online banking apps. ● Utilities: Provides a convenient platform for tenants to purchase and top-up their prepaid electricity meters which enables landlords to manage the electricity usage of each of their tenants without the postpaid risk. This was incorporated following our acquisition of Recharger in March 2025 and is a low churn annuity-based revenue model. ● Payments: Houses the proprietary payment technology of the Group, particularly the payment switch enabling us to insource components of the payments value chain to create greater efficiencies and reduce third party dependencies. Ancillary security and tokenization services are also offered to enterprise clients. This solution remains a modest contributor to the Enterprise Division’s revenue. Enterprise Competitive Landscape and Market Share We estimate an addressable revenue pool of approximately of $200 million of which we believe we have approximately 10.0% market share of the revenue in the market (according to South African Local Government Association 2024, Statista 2024, South African Treasury 2024, Grand View Research 2024 and management’s best estimates. Bill payments is a representation of the non-bank bill collection market in South Africa). Like our Merchant Division and Consumer Division, we have competitors within each of our core products, however no specific competitor participating across the integrated suite of products, offered in our Enterprise Division. 9 Human Capital Resources Over the last few years we have built a diverse team of high-caliber individuals, from different organizations, to form our leadership group. This leadership group is deeply committed to building a high-performance culture that is based on our core values and a commitment to the care and development of our people. Lesaka’s Core Values: • Entrepreneurial spirit; • Integrity; • Collective wisdom; • Ownership; and • A bias to action. These are our values that underpin our mission to enable Merchants to compete and grow, and for our Consumer customers, which comprise mainly grant beneficiaries, to improve their lives, by providing innovative financial technology and value-creating solutions. Employee training and skills development We strongly believe that learning is an ongoing process and that the majority of learning is in the doing. As such, while we offer a range of formal programs (as listed further below), more importantly, we continue to encourage a culture of learning in everything that we do. Sustainable employee training and development programs impact employee retention, and we believe that our investment in employee development contributes to high performance and high employee engagement as well as a strong pipeline of talent for key and critical roles This increases loyalty, which will in turn contribute to employee retention. We offer the following development programs to enhance employee performance and skills: • training programs; • leadership development programs; • unemployed and employed learnerships; • internships; • financial assistance to pursue further studies and obtain formal qualifications; • other in-house and cross-functional training to aid with career advancement; and • succession planning – training interventions to address scarce and critical skills. Equal opportunity Having an inclusive and diverse workforce which reflects our economically active population and society in general, is crucial for helping the organization attract and retain talent and is important for long-term organizational success. Our human capital team in partnership with our leaders drive recruiting and retaining a talented and diverse workforce with special focus on hiring previously disadvantaged groups whenever possible. We are committed to hiring qualified candidates without regard to their personal status, while taking into account the unique circumstances affecting our operations in South Africa and the need to uplift previously disadvantaged groups. This commitment extends to all levels of our organization, including within senior management and our board of directors. 10 As of June 30, 2025, the composition of our workforce was: • 53% female and 47% male; • 42% between 18 and 34 years old, 53% between 35 and 54 years old, and 5% over 55 years old; and • 66% Black, 9% two or more races, 10% Indian and 15% White. We have no female named executive officer. We continue to strive to build a more inclusive workforce and to enhance our pay structures by taking measures to eliminate potential remuneration discrimination and to help close gender pay gaps to progress towards gender equality at work. We have taken positive strides towards a rewards philosophy that rewards high performance and focuses on equal pay for work of equal value. Employee compensation programs We are committed to ensuring that all our employees are paid fair and competitive remuneration. To that end, we offer the following to our employees: • Access to a comprehensive medical, dental, and vision plan that our employees have the option to join; • Access to a defined contribution retirement plan that our employees have the option to join; • Paid sick, study, annual and family responsibility leave; • Maternity benefits; • Life and disability insurance coverage; • Financial aid to fund tertiary education for children of employees; • Employee assistance programs; and • Product discounts. Annual increases and incentive compensation are based on merit, which is communicated to employees at onboarding and documented as part of our annual remuneration review process. Our number of employees allocated on a segmental and group basis as of the years ended June 30, 2025, 2024 and 2023, is presented in the table below: Number of employees 2025 2024 2023 Consumer (1) 1,542 1,333 1,306 Merchant (1) 1,957 1,059 872 Enterprise (1) 213 130 118 Total segments 3,712 2,522 2,296 Group (1) 16 9 7 Total 3,728 2,531 2,303 (1) Consumer includes one executive officer for each of fiscal 2024 and 2023. Merchant includes one executive officer for each of fiscal 2024 and 2023. Group includes five executive officers for fiscal 2025, and two executive officers for each of fiscal 2024 and 2023. On a functional basis, as of June 30, 2025, five of our employees were our named executive officers, 1,567 were employed in sales and marketing, 703 were employed in finance and administration, 432 were employed in information technology and 1,021 were employed in operations. Health and safety laws and regulations We are subject to various South African laws and regulations that regulate the health and safety of our South African-based workforce, including those laws monitored by the South African Department of Employment and Labour which stipulates the legal framework within which we need to function. This framework comprises the Occupational Health and Safety Act, Act 85 of 1993 (“OHSA”), the Compensation for Occupational Injuries and Diseases Act, Act 130 of 1993 (“COIDA”), the Basic Conditions of Employment Act, Act 75 of 1997 (“BCEA”) and the Labour Relations Act, Act 66 of 1995 (“LRA”). Compliance with COVID-19 regulations remains regulated by the National Institute of Occupational Health (“NIOH”), and the Occupational Health Surveillance System (“OHSS”), the Centre for Scientific Industrial Research (“CSIR”) and the National Institute for Communicable Diseases (“NICD”). We have implemented and regularly update human capital-related policies that are designed to ensure compliance with applicable South African laws and regulations. 11 Our Executive Officers The table below presents our executive officers, their ages and their titles: Name Age Title Ali Mazanderani 43 Executive Chairman and Director Dan L. Smith 53 Group Chief Financial Officer and Director Naeem E. Kola 52 Group Chief Operating Officer and Director Lincoln C. Mali 57 Chief Executive Officer: Southern Africa and Director Steven J. Heilbron 60 Head of Corporate Development and Director Ali Mazanderani has been our Executive Chairman since February 1, 2024. He is a fintech investor and entrepreneur. He is the co-founder and chairman of Teya, a pan-European fintech. He is also a non-executive director on the board of several companies including Thunes (Singapore based private fintech), Kushki (Latin American payments company) and is the president of The European Digital Payments Industry Alliance (EDPIA). He was previously on the board of several other leading payments companies globally including StoneCo (Nasdaq: STNE) in Brazil and Network International Holdings Plc (LSE:NETW) in the Middle East. He was formerly a Partner at Actis, a London-based emerging market private equity firm, where he led multiple landmark fintech investments globally. Prior to his career at Actis, Mr. Mazanderani advised private equity and corporate clients for OC&C Strategy Consultants in London and served as lead strategy consultant for First National Bank based in Johannesburg. He holds postgraduate degrees in Economics from the University of Pretoria, Oxford University and the London School of Economics, an MBA from INSEAD and a Masters in Business Law from the University of St Gallen. Dan L. Smith has been our Group Chief Financial Officer since October 1, 2024. He has held various roles in the financial services sectors in South Africa and the United Kingdom. Mr. Smith is a director of ADvTECH Limited (JSE: ADH). He founded DLS Advisors in 2020 and was its CEO until joining VCP in 2021, where he was employed until September 2024. Prior to that, he was employed by Standard Bank South Africa for a number of years where he accumulated vast corporate finance experience, including heading the Mergers & Acquisitions investment banking team. He holds a Bachelor of Commerce, a Bachelor of Accounting and a Higher Diploma in Taxation Law from the University of Witwatersrand and is a Chartered Accountant (SA). He is a Graduate of the Oxford Fintech Programme from the Saïd Business School, University of Oxford. He also has an Advanced Valuation Techniques certificat ion from the Gordon Institute of Business Science and a Diploma in Strategic Client Management from the UCT Graduate School of Business. Naeem E. Kol a has been our Group Chief Operating Officer since October 1, 2024, and was previously our Group Chief Financial Officer from March 1, 2022 until September 30, 2024. Mr. Kola has progressively held senior finance roles in Dubai, most notably as Chief Financial Officer of the Emerging Markets Payments Group (“EMP”), a high-growth fintech business that grew materially and successfully concluded and integrated five acquisitions during Mr. Kola’s six-year tenure as Chief Financial Officer. Prior to becoming Chief Financial Officer, Mr. Kola was Senior Vice President for Investments, Strategy and Business Planning at Network International. Since the acquisition of EMP by Network International in 2017, Mr. Kola had been an Operations Director and Strategic Advisor to the emerging market private equity firm Actis, where he again focused on fintech businesses. He is a qualified Chartered Accountant (SA) and a member of the South African Institute of Chartered Accountants. Lincoln C. Mali has been our Chief Executive Officer: Southern Africa since May 1, 2021. Mr. Mali is a financial services executive with over 25 years in the industry. Until April 2021, he was the Head of Group Card and Payments at Standard Bank Group, having served in many different roles within that organization since 2001. Mr. Mali chaired the board of directors of Diners Club South Africa until April 2021, and was a member of the Central and Eastern Europe, Middle East and Africa Business Council for Visa. Mr. Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University, an MBA from Henley Management College, various diplomas and attended an Advanced Management Program at Harvard Business School. Steven J. Heilbron joined us following the acquisition of Connect in 2022. Mr. Heilbron has two decades of financial services experience, having spent 19 years working for Investec in South Africa and the UK, where he served as Global Head of Private Banking and Joint Chief Executive Officer of Investec Bank plc. He led a private consortium that acquired Cash Connect Management Solutions (Pty) Ltd (“CCMS”) in 2013. Mr. Heilbron has presided over significant organic growth in the rebranded Connect Group, as well as spearheading the successful acquisition and integration of Kazang and EFTpos acquired from the Paycorp Group in February 2020. He is a member of the South African Institute of Chartered Accountants . 12 Financial Information about Geographical Areas and Operating Segments Refer to Note 21 to our audited consolidated financial statements included in this Annual Report contains detailed financial information about our operating segments for fiscal 2025, 2024 and 2023. Revenues based on the geographic location from which the sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in the table below: Revenue (1) Long lived assets 2025 2024 2023 2025 2024 2023 $'000 $'000 $'000 $'000 $'000 $'000 South Africa 624,846 537,594 505,558 392,098 286,700 300,104 India (MobiKwik) - - - - 76,297 76,297 Rest of the world 34,855 26,628 22,413 3,055 2,548 2,197 Total 659,701 564,222 527,971 395,153 365,545 378,598 (1) Refer to Note 16 to our audited consolidated financial statements included in this Annual Report which contains detailed financial information about our revenue for fiscal 2025, 2024 and 2023. Corporate history Lesaka was incorporated in Florida in May 1997 as Net 1 UEPS Technologies, Inc. and changed its name to Lesaka Technologies, Inc. on May 12, 2022. In 2004, Lesaka acquired Net1 Applied Technology Holdings Limited (“Aplitec”), a public company listed on the Johannesburg Stock Exchange (“JSE”). In 2005, Lesaka completed an initial public offering and listed on the NASDAQ Stock Market. In 2008, Lesaka listed on the JSE in a secondary listing, which enabled the former Aplitec shareholders (as well as South African residents generally) to hold Lesaka common stock directly. Available information We maintain a website at www. lesakatech.com. Our Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports, as well as our proxy statements, are available free of charge through the “SEC filings” portion of our website, as soon as reasonably practicable after they are filed with the SEC. The information contained on, or accessible through, our website is not incorporated into this Annual Report. The SEC maintains a website at www.sec.gov that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. 13 ITEM 1A. RISK FACTORS OUR OPERATIONS AND FINANCIAL RESULTS ARE SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES, INCLUDING THOSE DESCRIBED BELOW, THAT COULD ADVERSELY AFFECT OUR BUSINESS, FINANCIAL CONDITION, RESULTS OF OPERATIONS, CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOC K Risks Relating to Our Business To achieve our mission, our strategy is to build and operate the leading South African full service fintech platform offering cash management, payment and financial services. Our future success, and our ability to return to profitability and positive cash flow is substantially dependent on our ability to complete the implementation of this strategy successfully. Our board conducted an extensive review of our business strategy and operations in July 2020, and decided to focus on our South African operations and other business opportunities in South Africa and, to a lesser extent, the rest of the African continent. The restructuring of the consumer business and acquisition of Connect were integral parts of the strategy to return the business to profitability and positive cash flow. We have made significant progress on both of these initiatives, including the acquisitions of Adumo and Recharger, and the proposed acquisition of Bank Zero (which remains subject to the fulfilment or waiver of various conditions precedent), however we cannot assure you that we will be able to complete our strategy successfully and return to profitability and positive cash flow. Even if we do return to profitability, achieving net income does not necessarily ensure positive cash flows. Future periods of net losses from operations could result in negative cash flow and may hamper ongoing operations or prevent us from sustaining or expanding our business. We cannot assure you that we will achieve, sustain or increase profitability in the future and if we do not, our business will be materially and adversely affected. We have a significant amount of indebtedness that requires us to comply with restrictive and financial covenants. If we are unable to comply with these covenants, we could default on this debt, which would have a material adverse effect on our business and financial condition. As of June 30, 2025, we had aggregate borrowings outstanding of ZAR 3.6 billion ($200.8 million translated at exchange rates as of June 30, 2025). We partially funded certain of our recent acquisitions through South African bank borrowings. We, together with Lesaka SA and the majority of Lesaka SA’s directly and indirectly wholly-owned subsidiaries, have agreed to guarantee the obligations of Lesaka SA and of the other borrowers under the certain of the borrowings to the lenders. Certain of these borrowings contain customary covenants which include a requirement for Lesaka SA to maintain specified Net Debt to EBITDA and Interest Cover Ratios (as defined in the lending agreements) and restricts the ability of Lesaka SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities. The borrowings through our merchant lending operations, through Cash Connect Capital (Pty) Ltd (“CCC”) and K2020 Connect (Pty) Ltd (“K2020”), include a ZAR 400 million revolving credit facility agreement. This facility contains customary covenants that require the borrowing parties to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities. These security arrangements and covenants may reduce our operating flexibility or our ability to engage in other transactions that may be beneficial to us. If we are unable to comply with the covenants, we could be in default and the indebtedness could be accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as a result, our business, financial condition and stock price would suffer. Failure to complete, or delays in completing, the Bank Zero acquisition, could materially and adversely affect our results of operations and stock price. The completion of the Bank Zero acquisition is subject to a number of conditions precedent, including receipt of regulatory approvals and certain third-party consents. Some of these conditions are outside our control. To complete the acquisition, we must make certain filings with, and obtain certain consents and approvals from, various governmental and regulatory authorities. The regulatory approval processes may take a lengthy period of time to complete, and there can be no assurance as to the outcome of the approval processes, including the undertakings and conditions that may be required for approval, or whether the regulatory approvals will be obtained at all. 14 In addition, the completion of the acquisition is conditional on, among other things, no action or circumstance occurring that would result in a material adverse effect on the Bank Zero’s business operations or financial results. We cannot provide any assurance regarding if or when all conditions precedent to the acquisition will be satisfied or waived. If, for any reason, the acquisition is not completed, or its completion is materially delayed and/or the transaction agreement is terminated, the market price of our common stock may be materially and adversely affected. In addition, if the acquisition is not completed for any reason, there are risks that (i) the announcement of the acquisition and (ii) the dedication of management’s attention and other of our resources to the completion thereof, could have a negative impact on our relationships with our stakeholders and could have a material adverse effect on our current and future operations, financial condition and prospects. We may not realize some or all of the anticipated benefits from the Bank Zero acquisition or we may fail to realize some or all of the expected benefits of certain recently integrated acquisitions, including Adumo and Recharger Even if we complete the Bank Zero acquisition, we may experience unforeseen events, changes or circumstances that may adversely affect us. For example, we may incur unexpected costs, charges or expenses resulting from the transaction, including charges to future earnings if Bank Zero’s business does not perform as expected. Our expectations regarding Bank Zero’s business and prospects may not be realized, including as a result of changes in the financial condition of the markets that Bank Zero serves. In addition, there are risks associated with Bank Zero’s product and service offerings or results of operations, including the risk of failing to comply with certain regulatory rules required to operate its business. Further, there are numerous challenges, risks and costs involved with integrating the operations of Bank Zero with ours. For example, integrating Bank Zero into our company will require significant attention from our senior management which may divert their attention from our day-to-day business. The difficulties of integration may also be increased by cultural differences between our two organizations and the necessity of retaining and integrating personnel, including Bank Zero’s key employees. During fiscal 2025 we closed the acquisitions of Adumo and Recharger and have integrated their businesses into our ours. As these businesses have only been recently integrated in our business there is a risk that we may fail to realize some or all of the expected benefits from these acquisitions. Our Sarbanes-Oxley Act of 2002 (“Sarbanes”) management certification and auditor attestation regarding the effectiveness of our internal control over financial reporting as of June 30, 2025, excludes the operations of Adumo and Recharger as these transactions were only closed during fiscal 2025. The requirement to evaluate and report on our internal controls also applies to companies that we acquire, including Bank Zero. As a group of South African private companies prior to acquisition, Adumo, and more recently Recharger, were not required to comply with Sarbanes prior to the time we acquired them. The integration of Adumo, Recharger and Bank Zero into our internal control over financial reporting would be expected to require significant time and resources from our management and other personnel and is expected to increase our compliance costs. If we fail to successfully integrate the operations of Adumo, Recharger and Bank Zero into our internal control over financial reporting, our internal control over financial reporting may not be effective. As such, if some or all of the aforementioned risks materialize, our ability to successfully integrate Bank Zero’s operations into our business and realize the associated benefits of that acquisition could be adversely impacted. This could lead to the recording of material impairments, and as a result, our financial condition, results of operations, cash flows and stock price could suffer. We may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business. Acquisitions are an integral part of our new growth strategy as we seek to expand our business and deploy our technologies in new markets in Southern Africa. However, we may not be able to locate suitable acquisition candidates at prices that we consider appropriate. If we do identify an appropriate acquisition candidate, we may not be able to successfully negotiate the terms of the transaction, finance it or, if the transaction occurs, integrate the new business into our existing business. These transactions may require debt financing or additional equity financing, resulting in additional leverage or dilution of ownership. Acquisitions of businesses or other material operations and the integration of these acquisitions or their businesses will require significant attention from members of our senior management team, which may divert their attention from our day-to-day business. The difficulties of integration may be increased by the necessity of integrating personnel with disparate business backgrounds and combining different corporate cultures. We also may not be able to retain key employees or customers of an acquired business or realize cost efficiencies or synergies or other benefits that we anticipated when selecting our acquisition candidates. Acquisition candidates may have liabilities or adverse operating issues that we fail to discover through due diligence prior to the acquisition. We may need to record write-downs from future impairments of goodwill or other intangible assets, which could reduce our future reported earnings. 15 Geopolitical conflicts, including the conflict between Russia and Ukraine and in the Middle East, may adversely affect our business and results of operations. The current conflicts between Russia and Ukraine, and in the Middle East are creating substantial uncertainty about the future of the global economy. Countries across the globe have instituted sanctions and other penalties against Russia. The retaliatory measures that have been taken, and could be taken in the future, by the U.S., NATO, and other countries have created global security concerns that could result in broader European military and political conflicts and otherwise have a substantial impact on regional and global economies, any or all of which could adversely affect our business. While the broader consequences are uncertain at this time, the continuation and/or escalation of the conflicts, along with any expansion of the conflict to surrounding areas, create a number of risks that could adversely impact our business, including: • Increased inflation and significant volatility in the macroeconomic environment; • Disruptions to our technology infrastructure, including through cyberattacks, ransom attacks or cyber-intrusion; • Adverse changes in international trade policies and relations; • Disruptions in global supply chains; and • Constraints, volatility or disruption in the credit and capital markets. All of these risks could materially and adversely affect our business and results of operations. We are continuing to monitor the situation in Ukraine, the Middle East and globally and assessing the potential impact on our business. A prolonged economic slowdown or lengthy or severe recession in South Africa or elsewhere could harm our operations. A prolonged economic downturn or recession in South Africa could materially impact our results from operations, particularly in light of electricity disruptions, a significantly weak USD/ ZAR exchange rate compared with previous periods, and our strategic decision to focus on our South African operations. Economic confidence in South Africa, our main operating environment, is currently low and, as a result, the risk of a prolonged economic downturn is increased, which could have a negative impact on merchants and retailers; mobile phone operators; our account holders; the level of transactions we process; the take-up of the financial services we offer and the ability of our customers to repay our loans or to pay their insurance premiums. If financial institutions and retailers experience decreased demand for their products and services, our hardware, software, related technology sales and processing revenue could decrease. Any economic slowdown may be further exacerbated by the recently imposed trade tariffs on South Africa by the U.S. While the South African government intends to negotiate the reduction of the 30% tariff hike, it is uncertain as to whether the planned attempt to negotiate will result in the desired outcome. It is therefore necessary to consider the macroeconomic effect of the tariff hike in the context of the South African economy which may ultimately have a ripple effect on our operations as our client consists of, but are not limited to, merchants, retailers, mobile phone operators and account holders. We are unable to quantify the impact of the tariff hike on our business and results of operations. Our ability to fund our ATM network requires that we continue to have access to an agreement with African Bank to provide liquidity to operate our ATM network. The operational maintenance of our ATM network, along with an increase in our consumer banking client base, necessitates access to large amounts of cash to stock the ATMs and maintain uninterrupted service levels. In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transit service providers to fund our ATMs. Under this arrangement, African Bank will use its cash resources to fund our ATMs and it is specifically recorded that the cash in our ATMs are African Bank’s property. Therefore, as we have not utilized a facility to obtain the cash, and do not own or control the cash for an extended period of time, we do not record cash or cash equivalents and borrowings in our consolidated statement of financial position. Cash withdrawn from our ATMs by our EPE customers and other consumers are settled through the interbank settlement system from the ATM users bank account to African Bank’s bank accounts. We pay African Bank a monthly fee for the service provided which is calculated based on the cumulative daily outstanding balance of cash utilized multiplied by the South African prime interest rate less 1%. We are exposed to the risk of cash lost while it is in our ATMs (i.e. from theft) and are required to repay African Bank for any shortages. We may not be able to extend the terms of the arrangement with African Bank and certain cash-in-transit service providers to fund our ATMs on commercially reasonable terms or at all. Our ability to continue the uninterrupted operation of our ATM network will be adversely impacted by our failure to renew these arrangements, any adverse change to the terms of these arrangements, or a significant reduction in the amounts provided under these arrangements. We may also suffer reputational damage if our service levels are negatively impacted due to the unavailability of cash. 16 Our consumer microlending loan book and merchant lending book expose us to credit risk and our allowance for doubtful finance loans receivable may not be sufficient to absorb future write-offs. All of our microfinance loans made are for a period of nine months or less and all of our merchant lending is for a period of less than 12 months. We have created an allowance for doubtful finance loans receivable related to these books. When creating the allowance, management considered factors including the period of the finance loan outstanding, creditworthiness of the customers and the past payment history of the borrower. We consider this policy to be appropriate as it takes into account factors such as historical bad debts, current economic trends and changes in our customer payment patterns. However, additional allowances may be required should the ability of our customers to make payments when due deteriorate in the future. A significant amount of judgment is required to assess the ultimate recoverability of these microfinance loan receivables. We may face competition from other companies that offer innovative payment technologies and payment processing, which could result in the loss of our existing business and adversely impact our ability to successfully market additional products and services. Our primary competitors in the payment processing market include other independent processors, as well as financial institutions, independent sales organizations, new digital and fintech entrants and, potentially card networks. Many of our competitors are companies who are larger than we are and have greater financial and operational resources than we have. These factors may allow them to offer better pricing terms or incentives to customers, which could result in a loss of our potential or current customers and/or force us to lower our prices. Either of these actions could have a significant effect on our revenues and earnings. Our future success will depend in part on our ability to attract, integrate, retain and incentivize key personnel and a sufficient number of skilled employees, particularly in the technical, sales and senior management areas. We believe our management team has the right experience and skills to execute on our strategy. However, in order to succeed in our product development and marketing efforts, we may need to identify and attract new qualified technical and sales personne l, as well as motivate and retain our existing employees. As a result, an inability to hire and retain such employees would adversely affect our ability to achieve our strategic goals and maintain our technological relevance. We may face difficulty in assimilating, transitioning and integrating newly-hired personnel or management of any future acquisitions into our existing management team, and this may adversely affect our business. Competitors may attempt to recruit our top management and employees. In order to attract and retain personnel in a competitive marketplace, we must provide competitive pay packages, including cash and equity -based compensation and the volatility in our stock price may from time to time adversely affect our ability to recruit or retain employees. We do not maintain any “key person” life insurance policies. If we fail to attract, integrate, retain and incentivize key personnel and skilled employees, our ability to manage and grow our business could be harmed and our product development and marketing activities could be negatively affected. Cybersecurity breaches and other system disruptions pose a significant threat to business operations. As a fintech organization reliant on digital infrastructure, we are highly susceptible to cybersecurity incidents involving sensitive data such as personally identifiable information (“PII”), payment card information (“PCI”), and proprietary business records. Our exposure includes the risk of data breaches, ransomware, denial-of-service attacks, and unauthorised system access. Although we follow the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework in our security controls, evolving cyber threats mean no system is invulnerable. A successful cybersecurity breach could result in financial losses, regulatory penalties, reputational damage, operational interruptions, and legal consequences. Prolonged or frequent breaches or system disruptions may diminish customer trust, potentially leading customers to consider our systems unreliable, which could impact adoption and harm brand reputation. Addressing breaches or system disruptions can significantly strain staff resources and delay new service launches. Furthermore, if customers rely on our products for critical transactions, a breach could disrupt their businesses and lead to claims for compensation. Even if unsuccessful, this type of claim could be time-consuming and costly for us to address. Although certain of our systems have been designed to reduce downtime in the event of outages or catastrophic occurrences, they remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication failures, terrorist attacks, computer viruses, computer denial-of-service attacks and similar events. Some of our systems are not fully redundant, and our disaster recovery planning may not be sufficient for all eventualities. Protection against fraud is of key importance to the purchasers and end users of our solutions. We incorporate security features, including encryption software, biometric identification and secure hardware, into our solutions to protect against fraud in electronic transactions and to provide for the privacy and integrity of cardholder data. Our solutions and systems may be vulnerable to breaches in security due to defects in the security mechanisms, the operating system, applications or the hardware platform as well as through risk introduced into our environment through third party suppliers, which the group relies heavily on. Security vulnerabilities could jeopardize the security of information transmitted using our solutions. If the security of our solutions is compromised, our reputation and marketplace acceptance of our solutions may be adversely affected, which would cause our business to suffer, and we may become subject to damages claims. We have not yet experienced any significant security breaches affecting our business. 17 Despite robust measures, unforeseen cyber incidents or natural disasters could trigger lengthy service interruptions. Existing business interruption insurance may not adequately compensate for losses stemming from cybersecurity failures. Defending our intellectual property rights or defending ourselves in infringement suits that may be brought against us is expensive and time-consuming and may not be successful. Litigation to enforce our trademarks or other intellectual property rights or to protect our trade secrets could result in substantial costs and may not be successful. Any loss of, or inability to protect, intellectual property in our technology could diminish our competitive advantage and also seriously harm our business. In addition, the laws of certain foreign countries may not protect our intellectual property rights to the same extent as do the laws in countries where we currently have protection. Our means of protecting our intellectual property rights in countries where we currently have protection, or any other country in which we operate, may not be adequate to fully protect our intellectual property rights. Similarly, if third parties claim that we infringe their intellectual property rights, we may be required to incur significant costs and devote substantial resources to the defense of such claims, to discontinue using and selling any infringing technology and services, to expend resources to develop non-infringing technology or to purchase licenses or pay royalties for other technology. In addition, if we are unsuccessful in defending any such third-party claims, we could suffer costly judgments and injunctions that could materially adversely affect our business, results of operations or financial condition. We may incur material losses in connection with our movement of cash through our infrastructure in South Africa. In our merchant business we collect and process large volumes of cash from our customers, assuming the risk of loss from the moment that cash is deposited into our vaults. We are then responsible for its collection and transportation to processing centers, which we outsource to various cash-in-transit service providers. These services extend across all areas of South Africa. South Africa suffers from high levels of crime and in particular cash-in-transit heists. We cannot insure against certain risks of loss or theft of cash from our delivery and collection vehicles, and we will therefore bear the full cost of certain uninsured losses or theft in connection with the cash handling process Such losses could materially and adversely affect our financial condition, cash flows and results of operations. We have not incurred any material losses resulting from cash distribution in recent years, but there is no assurance that we will not incur any such material losses in the future. We depend upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations, which could harm our business. We obtain our smart cards, ATMs, electronic payment and POS devices, components for our vaults, components to repair the ISV (independent software vendor) division’s POS hardware, and the other hardware we use in our business from a limited number of suppliers, and do not manufacture this equipment ourselves. We generally do not have long-term agreements with our manufacturers or component suppliers. If our suppliers become unwilling or unable to provide us with adequate supplies of parts or products when we need them, or if they increase their prices, we may not be able to find alternative sources in a timely manner and could be faced with a critical shortage. This could harm our ability to meet customer demand and cause our revenues to decline. Even if we are able to secure alternative sources in a timely manner, our costs could increase as a result of supply or geopolitical shocks, which may lead to an increase in the prices of goods and services from third parties. A supply interruption, such as the previous global shortage of semiconductors, or an increase in demand beyond current suppliers’ capabilities could harm our ability to distribute our equipment and thus to acquire new customers who use our technology. Any interruption in the supply of the hardware necessary to operate our technology, or our inability to obtain substitute equipment at acceptable prices in a timely manner, could impair our ability to meet the demand of our customers, which would have an adverse effect on our business. Our EasyPay Insurance business exposes us to risks typically experienced by life assurance companies. EasyPay Insurance Limited (“EasyPay Insurance”) is a life insurance company and exposes us to risks typically experienced by life assurance companies. Some of these risks include the extent to which we are able to continue to reinsure our risks at acceptable costs, reinsurer counterparty risk, maintaining regulatory capital adequacy, solvency and liquidity requirements, our ability to price our insurance products appropriately, the risk that actual claims experience may exceed our estimates, the ability to recover policy premiums from our customers and the competitiveness of the South African insurance market. If we are unable to maintain our desired level of reinsurance at prices that we consider acceptable, we would have to either accept an increase in our risk exposure or reduce our insurance writings. If our reinsurers are unable to meet their commitments to us in a timely manner, or at all, we may be unable to discharge our obligations under our insurance contracts. As such, we are exposed to counterparty risk, including credit risk, of these reinsurers. Our product pricing includes long-term assumptions regarding investment returns, mortality, morbidity, persistency and operating costs and expenses of the business. Using the wrong assumptions to price our insurance products could materially and adversely affect our financial position, results of operations and cash flows. If our actual claims experience is higher than our estimates, our financial position, results of operations and cash flows could be adversely affected. Finally, the South African insurance industry is highly competitive. Many of our competitors are well-established, represented nationally and market similar products and we therefore may not be able to effectively penetrate the South African insurance market. 18 Risks Relating to Operating in South Africa and Other Foreign Markets Operating in Southern and East Africa, both emerging markets, subjects us to greater risks than those we would face if we operated in more developed markets. Emerging markets such as Southern Africa are subject to greater risks than more developed markets. While we focus our business primarily on emerging markets because that is where we perceive the greatest opportunities to market our products and services successfully, the political, economic and market conditions in these markets present risks that could make it more difficult to operate our business successfully. Some of these risks include: • Political, legal and economic instability, including higher rates of inflation and currency fluctuations; • High levels of corruption, including bribery of public officials; • Loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection; • A lack of well-developed legal systems which could make it difficult for us to enforce our intellectual property and contractual rights; • Logistical, utilities (including electricity and water supply) and communications challenges; • Potential adverse changes in laws and regulatory practices, including import and export license requirements and restrictions, tariffs, legal structures and tax laws; • Difficulties in staffing and managing operations and ensuring the safety of our employees; • Restrictions on the right to convert or repatriate currency or export assets; • Greater risk of uncollectible accounts and longer collection cycles; • Indigenization and empowerment programs; • Exposure to liability under the UK Bribery Act; and • Exposure to liability under U.S. securities and foreign trade laws, including the Foreign Corrupt Practices Act, or FCPA, and regulations established by the U.S. Department of Treasury’s Office of Foreign Assets Control, or OFAC. If we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South African businesses, we may be subject to fines and we risk losing our government and/or private contracts. In addition, it is possible that we may be required to increase the Black shareholding of our company in a manner that could dilute your ownership and/or change the companies from which we purchase goods or procure services (to companies with a better BEE Status Level). The legislative framework for the promotion of Broad-Based Black Economic Empowerment (“BEE”) in South Africa has been established through the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended from time to time, and the Amended BEE Codes of Good Practice, 2013, or BEE Codes, and any sector-specific codes of good practice, or Sector Codes, published pursuant thereto. Sector Codes are fully binding between and among businesses operating in a sector for which a Sector Code has been published. Achievement of BEE objectives is measured by a scorecard which establishes a weighting for the various elements. Scorecards are independently reviewed by accredited BEE verification agencies which issue a verification certificate that presents an entity’s BEE Status Level. This BEE verification process must be conducted on an annual basis, and the resultant BEE verification certificate is only valid for a period of 12 months from the date of issue. Under our consolidated scorecard, which includes all South African businesses, we currently hold a BEE Status Level 2. Two of our South African businesses, being EasyPay Financial Services (Pty) Ltd (“EP FS”) and EasyPay Insurance Limited, are subject to the Amended Financial Sector Code, or the FS Sector Code, and all other businesses are consolidated under the Department of Trade and Industry (DTI) Generic Codes. The FS Sector Code have been amended and aligned with the new BEE Codes and were promulgated in December 2017. Licensing and/or regulatory authorities overseeing these South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating license to trade. The minimum requirement under the Financial Sector Code is Level 8. We currently have a BEE Status Level 5 for EP FS and BEE Status Level 4 for EasyPay Insurance. The BEE scorecard includes a component relating to management control, which serves to determine the participation of Black people in the board, as well as at various levels of management within a measured entity (including, inter alia, Executive Management, Senior Management, Middle Management and Junior Management). The BEE Codes and/or Sector Codes define the terms "Senior Management", "Middle Management" and "Junior Management" as those occupational categories as determined in accordance with the Employment Equity Regulations, with specific emphasis on improving participation in proportion to the demographics of the Economically Active Population of South Africa, as published by Statistics South Africa, from time to time. Employment Equity legislation seeks to drive the alignment of the workforce with the racial composition of the economically active population of South Africa and accelerate the achievement of employment equity targets, introducing monetary fines for non-compliance with the Employment Equity legislation and misrepresented submissions. Annexure EEA9 to the Employment Equity Regulations sets out the various occupational levels which are determined in accordance with the relevant grading systems applied by the measured entity and referred to in said Annexure. 19 During fiscal 2025, we made cash contributions to 36 community-based organizations and enterprises to enable them to promote growth and strengthen their capacity to develop innovative platforms or provide services to the markets they serve. We were also involved in disaster relief efforts for 275 families who were affected by disasters such as floods, cyclones and fires. We also advanced digital transformation in over 80 high schools by donating over 3,800 mobile devices. On November 14, 2024, our shareholders voted on and approved the funding and issuance of 2,490,000 shares of our common stock to the Lesaka ESOP Trust. The Lesaka Employee Share Ownership Plan (“ESOP”) is designed to create alignment with our long-term growth objectives. The Lesaka ESOP Trust is also expected to advance our transformation initiatives and plays an important role in improving our BEE Status Level. However, it is possible that these and other actions may not be sufficient to enable us to achieve the applicable BEE objectives set out for specific financial years. In that event, in order to maintain competitiveness in the South African marketplace, we may have to seek to increase compliance through other means, including by selling or placing additional shares of Lesaka or of our South African subsidiaries to Black South Africans (either directly or indirectly), over and above what has already been approved, and/or changing to suppliers that have higher BEE Status Levels. Such sales or placements of shares could have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline. We expect that our BEE Status Level will be important in order for us to remain competitive in the South African marketplace. We continually seek ways to improve our BEE Status Level, especially the ownership (so-called “equity”) and procurement elements thereof. We may not be able to effectively and efficiently manage the disruption to our operations as a result of erratic electricity supply in South Africa, which could adversely affect our, financial position, cash flows and future growth. Our businesses in South Africa are dependent on electricity generated and supplied by the state-owned utility, Eskom, in order to operate, and, in recent years, Eskom has been unable to consistently generate and supply the amount of electricity required by the South African economy which has resulted in significant and often unpredictable electricity supply disruptions. Eskom has implemented a number of short- and long-term mitigation plans to correct these issues, but supply disruptions continued to occur regularly and with no predictability, although consistency of electricity supply has improved significantly since April 2024. As part of our business continuity programs, we have installed back-up diesel generators in order for us to continue to operate our core data processing facilities in the event of intermittent disruptions to our electricity supply. We have to perform regular monitoring and maintenance of these generators and also source and manage diesel fuel levels. We may also be required to replace these generators on a more frequent basis due to the additional burden placed on them. Our results of operations, financial position, cash flows and future growth could be adversely affected if Eskom is unable to raise sufficient funding to operate and/or commission new electricity-generating power stations in accordance with its plans, or at all, or if we are unable to effectively and efficiently test, maintain, source fuel for, and replace, our generators. Fluctuations in the value of the South African rand have had, and will continue to have, a significant impact on our reported results of operations, which may make it difficult to evaluate our business performance between reporting periods and may also adversely affect our stock price. The South African rand, or ZAR, is the primary operating currency for our business operations while our financial results are reported in U.S. dollars. Therefore, any depreciation in the ZAR against the U.S. dollar, would negatively impact our reported revenue and net income. The U.S. dollar/ZAR exchange rate has historically been volatile and we expect this volatility to continue (refer to Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations—Currency Exchange Rate Information.”). Due to the significant fluctuation in the value of the ZAR and its impact on our reported results, you may find it difficult to compare our results of operations between financial reporting periods even though we provide supplemental information about our results of operations determined on a ZAR basis. Similarly, depreciation in the ZAR may negatively impact the prices at which our stock trades. We generally do not engage in any currency hedging transactions intended to reduce the effect of fluctuations in foreign currency exchange rates on our results of operations, other than economic hedging using forward contracts relating to our inventory purchases which are settled in U.S. dollars or euros. We cannot guarantee that we will enter into hedging transactions in the future or, if we do, that these transactions will successfully protect us against currency fluctuations. South Africa’s high levels of poverty, unemployment and crime may increase our costs and impair our ability to maintain a qualified workforce. While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment, relative to peer countries in Africa and other emerging economies, and there are significant differences in the level of economic and social development among its people, with large parts of the population, particularly in rural areas, having limited access to adequate education, healthcare, housing and other basic services, including water and electricity. In addition, South Africa has a high prevalence of HIV/AIDS and tuberculosis, the impact of which may be exacerbated in the short-term by the discontinuation of the U.S. government’s funding of certain HIV/AIDS research and outreach programs. 20 Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of citizens under previous governments may increase our costs and reduce our profitability, all of which could negatively affect our business. These problems may prompt emigration of skilled workers, hinder investment into South Africa and impede economic growth. As a result, we may have difficulties attracting and retaining qualified employees . The economy of South Africa is exposed to high rates of inflation, interest and corporate tax, which could increase our operating costs and thereby reduce our profitability. Furthermore, the South African government requires additional income to fund future government expenditures and may be required, among other things, to increase existing income tax rates, including the corporate income tax rate, amend existing tax legislation or introduce additional taxes. The economy of South Africa in the past has been, and in the future may continue to be, characterized by rates of inflation and interest that are substantially higher than those prevailing in the United States and other highly-developed economies. High rates of inflation could increase our South African-based costs and decrease our operating margins. High interest rates increase the cost of our debt financing, though conversely, they also increase the amount of income we earn on any cash balances. The South African corporate income tax rate, of 27%, is higher than the U.S. federal income tax rate, of 21%. Any increase in the effective South African corporate income tax rate would adversely impact our profitability and cash flow generation. Risks Relating to Government Regulation We are required to comply with certain laws and regulations, including economic and trade sanctions, which could adversely impact our future growth. We are subject to U.S. and other trade controls, economic sanctions and similar laws and regulations, including those in the jurisdictions where we operate. Our failure to comply with these laws and regulations could subject us to civil, criminal and administrative penalties and harm our reputation. These laws and regulations place restrictions on our operations, trade practices, partners and investment decisions. In particular, our operations are subject to U.S. and foreign trade control laws and regulations, including various export controls and economic sanctions programs, such as those administered by OFAC. We monitor compliance in accordance with the 10 principles as set out in the United Nations Global Compact Principles, the Organisation for Economic Co- operation and Development recommendations relating to corruption, and the International Labor Organization Protocol in terms of certain of the items to be monitored. As a result of doing business in foreign countries and with foreign partners, we are exposed to a heightened risk of violating trade control laws as well as sanctions regulations. Violations of trade control laws and sanctions regulations are punishable by civil penalties, including fines, denial of export privileges, injunctions, asset seizures, debarment from government contracts and revocations or restrictions of licenses, as well as criminal fines and imprisonment. We have developed policies and procedures as part of a company-wide compliance program that is designed to assist our compliance with applicable U.S. and international trade control laws and regulations, including trade controls and sanctions programs administered by OFAC, and provide regular training to our employees to create awareness about the risks of violations of trade control laws and sanctions regulations and to ensure compliance with these laws and regulations. However, there can be no assurance that all of our employees, consultants, partners, agents or other associated persons will not act in violation of our policies and these laws and regulations, or that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage, or provide a defense to any alleged violation. In particular, we may be held liable for the actions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations and financial condition. Any expansion into developing countries, and our development of new partnerships and joint venture relationships, could increase the risk of OFAC violations in the future. In addition, our payment processing and financial services activities are subject to extensive regulation. Compliance with the requirements under the various regulatory regimes may cause us to incur significant additional costs and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability. We are required to comply with anti-corruption laws and regulations, including the FCPA and UK Bribery Act, in the jurisdictions in which we operate our business, which could adversely impact our future growth. The FCPA prohibits us from providing anything of value to foreign officials for the purposes of obtaining or retaining business, or securing any improper business advantage, and requires us to keep books and records that accurately and fairly reflect our transactions. As part of our business, we may deal with state-owned business enterprises, the employees of which are considered foreign officials for purposes of the FCPA. The UK Bribery Act includes provisions that extend beyond bribery of foreign public officials and also apply to transactions with individuals not employed by a government and the act is also more onerous than the FCPA in a number of other respects, including jurisdiction, non-exemption of facilitation payments and penalties. Some of the international locations in which we operate or have investments lack a developed legal system and have higher than normal levels of corruption. 21 Any failure by us to adopt appropriate compliance procedures and ensure that our employees, agents and business partners comply with the anti-corruption laws and regulations could subject us to substantial penalties, and the requirement that we comply with these laws could put us at a competitive disadvantage against companies that are not required to comply. For example, in many emerging markets, there may be significant levels of official corruption, and thus, bribery of public officials may be a comm only accepted cost of doing business. Our refusal to engage in illegal behavior, such as paying bribes, may result in us not being able to obtain business that we might otherwise have been able to secure or possibly even result in unlawful, selective or arbitrary action being taken against us. Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, as well as criminal fines and imprisonment. We have developed policies and procedures as part of a company-wide compliance program that is designed to assist our compliance with applicable U.S., South African and other international anti-corruption laws and regulations, and provide regular training to our employees to comply with these laws and regulations. However, there can be no assurance that all of our employees, consultants, partners, agents or other associated persons will not take actions in violation of our policies or these laws and regulations, or that our policies and procedures will effectively prevent us from violating these regulations in every transaction in which we may engage, or provide a defense to any alleged violation. In particular, we may be held liable for the actions that our local, strategic or joint venture partners take inside or outside of the United States, even though our partners may not be subject to these laws. Such a violation, even if our policies prohibit it, could materially and adversely affect our reputation, business, results of operations and financial condition. We do not have a South African banking license and, therefore, we provide our EPE solution through an arrangement with a third-party bank, which limits our control over this business and the economic benefit we derive from it. If this arrangement were to terminate, we would not be able to operate our EPE business without alternate means of access to a banking license. We are also required to comply with the requirements of payment schemes, including VISA and Mastercard. Furthermore, we provide certain of our services under partnerships with South African banks. We will be unable to provide our payments and card-acquiring businesses if we fail to comply with payment scheme rules, and/or fail to maintain certain regulatory licenses and registrations, and/ or if we were unable to continue to partner with South African banks to provide our payments and card acquiring services. The South African retail banking market is highly regulated. Under current law and regulations, our EasyPay Everywhere (“EPE”) business activities require us to be registered as a bank in South Africa or to have access to an existing banking license. We are not currently so registered, but we have an agreement with African Bank Limited, that enables us to implement our EPE program in compliance with the relevant laws and regulations. If this agreement were to be terminated, we would not be able to operate these services unless we were able to obtain access to a banking license through alternate means. Furthermore, we have to comply with the South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing control regulations, when we open new bank accounts for our customers and when they transact. Failure to effectively implement and monitor responses to the legislation and regulations may result in significant fines or prosecution of African Bank and ourselves. The South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries between financial product suppliers and consumers in South Africa to register as financial service providers. EasyPay Insurance was granted a Financial Service Provider (“FSP”) license on June 9, 2015, and EP FS was granted a FSP license on July 11, 2017. If our FSP licenses are withdrawn or suspended, we may be stopped from continuing our financial services businesses in South Africa unless we are able to enter into a representative arrangement with a third party FSP. Furthermore, the proposed Conduct of Financial Institutions (“COFI”) Bill will overhaul the current regulatory and legislative framework by replacing the rules-based approach with an outcomes-driven and principles-based model, and the adoption of an activity- based licensing regime. It will establish a uniform legislative framework to regulate the conduct of all financial institutions across the financial services sector. While the framework will make significant changes, including the conversion of existing licences through transitional arrangements and new activities requiring licensing, it is likely to increase operational costs to meet regulatory expectations. The final draft of the COFI Bill is expected to be tabled before Parliament late 2025 or early 2026 for approval. However, contingencies are in place to ensure smooth transition should the COFI Bill face further delays which will include formal consultations and the phased introduction of the new legislative framework. We are required to comply with the requirements of payment schemes, including VISA and Mastercard. We have deployed a significant number of devices, and any mandatory compliance upgrades to our deployed POS devices would require significant capital expenditures and/or be disruptive to our customer base. Failure to comply with the payment schemes’ rules may result in significant fines and/or a loss of license to participate in the scheme(s). We provide card acquiring services to our customers by partnering with Nedbank Limited and ABSA Bank Limited, and payment processing services in partnership with the largest banks in South Africa. If these agreements were to be terminated, Adumo would not be able to operate its payment services unless it were able to obtain alternative card acquiring or payment processing agreements with other partners or obtain a direct designation license with the schemes and regulatory bodies. In addition, if we were to lose our Payment Association of South Africa (“PASA ”) registrations or fail to have them renewed, it would be unable to operate its payment services. 22 Compliance with the requirements under these various regulatory regimes may cause us to incur significant additional costs and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability. Proposed regulatory changes to the national payments system are expected to have a substantial impact on the South African payments industry. It may change the manner in which we conduct business and likely lead to increased operating costs for our business as we work to ensure compliance with the new legislative and regulatory framework, which may have a material adverse effect on our business. On March 3, 2025, the South African Reserve Bank (“SARB”) published certain draft regulatory documents for commentary that are expected to have a substantial impact on how we conduct our business namely: (i) a draft directive entitled “Directive in respect of specific payment activities within the national payment system” (the “Directive”); (ii) a draft exemption notice entitled “Designation by the Prudential Authority of specific activities conducted in the national payment system which shall be deemed not to constitute ‘the business of a bank’ under paragraph (cc) in section 1(1) of the Banks Act, 1990” (the “Exemption Notice”); and (iii) the National Payment System Bill (“NPS Bill”), which seeks to replace the existing National Payment System Act, 1998. The proposed regulations were made available for comment, and we submitted detailed comments to our industry body, Association of South African Payment Providers, on the proposed regulations. The key objectives of the proposed regulations are to clarify the mandate and objectives of the SARB with respect to the national payment system (“NPS”); and establish a robust regulatory, oversight, and supervisory framework for the NPS. The proposed regulations also aim to promote financial inclusion, competition, the prevention of financial crime, and the fair treatment and protection of customers, while introducing an activity-based licensing and authorization regime. In this regard, the Directive defines thirteen “payment activities” and provides that a person, which can be a bank or a non-bank, providing a “payment activity" must obtain authorisation from the SARB to undertake such activity. Under the Exemption Notice, certain payment activities are exempted from the definition of ‘the business of a bank’. Prior to the Exemption Notice, these activities could only be undertaken by a bank. Pursuant to the Exemption Notice, these activities can be undertaken by non-banks, subject to certain conditions. Certain of our businesses, including EasyPay Everywhere, Adumo and Kazang Pay, currently undertake activities which would qualify as “payment activities” under the Directive and the NPS Bill. Under the current regulatory framework, these activities are undertaken in partnership with a sponsoring bank and the sponsoring bank is subject to regulation by the SARB. In other words, the business undertaking the “payment activity” is not subject to direct regulation with respect to such payment activities. It is uncertain if and when the proposed regulations will enter into effect and whether a non-bank such as the relevant Lesaka subsidiary may elect whether to conduct an exempted payment activity by partnering with a bank to do so, or on its own, if it is authorised by the SARB - i.e. whether both options will be available to a non-bank. Should our businesses be subject to direct regulation under this new regime (i.e., if our current sponsorship model is no longer available), we expect that we will incur significant operating costs to comply with the new requirements, and to obtain authorization with respect thereto. Furthermore, while some requirements may already exist under other current regulatory frameworks for certain of our businesses, we will likely need to invest in additional resources, systems and processes to satisfy the regulatory requirements contemplated in the proposed regulations, which may also lead to increased operational costs, which may have a material adverse effect on our business. We may be subject to regulations regarding privacy, data use and/or security, which could adversely affect our business. We are subject to regulations in a number of the countries in which we operate relating to the processing (which includes, inter alia , the collection, use, retention, security and transfer) of personal information about the people (whether natural or juristic) who use our products and services. The interpretation and application of user data protection laws are in a state of flux. These laws may be interpreted and applied inconsistently from country to country and our current data protection policies and practices may not be consistent with those interpretations and applications. Complying with these varying requirements could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business. Any failure, or perceived failure, by us to comply with any regulatory requirements or international privacy or consumer protection-related laws and regulations could result in proceedings or actions against us by governmental entities or others, subject us to significant penalties and negative publicity. In addition, as noted above, we are subject to the possibility of security breaches, which themselves may result in a violation of these laws. Amendments to the NCA were signed into law in South Africa in August 2019. Compliance with these amendments may adversely impact our micro-lending operations in South Africa. In August 2019, the National Credit Amendment Bill, or debt-relief bill, was signed into law in South Africa. The effective date of the debt-relief bill has not yet been announced and has been significantly delayed. We believe that the debt-relief bill will restrict the ability of financial services providers to provide lending products to certain low-income earners and will increase the cost of credit to these consumers. As a result, compliance with the debt -relief bill may adversely impact our micro-lending operations in South Africa. Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement this new legislation in our lending processes and practices. Non-compliance with the provisions of this new legislation may result in financial loss and penalties, reputational loss or other administrative punishment. 23 Risks Relating to our Common Stock Our stock price has been and may continue to be volatile. Our stock price has periodically experienced significant volatility. During the 2025 fiscal year, our stock price ranged from a low of $3.39 to a high of $5.60. We expect that the trading price of our common stock may continue to be volatile as a result of a number of factors, including, but not limited to the following: • Any adverse developments in litigation or regulatory actions in which we are involved; • Fluctuations in currency exchange rates, particularly the U.S. dollar/ZAR exchange rate; • Announcement of additional BEE transactions, especially one involving the issuance or potential issuance of equity securities or dilution or sale of our existing business in South Africa; • Quarterly variations in our operating results; • Significant fair value adjustments or impairment in respect of investments or intangible assets; • Announcements of acquisitions or disposals; • The timing of, or delays in the commencement, implementation or completion of major projects; • Large purchases or sales of our common stock; and • General conditions in the markets in which we operate. Additionally, shares of our common stock can be expected to be subject to volatility resulting from purely market forces over which we have no control. The put right we granted to the IFC Investors on the occurrence of certain triggering events may have adverse impacts on us. In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors. Certain IFC Investors were also investors in Adumo and on October 1, 2024, we issued an aggregate of 1,989,162 additional shares of our common stock to these IFC Investors pursuant to the Adumo transaction agreement. As of June 30, 2025, the IFC Investors held 9,356,028 shares. We granted the IFC Investors certain rights, including the right to require us to repurchase any share held by the IFC Investors pursuant to the May 2016 and October 2024 transactions upon the occurrence of specified triggering events, which we refer to as a “put right.” The put price per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price per share prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror. If a put triggering event occurs, it could adversely impact our liquidity and capital resources. In addition, the existence of the put right could also affect whether or on what terms a third party might in the future offer to purchase our company. Our response to any such offer could also be complicated, delayed or otherwise influenced by the existence of the put right. Approximately 31% of our outstanding common stock is owned by two shareholders. The interests of these shareholders may conflict with those of our other shareholders. There is a concentration of ownership of our outstanding common stock because approximately 31% of our outstanding common stock is owned by two shareholders. Based on their most recent SEC filings disclosing ownership of our shares, Value Capital Partners (Pty) Ltd, or VCP, and IFC Investors, beneficially own approximately 19% and 12% of our outstanding common stock as of June 30, 2025, respectively. The interests of VCP and the IFC Investors may be different from or conflict with the interests of our other shareholders. As a result of the significant combined ownership by VCP and the IFC Investors, they may be able, if they act together, to significantly influence the voting outcome of all matters requiring shareholder approval. This concentration of ownership may have the effect of delaying or preventing a change of control of our company, thus depriving shareholders of a premium for their shares, or facilitating a change of control that other shareholders may oppose. We may seek to raise additional financing by issuing new securities with terms or rights superior to those of shares of our common stock, which could adversely affect the market price of such shares. We may require additional financing to fund future operations, including expansion in current and new markets, programming development and acquisition, capital costs and the costs of any necessary implementation of technological innovations or alternative technologies, or to fund acquisitions. We may also wish to raise additional equity funding to reduce the amount of debt funding on our balance sheet. Because of the exposure to market risks associated with economies in emerging markets, we may not be able to obtain financing on favorable terms or at all. If we raise additional funds by issuing equity securities, the percentage ownership of our current shareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of common stock, which could adversely affect the market price and voting power of shares of common stock. If we raise additional funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior to those of the holders of shares of common stock, and the terms of these debt securities could impose restrictions on operations and create a significant interest expense for us. 24 Issuances of significant amounts of stock in the future could potentially dilute your equity ownership and adversely affect the price of our common stock. We believe that it is necessary to maintain a sufficient number of available authorized shares of our common stock in order to provide us with the flexibility to issue shares for business purposes that may arise from time to time. For example, we could sell additional shares to raise capital to fund our operations, to reduce debt or to acquire other businesses, issue shares in a BEE transaction, issue additional shares under our stock incentive plan or declare a stock dividend. Our board may authorize the issuance of additional shares of common stock without notice to, or further action by, our shareholders, unless shareholder approval is required by law or the rules of the NASDAQ Stock Market. The issuance of additional shares could dilute the equity ownership of our current shareholders and any such additional shares would likely be freely tradable, which could adversely affect the trading price of our common stock. We have identified material weaknesses in our internal control over financial reporting which, if not timely remediated, may adversely affect the accuracy and reliability of our financial statements, and our reputation, business and stock price, as well as lead to a loss of investor confidence in us. As described under Item 9A—“Controls and Procedures.”, we concluded that our disclosure controls and procedures were not effective as of June 30, 2025 and that we had, as of such date, material weaknesses in our internal control over financial reporting related to: ● Our Consumer lending process, specifically insufficient risk assessment and monitoring activities relating to changes in systems and processes, insufficient controls over internal information and information from service organizations, and insufficient design and implementation of information technology general controls (“ITGCs”), controls over service organizations and process level controls, resulting in ineffective process level controls, including a lack of validation of the completeness and accuracy of information used within the process; ● Our payroll process, specifically insufficient risk assessment and monitoring activities relating to changes over the transfer of ownership to the centralized payroll processes, insufficient controls over information from service organizations, and insufficient design and implementation of ITGCs, controls over service organizations and process level controls resulting in ineffective process level controls including a lack of validation of the completeness and accuracy of information used within this process; ● Our annual goodwill impairment process, specifically related to insufficient risk assessment and ineffective design and implementation of controls resulting in ineffective process level controls; ● Our business combination process, specifically insufficient risk assessment and ineffective design and implementation of controls over the purchase price allocation of the Adumo and Recharger acquisitions including insufficient controls over information resulting in ineffective process level controls including a lack of validation of the completeness and accuracy of information used; ● Our revenue recognition process relating to prepaid airtime sold and processing fees relating to certain agreements, specifically insufficient risk assessment and ineffective design and implementation of controls related to our judgement over revenue recognized either as principal versus as agent resulting in ineffective process level controls.; ● Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation of controls including insufficient controls over information resulting in ineffective process level controls including a lack of validation of the completeness of the journal entry population and a lack of validation of the completeness and accuracy of information used within the process; and ● An insufficient number of experienced and trained resources to execute on their internal control responsibilities resulting in ineffective design, implementation and operating effectiveness of process level controls for processes in the scope of our internal control over financial reporting evaluation. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim consolidated financial statements would not be prevented or detected on a timely basis. The material weaknesses identified in Item 9A—“Controls and Procedures.”, did not result in any adjustments or restatements of our audited and unaudited consolidated financial statements or disclosures for any prior period previously reported by us. We intend to remediate these material weaknesses. While we believe the steps we take to remediate these material weaknesses will improve the effectiveness of our internal control over financial reporting and will remediate the identified deficiencies, if our remediation efforts are insufficient to address the material weakness or we identify additional material weaknesses in our internal control over financial reporting in the future, our ability to analyze, record and report financial information accurately, to prepare our financial statements within the time periods specified by the rules and forms of the SEC and to otherwise comply with our reporting obligations under the federal securities laws may be adversely affected. The occurrence of, or failure to remediate, these material weaknesses and any future material weaknesses in our internal control over financial reporting may adversely affect the accuracy and reliability of our financial statements and have other consequences that could materially and adversely affect our business, including an adverse impact on the market price of our common stock, potential actions or investigations by the SEC or other regulatory authorities, shareholder lawsuits, a loss of investor confidence and damage to our reputation. 25 Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act, especially over companies that we may acquire, could have a material adverse effect on our business and stock price. Under Section 404 of Sarbanes, we are required to furnish a management certification and auditor attestation regarding the effectiveness of our internal control over financial reporting. We are required to report, among other things, control deficiencies that constitute a “material weakness” or changes in internal control that materially affect, or are reasonably likely to materially affect, internal control over financial reporting. A “material weakness” is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely basis. The requirement to evaluate and report on our internal controls also applies to companies that we acquire. Some of these companies, such as Adumo and Recharger, may not be required to comply with Sarbanes prior to the time we acquire them. The integration of these acquired companies into our internal control over financial reporting could require significant time and resources from our management and other personnel and may increase our compliance costs. If we fail to successfully integrate the operations of these acquired companies into our internal control over financial reporting, our internal control over financial reporting may not be effective. While we continue to dedicate resources and management time to ensuring that we have effective controls over financial reporting, failure to achieve and maintain an effective internal control environment could have a material adverse effect on the market’s perception of our business and our stock price. The restatement of our prior quarterly financial statements may affect shareholder and investor confidence in us or harm our reputation, and may subject us to additional risks and uncertainties, including increased costs and the increased possibility of legal proceedings and regulatory inquiries, sanctions or investigations. We identified material misstatements in the original filings of our Quarterly Report on Form 10-Q for the quarters ended September 30, 2024, December 31, 2024 and March 31, 2025 (“Original Filings”) and withdrew reliance on these Original Filings on September 10, 2025. We filed amended quarterly reports on September 29, 2025 which include restatement(s), refer to the section titled “Restatement” in Note 1 to the unaudited condensed consolidated financial statements in each of the amended filings on Form 10-Q/A for the quarters ended September 30, 2024, December 31, 2024 and March 31, 2025, for additional information regarding the restatement(s). Management also identified material weaknesses in our internal control over financial reporting specific to the evaluation of information that was known or knowable at the time of the transaction or event included in the Original Filings, refer to Item 9A—“Controls and Procedures.” As a result of the restatement described above, we have incurred, and may continue to incur, unanticipated costs for accounting and legal fees in connection with, or related to, such restatement. In addition, such restatement could subject us to a number of additional risks and uncertainties, including the increased possibility of legal proceedings and inquiries, sanctions or investigations by the SEC or other regulatory authorities. Any of the foregoing may adversely affect our reputation, the accuracy and timing of our financial reporting, or our business, results of operations, liquidity and financial condition, or cause shareholders, investors and customers to lose confidence in the accuracy and completeness of our financial reports or cause the market price of our common stock to decline. You may experience some difficulties in effecting service of legal process, enforcing U.S and/or foreign judgments or bringing original actions based upon U.S. laws, including federal securities laws or other foreign laws, against us or certain of our directors and officers and experts. While Lesaka is incorporated in the state of Florida, United States, substantially all of the company’s assets are located outside the United States. For this reason, the majority of Lesaka’s directors and all its officers reside outside of the United States and the majority of our experts, including our independent registered public accountants, are based in South Africa. As a result, even though you could effect service of legal process upon Lesaka, as a Florida corporation, in the United States, you may not be able to collect any judgment obtained against Lesaka in the United States, including any judgment based on the civil liability provisions of U.S. federal securities laws, because substantially all of our assets are located outside the United States. 26 Any legal processes initiating action in the United States against Lesaka's directors, officers, and experts who are located outside of the United States, will need to be served on them in that country, in accordance with the procedures prescribed by the relevant U.S. court. South Africa is not a party to any treaties regarding the enforcement of foreign commercial judgments. In order to be able to enforce a foreign judgment, it is required for the South African courts to first "recognize" the U.S. judgment – in the absence of this, the foreign judgment has no automatic extra territorial effect. The foreign judgment constitutes a "cause of action" which may be recognized and enforced by South African courts. In order to achieve this, legal proceedings must be commenced in the South African courts. South Africa is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and its International Arbitration Act 15 of 2017 provides that foreign arbitral awards must be recognised and enforced in South Africa. However, application must still be made to the South African High Court in order for the award to be recognised and enforceable in South Africa. Additional, practical, considerations relating to the enforcement of foreign judgments and arbitration awards in South Africa include the following: ● If a foreign judgment is enforced by a South African court, the approval of the SARB (or an Authorised Dealer of SARB) is required (i) before a defendant resident in South Africa may pay money to a non-resident plaintiff; and (ii) to settle the judgement in a currency other than South African Rand; and ● A plaintiff who is not resident in South Africa may be required to provide security for costs when initiating court proceedings in South Africa (including for the enforcement of foreign judgments and awards). 27 ITEM 1B. UNRESOLVED STAFF COMMENTS None. ITEM 1C. CYBERSECURITY We operate in the Southern African Fintech industry, which is subject to various cybersecurity risks that could adversely affect our business, financial condition, and results of operations including, but not limited to, the following: intellectual property theft, fraud, extortion, harm to employees or customers, violation of privacy laws and other litigation and legal risk and reputational risk. We have implemented a risk-based approach to identify and assess the cybersecurity threats that could affect our business and information systems. Our cybersecurity program is aligned with industry standards and best practices, specifically the Payment Card Industry Data Security Standard (“PCI DSS”), the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework and more recently the SARB Directive No. 01 of 2024, focusing on cybersecurity and cyber-resilience within the National Payment System (“NPS”). We periodically conduct a third -party Security Risk Assessment (“SRA”) to identify the potential impact and likelihood of various cyber scenarios and to determine the appropriate mitigation strategies and controls. We also use this SRA to inform our cybersecurity roadmap and strategies to ensure a robust IT security environment is implemented at our company. We use various tools and methodologies to manage cybersecurity risk—including, but not limited to, the following: the use of a Managed Endpoint Detection and Response (“EDR”) software and Managed Network Detection and Response (“MNDR”) for our Local Area Network (“LAN”) monitoring with internal and external Security Operations Center (“SOC”) real-time monitoring, Data Loss Prevention (“DLP”) enabled across email and web channels as well as mandatory Multi-factor Authentication (“MFA”) in our IT environment. In addition, we do periodic backups and regularly test the process to recover any lost or corrupted data. We also monitor and evaluate our cybersecurity posture and performance on an ongoing basis through regular vulnerability scans, penetration tests, and threat intelligence feeds provided by our respective security vendors. We require third-party service providers with access to personal, confidential or proprietary information to implement and maintain comprehensive cybersecurity practices consistent with applicable legal standards and industry best practices. We recognize the importance of cyber security awareness and skills development which is regularly provided to the general workforce, security teams, developers and senior management which includes regular crisis simulations to prepare respective teams for crisis scenarios. This also includes regular phishing simulations and campaigns. Our business depends on the availability, reliability, and security of our information systems, networks, data, and intellectual property. Any disruption, compromise, or breach of our systems or data due to a cybersecurity threat or incident could adversely affect our operations, customer service, product development, and competitive position. This could also result in a breach of our contractual obligations or legal duties to protect the privacy and confidentiality of our stakeholders. Such a breach could expose us to business interruption, lost revenue, ransom payments, remediation costs, liabilities to affected parties, cybersecurity protection costs, lost assets, litigation, regulatory scrutiny and actions, reputational harm, customer dissatisfaction, harm to our vendor relationships, or loss of market share. Our Board of Directors exercises its oversight role through the Audit Committee , which provides the Board with regular reports and findings from our Group Chief Information Security Officer (“ CISO ”) , a qualified cybersecurity professional with over 25 years of experience and a Master’s in Information Security from Royal Holloway, University of London . As of the date of this Annual Report, we do not believe any risks from cybersecurity threats have materially affected or are reasonably likely to materially affect us, including our results of operations or financial condition. This Item 1C should be read in conjunction with the other sections of this Annual Report, particularly Item 1A “Risk Factors,” for a comprehensive understanding of the risks and uncertainties related to our business and operations. 28 ITEM 2. PROPERTIES We lease our corporate headquarters facility which consists of approximately 81,000 square feet in Johannesburg, South Africa. We also lease properties throughout South Africa, including 207 financial services branches, 14 financial service express stores, 17 satellite branches and 14 sites to support our integrated POS software and hardware to the hospitality industry operations. We also lease additional office space in Johannesburg, Cape Town and Durban, South Africa; Gaborone, Botswana; Windhoek Namibia; and Nairobi, Kenya. These leases expire at various dates through 2030, assuming the exercise of options to extend. We believe that we have adequate facilities for our current business operations. ITEM 3. LEGAL PROCEEDINGS Litigation related to CPS Lesaka SA is a party to proceedings in the Constitutional Court of South Africa involving its subsidiary, Cash Paymaster Services Proprietary Limited (“CPS”), which is currently in liquidation. The objective of these proceedings is to procure an order for CPS to pay to SASSA the profit generated by CPS pursuant to an agreement concluded between SASSA and CPS, following the award of a tender to CPS. This arose as a consequence of prior court proceedings which concluded that the tender should not have been awarded to CPS (for technical reasons not related to any conduct by CPS). Lesaka SA has been included in these proceedings in order to provide information relevant to determining the profit so made by CPS. A hearing was held in the Constitutional Court on May 27, 2025 and we await the ruling of the Constitutional Court. While no formal steps have been taken by CPS or any other party to these proceedings to claim that Lesaka SA should be liable to SASSA or to CPS as a consequence of the proceedings currently before the Constitutional Court, it is difficult to anticipate what the ruling of the Constitutional Court will be. General From time to time, we are involved in legal proceedings and litigation arising in the ordinary course of business. As of the date of this Annual Report on Form 10-K, we are not a party to any litigation or legal proceeding or subject to any claim that, in the current opinion of management, could reasonably be expected to have a material adverse effect on our financial position or results of operations. However, due to the risks and uncertainties inherent in legal proceedings, actual results could differ from current expected results. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 29 PART II ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market information Our common stock is listed on The NASDAQ Global Select Market, or Nasdaq, in the United States under the symbol “LSAK” and on the JSE in South Africa under the symbol “LSK.” The Nasdaq is our principal market for the trading of our common stock and we have a secondary listing on the JSE. Our transfer agent in the United States is Computershare Shareowner Services LLC, 480 Washington Blvd, Jersey City, New Jersey, 07310. According to the records of our transfer agent, as of September 25, 2025, there were 6 shareholders of record of our common stock. We believe that a substantially greater number of beneficial owners of our common stock hold their shares though banks, brokers, and other financial institutions (i.e. “street name”). Our transfer agent in South Africa is JSE Investor Services (Pty) Ltd, One Exchange Square, 2 Gwen Lane, Sandown, Sandton, 2196, South Africa. Dividends We have not paid any dividends on shares of our common stock during our last two fiscal years and presently intend to retain future earnings to finance the expansion of the business. We do not anticipate paying any cash dividends in the foreseeable future. The future dividend policy will depend on our earnings, capital requirements, debt commitments, expansion plans, financial condition and other relevant factors. Issuer purchases of equity securities On September 2, 2025, our board of directors approved a share repurchase authorization to repurchase up to an aggregate of $15 million of our common stock. The authorization has no expiration date. This share purchase authorization replaces our $100 million share repurchase authorization. The table below presents information relating to purchases of shares of our common stock during the fourth quarter of fiscal 2025: Period (a) Total number of shares purchased (b) Average price paid per share ($) (c) Total number of shares purchased as part of publicly announced plans or programs (d) Maximum dollar value of shares that may yet be purchased under the plans or programs ($) April 2025 0 - - 100,000,000 May 2025 (1) 230,442 4.49 - 100,000,000 June 2025 (1) 2,853 4.19 - 100,000,000 Total 233,295 - (1) Relates to the delivery of shares of our common stock to us by certain of our employees to settle their income tax liabilities. These shares do not reduce the repurchase authority under our previous $100 million share repurchase program. 30 Share performance graph The chart below compares the five-year cumulative return, assuming the reinvestment of dividends, where applicable, on our common stock with that of the S&P 500 Index and the NASDAQ Industrial Index. This graph assumes $100 was invested on June 30, 2020, in each of our common stock, the companies in the S&P 500 Index, and the companies in the NASDAQ Industrial Index. ITEM 6. [RESERVED] 31 ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis should be read in conjunction with Item 8—“Financial Statements and Supplementary Data.” In addition to historical consolidated financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. See Item 1A— “Risk Factors” and “Forward Looking Statements.” U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. We discuss why we consider it useful to present these non-GAAP measures and the material risks and limitations of these measures, as well as a reconciliation of these non- GAAP measures to the most directly comparable GAAP financial measure below at “—Results of Operations —Use of Non-GAAP Measures” below. Overview We offer an integrated and holistic multiproduct platform that provides transactional accounts, lending, insurance, merchant acquiring, cash management, software and ADP. Targeted solutions and integrations facilitate payments between consumers and businesses. By providing a full-service fintech platform in our connected ecosystem, we facilitate the digitization of commerce in our markets. Sources of Revenue We generate revenue through a diversified portfolio of financial, payment, software, and technology solutions, structured across three reportable segments: Merchant, Consumer, and Enterprise. Merchant Revenues in Merchant are derived from a combination of transaction-based fees and an ad valorem pricing model. ● Merchant acquiring: We earn revenue from merchant acquiring on an ad valorem basis, based on a percentage of the total transaction value processed through our network. We also earn revenue from transaction fees charged to merchants. ● Software (technology products): Revenue is generated through selling hardware (such as POS devices) and providing licensing software and technology services to merchants. ● Cash: We generally earn revenue on an ad valorem basis, based on a percentage of the total cash settlements processed through our cash vaulting network. We also earn transaction fees when customers utilize our ATM network. ● Lending: We generate interest revenue from qualifying merchant customers who are able to access short-term business loans. This revenue stream includes interest charged on outstanding loan balances. ● ADP: We also offer merchant customers access to platforms through which we (a) generate revenue from the sale of prepaid airtime and generate fees from distribution of ADP, including prepaid solutions (airtime, data, electricity and gaming), bill payments, International Money Transfers (“IMT”) and supplier enabled payments. These fees are largely charged on an ad valorem basis. Consumer Revenues in Consumer are generated from transactional banking fees, interest income, insurance premiums and card transaction processing fees. ● Transactional Fees: We earn revenue by charging a monthly fee and charge fees on an ad valorem basis for goods and services purchased. Transactional fees associated with our consumer accounts include monthly account service fees, ATM withdrawal fees, and other fees based on usage. ● Lending: Revenue from our lending products is derived from a combination of origination fees, monthly interest on outstanding loan balances and monthly service fees. ● Insurance: Revenue from our insurance offerings is earned monthly premiums paid by the policyholders. Enterprise Like Merchant, Enterprise generates revenue from a combination of transaction-based fees and an ad valorem pricing model. ● ADP: Revenue from our ADP offering for Enterprise clients is primarily based on a fixed fee per transaction. A secondary pricing model is on an ad valorem basis, depending on the specific digital product being sold. ● Utilities: Our utilities vertical generates revenue predominantly through an annuity-based model, with fees charged on an ad valorem basis based on the total value of electricity vended through our platform. Ad-hoc hardware sales of utility meters also an additional contribution to revenue. ● Payments: Our payment solutions enable payment acceptance for us and external enterprises, on which we earn a fee per transaction processed. 32 Developments during Fiscal 2025 This item generally discusses our 2025 results compared to our 2024 results. Discussions of our 2024 results compared to our 2023 results can be found within our Annual Report on Form 10-K for the year ended June 30, 2024. Merchant Division Performance in Merchant has been driven by: Merchant acquiring Merchant acquiring includes 84,541 devices deployed under the Adumo, Card Connect and Kazang brands. 2025 2024 2023 2025 vs 2024 Number of devices in deployment 84,541 51,880 44,935 63% Total Throughput for the year (ZAR billions) 35.5 15.6 12.0 127% ● 2025 is inclusive of approximately 29,000 devices deployed by Adumo with the Adumo transaction closing on October 1, 2024, the impact of which is not included in the prior period comparatives. ● Throughput increased to ZAR 35.5 billion for the year, driven mainly by the inclusion of Adumo for nine months of fiscal 2025 and 15% year-on-year growth attributable to Kazang Pay. Software Our software solutions are offered through GAAP. 2025 Number of GAAP sites 9,649 Approximate ARPU per site (ZAR) (1) 3,144 (1) ARPU is calculated on a revenue per site basis, as monthly figure based on a three -month rolling average for the quarter ending June 30, 2025. ● GAAP was acquired on October 1, 2024. ● Monthly ARPU per site combines hardware on a rental basis and software subscription revenue, but excludes the merchant acquiring revenue when our software customers utilize our merchant acquiring payment solutions. Cash 2025 2024 2023 2025 vs 2024 Number of devices in deployment 4,572 4,448 4,393 3% Cash settlements (throughput) for the year (ZAR billions) 114.8 112.6 110.1 2% Our cash business continues to reflect a tale of two distinct markets: ● Small-to-Medium merchant sector: Ongoing decline in cash usage with flat net growth in vault activity in a more mature digital economy where cash is increasingly displaced by digital alternatives. ● Micro-merchant market: High cash prevalence and increasing digital adoption is supporting strong growth in the numbers of devices and cash settlements. Throughput in our vaults placed in the micro-merchant sector increased more than 90% to ZAR 13.8 billion in fiscal 2025, representing more than 10% of total vault throughput for the year compared to over 5% a year ago. This is fast becoming a meaningful contributor to our cash offering. 33 Lending Our lending solutions are offered to merchants through Capital Connect and Adumo Capital. Adumo Capital is a joint venture with Retail Capital, a division of Tyme Bank, with a 50:50 profit share. 2025 2024 2023 2025 vs 2024 Total lending origination volume (ZAR millions) (1) 917 716 769 28% Total net loan book outstanding at period end (ZAR millions) (1) 479 284 294 69% (1) Amounts reflected above includes 100% of Adumo Capital’s credit disbursed and net loan book. ● 2025 is inclusive of lending origination volume (for nine months) and the net loan book under the Adumo brand, with the Adumo transaction closing on October 1, 2024, the impact of which is not included in the prior period comparatives. ● Capital Connect comprises more than 70% of our merchant lending activity. After a challenging two-year period shaped by macroeconomic headwinds, Capital Connect lending origination volume rebounded during fiscal 2025. Capital Connect disbursed ZAR 783 million in 2025, compared with ZAR 716 million last year and ZAR 769 million in 2023. This recovery has been driven by targeted strategic interventions, including dedicated sales teams, improved proprietary visibility into merchants’ business activity, increased emphasis on new client acquisition and renewals for repeat borrowers. ADP ADP in our Merchant Division includes prepaid solutions (airtime, data, electricity and gaming), bill payments, IMT and supplier enabled payments. IMT and bill payments are included in the supplier enabled throughput shown below, with supplier payments representing the most significant contributor to ADP throughput in the Merchant Division. 2025 2024 2023 2025 vs 2024 Number of devices in deployment 94,345 87,562 74,955 8% Total throughput for the year (ZAR billions) 42.5 33.0 27.6 29% Prepaid solutions throughput for the year (ZAR billions) 19.1 18.1 14.8 6% Supplier enabled payments throughput for the year (ZAR billions) 23.4 14.9 12.8 57% ● We had 94,345 devices deployed as of June 30, 2025, representing a 8% year-on-year growth. Core to our device placement strategy is the decision to focus on quality business and optimizing our existing fleet, which is reflected in healthy throughput growth. ● Total throughput increased 29% to ZAR 42.5 billion year-on-year, driven by a 57% increase in supplier enabled payments. Unification of Merchant under Lesaka brands Over the past three years, we have brought together Kazang and Connect and subsequently added Adumo and GAAP to our Merchant Division. In 2025, we accelerated the integration of our micro-merchant and merchant businesses as we build an integrated, multi-product platform serving merchants of all sizes. The unification of our Merchant Division’s operations and the realignment of these brands under a single Lesaka identity has commenced. We expect streamlining efforts to reduce complexity, eliminate duplication, and unify our go-to-market strategy. As a result of these actions, we have incurred reorganization costs, as well as additional intangible asset amortization charges due to the shortening of the deemed useful lives of some of our brands. Consumer Division Our consumer base includes South African grant beneficiaries and other EasyPay Payouts cardholders. ● Our grant beneficiary base includes both permanent and non-permanent grant beneficiaries. As the division has evolved, both sub-categories of consumers are revenue generating and hence the combined consumer base metrics shown below are most appropriate to measure the performance of the division financially and operationally. Although historically we have shown these metrics separately, it is maintained that 90% of the active consumer base are permanent grant beneficiaries. ● Our definition of an active consumer is any EPE consumer that has made a voluntary transaction (debit and/or credit) within the last 90 days. Consumers who may be charged a monthly banking fee but have not made a voluntary transaction in the last 90 days would not be considered an active consumer. ● The definition of an active consumer reflects the revenue generating engagement of our entire consumer base and more accurately tracks our current and future monetization strategy for the division. 34 ● We will continue to show the EasyPay Payouts separately given this follows a different monetization model. 2025 2024 2023 2025 vs 2024 Transactional accounts (banking) - EPE Total active EPE transactional account base at year end (millions) 1.9 1.5 1.3 24% Approximate Net EPE account activations for the year – active EPE transactional account base (number '000) 348 235 143 48% Lending - EasyPay Loans Approximate number of loans originated during the year (number '000) 1,299 1,061 856 22% Gross advances in the year (ZAR millions) 2,500 1,686 1,306 48% Loan book size, before allowances, at year end (ZAR millions) (1) 996 548 415 82% Insurance - EasyPay Insurance Approximate number of insurance policies written in the year (number '000) 210 170 125 23% Total active insurance policies on book as of year end (number '000) 564 439 335 28% Gross written premium (ZAR millions) 404 294 229 38% Average revenue per consumer per month, in the quarter, (active customers) (ZAR) (2) 85 76 71 11% EasyPay Payouts Approximate number of active cardholders (number '000) 212,724 n.a. n.a. nm Approximate load value for the year (ZAR millions) (3) 457 n.a. n.a. nm (1) Gross loan book, before provisions. (2) ARPU is calculated on a revenue per active consumer basis whereby an active consumer can be both a permanent and non- permanent grant beneficiary with prior periods adjusted for comparison purposes. Previously ARPU represented only accounted for permanent grant beneficiaries. ARPU is a monthly figure based on a 3-month rolling average for the quarter ended June 30, 2025. (3) Represents the 9-month period for fiscal 2025 given Adumo integration into results from the second quarter of fiscal 2025 onwards. ● Driving customer acquisition, supported by increased focus on customer service. o Net active account growth ( permanent grant beneficiaries per SASSA’s monthly Social Assistance report for June 30, 2025, on the SASSA statistical reports portal) for the year was approximately 348,000 accounts, compared to approximately 235,000 a year ago (fiscal 2024). o Our focus is on all revenue generating consumers who have initiated a transaction within the last 90-day period. This will include both permanent and temporary grant beneficiaries. Our total active consumer base stood at approximately 1.9 million at the end of June 2025, compared to 1.5 million a year ago. ● Progress on cross selling. EasyPay Loans o We originated approximately 1.3 million loans during the year, with our consumer loan book, before allowances (“gross book”), increasing 82% to ZAR 996 million as of June 30, 2025, compared to ZAR 548 million as of June 30, 2024. o We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our tailored loan product for this market, growth in EPE bank account customer base and improved cross-selling capabilities. o The loan conversion rate continues to improve following the implementation of several targeted Consumer lending campaigns and encouraging results from our digital channels. o The portfolio loss ratio, calculated as the loans written off over the last 12 months as a percentage of the total gross loan book at the end of the quarter, has remained stable at approximately 6% on an annualized basis, compared to a year ago (fourth quarter of fiscal 2024). With the roll-out of the new lending product, targeting larger loans for a longer tenor, we expect a modest and non -material increase in the portfolio loss ratio. 35 EasyPay Insurance o Our insurance product sales continue to grow and is a material contributor to the improvement in our overall ARPU. We have been able to improve customer penetration to approximately 34% of our active permanent grant account base as of June 30, 2025, compared to 33% as of June 30, 2024. Approximately 210,000 new policies were written in the year, increasing 23% compared to approximately 170,000 a year ago. The total number of active policies has grown 28% to approximately 564,000 policies at year end, compared to 439,000 policies a year ago (fiscal 2024). ARPU o ARPU for our active consumer base has increased to approximately ZAR 85 per month for the fourth quarter of fiscal 2025 from approximately ZAR 76 a year ago (during the fourth quarter of fiscal 2024). ARPU reflects the definition of an active customer and includes permanent and non-permanent grant beneficiaries. EasyPay Payouts o The number of active card holders was approximately 213,000 at year end, with a load value of approximately ZAR 457 million for 9 months with the Adumo transaction closing on October 1, 2024. Enterprise Division ADP includes prepaid solutions and bill payments through channels such as retailer distribution networks and online banking apps. 2025 2024 2025 vs 2024 ADP Total Throughput for the year (ZAR billions) 40.7 38.5 6% Utilities Total Throughput for the year (ZAR millions) (1) 1,329 1,051 26% Number of Registered Meters (Thousands) 524,711 444,397 18% (1) The Recharger transaction closed on March 3, 2025. Utility payments throughput for fiscal 2025 is a 4-month contribution (comprising a 1-month contribution to the third quarter and a full quarter contribution to the fourth quarter). Utilities throughput shown combines historical performance pre -acquisition. Acquisition of Bank Zero On June 26, 2025, we announced the acquisition of Bank Zero, subject to regulatory approval. The transaction marks another key milestone in our journey to build a vertically integrated fintech platform. The combination of Bank Zero's digital banking infrastructure and its operational banking license, together with our fintech and distribution platform, is intended to transform the way Lesaka is able to conduct business in the future, offering key financial, strategic and regulatory benefits, including: (i) Better end-to-end servicing of Lesaka's customer base through a full suite of banking services, (ii) Unlocking meaningful synergies and new opportunities for the group, (iii) Accelerating product innovation and streamlining operations across Consumer, Merchant and Enterprise, (iv) Enabling a transformative shift in our financial profile, and (v) Empowering the combined group to deliver greater value to consumers and businesses across South Africa. Upon completion of the proposed transaction, the selling shareholders of Bank Zero – which include Michael Jordaan (Chairman of Bank Zero), Yatin Narsai (CEO of Bank Zero), and other key members of the Bank Zero will collectively hold an approximate 12% stake in Lesaka. Bank Zero sellers will be subject to regulatory and contractual lockups ranging from between 18 and 36-months post- completion, depending on the seller. Subject to completion of the transaction, Michael Jordaan is expected to join our Board of Directors, while Yatin Narsai is expected to continue as CEO of Bank Zero. The broader Bank Zero leadership team will remain in their current roles, ensuring continuity and integration. 36 Balance Sheet Optimization Debt refinance and new banking partner At the end of February 2025, we completed the ZAR 4.5 billion refinance of our debt facilities, including Investec Bank Limited (acting through its Investment Banking division: Corporate Solutions) (“Investec Bank”) as a new banking partner alongside our incumbent bank, FirstRand Bank Limited (acting through its Rand Merchant Bank division) (“RMB”). The benefits of the debt refinance include: (i) consolidating most of our legacy senior debt facilities at the center, (ii) reducing our overall weighted average borrowing rate by approximately 1.3% per year, (iii) reshaping the repayment profile of our senior debt, and (iv) diversifying our funding sources and increasing debt facility headroom, thereby creating flexibility and capacity for organic and inorganic growth. Refinancing the Merchant lending facility At the end of September 2025, we refinanced and increased our merchant lending facility to $22.5 million (ZAR 400 million) to create capacity to fund growth of our merchant lending book. We achieved a 75 basis point reduction in the overall funding cost of this facility. Mobikwik We completed the disposal of our major non -core asset, Mobikwik, for $16.4 million (ZAR 290 million) with proceeds received at the end of June. These funds have been included in our cash balances and used to partially offset our debt, in line with our stated intention. Lesaka Employee Share Trust We successfully launched Lesaka’s Employee Share Ownership Plan (“Lesaka ESOP”) in March 2025 reflecting our commitment to our people and adherence to change of control obligations placed on us by the Competition Commission South Africa at the time of the Connect acquisition in 2022. Our ESOP is designed to create alignment with our long-term growth objectives. The Lesaka ESOP Trust held an effective 3% of our issued shares at the date of implementation, representing approximately ZAR 220 million at the current market price. This allocation of shares ensures that employees have a meaningful stake in our future financial success and gives them the opportunity to share in the value created by us. The Lesaka ESOP Trust advances our transformation initiatives and plays an important role in improving our BBBEE rating. Our employee base is comprised of 87% designated groups for BBBEE purposes. Through the creation of a broader base of employee ownership, we are helping to promote economic inclusion and contribute to transformation in the broader South African economy. Association of South African Payment Providers (“ASAPP”) ASAPP, publicly launched (www.asapp.co.za) in January 2025, is now fully established as the main representatives of non-bank participants in the payments space. The eight original members (Altron Fintech, Hello Group Inc., iKhokha (Pty) Ltd, Lesaka Technologies (Pty) Ltd, Network International Holdings Plc, Peach Payment Services (Pty) Ltd, Shop2Shop (Pty) Ltd, Yoco Technologies (Pty) Ltd) have been joined by Flash Group, PayU GPO, Cross Switch Technology Ltd, and Paycorp Group. Key workstreams include: ● Greater inclusion of Non-Bank participation in the payment’s ecosystem including services such as settlement of funds as part of the Bank's Act. ● Calling to action a review of interchange pricing in South Africa, directly with the SARB. ● Working alongside the SARB and other regulatory stakeholders on the strategic direction of the Faster Payment System, National Treasury Financial Inclusion Forum and the Payments Industry Body Formation. 37 Critical Accounting Policies Our audited consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities. As future events and their effects cannot be determined with absolute certainty, the determination of estimates requires management’s judgment based on a variety of assumptions and other determinants such as historical experience, current and expected market conditions and certain scientific evaluation techniques. Management believes that the following accounting policies are critical due to the degree of estimation required and the impact of these policies on the understandi ng of the results of our operations and financial condition. Recoverability of Goodwill A significant component of our growth strategy is to acquire and integrate businesses that complement our existing operations. The purchase price of an acquired business is allocated to the tangible and intangible assets acquired and liabilities assumed based upon their estimated fair value at the date of purchase. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill. In determining the fair value of assets acquired and liabilities assumed in a business combination, we use various recognized valuation methods, including present value modeling. Further, we make assumptions using certain valuation techniques, including discount rates and timing of future cash flows. We review the carrying value of goodwill annually (June 30) or more frequently if circumstances indicating impairment have occurred. W e did not perform interim impairment testing in fiscal 2025 as no triggering events were identified outside of the annual impairment test date. In performing this review, we are required to estimate the fair value of goodwill that is implied from a valuation of the reporting unit to which the goodwill has been allocated after deducting the fair values of all the identifiable assets and liabilities that form part of the reporting unit. The determination of the fair value of a reporting unit requires us to make significant judgments and estimates. Changes in these judgements and estimates may impact on the outcome of the impairment test. For instance, the fair value of the ISV reporting unit included in our acquisition of Adumo exceeded the carrying value of the reporting unit as of June 30, 2025, by only 2.4%. If we had used a weighted average cost of capital (“WACC”) rate that was 1% higher, we would have recorded an impairment of $3.8 million, and if the WACC rate was 1% lower, the headroom would have increased from 2.4% to 12.4%. In determining the fair value of reporting units for fiscal 2024 and 2023, our key judgements related to reporting unit revenue growth rates and the weighted-average cost of capital applicable to peer and industry comparables of the reporting units. In determining the fair value of reporting units for fiscal 2025, we considered key judgements related to reporting unit revenue growth rates, the weighted-average cost of capital applicable to peer and industry comparables of the reporting units and the forecast period to be used. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. In addition, we make judgments and assumptions in allocating assets and liabilities to each of our reporting units. Refer to Note 10 to our audited consolidated financial statements for a summary of the key judgements used in our impairment testing. The results of our impairment tests during fiscal 2025 and 2023 indicated that the fair value of our reporting units exceeded their carrying values, with the exception of the $17.0 million (related to the Cash Connect, Adumo Technologies, Adumo Payouts and EasyPay reporting units) and $7.0 million (related to the PPT/ NUETS reporting unit), respectively, of goodwill impaired during fiscal 2025 and 2023, as discussed in Note 10 to our audited consolidated financial statements. The results of our impairment tests during fiscal 2024 indicated that the fair value of our reporting units exceeded their carrying values and so did not require impairment. Intangible Assets Acquired Through Acquisitions The fair values of the identifiable intangible assets acquired through acquisitions were determined by management using the purchase method of accounting. We completed the acquisition of Adumo and Recharger during fiscal 2025 where we identified and recognized intangible assets. We did not identify any significant intangible assets related to the Touchsides acquisition in fiscal 2024. We used the relief from royalty method to value identified brands identified in the Adumo acquisition, and the multi-period excess earnings method to value identified customer relationships and the replacement cost approach to value the identified technology assets related to Adumo and Recharger . We have used the relief from royalty method, the multi-period excess earnings method, the income approach and the cost approach to value other historic acquisition-related intangible assets. In so doing, we made assumptions regarding expected future revenues and expenses to develop the underlying forecasts, applied contributory asset charges, WACC rates, and useful lives. The valuations were based on information available at the time of the acquisition and the expectations and assumptions that were deemed reasonable by us. No assurance can be given, however, that the underlying assumptions or events associated with such assets will occur as projected. For these reasons, among others, the actual cash flows may vary from forecasts of future cash flows. To the extent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary. Management assesses the useful life of the acquired intangible assets upon initial recognition and revisions to the useful life or impairment of these intangible assets may be necessary in the future. 38 For instance, during early calendar 2025, our executive considered the unification of our merchant segments operations and the realignment of our brands under the master brand “Lesaka”. We have identified the steps and timing to realign the affected brands under the master brand and expect to have complete alignment by February 2027, with certain brands expected to be aligned by December 2025. The change in brands has resulted in a change in the useful life of certain of our brand and trademark intangible assets which has resulted in an increase in amortization expense of $2.6 million during the year ended June 30, 2025. Furthermore, we recorded an impairment loss of $1.8 million related to Adumo Technologies intangible assets which were fully impaired during the year ended June 30, 2025. Refer to Note 10 of our audited consolidated financial statements for additional information. Revenue recognition – principal versus agent considerations We generate revenue from the provision of transaction-processing services through our various platforms and service offerings. We use these platforms to (a) sell prepaid airtime vouchers that are held as inventory and (b) distribute ADP, including prepaid airtime vouchers (which we do not hold as inventory), prepaid electricity, gaming vouchers, and other services, to end consumers through our platforms. The determination of whether we act as a principal or as an agent when providing these services using guidance contained in Accounting Standards Codification (“ASC”) 606 Revenue from Contracts with Customers requires a significant amount of judgement. When we are the principal in a transaction, revenue is reported on a gross basis. When we are an agent in a transaction, revenue is recognized based on the amount that we are contractually entitled to receive for performing the distribution service on behalf of our customers. Finance Loans Receivable and Allowance for Credit Losses Merchant lending The allowance for credit losses related to Merchant finance loans receivables is calculated by multiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book. Our risk management procedures include adhering to our proprietary lending criteria which uses an online- system loan application process, obtaining necessary customer transaction-history data and credit bureau checks. We consider 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. We recently (in the past three years) commenced lending to merchant customers and uses historical default experience over the lifetime of loans generated thus far in order to calculate a lifetime loss rate for the lending book. In addition, management determines the expected write-off rate for doubtful or legal debt based on historical recovery trends for defaulted receivables. The allowance for credit losses related to these merchant finance loans receivables is calculated by multiplying the expected write-off rate for doubtful or legal debt with the total actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book. The lifetime loss rate as of June 30, 2025 and June 30, 2024, was 1.14% and 1.18%, respectively. The performing component (that is, outstanding loan payments not in arrears), under-performing component (that is, outstanding loan payments that are in arrears) and non-performing component (that is, outstanding loans for which payments appeared to have ceased) of the book represents approximately 95%, 4% and 1%, respectively, of the outstanding lending book as of June 30, 2025. Prior to July 1, 2023, we maintained an allowance for credit losses - finance loans receivable related to our Merchant services segment with respect to short-term loans to qualifying merchant customers. Our policy was to regularly review the ageing of outstanding amounts due from these merchants and an allowance is created for the full amount outstanding if the customer was in arrears for more than 15 days. We wrote off loans and related interest and fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legal action, had failed. Consumer microlending The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the lifetime loss rate with the month-end outstanding lending book , excluding upfront initiation fees. Loans to customers have a tenor of up to nine months, with the majority of loans originated having a tenor of six months. Credit bureau checks as well as an affordability test are conducted as part of the origination process, both of which are in line with local regulations. We consider 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. While the allowance for credit losses is primarily determined utilizing a provisioning model, there is still an element of judgment required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer. We have operated this lending book for more than five years and use historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for the lending book. We analyze 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. The allowance for credit losses related to these microlending finance loans receivables is calculated by multiplying the lifetime loss rate with the month end outstanding lending book, excluding upfront initiation fees. The lifetime loss rate as of each of June 30, 2024 and June 30, 2024, was 6.50%. The performing component (that is, outstanding loan payments not in arrears) of the book exceeds more than 98% of outstanding lending book as of June 30, 2025. 39 Prior to July 1, 2023, we maintained an allowance for credit losses - finance loans receivable related to our Consumer services segment with respect to short-term loans to qualifying customers. Our policy was to regularly review the ageing of outstanding amounts due from borrowers and adjust the provision based on management’s estimate of the recoverability of finance loans receivable. We wrote off microlending loans and related service fees if a borrower is in arrears with repayments for more than three months or , in the event of the borrower’s death, or if the borrower was under debt review. Valuation of investment in Cell C We have elected to measure our investment in Cell C, an unlisted equity security, at fair value using the fair value option. Changes in the fair value of this equity security are recognized in the caption “change in fair value of equity securities” in our audited consolidated statements of operations. The tax impact related to the change in fair value of equity securities is included in income tax expense in our audited consolidated statements of operation. The determination of the fair value of this equity security requires us to make significant judgments and estimates. We base our estimates on assumptions we believe to be reasonable but that are unpredictable and inherently uncertain. Refer to Note 6 of our audited consolidated financial statements regarding the valuation inputs and sensitivity related to our investment in Cell C. We used a discounted cash flow model to determine the fair value of our investment in Cell C as of June 30, 2024 and 2023, and valued Cell C at $0.0 (zero) as of each of June 30, 2025 and 2024. We utilized the latest business plan provided by Cell C management for the period ended May 31, 2030, for the June 30, 2025, valuation and the business plan approved by Cell C management for the period ended December 31, 2027, for the June 30, 2024, valuation, and the following key valuation inputs were used: Weighted Average Cost of Capital: 24% as of June 30, 2025 and between 21% and 23% as of June 30, 2024 Long-term growth rate: 4.5% (4.5% as of June 30, 2024) Marketability discount: 15% (20% as of June 30, 2024) Minority discount: 17% (24% as of June 30, 2024) Net adjusted external debt - June 30, 2025: (1) ZAR 8.3 billion ($0.5 billion), no lease liabilities included Net adjusted external debt - June 30, 2024: (2) ZAR 8 billion ($0.4 billion), no lease liabilities included (1) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2025. (2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2024. We believe the Cell C business plan is reasonable based on the current performance and the expected changes in the business model. Refer to the sensitivity analysis included in Note 6 to our audited consolidated financial statements related to our valuation of Cell C as of June 30, 2025. On September 1, 2025, Cell C’s largest shareholder, Blue Label Telecoms Limited (“BLT”), announced that BLT, The Prepaid Company Proprietary Limited (a wholly-owned subsidiary of BLT), Cell C Limited, Comm Equipment Company Proprietary Limited (a wholly-owned indirect subsidiary of BLT), K2021889191 (South Africa) (RF) Proprietary Limited, and K2022559963 (South Africa) (RF) Proprietary Limited, had entered into an agreement setting out the terms of the proposed restructure of BLT and its subsidiaries (the “Pre-Listing Restructuring”). The Pre-Listing Restructuring encompasses various transactions aimed at optimizing Cell C’s capital structure and balance sheet in preparation for a separation and listing of the Cell C business on the JSE. The Cell C listing remains subject to, amongst other things, market conditions, shareholder, regulatory and other relevant approvals and therefore the exact date of listing is unknown at the date of this Annual Report on Form 10-K. The listing of Cell C’s business on the JSE may result in a change in the methodology used to value our interest in Cell C because we may use its quoted listed price instead of the discounted cash flow model currently used. Recent Accounting Pronouncements Recent accounting pronouncements adopted Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements, including the dates of adoption and effects on financial condition, results of operations and cash flows. Recent accounting pronouncements not yet adopted as of June 30, 2025 Refer to Note 2 of our audited consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of June 30, 2025, including the expected dates of adoption and effects on financial condition, results of operations and cash flows. 40 Currency Exchange Rate Information Actual exchange rates The actual exchange rates for and at the end of the periods presented were as follows: Table 1 June 30, 2025 2024 2023 ZAR : $ average exchange rate 18.1644 18.7070 17.7641 Highest ZAR : $ rate during period 19.6350 19.4568 19.7558 Lowest ZAR : $ rate during period 17.1144 17.6278 16.2034 Rate at end of period 17.7554 18.1808 18.8376 Translation Exchange Rates We are required to translate our results of operations from ZAR to U.S. dollars on a monthly basis. Thus, the average rates used to translate this data for the years ended June 30, 2025, 2024 and 2023, vary slightly from the averages shown in the table above. The translation rates we use in presenting our results of operations are the rates shown in the following table: Table 2 June 30, 2025 2024 2023 Income and expense items: $1 = ZAR 17.9031 18.6844 17.9400 Balance sheet items: $1 = ZAR 17.7554 18.1808 18.8376 We have translated the results of operations and operating segment information for the year ended June 30, 2025 and 2024, provided in the tables below using the actual average exchange rates per month between the USD and ZAR in order to reduce the reconciliation of information presented to our chief operating decision maker. The impact of using this method compared with the average rate for the quarter and year to date is not significant, however, it does result in minor differences. We believe that presentation using the average exchange rates per month compared with the average exchange rate per quarter and for the year improves the accuracy of the information presented in our external financial reporting and leads to fewer differences between our external reporting measures which are supplementally presented in ZAR, and our internal management information, which is also presented in ZAR. 41 Results of operations The discussion of our consolidated overall results of operations is based on amounts as reflected in our audited consolidated financial statements which are prepared in accordance with U.S. GAAP. We analyze our results of operations both in U.S. dollars, as presented in the audited consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the entities which contribute the majority of our results and is the currency in which the majority of our transactions are initially incurred and measured. Presentation of our reported results in ZAR is a non-GAAP measure. Due to the significant impact of currency fluctuations between the U.S. dollar and ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business. Our operating segment revenue presented in “—Results of operations by operating segment” represents total revenue per operating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue, as well as the reconciliation between our segment performance measure and net loss before tax (benefits) expense, is presented in our audited consolidated financial statements in Note 21 to those statements. Our chief operating decision maker is our Executive Chairman and he 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”) for each operating segment. We do not allocate once-off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments. We have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for fiscal 2025. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. 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 our loss before income tax expense. Effective from fiscal 2025, all lease charges are allocated to our operating segments, whereas in previous filings we presented certain lease charges on a separate line outside of our operating segments. Prior period information has been recasted to include the lease charges which were previously reported on a separate line in our Consumer and Merchant (and now Merchant, Consumer and Enterprise) operating segments. Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Refer also “Results of Operations—Use of Non-GAAP Measures” below. In fiscal 2025 we closed the acquisitions of Adumo and Recharger and have integrated their businesses into our ours. Our fiscal 2025 financial results include Adumo from October 1, 2024 and Recharger from March 3, 2025. Refer also to Note 3 to the audited consolidated financial statements for additional information regarding these transactions. Adumo and Recharger are not included in our financial results for fiscal 2024 and 2023. We analyze our business and operations in terms of three inter-related but independent operating segments: (1) Merchant (2) Consumer and (3) Enterprise. In addition, corporate activities that are impracticable to allocate directly to the operating segments, as well as any inter-segment eliminations, are included in Group costs. Inter-segment revenue eliminations are included in Eliminations. Fiscal 2025 Compared to Fiscal 2024 The following factors had a significant influence on our results of operations during fiscal 2025 as compared with the same period in the prior year: ● Revenue increased: Our revenues increased by 16.9% in U.S. dollar and 13.5% in ZAR, primarily due to the inclusion of Adumo and Recharger, an increase in value-added services activity in Merchant, higher Pinned Airtime sales, as well as higher transaction, insurance and lending revenues in Consumer, which was partially offset by a lower contribution from our legacy Enterprise businesses; ● Operating income increase, before transaction costs: Operating income, before transaction and related costs, increased significantly primarily due to contribution s from Adumo from October 1, 2024 and Recharger from March 3, 2025, which were partially offset by increased costs and an increase in amortization of acquisition-related intangible assets related to the acquisition of Adumo and Recharger; ● Non-cash fair value adjustment related to equity securities: We recorded a non -cash fair value loss of $59.8 million during fiscal 2025 related to the disposal of our investment in MobiKwik; ● Higher net interest charge: Net interest charge increased to $18.9 million (ZAR 342.8 million) from $16.6 million (ZAR 311.1 million) primarily due to higher overall borrowings, which was partially offset by an increase in interest received as a result of the inclusion of Adumo; and ● Foreign exchange movements: The U.S. dollar was 4.2% weaker against the ZAR during fiscal 2025 compared to the prior period, which positively impacted our U.S. dollar reported results. 42 Consolidated overall results of operations This discussion is based on the amounts prepared in accordance with U.S. GAAP. The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 3 In U.S. Dollars Year ended June 30, 2025 2024 $ % $ ’000 $ ’000 change Revenue 659,701 564,222 17% Cost of goods sold, IT processing, servicing and support 486,546 442,673 10% Selling, general and administration 131,512 91,969 43% Depreciation and amortization 33,721 23,665 42% Impairment loss 18,863 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 16,159 2,325 595% Operating (loss) income (27,100) 3,590 nm Change in fair value of equity securities (59,828) - nm Loss on disposal of equity-accounted investment 161 - nm Reversal of allowance for EMI doubtful debt receivable - 250 nm Interest income 2,596 2,294 13% Interest expense 21,453 18,932 13% Loss before income tax (benefit) expense (105,946) (12,798) 728% Income tax (benefit) expense (18,198) 3,363 nm Net loss before earnings (loss) from equity-accounted investments (87,748) (16,161) 443% Earnings (Loss) from equity-accounted investments 114 (1,279) nm Net loss (87,634) (17,440) 402% Add net loss attributable to non-controlling interest 130 - nm Net loss attributable to us (87,504) (17,440) 402% Table 4 In South African Rand Year ended June 30, 2025 2024 ZAR % ZAR ’000 ZAR ’000 change Revenue 11,980,399 10,553,233 14% Cost of goods sold, IT processing, servicing and support 8,833,924 8,280,262 7% Selling, general and administration 2,388,795 1,719,992 39% Depreciation and amortization 612,298 442,570 38% Impairment loss 334,929 - nm Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 291,358 43,154 575% Operating (loss) income (480,905) 67,255 nm Change in fair value of equity securities (1,089,871) - nm Loss on disposal of equity-accounted investment 2,886 - nm Reversal of allowance for EMI doubtful debt receivable - 4,741 nm Interest income 47,108 42,896 10% Interest expense 389,882 354,048 10% Loss before income tax (benefit) expense (1,916,436) (239,156) 701% Income tax (benefit) expense (328,347) 62,616 nm Net loss before earnings (loss) from equity-accounted investments (1,588,089) (301,772) 426% Earnings (Loss) from equity-accounted investments 2,035 (24,298) nm Net loss (1,586,054) (326,070) 386% Add net loss attributable to non-controlling interest 2,307 - nm Net loss attributable to us (1,583,747) (326,070) 386% 43 Revenue increased by $95.5 million (ZAR 1.4 billion) or 16.9% (in ZAR, 13.5%). The increase in ZAR was primarily due to, the inclusion of Adumo, an increase in the volume of value-added services provided (Pinless Airtime and gaming), an increase in Pinned Airtime sales, an increase in certain issuing fee base prices and transaction activity in our issuing business, and an increase in insurance premiums collected and lending revenues following higher loan originations. Refer to discussion above at “—Recent Developments” for a description of key trends impacting our revenue this fiscal year. Cost of goods sold, IT processing, servicing and support increased by $43.9 million (ZAR 0.6 million ) or 9.9% (in ZAR, 6.7%), primarily due to the inclusion of Adumo, higher commissions paid related to ADP revenue generated, and higher insurance-related claims and third-party transaction fees, which was partially offset by the decrease in Pinned Airtime sales. Selling, general and administration expenses increased by $39.5 million (ZAR 668.8 million), or 43.0% (in ZAR, 38.9%). The increase was primarily due to the inclusion of Adumo; higher employee-related expenses (including annual salary increases); higher stock-based compensation charges, consulting fees and audit fees; and the year-over-year impact of inflationary increases on certain expenses. Depreciation and amortization expense increased by $10.06 million (ZAR 169.7 million), or 42.5% (in ZAR, 38.4%). The increase was due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Adumo and Recharger acquisitions and an increase in depreciation expense related to additional POS devices deployed. During fiscal 2025, we recorded an impairment loss which includes an impairment of goodwill of $17.0 million related to the impairment of goodwill allocated to each of Merchant, Consumer and Enterprise as well as an impairment of intangible assets of 1.8 million. Refer to Note 10 of our audited consolidated financial statements for additional information regarding these impairment losses. Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs includes fees paid to external service providers associated with legal and advisory services procured to close the Adumo transaction on October 1, 2024, and the Recharger transaction in March 2025, as well as post-combination compensation charges recognized related to the Recharger acquisition of $13.6 million (ZAR 245.7 million) and increased primarily due to these post-combination compensation charges. This caption also includes transaction costs related to the proposed acquisition of Bank Zero. Refer to Note 3 to our audited consolidat ed financial statements for additional information. Our operating (loss) income margin in fiscal 2025 and 2024 was (4.1%) and 0.6%, respectively. We discuss the components of operating loss margin under “—Results of operations by operating segment.” The change in fair value of equity securities of $59.8 million during fiscal 2025 represents a non-cash fair value adjustment loss related to MobiKwik. We did not record any changes in the fair value of equity interests in MobiKwik during the fiscal 2024, or any fair value adjustments for Cell C during fiscal 2025 or 2024, respectively. We continue to carry our investment in Cell C at $0 (zero). Interest on surplus cash increased to $2.6 million (ZAR 47.1 million) from $2.3 million (ZAR 42.9 million), primarily due to the inclusion of Adumo and higher overall average cash balances on deposit during fiscal 2025 compared with 2024. Interest expense increased to $21.5 million (ZAR 389.9 million) from $18.9 million (ZAR 354.0 million). In ZAR, the increase was primarily as a result of higher overall borrowings during fiscal 2025 compared with the comparable period in the prior quarter, which was partially offset by lower overall interest rates. Fiscal 2025 income tax benefit was $18.2 million (ZAR 328.3 million) compared to an income tax expense of $3.4 million (ZAR 62.6 million) in fiscal 2024. Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equity securities, the reversal of $12.8 million related to certain valuation allowances created in prior years following (i) an improvement in profitability of certain of our subsidiaries and (ii) a change in judgment on the need for a valuation allowance of $11.4 million related to an entity which we believe has achieved sustainable profitability, the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses (in transaction-related expenses), the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Our effective tax rate for fiscal 2024 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. 44 Results of operations by operating segment and group costs The composition of revenue and the contributions of our business activities to Group Adjusted EBITDA are illustrated below: Table 5 In U.S. Dollars Year ended June 30, 2025 % of 2024 % of % Operating Segment $ ’000 total $ ’000 total change Consolidated revenue: Merchant 526,598 80% 459,790 81% 15% Consumer 96,008 15% 69,211 12% 39% Enterprise 42,556 6% 46,897 8% (9%) Subtotal: Operating segments 665,162 101% 575,898 101% 15% Eliminations (5,461) (1%) (11,676) (1%) (53%) Total consolidated revenue 659,701 100% 564,222 100% 17% Group Adjusted EBITDA: Merchant (1)(2) 36,195 71% 29,170 79% 24% Consumer (1)(2) 23,949 47% 12,679 34% 89% Enterprise (1)(2) 1,287 3% 2,931 8% (56%) Group costs (10,743) (21%) (7,844) (21%) 37% Group Adjusted EBITDA (non-GAAP) (3) 50,688 100% 36,936 100% 37% (1) Segment Adjusted EBITDA for fiscal 2025, includes reorganization and retrenchment costs for Merchant of $0.8 million, Enterprise of $0.8 million, and Consumer of $0.1 million. Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant $0.3 million and Consumer of $0.2 million. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant, Consumer and Enterprise Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. Table 6 In South African Rand Year ended June 30, 2025 % of 2024 % of % Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue: Merchant 9,562,360 80% 8,599,450 81% 11% Consumer 1,744,429 15% 1,294,632 12% 35% Enterprise 773,057 6% 877,317 8% (12%) Subtotal: Operating segments 12,079,846 101% 10,771,399 101% 12% Eliminations (99,447) (1%) (218,166) (1%) (54%) Total consolidated revenue 11,980,399 100% 10,553,233 100% 14% Group Adjusted EBITDA: Merchant (1)(2) 657,177 71% 545,472 79% 20% Consumer (1)(2) 435,193 47% 237,362 34% 83% Enterprise (1)(2) 23,724 3% 54,924 8% (57%) Group costs (193,853) (21%) (146,815) (21%) 32% Group Adjusted EBITDA (non-GAAP) (3) 922,241 100% 690,943 100% 33% (1) Segment Adjusted EBITDA for fiscal 2025, includes reorganization and retrenchment costs for Merchant of ZAR 15.7 million, Enterprise of ZAR 13.6 million, and Consumer of ZAR 1.5 million. Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant of ZAR 4.9 million and Consumer of ZAR 3.5 million. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant and Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. 45 Merchant Segment revenue primarily increased due to the inclusion of Adumo, and a higher volume of ADP provided (Pinless Airtime and gaming) and an increase in fewer Pinned Airtime sales. In ZAR, the increase in Segment Adjusted EBITDA is primarily due to the inclusion of Adumo, which was partially offset by higher operating expenses incurred, including employment-related expenditures, to expand our offering, an increase in the allowance for credit losses following higher loan originations and reorganization and retrenchment costs incurred during fiscal 2025. Our Segment Adjusted EBITDA margin (calculated as Segment Adjusted EBITDA divided by revenue) for fiscal 2025 and 2024 was 6.9% and 6.3%, respectively. Consumer Segment revenue increased primarily due to higher transaction fees generated from the higher EPE account holders base, an increase in certain issuing fee base prices and transaction activity in our issuing business, insurance premiums collected, lending revenues following an increase in loan originations and the inclusion of Adumo. This increase in revenue has translated into improved profitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations during fiscal 2025, higher insurance-related claims, interest expense (of ZAR 61.4 million) incurred to fund our lending book, higher computer software license costs, and the year-over-year impact of inflationary increases on certain expenses. We have included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for fiscal 2025 compared with fiscal 2024. Our Segment Adjusted EBITDA margin for fiscal 2025 and 2024 was 24.9% and 18.3%, respectively. Enterprise Segment revenue decreased primarily due to fewer ad hoc hardware sales as well as lower revenue generated from the sale of prepaid airtime vouchers, which was partially offset by the inclusion of Recharger. In ZAR, the significant decrease in Segment Adjusted EBITDA is primarily due to the impact of few sales, which was partially offset by the inclusion of Recharger . Our Segment Adjusted EBITDA margin for fiscal 2025 and 2024 was 3.0% and 6.2%, respectively. Group costs Our group costs primarily include employee related costs in relation to employees specifically hired for group roles and costs related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non- employee directors’ fees; legal fees; group and US-listed related audit fees; and directors’ and officers’ insurance premiums. Our group costs for fiscal 2025 increased compared with the prior period due to higher employee costs resulting from an increase in the number of individuals allocated to group costs and base salary adjustments, higher bonus expense, travel, audit, consulting and legal fees. Fiscal 2024 Compared to Fiscal 2023 The following factors had a significant influence on our results of operations during fiscal 2024 as compared with the same period in the prior year: ● Higher revenue: Our revenues increased by 6.9% in U.S. dollar and 11.4% in ZAR, primarily due to an increase in low margin prepaid airtime sales and other value-added services, as well as higher transaction, insurance and lending revenues, which was partially offset by lower hardware sales revenue in our POS hardware distribution business given the lumpy nature of bulk sales; ● Operating income generated: Operating profitability was achieved following years of operating losses as a result of the various cost reduction initiatives in Consumer implemented in prior periods as well as the contribution from Connect; ● Higher net interest charge: The net interest charge increased to $16.6 million (ZAR 311.1 million) from $16.7 million (ZAR 299.9 million) primarily due to higher interest rates; ● Significant transaction costs: We expensed $2.3 million of transaction costs related to the Adumo transaction in fiscal 2024; and ● Foreign exchange movements: The U.S. dollar was 4.1% stronger against the ZAR during fiscal 2024 compared to the prior period, which adversely impacted our U.S. dollar reported results. 46 The following tables show the changes in the items comprising our statements of operations, both in U.S. dollars and in ZAR: Table 7 In U.S. Dollars Year ended June 30, 2024 2023 $ % $ ’000 $ ’000 change Revenue 564,222 527,971 7% Cost of goods sold, IT processing, servicing and support 442,673 417,544 6% Selling, general and administration 91,969 95,050 (3%) Depreciation and amortization 23,665 23,685 (0%) Impairment loss - 7,039 nm Transaction costs related to Adumo and Recharger acquisitions 2,325 - nm Operating income (loss) 3,590 (15,347) nm Reversal of allowance for EMI doubtful debt receivable 250 - nm Loss on disposal of equity-accounted investment - 205 nm Interest income 2,294 1,853 24% Interest expense 18,932 18,567 2% Loss before income tax expense (benefit) (12,798) (32,266) (60%) Income tax expense (benefit) 3,363 (2,309) nm Net loss before loss from equity-accounted investments (16,161) (29,957) (46%) Loss from equity-accounted investments (1,279) (5,117) (75%) Net loss attributable to us (17,440) (35,074) (50%) Table 8 In South African Rand (US GAAP) Year ended June 30, 2024 2023 ZAR % ZAR ’000 ZAR ’000 change Revenue 10,553,233 9,471,800 11% Cost of goods sold, IT processing, servicing and support 8,280,262 7,490,739 11% Selling, general and administration 1,719,992 1,705,196 1% Depreciation and amortization 442,570 424,909 4% Impairment loss - 126,280 nm Transaction costs related to Adumo and Recharger acquisitions 43,154 - nm Operating income (loss) 67,255 (275,324) nm Reversal of allowance for EMI doubtful debt receivable 4,741 - nm Loss on disposal of equity-accounted investment - 3,678 nm Interest income 42,896 33,243 29% Interest expense 354,048 333,092 6% Loss before income tax expense (benefit) (239,156) (578,851) (59%) Income tax expense (benefit) 62,616 (41,423) nm Net loss before loss from equity-accounted investments (301,772) (537,428) (44%) Loss from equity-accounted investments (24,298) (91,799) (74%) Net loss attributable to us (326,070) (629,227) (48%) Revenue increased by $36.3 million (ZAR 1.1 billion), or 6.9% (in ZAR, 11.4%) , primarily due to the increase in the number of low-margin prepaid airtime vouchers sold and an increase in volume of other value-added services provided, as well as higher transaction volumes processed, insurance premiums collected and lending revenues following an increase in loan originations, which was partially offset by a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales. Cost of goods sold, IT processing, servicing and support increased by $25.1 million (ZAR 0.8 billion), or 6.0% (in ZAR, 10.5%), primarily due to the increase in low margin prepaid airtime sales, which were partially offset by the lower cost of goods sold related to fewer hardware sales. 47 Selling, general and administration expenses decreased by $3.1 million (ZAR 14.8 million), or 3.2% (in ZAR, 0.9%). In ZAR, the modest increase was primarily due to higher employee-related expenses related to the expansion of our senior management team and the year-over -year impact of inflationary increases on employee-related expenses, which were partially offset by the benefits of various cost reduction initiatives in Consumer. Depreciation and amortization expense decreased by $0.02 million (in USD, < 0.1%), and increased by ZAR 17.7 million (in ZAR, 4.2%). In ZAR, the increase was due to an increase in depreciation expense related to additional POS devices deployed. During fiscal 2023, we recorded an impairment loss of $7.0 million related to the impairment of our hardware/ software supply business unit’s allocated goodwill. Refer to Note 10 of our audited consolidated financial statements for additional information regarding these impairment losses. Transaction costs related to Adumo acquisition includes fees paid to external service providers associated with legal, commercial, financial and tax due diligence activities performed, fees paid to legal advisors to draft the purchase agreement as well as other legal and advisory services procured related to the transaction. Our operating income (loss) margin in fiscal 2024 and 2023 was 0.6% and (2.9%), respectively. We discuss the components of operating loss margin under “—Results of operations by operating segment.” We did not record any changes in the fair value of equity interests in MobiKwik and Cell C during fiscal 2024 and 2023, respectively. We continue to carry our investment in Cell C at $0 (zero). Refer to Note 9 to our consolidated financial statements for the methodology and inputs used in the fair value calculation for MobiKwik and Note 6 for the methodology and inputs used in the fair value calculation for Cell C. During fiscal 2024, we received an outstanding amount of $0.3 million related to the sale of Carbon in fiscal 2023, which resulted in the reversal of an allowance for doubtful loans receivable of $0.3 million recorded in fiscal 2023. We recorded a net loss of $0.2 million comprising a loss of $0.4 million related to the disposal of a minor portion of our investment in Finbond and a $0.25 million gain related to the disposal of our entire interest in Carbon during fiscal 2023. Refer to Note 9 to our consolidated financial statements for additional information regarding these disposals. Interest on surplus cash increased to $2.3 million (ZAR 42.9 million) from $1.9 million (ZAR 33.2 million), primarily due to higher interest rates. Interest expense increased to $18.9 million (ZAR 354.0 million) from $18.6 million (ZAR 333.1 million), primarily as a result of higher overall interest rates and higher overall borrowings during fiscal 2024 compared with comparable period in the prior year, which was partially offset by lower interest expense incurred on certain of our borrowings for which we were able to negotiate lower rates of interest during the latter half of fiscal 2023 and again towards the end of calendar 2023 . Fiscal 2024 tax expense was $3.4 million (ZAR 62.6 million) compared to a tax benefit of $2.3 million (ZAR 41.4 million) in fiscal 2023. Our effective tax rate for fiscal 2024 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Our effective tax rate for fiscal 2023 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 our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, a deferred tax benefit related to an expense paid by Connect before we acquired the business and which subsequently has been determined to be deductible for tax purposes, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. 48 Results of operations by operating segment and group costs The composition of revenue and the contributions of our business activities to Group Adjusted EBITDA are illustrated below: Table 9 In U.S. Dollars Year ended June 30, 2024 % of 2023 % of % Operating Segment $ ’000 total $ ’000 total change Consolidated revenue: Merchant 459,790 81% 416,562 79% 10% Consumer 69,211 12% 62,801 12% 10% Enterprise 46,897 8% 50,456 10% (7%) Subtotal: Operating segments 575,898 101% 529,819 101% 9% Not allocated to operating segments - - 1,469 - nm Eliminations (11,676) (1%) (3,317) (1%) 252% Total consolidated revenue 564,222 100% 527,971 100% 7% Group Adjusted EBITDA: Merchant (1)(2) 29,170 78% 29,008 117% 1% Consumer (1)(2) 12,679 34% 1,675 7% 657% Enterprise (2) 2,931 8% 3,256 13% (10%) Group costs (7,844) (21%) (9,109) (37%) (14%) Group Adjusted EBITDA (non-GAAP) (3) 36,936 100% 24,830 100% 49% (1) Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant $0.3 million and Consumer of $0.2 million. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant, Consumer and Enterprise Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. Table 10 In South African Rand Year ended June 30, 2024 % of 2023 % of % Operating Segment ZAR ’000 total ZAR ’000 total change Consolidated revenue: Merchant 8,599,450 81% 7,473,122 79% 15% Consumer 1,294,632 13% 1,126,650 12% 15% Enterprise 877,317 8% 905,181 10% (3%) Subtotal: Operating segments 10,771,399 102% 9,504,953 100% 13% Not allocated to operating segments - - 26,354 - nm Eliminations (218,166) (2%) (59,507) - 267% Total consolidated revenue 10,553,233 100% 9,471,800 100% 11% Group Adjusted EBITDA: Merchant (1)(2) 545,472 79% 520,403 117% 5% Consumer (1)(2) 237,362 34% 30,049 7% 690% Enterprise (2) 54,924 8% 58,413 13% (6%) Group costs (146,815) (21%) (163,415) (37%) (10%) Group Adjusted EBITDA (non-GAAP) (3) 690,943 100% 445,450 100% 55% (1) Segment Adjusted EBITDA for fiscal 2024, includes retrenchment costs for Merchant of ZAR 4.9 million and Consumer of ZAR 3.5 million. (2) Lease expenses which were previously presented on a separate line in fiscal 2024 are now included in Merchant and Consumer Segment Adjusted EBITDA. The prior period has been re-presented to conform with current period presentation. (3) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation below at “—Results of Operations—Use of Non- GAAP Measures”. 49 Merchant Segment revenue increased due to the increase in prepaid airtime vouchers sold and other ADP provided, which was partially offset by lower revenue generated from a decrease in certain ADP transaction volumes processed (such as international money transfers). In ZAR, the increase in Segment Adjusted EBITDA is primarily due to the higher sales activity. Our Segment Adjusted EBITDA margin in fiscal 2024 and 2023 was 6.3% and 7.0%, respectively. Consumer Segment revenue increased primarily due to more transaction fees generated from the higher EPE account holders base, higher insurance revenues, and an increase in lending revenue as a result of an increase in loan originations. This increase in revenue, together with the cost reduction initiatives initiated in fiscal 2022 and through fiscal 2023, have translated into a turnaround in the Consumer Division and the realization of sustained positive Segment Adjusted EBITDA in fiscal 2024 compared with fiscal 2023. Consumer Segment Adjusted EBITDA during fiscal 2024 was also impacted by higher credit losses (as a result of an increase in originations) and higher insurance-related claims (as a result of a higher number of insurance policies) compared with fiscal 2023. Our Segment Adjusted EBITDA margin in fiscal 2024 and 2023 was 18.3% and 2.7%, respectively. Enterprise Segment revenue decreased due to a lower number of hardware sales in our POS hardware distribution business given the lumpy nature of bulk sales as well as lower revenue generated, which was partially offset by the increase in prepaid airtime vouchers sold and other value-added services provided . In ZAR, the decrease in Segment Adjusted EBITDA is primarily due to lower hardware sales. Our Segment Adjusted EBITDA margin in fiscal 2024 and 2023 was 6.2% and 6.5%, respectively. Group costs Our group costs primarily include employee related costs in relation to employees specifically hired for group roles and costs related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non- employee directors’ fees; legal fees; group and US-listed related audit fees; and directors’ and officers’ insurance premiums. Our group costs for fiscal 2024 decreased compared with the prior period due to lower external audit, legal and consulting fees and lower provision for executive bonuses, which was partially offset by higher employee costs and travel expenses. 50 Presentation of Merchant, Consumer and Enterprise by segment for fiscal 2025, 2024 and 2023 The tables below present Merchant, Consumer and Enterprise revenue and EBITDA for fiscal 2025, 2024 and 2023, including lease charges, as well as the U.S. dollar/ ZAR exchange rates applicable per fiscal quarter and year: Table 11 Fiscal 2025 In United States dollars Quarter 1 Quarter 2 Quarter 3 Quarter 4 F2025 $ ’000 $ ’000 $ ’000 $ ’000 $ ’000 Revenue Merchant 123,651 145,209 128,781 128,957 526,598 Consumer 21,072 22,929 24,096 27,911 96,008 Enterprise 11,883 8,933 9,444 12,296 42,556 Subtotal: Operating segments 156,606 177,071 162,321 169,164 665,162 Eliminations (3,038) (855) (871) (697) (5,461) Total consolidated revenue 153,568 176,216 161,450 168,467 659,701 Group Adjusted EBITDA: Merchant 7,554 10,319 8,103 10,219 36,195 Consumer 4,396 4,342 6,333 8,878 23,949 Enterprise 362 (31) 133 823 1,287 Group costs (2,949) (2,820) (1,772) (3,202) (10,743) Group Adjusted EBITDA (non-GAAP) 9,363 11,810 12,797 16,718 50,688 Income and expense items: $1 = ZAR 17.72 17.85 18.40 17.87 17.90 Table 12 Fiscal 2024 In United States dollars Quarter 1 Quarter 2 Quarter 3 Quarter 4 F2024 $ ’000 $ ’000 $ ’000 $ ’000 $ ’000 Revenue Merchant 112,061 117,182 111,801 118,746 459,790 Consumer 15,580 16,707 17,904 19,020 69,211 Enterprise 9,467 11,921 11,322 14,187 46,897 Subtotal: Operating segments 137,108 145,810 141,027 151,953 575,898 Eliminations (1,019) (1,917) (2,833) (5,907) (11,676) Total consolidated revenue 136,089 143,893 138,194 146,046 564,222 Group Adjusted EBITDA: Merchant 6,910 7,497 7,420 7,343 29,170 Consumer 2,120 2,575 3,757 4,227 12,679 Enterprise 815 891 725 500 2,931 Group costs (1,822) (2,011) (2,199) (1,812) (7,844) Group Adjusted EBITDA (non-GAAP) 8,023 8,952 9,703 10,258 36,936 Income and expense items: $1 = ZAR 18.71 18.71 18.88 18.47 18.68 51 Table 13 Fiscal 2023 In United States dollars Quarter 1 Quarter 2 Quarter 3 Quarter 4 F2023 $ ’000 $ ’000 $ ’000 $ ’000 $ ’000 Revenue Merchant 96,771 105,034 108,414 106,343 416,562 Consumer 15,004 15,434 15,876 16,487 62,801 Enterprise 14,450 16,999 10,157 8,850 50,456 Subtotal: Operating segments 126,225 137,467 134,447 131,680 529,819 Not allocated to segments - - - 1,469 1,469 Eliminations (1,439) (1,399) (479) - (3,317) Total consolidated revenue 124,786 136,068 133,968 133,149 527,971 Group Adjusted EBITDA: Merchant 6,406 6,693 7,645 8,264 29,008 Consumer (1,893) 171 1,263 2,134 1,675 Enterprise 1,174 2,087 335 (340) 3,256 Group costs (2,300) (2,256) (2,293) (2,260) (9,109) Group Adjusted EBITDA (non-GAAP) 3,387 6,695 6,950 7,798 24,830 Income and expense items: $1 = ZAR 17.13 17.52 17.93 18.74 17.94 Use of Non-GAAP Measures U.S. securities laws require that when we publish any non-GAAP measures, we disclose the reason for using these non-GAAP measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA is a non-GAAP measure. We provide this non-GAAP measure to enhance our evaluation and understanding of our financial performance and trends. We believe that this measure is helpful to users of our financial information understand key operating performance and trends in our business because it excludes certain non-cash expenses (including depreciation and amortization and stock-based compensation charges) and income and expenses that we consider once-off in nature. Non-GAAP Measures Group Adjusted EBITDA is earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for non- operational transactions (including loss on disposal of equity-accounted investments, change in fair value of equity securities), (earnings) loss from equity-accounted investments, stock-based compensation charges and once-off items. We included an intercompany interest expense in our Consumer Segment Adjusted EBITDA for eight months to February 28, 2025. We commenced utilizing our February 2025 lending facilities to fund a portion of our Consumer lending book from March 1, 2025. Once-off items represents non-recurring income and expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. 52 The table below presents the reconciliation between GAAP net loss attributable to Lesaka to Group Adjusted EBITDA: Table 14 Years ended June 30, 2025 2024 2023 $ ’000 $ ’000 $ ’000 Loss attributable to Lesaka - GAAP (87,634) (17,440) (35,074) Loss from equity accounted investments (114) 1,279 5,117 Net loss before loss from equity-accounted investments (87,748) (16,161) (29,957) Income tax expense (benefit) (18,198) 3,363 (2,309) Loss before income tax expense (105,946) (12,798) (32,266) Interest expense 21,453 18,932 18,567 Interest income (2,596) (2,294) (1,853) Reversal of allowance for doubtful EMI loan receivable - (250) - Net loss on disposal of equity-accounted investment 161 - 205 Change in fair value of equity securities 59,828 - - Operating (loss) income (27,100) 3,590 (15,347) Impairment loss 18,863 - 7,039 PPA amortization (amortization of acquired intangible assets) 21,384 14,419 15,149 Depreciation 12,337 9,246 8,536 Stock-based compensation charges 9,550 7,911 7,309 Interest adjustment (2,195) - - Once-off items (1) 17,826 1,853 1,922 Unrealized Loss FV for currency adjustments 23 (83) 222 Group Adjusted EBITDA - Non-GAAP 50,688 36,936 24,830 (1) The table below presents the components of once-off items for the periods presented: Table 15 Years ended June 30, 2025 2024 2023 $ ’000 $ ’000 $ ’000 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs 16,159 2,325 - Transaction costs 1,794 480 850 Indirect taxes provision (127) - 438 (Income recognized) Expenses incurred related to closure of legacy businesses - (952) 639 Non-recurring revenue not allocated to segments - - (1,469) Employee misappropriation of company funds - - 1,202 Separation of employee expense - - 262 Total once-off items 17,826 1,853 1,922 Once-off items are non-recurring in nature, however, certain items may be reported in multiple quarters. For instance, transaction costs include costs incurred related to acquisitions and transactions consummated or ultimately not pursued. The transactions can span multiple quarters, for instance in fiscal 2025 we incurred significant transaction costs related to the acquisition of Adumo and Recharger over a number of quarters, and the transactions are generally non-recurring Indirect tax provision release relates to the reversal of a non-recurring indirect tax provision created in fiscal 2023 which was resolved in fiscal 2025 following settlement of the matter with the tax authority. (Income recognized) Expenses incurred related to closure of legacy businesses represents (i) gains recognized related to the release of the foreign currency translation reserve on deconsolidation of a subsidiary and (ii) costs incurred related to subsidiaries which we are in the process of deregistering/ liquidation and therefore we consider these costs non-operational and ad hoc in nature. Non-recurring revenue not allocated to segments includes once off revenue recognized that we believe does not relate to either our Merchant or Consumer divisions. Employee misappropriation of company funds represents a once -off loss incurred. We incurred separation costs related to the termination of certain senior-level employees, including an executive officer and senior managers, during the fiscal year and we consider these specific terminations to be of a non-recurring nature. 53 Liquidity and Capital Resources At June 30, 2025, our unrestricted cash and cash equivalents were $76.5 million and comprised of ZAR-denominated balances of ZAR 1.0 billion ($55.2 million), U.S. dollar-denominated balances of $3.2 million, and other currency deposits, primarily Indian rupee (related to the sale of MobiKwik), of $18.1 million, all amounts translated at exchange rates applicable as of June 30, 2025. The increase in our unrestricted cash balances from June 30, 2024, was primarily due to the positive contribution from all of our operating segments, proceeds from the sale of MobiKwik, and utilizing of our borrowing facilities, which was partially offset by the utilization of cash reserves to fund certain scheduled and other repayments of our borrowings, settle the cash portion of the purchase consideration related to our various acquisitions, purchase ATMs and vaults and other items of capital expenditure, pay annual bonuses, pay for expenses included in our group costs, and to make an investment in working capital. We generally invest any surplus cash held by our South African operations in overnight call accounts that we maintain at South African banking institutions, and any surplus cash held by our non-South African companies in U.S. dollar-denominated money market accounts. Historically, we have financed most of our operations, research and development, working capital, and capital expenditures, as well as acquisitions and strategic investments, through internally generated cash and our financing facilities. When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. Refer to Note 12 to our consolidated financial statements for the year ended June 30, 2025, for additional information related to our borrowings. Our ability to make payments on our indebtedness and to fund our operations may be dependent upon the operating income and the distribution of funds from our subsidiaries. However, as local laws and regulations and/or the terms of our indebtedness restrict certain of our subsidiaries from paying dividends and transferring assets to us, there is no assurance that our subsidiaries will be permitted to provide us with sufficient dividends, distributions or loans when necessary. We will make a cash payment of ZAR 175.0 million ($9.9 million translated at exchange rates as of June 30, 2025) in March 2026 related to the cash portion of the deferred consideration due to the seller of Recharger. Available short-term borrowings Summarized below are our short-term facilities available and utilized as of June 30, 2025: Table 16 RMB GBF RMB Other Nedbank $ ’000 ZAR ’000 $ ’000 ZAR ’000 $ ’000 ZAR ’000 Total short-term facilities available, comprising: Total overdraft 39,475 700,901 - - - - Indirect and derivative facilities (1) - - 5,672 100,718 8,817 156,554 Total short-term facilities available 39,475 700,901 5,672 100,718 8,817 156,554 Utilized short-term facilities: Overdraft 24,469 434,461 - - - - Indirect and derivative facilities - - 1,864 33,089 119 2,110 Total short-term facilities available 24,469 434,461 1,864 33,089 119 2,110 Interest rate, based on South African prime rate 10.25% N/A N/A (1) Other facilities include indirect and derivative facilities may only be used for guarantees, letters of credit and forward exchange contracts to support guarantees issued by RMB and Nedbank to various third parties on our behalf. In terms of a commitment provided to the lender under the CTA entered into on February 27, 2025, we have undertaken not to utilize more than ZAR 5.0 million ($0.3 million) of the Nedbank Facility. Long-term borrowings We have aggregate long-term borrowing outstanding of ZAR 3.6 billion ($200.8 million translated at exchange rates as of June 30, 2025) as described in Note 12. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 3.1 billion, which was used to refinance our previous long-term borrowings. We have utilized all of these long-term borrowings. As of September 29, 2025, we also have a revolving credit facility, of ZAR 400.0 million which is utilized to fund a portion of our merchant finance loans receivable book and an asset backed facility of ZAR 227.0 million which is utilized to partially fund the acquisition of POS devices and vaults. 54 Restricted cash We have also entered into cession and pledge agreements with Nedbank related to our Nedbank indirect credit facilities and we have ceded and pledged certain bank accounts to Nedbank. The funds included in these bank accounts are restricted as they may not be withdrawn without the express permission of Nedbank. Our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows as of June 30, 2025, includes restricted cash of $0.1 million that has been ceded and pledged. Arrangement with African Bank to fund our ATMs In September 2024, we entered into an arrangement with African Bank Limited (“African Bank”) and certain cash-in-transit service providers to fund our ATMs. Under this arrangement, African Bank will use its cash resources to fund our ATMs and it is specifically recorded that the cash in our ATMs are African Bank’s property. Therefore, as we have not utilized a facility to obtain the cash, and do not own or control the cash for an extended period of time, we do not record cash or cash equivalents and borrow ings in our consolidated statement of financial position. Cash withdrawn from our ATMs by our EPE customers and other consumers are settled through the interbank settlement system from the ATM users bank account to African Bank’s bank accounts. We pay African Bank a monthly fee for the service provided which is calculated based on the cumulative daily outstanding balance of cash utilized multiplied by the South African prime interest rate less 1%. We are exposed to the risk of cash lost while it is in our ATMs (i.e. from theft) and are required to repay African Bank for any shortages. Cash flows from operating activities Net cash used in operating activities during fiscal 2025 was $9.1 million (ZAR 163.3 million) compared to net cash provided by operating activities of $28.8 million (ZAR 537.9 million) during fiscal 2024. Excluding the impact of income taxes, our cash used in operating activities during fiscal 2025 includes cash utilized for the settlement of working capital movements within our Merchant and Enterprise businesses related to quarter-end transaction processing activities and which were settled in the following week (our fourth quarter of fiscal 2024 closed on a Sunday), and the net growth in our Consumer and Merchant finance loans receivable books, which was partially offset by the positive contribution from our Merchant and Consumer businesses. Net cash provided by operating activities during fiscal 2024 was $28.8 million (ZAR 537.9 million) compared to $0.4 million (ZAR 7.4 million) during fiscal 2023. Excluding the impact of income taxes, our cash provided by operating activities during the fiscal 2024 was positively impacted by the contribution from Merchant and Consumer, the sale of Cell C inventory and temporary working capital movements within our merchant business as a result of quarter-end transaction processing activities closing on a Sunday and which were settled in the following week, which was partially offset by growth in our consumer finance loans receivable book During fiscal 2025, we paid our first provisional South African tax payments of $4.2 million (ZAR 76.1 million) related to our 2025 tax year. During fiscal 2025, we also made our second provisional South African tax payments of $2.2 million (ZAR 39.3 million related to our 2025 tax year and received tax refunds of $0.44 million (ZAR 7.2 million). We also paid taxes totaling $0.3 million in other tax jurisdictions, primarily in the Botswana and Namibia. During fiscal 2024, we paid our first provisional South African tax payments of $2.7 million (ZAR 49.5 million) related to our 2024 tax year. During fiscal 2024, we also made our second provisional South African tax payments of $2.9 million (ZAR 52.7 million related to our 2024 tax year and received tax refunds of $0.0 million (ZAR 0.8 million). We also paid taxes totaling $0.4 million in other tax jurisdictions, primarily in the Botswana. During fiscal 2023, we paid our first provisional South African tax payments of $3.0 million (ZAR 50.8 million) related to our 2023 tax year. During fiscal 2023, we also made our second provisional South African tax payments of $4.1 million (ZAR 76.1 million related to our 2023 tax year and received tax refunds of $0.2 million (ZAR 3.8 million). We also paid taxes totaling $0.4 million in other tax jurisdictions, primarily in the Botswana. Taxes paid during fiscal 2025, 2024 and 2023 were as follows: Table 17 Year ended June 30, 2025 2024 2023 2025 2024 2023 $ $ $ ZAR ZAR ZAR ‘000 ‘000 ‘000 ‘000 ‘000 ‘000 First provisional payments 4,182 2,663 2,955 76,118 49,534 50,798 Second provisional payments 2,198 2,861 4,079 39,279 52,721 76,089 Taxation paid related to prior years 225 641 15 4,081 12,187 273 Tax refund received (438) (38) (210) (7,173) (768) (3,756) Total South African taxes paid 6,167 6,127 6,839 112,305 113,674 123,404 Foreign taxes paid 314 379 361 5,738 7,063 6,482 Total tax paid 6,481 6,506 7,200 118,043 120,737 129,886 55 We expect to make additional provisional income tax payments in South Africa related to our 2025 tax year in the first quarter of fiscal 2026, however, the amount was not quantifiable as of the date of the filing of this Annual Report. Cash flows from investing activities Cash used in investing activities for fiscal 2025 included capital expenditures of $17.2 million (ZAR 307.9 million), primarily due to the acquisition of vaults and POS devices. We also incurred expenditures of $3.9 million (ZAR 69.8 million), primarily related to the capitalization of development costs, during fiscal 2025. During fiscal 2025, we paid $12.9 million related to acquisition of certain businesses, including Adumo and Recharger. We also received $16.4 million related to the sale of our entire equity investment in MobiKwik in June 2025. Cash used in investing activities for fiscal 2024 included capital expenditures of $12.7 million (ZAR 236.6 million), primarily due to the acquisition of vaults and POS devices. During fiscal 2024, we received proceeds of $3.5 million related to the sale of remaining interest in Finbond and $0.25 million related to the second (and final) tranche from the disposal of our entire equity interest in Carbon. Cash used in investing activities for fiscal 2023 included capital expenditures of $16.2 million (ZAR 289.8 million), primarily due to the acquisition of ATMs . During fiscal 2023, we received proceeds of $0.25 million related to the first tranche (of two) from the disposal of our entire equity interest in Carbon and $0.4 million related to the sale of minor positions in Finbond. Cash flows from financing activities During fiscal 2025, we utilized $98.6 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect as well as to partially fund the acquisition of Recharger and for the February 2025 refinance of certain of our facilities. We repaid $89.2 million of those facilities, including towards our refinanced facilities. We utilized $190.1 million of our borrowings to settle a portion of the Adumo purchase consideration, pay certain transaction expenses, repay Adumo’s borrowings, repurchase shares of our common stock, fund the acquisition of certain capital expenditures, for working capital requirements and for the February 2025 refinance of certain of our facilities. We repaid $131.2 million of long-term borrowings towards our refinanced facilities and in accordance with our repayment schedule, paid $7.2 million to settle Adumo’s borrowings, and settled a portion of our revolving credit facility utilized. We also paid an origination fee of $1.0 million to secure additional borrowings as well as paid dividends to the non-controlling interest of $0.4 million. During fiscal 2024, we utilized approximately $183.0 million from our South African overdraft facilities to fund our ATMs and repaid $199.6 million of these facilities. We utilized $23.7 million of our long-term borrowings to fund the acquisition of certain capital expenditures and for working capital requirements. We repaid $20.1 million of these long-term in accordance with our repayment schedule as well as to settle a portion of our revolving credit facility utilized. We received $0.1 million from the exercise of stock options. We also paid $1.5 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock. During fiscal 2023, we utilized $520.1 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect and repaid $547.3 million of these facilities. We utilized $24.4 million of our long-term borrowings to settle $10.5 million of our revolving credit facilities, fund our merchant finance loans receivable business, and to fund the acquisition of certain capital expenditures. We repaid $17.5 million of these long-term, including $10.5 million to settle our revolving credit balance in full. We received $0.5 million from the exercise of stock options. We also paid $1.3 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock and to settle the strike price due and taxes due related to the exercise of stock options. 56 Contractual Obligations The following table sets forth our contractual obligations as of June 30, 2025: Table 18 Payments due by Period, as of June 30, 2025 (in $ ’000s) Total Less than 1 year 2-3 years 3-5 years Thereafter Short-term credit facilities (A) 24,469 24,469 - - - Long-term borrowings Principal repayments (A)(B) 200,769 11,956 31,445 157,368 - Interest payments (A)(B) 38,652 10,739 19,475 8,438 - Operating lease liabilities, including imputed interest (C) 11,660 4,852 5,460 1,348 - Purchase obligations 2,872 2,872 - - - Capital commitments 157 157 - - - Deferred purchase consideration due to seller of Recharger (D) 9,856 9,856 - - - Other long-term obligations reflected on our balance sheet (E)(F) 2,991 - - - 2,991 Total 291,426 64,901 56,380 167,154 2,991 (A) – Refer to Note 12 to our audited consolidated financial statements. (B) – Long-term borrowings principal repayments for the 3-5 year period includes all unamortized fees as of June 30, 2025. Interest payments based on applicable interest rates as of June 30, 2025, and expected outstanding long-term borrowings over the period. All amounts converted from ZAR to USD using the June 30, 2025, USD/ ZAR exchange rate. (C) – Refer to Note 8 to our audited consolidated financial statements. (D) – Represents the deferred consideration of ZAR 175 million due in March 2026 to the seller of Recharger. Refer to Note 3 to our audited consolidated financial statements. Translated at exchange rates applicable as of June 30, 2025. (E) – Includes policyholder liabilities of $3.2 million related to our insurance business. All amounts are translated at exchange rates applicable as of June 30, 2025. (F) – We have excluded cross-guarantees in the aggregate amount of $0.1 million issued as of June 30, 2025, to RMB and Nedbank to secure guarantees it has issued to third parties on our behalf as the amounts that will be settled in cash are not known and the timing of any payments is uncertain. Off-Balance Sheet Arrangements We have no off -balance sheet arrangements. Capital Expenditures Capital expenditures for the years ended June 30, 2025, 2024 and 2023 were as follows: Table 19 2025 2024 2023 2025 2024 2023 $ $ $ ZAR ZAR ZAR ’000 ’000 ’000 ’000 ’000 ’000 Merchant 18,117 11,202 12,812 324,350 209,302 229,847 Consumer 1,500 1,317 3,170 26,855 24,607 56,870 Enterprise 1,482 146 174 26,532 2,728 3,122 Total 21,099 12,665 16,156 377,737 236,637 289,839 Our capital expenditures for fiscal 2025, 2024 and 2023, are discussed under “—Liquidity and Capital Resources—Cash flows from investing activities.” All of our capital expenditures for the past three fiscal years were funded through internally-generated funds, except for certain capital expenditures of POS devices and vaults, made by Connect which were funded through the utilization of asset-backed borrowings. We had outstanding capital commitments as of June 30, 2025, of $0.2 million. In addition to these capital expenditures, we expect that capital spending for fiscal 2026 will include acquisition of POS devices, vaults, computer software, computer and office equipment, as well as for our ATM infrastructure and branch network in South Africa . Acquisition of these assets will be funded through the use of internally-generated funds and available facilities. 57 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK We seek to manage our exposure to currency exchange, translation, interest rate, credit, microlending credit and equity price and liquidity risks as discussed below. Currency Exchange Risk We are subject to currency exchange risk because we purchase components for vaults, that we assemble, and inventories that we are required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar. We have used forward contracts in order to limit our 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. We had no outstanding foreign exchange contracts as of June 30, 2025 and 2024. Translation Risk Translation risk relates to the risk that our results of operations will vary significantly as the U.S. dollar is our reporting currency, but we earn a significant amount of our revenues and incur a significant amount of our expenses in ZAR. The U.S. dollar to the ZAR exchange rate has fluctuated significantly over the past three years. As exchange rates are outside our control, there can be no assurance that future fluctuations will not adversely affect our results of operations and financial condition. Interest Rate Risk As a result of our normal borrowing activities, our operating results are exposed to fluctuations in interest rates, which we manage primarily through regular financing activities. Interest rates in South Africa have been trending downwards in recent quarters and as of the date of this Annual Report, are expected to decline by a further 25 basis points in the first quarter of calendar 2026 and stabilize at that level for the remainder of that year. We periodically evaluate the cost and effectiveness of interest rate hedging strategies to manage this risk. We generally maintain investments in cash equivalents and held to maturity investments and have occasionally invested in marketable securities. We have short and long-term borrowings in South Africa as described in Note 12 to our consolidated financial statements which attract interest at rates that fluctuate based on changes in the South African prime and 3-month JIBAR interest rates. The following table illustrates the effect on our annual expected interest charge, translated at exchange rates applicable as of June 30, 2025, as a result of changes in the South African prime and 3-month JIBAR interest rates, using our outstanding short and long-term borrowings as of June 30, 2025. The effect of a hypothetical 1% (i.e. 100 basis points) increase and a 1% decrease in the interest rates applicable to the borrowings as of June 30, 2025, are shown. The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios. Table 20 As of June 30, 2025 Annual expected interest charge ($ ’000) Hypothetical change in interest rates Impact of hypothetical change in interest rates ($ ’000) Estimated annual expected interest charge after hypothetical change in interest rates ($ ’000) Interest on South Africa borrowings 23,987 1% 2,262 26,249 (1%) (2,262) 21,725 Credit Risk Credit risk relates to the risk of loss that we would incur as a result of non-performance by counterparties. We maintain credit risk policies in respect of our 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 our management deems appropriate. With respect to credit risk on financial instruments, we maintain 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. 58 Consumer microlending credit risk We are exposed to credit risk in our 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. We consider this policy to be appropriate because the affordability test we perform 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 our customers to make payments when due deteriorate in the future. A significant amount of judgment is required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer. Merchant lending We maintain an allowance for doubtful finance loans receivable related to its Merchant services segment with respect to short- term loans to qualifying merchant customers. Our risk management procedures include adhering to our proprietary lending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks. We consider 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 Securities Price Risk Equity price risk relates to the risk of loss that we would incur as a result of the volatility in the exchange -traded price of equity securities that we hold. As of June 30, 2025, we did not have any equity securities that were exchange-traded and held as available for sale. Historically, exchange -traded equity securities held as available for sale were expected to be held for an extended period of time and we were not concerned with short-term equity price volatility with respect to these securities provided that the underlying business, economic and management characteristics of the company remained sound. The market price of these exchange-traded equity securities may fluctuate for a variety of reasons and, consequently, the amount we may obtain in a subsequent sale of these securities may significantly differ from the reported market value. Equity Securities Liquidity Risk Equity liquidity risk relates to the risk of loss that we would incur as a result of the lack of liquidity on the exchange on which those securities are listed. We 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. We monitor these investments for impairment and make appropriate reductions in carrying value when an impairment is deemed to be other-than-temporary. As of June 30, 2025, we did not own any exchange-traded equity securities. 59 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Our audited consolidated financial statements, together with the reports of our independent registered public accounting firms, appear on pages F-1 through F-83 of this Annual Report. 60 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. ITEM 9A. CONTROLS AND PROCEDURES Evaluation of disclosure controls and procedures Under the supervision and with the participation of our management, including our Executive Chairman and our Group Chief Financial Officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Executive Chairman and Group Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2025, due to the material weaknesses in internal control over financial reporting as described below. Internal Control over Financial Reporting Internal control over financial reporting is a process designed by, or under the supervision of, our Executive Chairman and Group Chief Financial Officer, or persons performing similar functions, and effected by our board of directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of our officers and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our audited consolidated financial statements. Inherent Limitations in Internal Control over Financial Reporting Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design safeguards into the process to reduce, though not eliminate, this risk. Management’s Report on Internal Control Over Financial Reporting Management, including our Executive Chairman and our Group Chief Financial Officer, is responsible for establishing and maintaining adequate internal control over our financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this evaluation and as described below, management concluded that our internal control over financial reporting was not effective as of June 30, 2025. As permitted by the rules of the SEC, management has excluded Adumo and Recharger from its evaluation for the year ended June 30, 2025, the year of acquisition. As of June 30, 2025, Adumo and Recharger’s total assets represented approximately 7% of our consolidated total assets and approximately 13% of consolidated total current assets. Their total revenues constituted approximately 8% of our consolidated revenue and their operating income constituted approximately 11% of our consolidated operating loss for the year ended June 30, 2025. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that a reasonable possibility exists that a material misstatement of our annual or interim financial statements would not be prevented or detected on a timely basis. As of June 30, 2025, we identified material weaknesses related to: ● Our Consumer lending process, specifically insufficient risk assessment and monitoring activities relating to changes in systems and processes, insufficient controls over internal information and information from service organizations, and insufficient design and implementation of ITGCs, controls over service organizations and process level controls, resulting in ineffective process level controls, including a lack of validation of the completeness and accuracy of information used within the process; 61 ● Our payroll process, specifically insufficient risk assessment and monitoring activities relating to changes over the transfer of ownership to the centralized payroll processes, insufficient controls over information from service organizations, and insufficient design and implementation of ITGCs, controls over service organizations and process level controls resulting in ineffective process level controls including a lack of validation of the completeness and accuracy of information used within this process; ● Our annual goodwill impairment process, specifically related to insufficient risk assessment and ineffective design and implementation of controls resulting in ineffective process level controls; ● Our business combination process, specifically insufficient risk assessment and ineffective design and implementation of controls over the purchase price allocation of the Adumo and Recharger acquisitions including insufficient controls over information resulting in ineffective process level controls including a lack of validation of the completeness and accuracy of information used; ● Our revenue recognition process relating to prepaid airtime sold and processing fees relating to certain agreements, specifically insufficient risk assessment and ineffective design and implementation of controls related to our judgement over revenue recognized either as principal versus as agent resulting in ineffective process level controls.; ● Our journal entry process, specifically relating to insufficient risk assessment, and ineffective design and implementation of controls including insufficient controls over information resulting in ineffective process level controls including a lack of validation of the completeness of the journal entry population and a lack of validation of the completeness and accuracy of information used within the process; and ● An insufficient number of experienced and trained resources to execute on their internal control responsibilities resulting in ineffective design, implementation and operating effectiveness of process level controls for processes in the scope of our internal control over financial reporting evaluation. Of the material weaknesses described above, the material weaknesses related to the revenue recognition process resulted in a material corrected misstatement for the year ended June 30, 2025 and a restatement for each of the quarters ended September 30, 2024, December 31, 2024 and March 31, 2025 of our revenue and cost of goods sold, IT processing, servicing and support, exclusive of depreciation and amortization. There was no impact on the Company’s reported operating income (loss), net loss or loss per share in any of such quarters. Of the material weaknesses described above, the material weaknesses related to the annual goodwill impairment process resulted in a corrected material misstatement and a corrected immaterial misstatement of goodwill and impairment loss in the Company’s consolidated financial statements for the year ended June 30, 2025 . Of the material weaknesses described above, the material weaknesses related to the journal entry process resulted in a corrected immaterial misstatement to our revenue and cost of goods sold, IT processing, servicing and support, exclusive of depreciation and amortization in the Company’s consolidated financial statements for the year ended June 30, 2025. Of the material weaknesses described above, the material weakness related to an insufficient number of experienced and trained resources to execute on their internal control responsibilities also resulted in a corrected material misstatement of current and long- term borrowings in the Company’s consolidated financial statements for the year ended June 30, 2025. All other material weaknesses did not result in any corrected material or immaterial misstatements, however a reasonable possibility exists that material misstatements in the Company’s consolidated financial statements may not be prevented or detected on a timely basis. Lesaka’s independent registered public accounting firm, KPMG Inc, who audited the consolidated financial statements included in this Annual Report, has expressed an adverse report on the operating effectiveness of our internal control over financial reporting as of June 30, 2025, which appears in Part II, Item 9 of this Annual Report. Remediation of Newly Identified Material Weaknesses To address the material weaknesses, our management, including our Information Technology (“IT”) team, has commenced with remediation of these material weaknesses including, but not limited to: (1) developing and implementing a comprehensive remediation plan that includes specific actions aimed at enhancing the understanding of control owners related to the operation and importance of internal controls over financial reporting, including the principles and requirements of each control, with a focus on the impacted processes including controls over service organizations, ITGCs, and other process level controls; (2) mandating improved risk assessment procedures with governance requirements upon implementing new systems within the Group together with the design, implementation and monitoring of control activities; (3) the recruitment of additional appropriately skilled resources across the Finance and Risk and Compliance disciplines coupled with the further upskilling and training of existing resources responsible for the execution of key controls as well as a focus on a greater degree of automation of controls throughout the organization, (4) the embedding of controls compliance in the key performance indicators of senior executives across the business and (5) collaborating closely with internal and external assurance partners to ensure the robustness of our remediation plan. 62 While we are actively taking steps to implement our remediation plan, the material weaknesses will not be deemed resolved until the enhanced controls operate for a sufficient period of time and management has confirmed through testing that the same are operating effectively. We will continue to monitor the remediation plan's effectiveness and adjust our efforts as needed. As we assess and test our internal control over financial reporting, we may identify the need for additional measures or modifications to the plan. Remediation of Previously Identified Material Weaknesses Management has, however, made progress in remediating the material weaknesses identified in the previous fiscal year related to the failure of specific ITGCs for certain IT systems to operate effectively as well as the insufficient design and implementation of controls and policies and procedures related to the goodwill impairment assessment. As a result, controls in the areas of user access and program-change management for associated IT systems that support our financial reporting processes have been remediated. Revised procedures have been implemented related to the validation of completeness and accuracy of the data used in the goodwill impairment model together with additional procedures implemented to enhance the precision levels in evaluating certain assumptions utilized in this model. Even though the controls for the goodwill impairment process have been strengthened, it has not yet been fully remediated as model errors persisted. Changes in Internal Control over Financial Reporting Except as described above, there were no changes in our internal control over financial reporting during the quarter ended June 30, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. As stated, management has excluded Adumo and Recharger from its evaluation of the effectiveness of internal control over financial reporting for the year ended June 30, 2025, the year of acquisition, however continues to evaluate Adumo and Recharger’s internal control over financial reporting (refer to Item 1A—“Risk Factors—Failure to maintain effective internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act). 63 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and Board of Directors of Lesaka Technologies, Inc. Opinion on Internal Control Over Financial Reporting We have audited Lesaka Technologies, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses, described below, on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of June 30, 2025 and 2024, the related consolidated statements of operations, comprehensive loss or income, changes in equity, and cash flows for each of the years in the two-year period ended June 30, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated September 29, 2025 expressed an unqualified opinion on those consolidated financial statements. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis. Material weaknesses related to risk assessment, sufficient experienced and trained resources, design and implementation of control activities, information and communication, and monitoring have been identified and included in management’s assessment. The material weaknesses were considered in determining the nature, timing, and extent of audit tests applied in our audit of the 2025 consolidated financial statements, and this report does not affect our report on those consolidated financial statements. The Company acquired the Adumo (RF) Proprietary Limited, Recharger Proprietary Limited, Master Fuel Software and Support Proprietary Limited and Genisus Risk Proprietary Limited (the “Acquisitions”) during 2025, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of June 30, 2025, the Acquisitions’ internal control over financial reporting associated with total assets of $22,840 thousand and total revenues of $51,651 thousand included in the consolidated financial statements of the Company as of and for the year ended June 30, 2025. Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of the Acquisitions. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG Inc. Johannesburg, Republic of South Africa September 29, 2025 64 ITEM 9B. OTHER INFORMATION Our Section 16 officers and directors, as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934 (the “Exchange Act”), may from time to time enter into plans for the purchase or sale of our common stock that are intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. During the quarter ended June 30, 2025, no officers or directors, as defined in Rule 16a-1(f), adopted , modified , or terminated a “Rule 10b5-1 trading arrangement” or a “non-Rule 10b5-1 trading arrangement,” as defined in Item 408 of Regulation S-K. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 65 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information about our executive officers is set out in Part I, Item 1 under the caption “Our Executive Officers.” The other information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2025 annual meeting of shareholders entitled “Board of Directors and Corporate Governance” and “Additional Information.” ITEM 11. EXECUTIVE COMPENSATION The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2025 annual meeting of shareholders entitled “Executive Compensation,” “Board of Directors and Corporate Governance—Compensation of Directors” and “—Remuneration Committee Interlocks and Insider Participation.” ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2025 annual meeting of shareholders entitled “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information.” ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2025 annual meeting of shareholders entitled “Certain Relationships and Related Transactions” and “Board of Directors and Corporate Governance.” ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item is incorporated by reference to the sections of our definitive proxy statement for our 2025 annual meeting of shareholders entitled “Audit and Non-Audit Fees.” 66 PART IV ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES a) The following documents are filed as part of this report 1. Financial Statements The following financial statements are included on pages F-1 through F-83. Report of the Independent Registered Public Accounting Firm – KPMG, Inc. (PCAOB Firm ID 1025 ) F-2 Report of the Independent Registered Public Accounting Firm – Deloitte & Touche (South Africa) (PCAOB Firm ID 0 1130 ) F-4 Consolidated balance sheets as of June 30, 2025 and 2024 F-5 Consolidated statements of operations for the years ended June 30, 2025, 2024 and 2023 F-6 Consolidated statements of comprehensive (loss) income for the years ended June 30, 2025, 2024 and 2023 F-7 Consolidated statements of changes in equity for the years ended June 30, 2025, 2024 and 2023 F-8 Consolidated statements of cash flows for the years ended June 30, 2025, 2024 and 2023 F-11 Notes to the consolidated financial statements F-12 2. Financial Statement Schedules Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included. (b) Exhibits Incorporated by Reference Herein Exhibit No. Description of Exhibit Included Herewith Form Exhibit Filing Date 2.1 Sale of Shares Agreement, dated October 31, 2021, by and among Net1 Applied Technologies South Africa Proprietary Limited; Net1 UEPS Technologies, Inc.; Old Mutual Life Assurance Company (South Africa) Limited; Lirast (Mauritius) Company Limited; SIG International Investment (BVI) Limited; Aldgate International Limited; Ivan Michael Epstein; PFCC (BVI) Limited; PCF Investments (BVI) Limited; Ovobix (RF) Proprietary Limited; Luxanio 227 Proprietary Limited; Vista Capital Investments Proprietary Limited; Vista Treasury Proprietary Limited; K2021477132 (South Africa) Proprietary Limited; and Cash Connect Management Solutions Proprietary Limited. 8-K 10.1 November 2, 2021 2.2 Sale and Purchase Agreement, dated May 7, 2024, between Lesaka Technologies Proprietary Limited; Lesaka Technologies, Inc. and the parties listed in Annexure A. 8-K 10.1 May 7, 2024 2.3 First Addendum to Sale and Purchase Agreement, dated October 1, 2024, between Lesaka Technologies Proprietary Limited; Lesaka Technologies, Inc. and the parties listed in Annexure A 8-K 2.2 October 1, 2025 2.4 Transaction Implementation Agreement, dated June 26, 2025, entered into between the parties listed in Annexure A and the parties listed in Annexure B and Lesaka Technologies Proprietary Limited and Zero Research Proprietary Limited and Bank Zero Mutual Bank and Naught Holdings Ltd. 8-K 2.1 June 26, 2025 3.1 Amended and Restated Articles of Incorporation 8-K 3.1 May 17, 2022 67 3.2 Amended and Restated By-Laws of Lesaka Technologies, Inc. 8-K 3.2 May 17, 2022 4.1 Form of common stock certificate 10-K 4.1 September 9, 2022 4.2 Description of registrant’s securities X 10.1* Form of Restricted Stock Agreement 10-Q 10.49 February 7, 2023 10.2* Form of Stock Option Agreement 10-Q 10.50 February 7, 2023 10.3* Form of Restricted Stock Agreement (non-employee directors) 10-Q 10.51 February 7, 2023 10.4* Form of Indemnification Agreement 10-K 10.4 September 11, 2024 10.5* Form of non-employee director agreement 10-K 10.5 August 24, 2017 10.6* Amended and Restated 2022 Stock Incentive Plan of Lesaka Technologies, Inc. 14A A September 30, 2022 10.7* Amendment to the 2022 Amended and Restated Stock Incentive Plan of Lesaka Technologies, Inc. 14A B April 22, 2024 10.8* Employment Agreement, dated as of December 4, 2023, between Lesaka Technologies, Inc. and Ali Mazanderani 8-K 10.1 December 4, 2023 10.9* Option Award Agreement between Ali Mazanderani and Lesaka Technologies, Inc. 14A A April 22, 2024 10.10* Contract of Employment, effective February 5, 2021, between Net1 Applied Technologies South Africa Proprietary Limited and Lincoln Mali 8-K 10.1 February 11, 2021 10.11* Restrictive Covenants Agreement, effective February 5, 2021, between Net1 Applied Technologies South Africa Proprietary Limited and Lincoln Mali 8-K 10.2 February 11, 2021 10.12* Contract of Employment, dated as of December 9, 2021, between Net1 Applied Technologies South Africa (Pty) Ltd and Naeem Kola 8-K 10.1 December 10, 2021 10.13* Restrictive Covenants Agreement, dated as of December 9, 2021, between Net1 Applied Technologies South Africa (Pty) Ltd and Naeem Kola 8-K 10.2 December 10, 2021 10.14* Employment Agreement, dated as of December 9, 2021, between Net 1 UEPS Technologies, Inc. and Naeem Kola 8-K 10.3 December 10, 2021 10.15* Restrictive Covenants Agreement, dated as of December 9, 2021, between Net 1 UEPS Technologies, Inc. and Naeem Kola 8-K 10.4 December 10, 2021 10.16* Employment Agreement, dated as of February 8, 2023, between Lesaka Technologies, Inc. and Steven John Heilbron 10-Q 10.52 May 9, 2023 10.17* Restrictive Covenants Agreement, dated as of February 8, 2023, between Lesaka Technologies, Inc. and Steven John Heilbron 10-Q 10.53 May 9, 2023 10.18* Contract of Employment, dated as of October 1, 2024, between Lesaka Technologies (Pty) Ltd and Daniel Luke Smith 10-Q 10.53 May 7, 2025 10.19* Restrictive Covenants Agreement, dated as of October 1, 2024, between Lesaka Technologies (Pty) Ltd and Daniel Luke Smith 10-Q 10.54 May 7, 2025 10.20* Employment Agreement, dated as of October 1, 2024, between Lesaka Technologies, Inc. and Daniel Luke Smith 10-Q 10.55 May 7, 2025 10.21* Restrictive Covenants Agreement, dated as of October 1, 2024, between Lesaka Technologies, Inc. and Daniel Luke Smith 10-Q 10.56 May 7, 2025 10.22 Policy Agreement, dated April 11, 2016, among the Company and the IFC Investors 8-K 10.32 April 12, 2016 68 10.23 Amended & Restated Policy Agreement, dated October 28, 2024, among Lesaka Technologies, Inc. and the IFC Investors 10-Q 10.43 February 5, 2025 10.24 Cooperation Agreement, dated May 13, 2020, by and between Net 1 UEPS Technologies, Inc. and VCP (Proprietary) Limited 8-K 10.1 May 14, 2020 10.25 Amendment No. 1 to Cooperation Agreement, dated December 9, 2020, by and between Net 1 UEPS Technologies, Inc. and Value Capital Partners (Pty) Ltd 8-K 10.1 December 10, 2020 10.26 Amendment No. 2 to Cooperation Agreement, dated March 22, 2022, by and between Net 1 UEPS Technologies, Inc. and Value Capital Partners (Pty) Ltd 10-K 10.32 September 9, 2022 10.27 Securities Purchase Agreement, dated March 22, 2022, among Net1 UEPS Technologies, Inc., Net1 Applied Technologies South Africa Proprietary Limited and Value Capital Partners Proprietary Limited 10-Q 10.58 May 10, 2022 10.28 Amendment No. 1 to Securities Purchase Agreement dated March 16, 2023, among Lesaka Technologies, Inc. (formerly Net1 UEPS Technologies, Inc.), Lesaka Technologies Proprietary Limited (formerly Net1 Applied Technologies South Africa Proprietary Limited) and Value Capital Partners Proprietary Limited 8-K 10.3 March 22, 2023 10.29 Sale of Shares Agreement dated October 1, 2024, between Lesaka Technologies Proprietary Limited and Crossfin Holdings Proprietary Limited 8-K 10.40 October 1, 2024 10.30 Trust Deed of the Lesaka Employee Share Trust entered into between Lesaka Technologies, Inc. and Nomaxabiso Norma Teyise and Zwelethu Masinga 14A A October 2, 2024 10.31 Relationship Agreement between Lesaka Technologies, Inc. and the Trustees for the time being of the Lesaka Employee Share Trust 14A B October 2, 2024 10.32 Common Terms Agreement Senior Term Loan, Revolving Loan and Working Capital Facilities and Lesaka Technologies Proprietary Limited (as Term/RCF Borrower) and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as Facility Agent) and Bowwood and Main No 408 (RF) Proprietary Limited (as Debt Guarantor) dated February 27, 2025 10-Q 10.46 May 7, 2025 10.33 Senior Term Facility A Agreement between Lesaka Applied Technologies Proprietary Limited (as Term/RCF Borrower) and The Persons Listed in Annexure A (as Original Senior Term Facility A Lenders) and FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (as Facility Agent) dated February 27, 2025 10-Q 10.47 May 7, 2025 10.34 Senior Term Facility B Agreement between Lesaka Applied Technologies Proprietary Limited (as Term/RCF Borrower) and The Persons Listed in Annexure A (as Original Senior Term Facility B Lenders) and FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (as Facility Agent) dated February 27, 2025 10-Q 10.48 May 7, 2025 69 10.35 Senior RCF Agreement between Lesaka Applied Technologies Proprietary Limited (as Term/RCF Borrower) and The Persons Listed in Annexure A (as Original Senior RCF Lenders) and FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (as Facility Agent) dated February 27, 2025 10-Q 10.49 May 7, 2025 10.36 Pledge and Cession in Security Agreement between Lesaka Technologies, Inc. (as Cedent) and Lesaka Technologies Proprietary Limited (as Obligors' agent and Term/RCF Borrower) and Bowwood and Main No 408 (RF) Proprietary Limited (as Debt Guarantor) and FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (as Facility Agent) dated February 27, 2025 10-Q 10.50 May 7, 2025 10.37 Subordination Agreement between Lesaka Applied Technologies Proprietary Limited (as Term/RCF Borrower) and The Persons Listed in Annexure A (as Original Subordinated Parties) and The Persons Listed in Annexure B (as Original Obligors) and The Persons Listed in Annexure C (As Original Lenders) and FirstRand Bank Limited (acting through its Rand Merchant Bank Division) (as Facility Agent) and Bowwood and Main No 408 (RF) Proprietary Limited (as Debt Guarantor) dated February 28, 2025 10-Q 10.51 May 7, 2025 10.38 General Banking Facility Agreement dated February 27, 2025 between Lesaka Technologies (Proprietary) Limited and FirstRand Bank Limited (acting through its Rand Merchant Bank division) 10-Q 10.52 May 7, 2025 10.39 Facility Letter between Nedbank Limited and Net1 Applied Technologies South Africa Limited and certain of its subsidiaries dated as of December 13, 2013 and First Addendum thereto dated as of December 18, 2013 8-K 10.27 December 19, 2013 10.40 Letter from Nedbank Limited to Net1 Applied Technologies South Africa Proprietary Limited and certain of its subsidiaries, dated December 7, 2016 8-K 10.50 December 9, 2016 10.41 Revolving Credit Facility Agreement, dated November 29, 2022, between Cash Connect Capital Proprietary Limited, the Parties Listed in Part I of Schedule 1 (the Original Guarantors) and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as Lender) 8-K 10.1 December 5, 2022 10.42 Senior Facility E Agreement, dated September 26, 2018, among Net1 Applied Technologies South Africa Proprietary Limited, FirstRand Bank Limited (acting through its Rand Merchant Bank division), as lender, and FirstRand Bank Limited (acting through its Rand Merchant Bank division), as agent 8-K 10.96 October 2, 2018 10.43 Letter of Amendment, dated August 2, 2021, among Net1 Applied Technologies South Africa Proprietary Limited and FirstRand Bank Limited (acting through its Rand Merchant Bank division), as lender, related to the amendment to the Senior Facility E Agreement 8-K 10.1 August 2, 2021 10.44 Letter of Amendment, dated January 22, 2024, among Lesaka Proprietary Limited and FirstRand Bank Limited (acting through its Rand Merchant Bank division), as lender, related to the amendment to the Senior Facility E Agreement 8-K 10.1 January 23, 2024 70 10.45 Fifth Amendment and Restatement Agreement, dated March 16, 2023, between Lesaka Technologies Proprietary Limited (as borrower), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as lender), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as facility agent) 8-K 10.1 March 22, 2023 10.46 Amendment and Restatement Agreement, dated November 24, 2023, between Lesaka Technologies Proprietary Limited (as borrower), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as lender), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as facility agent) 8-K 10.1 December 1, 2023 10.47 First Amendment and Restatement Agreement, dated March 22, 2023, between Cash Connect Management Solutions Proprietary Limited (as borrower), arranged by FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as mandated lead arranger), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as facility agent) 8-K 10.2 March 22, 2023 10.48 Third Addendum to Facility Letter no.: LM/CCMS/01/2021 between FirstRand Bank Ltd, Cash Connect Management Solutions (Pty) Ltd, Main Street 1723 (Pty) Ltd, Cash Connect Rentals (Pty) Ltd; and K2020 Connect (Pty) Ltd dated October 29, 2024 10-Q 10.41 November 6, 2024 10.49 Facility Letter dated September 30, 2024 between Lesaka Technologies (Proprietary) Limited and FirstRand Bank Limited (acting through its Rand Merchant Bank division) 8-K 10.1 October 1, 2024 10.50 First Addendum to the Facility Letter dated December 10, 2024 between Lesaka Technologies (Proprietary) Limited and FirstRand Bank Limited (acting through its Rand Merchant Bank division) 8-K 10.1 December 10, 2024 14 Code of Ethics X 19 Insider Trading Policy X 21 Subsidiaries of Registrant X 23.1 Consent of Independent Registered Public Accounting Firm - KPMG, Inc. X 23.2 Consent of Independent Registered Public Accounting Firm - Deloitte & Touche (South Africa) X 31.1 Certification of Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended X 31.2 Certification of Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as amended X 32 Certification pursuant to 18 USC Section 1350 X 97 Compensation Clawback Policy X 101.INS XBRL Instance Document X 101.SCH XBRL Taxonomy Extension Schema X 101.CAL XBRL Taxonomy Extension Calculation Linkbase X 101.DEF XBRL Taxonomy Extension Definition Linkbase X 101.LAB XBRL Taxonomy Extension Label Linkbase X 101.PRE XBRL Taxonomy Extension Presentation Linkbase X 104 Cover Page Interactive Data File (formatted as inline XBRL and continued in Exhibit 101) X * Indicates a management contract or compensatory plan or arrangement. 71 ITEM 16. FORM 10-K SUMMARY None. 72 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. LESAKA TECHNOLOGIES, INC. By: /s/ Ali Mazanderani Ali Mazanderani Executive Chairman and Director Date: September 29, 2025 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. NAME TITLE DATE /s/ Kuben Pillay Lead Independent Director and Director September 29, 2025 Kuben Pillay /s/ Ali Mazanderani Executive Chairman and Director (Principal Executive Officer) September 29, 2025 Ali Mazanderani /s/ Dan L. Smith Group Chief Financial Officer and Director (Principal Financial and Accounting Officer) September 29, 2025 Dan L. Smith /s/ Antony C. Ball Director September 29, 2025 Antony C. Ball /s/ Nonkululeko N. Gobodo Director September 29, 2025 Nonkululeko N. Gobodo /s/ Naeem E. Kola Director September 29, 2025 Naeem E. Kola /s/ Steven J. Heilbron Director September 29, 2025 Steven J. Heilbron /s/ Lincoln C. Mali Director September 29, 2025 Lincoln C. Mali /s/ Sharron Venessa Naidoo Director September 29, 2025 Sharron Venessa Naidoo /s/ Ekta Singh-Bushell Director September 29, 2025 Ekta Singh-Bushell /s/ Dean Sparrow Director September 29, 2025 Dean Sparrow F-1 LESAKA TECHNOLOGIES, INC. LIST OF CONSOLIDATED FINANCIAL STATEMENTS Report of the Independent Registered Public Accounting Firm – KPMG Inc. F-2 Report of the Independent Registered Public Accounting Firm – Deloitte & Touche (South Africa) F-4 Consolidated balance sheets as of June 30, 2025 and 2024 F-5 Consolidated statements of operations for the years ended June 30, 2025, 2024 and 2023 F-6 Consolidated statements of comprehensive (loss) income for the years ended June 30, 2025, 2024 and 2023 F-7 Consolidated statements of changes in equity for the years ended June 30, 2025, 2024 and 2023 F-8 Consolidated statements of cash flows for the years ended June 30, 2025, 2024 and 2023 F-11 Notes to the consolidated financial statements F-12 F-2 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and Board of Directors of Lesaka Technologies, Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Lesaka Technologies, Inc. and subsidiaries (the Company) as of June 30, 2025 and 2024, the related consolidated statements of operations, comprehensive loss or income, changes in equity, and cash flows for each of the years in the two-year period ended June 30, 2025, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of June 30, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated September 29, 2025 expressed an adverse opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Assessment of goodwill impairment test for certain reporting units As discussed in Notes 2 and 10 to the consolidated financial statements, the Company recorded goodwill of $199,395 thousand as of June 30, 2025. The Company tests for impairment of goodwill on an annual basis and at any other time if events or circumstances change that could trigger an impairment test. The Company uses a discounted cash flow model to estimate the fair value for each reporting unit, which requires the Company to make significant estimates and certain assumptions related to the reporting units’ revenue growth rates, terminal revenue growth rates, forecast period for certain reporting units and weighted average cost of capital. We identified the assessment of the Company’s goodwill impairment test for certain reporting units as a critical audit matter. Subjective auditor judgement and specialized skills and knowledge were required to evaluate certain assumptions used in the discounted cashflow model. Specifically, reporting units’ revenue growth rates, terminal revenue growth rates, forecast period for certain reporting units and the weighted average cost of capital. Changes in these assumptions could have a significant impact on the fair value of the reporting units. The following are the primary procedures we performed to address this critical audit matter: • We evaluated the revenue growth rates by comparing the revenue growth rates against historic performance, approved budgets and challenged management on the expected future performance based on reporting unit specific factors. • We performed sensitivity analyses over revenue growth rates and the forecast period of certain reporting units to assess their impact on the Company’s determination of the fair values in respect to the reporting units. F-3 • We involved valuation professionals with specialized skills and knowledge who assisted in: o independently recalculating the terminal revenue growth rates for the reporting units considering industry, product and country specific information; o evaluating the weighted average cost of capital, by developing an independent estimate of weighted average cost of capital range and comparing it to the weighted average cost of capital selected by the Company for each reporting unit; and o performing a sensitivity and scenario type analysis on terminal revenue growth rates and weighted average cost of capital to assess the impact of changes in those assumptions on the Company’s determination of fair value for each reporting unit. Assessment of certain intangibles assets acquired through business combinations As discussed in Notes 2, 3 and 10 to the consolidated financial statements, the Company, through its subsidiary, Lesaka Technologies Proprietary Limited, acquired 100% of the equity interests of Adumo (RF) Proprietary Limited (“Adumo”) on October 1, 2024 and Recharger Proprietary Limited (“Recharger”) on March 3, 2025, respectively. As a result of the transactions, the Company recognized intangible assets, such as brands of $3,623 thousand which related to Adumo, and customer relationships of $11,185 thousand and $15,010 thousand related to Adumo and Recharger, respectively. The fair values of the brands were estimated based on a relief from royalty approach, which included assumptions such as useful lives and the weighted average cost of capital. The fair values of the customer relationships were estimated based on a multi-periods excess earnings method, which included certain assumptions such as expected future revenues, useful lives, and weighted average costs of capital. We identified the assessment of the fair value of the brands and customer relationships acquired through the Adumo and Recharger business combinations as a critical audit matter. A high degree of auditor judgement was required to assess the expected future revenues used to estimate the fair value of the customer relationships; and the useful lives and weighted average costs of capital used to estimate the fair value of the brands and customer relationships. Changes in these assumptions could have a significant effect on the fair value of the intangible assets. The following are the primary procedures we performed to address this critical audit matter: • We performed sensitivity analyses over expected future revenues, useful lives and weighted average costs of capital to assess their impact on the Company’s determination of the fair values of the respective intangible assets acquired through the business combination. • We involved valuation professionals with specialized skills and knowledge who assisted in evaluating the: o estimated useful lives for brands by comparing them to observable useful lives in similar transactions; o estimated useful lives for customer relationships by developing independent estimated useful lives and comparing them to the useful lives selected by the Company; and o weighted average costs of capital used by developing an independent estimated of a weighted average cost of capital range and comparing this range to the weighted average costs of capital selected by the Company. /s/ KPMG Inc. We have served as the Company’s auditor since 2024. Johannesburg, Republic of South Africa September 29, 2025 F-4 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the shareholders and the Board of Directors of Lesaka Technologies, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated statements of operations, comprehensive (loss) income, changes in equity, and cash flows, for the year ended June 30, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the 2023 financial statements present fairly, in all material respects, the results of its operations and its cash flows for the year ended June 30, 2023, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Deloitte & Touche Deloitte & Touche Registered Auditors Johannesburg, South Africa September 12, 2023 (September 29, 2025 as to Notes 10, 16 and 21) We began serving as the Company's auditor in 2004. In 2023 we became the predecessor auditor. LESAKA TECHNOLOGIES, INC. CONSOLIDATED BALANCE SHEETS as of June 30, 2025 and 2024 F-5 June 30, June 30, 2025 2024 (A) (In thousands, except share data) ASSETS CURRENT ASSETS Cash and cash equivalents $ 76,520 $ 59,065 Restricted cash related to ATM funding and short-term credit facilities (Note 12) 119 6,853 Accounts receivable, net and other receivables (Note 4) 42,525 36,667 Finance loans receivable, net (Note 4) 74,110 44,058 Inventory (Note 5) 23,551 18,226 Total current assets before settlement assets 216,825 164,869 Settlement assets 27,098 22,827 Total current assets 243,923 187,696 PROPERTY, PLANT AND EQUIPMENT, NET (Note 7) 44,924 31,936 OPERATING LEASE RIGHT-OF-USE (Note 8) 9,691 7,280 EQUITY-ACCOUNTED INVESTMENTS (Note 9) 199 206 GOODWILL (Note 10) 199,395 138,551 INTANGIBLE ASSETS, NET (Note 10) 139,215 111,353 DEFERRED TAX ASSETS, NET 12,554 3,446 OTHER LONG-TERM ASSETS, including equity securities (Note 9 and 11) 3,809 77,982 TOTAL ASSETS 653,710 558,450 LIABILITIES CURRENT LIABILITIES Short-term credit facilities for ATM funding (Note 12) - 6,737 Short-term credit facilities (Note 12) 24,469 9,351 Accounts payable 19,867 16,674 Other payables (Note 13) 72,079 56,051 Operating lease liability - current (Note 8) 4,007 2,343 Current portion of long-term borrowings (Note 12) 11,956 15,719 Income taxes payable 1,400 654 Total current liabilities before settlement obligations 133,778 107,529 Settlement obligations 26,695 22,358 Total current liabilities 160,473 129,887 DEFERRED TAX LIABILITIES, NET 33,921 38,128 OPERATING LEASE LIABILITY - LONG TERM (Note 8) 6,129 5,087 LONG-TERM BORROWINGS (Note 12) 188,813 127,467 OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 11) 2,991 2,595 TOTAL LIABILITIES 392,327 303,164 REDEEMABLE COMMON STOCK (Note 14) 88,957 79,429 EQUITY COMMON STOCK (Note 14) Authorized: 200,000,000 with $ 0.001 par value; Issued and outstanding shares, net of treasury - 2025: 81,249,097 ; 2024: 64,272,243 103 83 PREFERRED STOCK Authorized shares: 50,000,000 with $ 0.001 par value; Issued and outstanding shares, net of treasury: 2025: - ; 2024: - - - ADDITIONAL PAID-IN-CAPITAL 426,950 343,639 TREASURY SHARES, AT COST: 2025: 29,934,044 ; 2024: 25,563,808 ( 298,523 ) ( 289,733 ) ACCUMULATED OTHER COMPREHENSIVE LOSS (Note 15) ( 185,664 ) ( 188,355 ) RETAINED EARNINGS 222,719 310,223 TOTAL LESAKA EQUITY 165,585 175,857 NON-CONTROLLING INTEREST 6,841 - TOTAL EQUITY 172,426 175,857 TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY $ 653,710 $ 558,450 (A) – The Company reclassified an amount of $ 11,841 from long-term borrowings to current portion of long-term borrowings, refer to Note 1. See accompanying notes to consolidated financial statements. LESAKA TECHNOLOGIES, INC. CONSOLIDATED STATEMENT OF OPERATIONS for the years ended June 30, 2025, 2024 and 2023 F-6 2025 2024 2023 (In thousands, except per share data) REVENUE (Note 16) $ 659,701 $ 564,222 $ 527,971 Services rendered 613,201 529,818 486,800 Loan-based fees received 37,344 29,948 25,308 Sale of goods 9,157 4,456 15,863 EXPENSE Cost of goods sold, IT processing, servicing and support, exclusive of depreciation and amortization shown separately below 486,546 442,673 417,544 Selling, general and administration, exclusive of depreciation and amortization shown separately below (A) 131,512 91,969 95,050 Depreciation and amortization 33,721 23,665 23,685 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs (Note 3) (A) 16,159 2,325 - Impairment loss (Note 10) 18,863 - 7,039 OPERATING (LOSS) INCOME ( 27,100 ) 3,590 ( 15,347 ) CHANGE IN FAIR VALUE OF EQUITY SECURITIES (Note 6 and 9) ( 59,828 ) - - LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT (Note 9) 161 - 205 REVERSAL OF ALLOWANCE FOR DOUBTFUL EMI DEBT RECEIVABLE (Note 9) - 250 - INTEREST INCOME 2,596 2,294 1,853 INTEREST EXPENSE 21,453 18,932 18,567 LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE ( 105,946 ) ( 12,798 ) ( 32,266 ) INCOME TAX (BENEFIT) EXPENSE (Note 18) ( 18,198 ) 3,363 ( 2,309 ) LOSS BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS ( 87,748 ) ( 16,161 ) ( 29,957 ) EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS (Note 9) 114 ( 1,279 ) ( 5,117 ) NET LOSS FROM CONTINUING OPERATIONS ( 87,634 ) ( 17,440 ) ( 35,074 ) ADD NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST 130 - - NET LOSS ATTRIBUTABLE TO LESAKA $ ( 87,504 ) $ ( 17,440 ) $ ( 35,074 ) Net loss per share, in United States dollars (Note 19): Basic loss attributable to Lesaka shareholders $ ( 1.14 ) $ ( 0.27 ) $ ( 0.56 ) Diluted loss attributable to Lesaka shareholders $ ( 1.14 ) $ ( 0.27 ) $ ( 0.56 ) (A) – Recharger transactions costs for the year ended June 30, 2024, of $ 0.03 million have been reallocated from Selling, general and administration to Transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs in the consolidated statement operations, refer to Note 3. See accompanying notes to consolidated financial statements. LESAKA TECHNOLOGIES, INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME for the years ended June 30, 2025, 2024 and 2023 F-7 2025 2024 2023 (In thousands) Net loss $ ( 87,634 ) $ ( 17,440 ) $ ( 35,074 ) Other comprehensive income (loss), net of taxes: Movement in foreign currency translation reserve 2,502 6,291 ( 31,183 ) Movement in foreign currency translation reserve related to equity-accounted investments (Note 15) - 489 3,935 Release of foreign currency translation reserve related to disposal of Finbond equity securities (Note 9 and Note 15) - 1,543 362 Release of foreign currency translation reserve related to liquidation of subsidiaries (Note 15) 6 ( 952 ) - Total other comprehensive income (loss), net of taxes 2,508 7,371 ( 26,886 ) Comprehensive loss ( 85,126 ) ( 10,069 ) ( 61,960 ) Add comprehensive income attributable to non- controlling interest 313 - - Comprehensive loss attributable to Lesaka $ ( 84,813 ) $ ( 10,069 ) $ ( 61,960 ) See accompanying notes to consolidated financial statements LESAKA TECHNOLOGIES, INC. Consolidated Statement of Changes in Equity for the year ended June 30, 2023 (dollar amounts in thousands) F-8 Lesaka Technologies, Inc. Shareholders Number of Shares Amount 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 Total Redeemable common stock Balance – July 1, 2022 87,215,613 $ 83 ( 24,891,292 ) $ ( 286,951 ) 62,324,321 $ 327,891 $ 362,737 $ ( 168,840 ) $ 234,920 $ - $ 234,920 $ 79,429 Treasury shares repurchased ( 352,994 ) ( 1,287 ) ( 352,994 ) - ( 1,287 ) ( 1,287 ) Shares issued (Note 17) 206,239 - 206,239 - - - Restricted stock granted 1,418,386 1,418,386 - - - Exercise of stock options 158,659 158,659 481 481 481 Stock-based compensation charge (Note 17) 7,673 7,673 7,673 Reversal of stock-based compensation charge (Note 17) ( 114,365 ) ( 114,365 ) ( 364 ) ( 364 ) ( 364 ) Stock-based compensation charge related to equity-accounted investment (Note 9) 15 15 15 Net loss ( 35,074 ) ( 35,074 ) - ( 35,074 ) Other comprehensive loss (Note 15) ( 26,886 ) ( 26,886 ) - ( 26,886 ) Balance – June 30, 2023 88,884,532 $ 83 ( 25,244,286 ) $ ( 288,238 ) 63,640,246 $ 335,696 $ 327,663 $ ( 195,726 ) $ 179,478 $ - $ 179,478 $ 79,429 LESAKA TECHNOLOGIES, INC. Consolidated Statement of Changes in Equity for the year ended June 30, 2024 (dollar amounts in thousands) F-9 Lesaka Technologies, Inc. Shareholders Number of Shares Amount 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 Total Redeemable common stock Balance – July 1, 2023 88,884,532 $ 83 ( 25,244,286 ) $ ( 288,238 ) 63,640,246 $ 335,696 $ 327,663 $ ( 195,726 ) $ 179,478 $ - $ 179,478 $ 79,429 Treasury shares repurchased ( 319,522 ) ( 1,495 ) ( 319,522 ) - ( 1,495 ) ( 1,495 ) Shares issued (Note 17) 194,454 194,454 - - - Restricted stock granted 1,002,241 1,002,241 - - - Exercise of stock options 54,287 54,287 165 165 165 Stock-based compensation charge (Note 17) 8,045 8,045 8,045 Reversal of stock-based compensation charge (Note 17) ( 299,463 ) ( 299,463 ) ( 134 ) ( 134 ) ( 134 ) Stock-based compensation charge related to equity-accounted investment (Note 9) ( 133 ) ( 133 ) ( 133 ) Net loss ( 17,440 ) ( 17,440 ) - ( 17,440 ) Other comprehensive income (Note 15) 7,371 7,371 - 7,371 Balance – June 30, 2024 89,836,051 $ 83 ( 25,563,808 ) $ ( 289,733 ) 64,272,243 $ 343,639 $ 310,223 $ ( 188,355 ) $ 175,857 $ - $ 175,857 $ 79,429 LESAKA TECHNOLOGIES, INC. Consolidated Statement of Changes in Equity for the year ended June 30, 2025 (dollar amounts in thousands) F-10 Lesaka Technologies, Inc. Shareholders Number of Shares Amount 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 Total Redeemable common stock Balance – July 1, 2024 89,836,051 $ 83 ( 25,563,808 ) $ ( 289,733 ) 64,272,243 $ 343,639 $ 310,223 $ ( 188,355 ) $ 175,857 $ - $ 175,857 $ 79,429 Treasury shares repurchased ( 5,462,597 ) ( 13,660 ) ( 5,462,597 ) - ( 13,660 ) ( 13,660 ) Shares issued (Note 14 and Note 17) 19,960,181 19 19,960,181 73,237 73,256 73,256 9,528 Gain recognized related to issue of shares included in treasury shares (Note 3) 1,092,361 4,870 1,092,361 408 5,278 - 5,278 Restricted stock granted 1,499,610 1,499,610 - - - Exercise of stock options 38,011 1 38,011 116 117 117 Stock-based compensation charge (Note 17) 9,639 9,639 9,639 Reversal of stock-based compensation charge (Note 17) ( 150,712 ) ( 150,712 ) ( 89 ) ( 89 ) ( 89 ) Stock-based compensation charge related to equity-accounted investment (Note 9) - - - Adumo non-controlling interest acquired (Note 3) - 7,586 7,586 Net loss ( 87,504 ) ( 87,504 ) ( 130 ) ( 87,634 ) Dividends paid to non-controlling interests - ( 432 ) ( 432 ) Other comprehensive income (Note 15) 2,691 2,691 ( 183 ) 2,508 Balance – June 30, 2025 111,183,141 $ 103 ( 29,934,044 ) $ ( 298,523 ) 81,249,097 $ 426,950 $ 222,719 $ ( 185,664 ) $ 165,585 $ 6,841 $ 172,426 $ 88,957 See accompanying notes to consolidated financial statements. LESAKA TECHNOLOGIES, INC. CONSOLIDATED STATEMENT OF CASHFLOWS for the years ended June 30, 2025, 2024 and 2023 F-11 2025 2024 2023 (In thousands) Cash flows from operating activities Net loss $ ( 87,634 ) $ ( 17,440 ) $ ( 35,074 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 33,721 23,665 23,685 Impairment loss (Note 10) 18,863 - 7,039 Movement in allowance for credit losses 8,011 5,158 6,495 Fair value adjustment related to financial liabilities ( 120 ) ( 853 ) ( 20 ) Change in fair value of equity securities (Note 6 and 9) 59,828 - - Loss (Profit) on disposal of property, plant and equipment 13 ( 305 ) ( 468 ) Stock-based compensation charge (Note 17) 9,550 7,911 7,309 Loss on disposal of equity-accounted investment (Note 9) 161 - 205 (Earnings) Loss from equity-accounted investments (Note 9) ( 114 ) 1,279 5,117 Movement in allowance for doubtful loans to equity-accounted investments - ( 250 ) - Dividends received from equity-accounted investments 96 95 42 Interest payable 4,723 1,119 5,069 Facility fee amortized (Note 12) 429 443 864 Changes in net working capital Decrease (Increase) in accounts receivable (Note 20) 1,081 ( 10,873 ) ( 1,687 ) Increase in finance loans receivable (Note 20) ( 34,614 ) ( 10,029 ) ( 12,353 ) Decrease in inventory 169 9,840 2,172 (Decrease) Increase in accounts payable and other payables ( 13,401 ) 22,141 1,705 Deferred consideration due to seller of Recharger included in accounts payable and other payables (Note 3 and Note 13) 13,586 - - Increase (Decrease) in income taxes payable 485 ( 400 ) ( 800 ) Deferred tax expense (benefit) ( 23,955 ) ( 2,712 ) ( 8,890 ) Net cash (used in) provided by operating activities ( 9,122 ) 28,789 410 Cash flows from investing activities Capital expenditures ( 17,199 ) ( 12,665 ) ( 16,156 ) Proceeds from disposal of property, plant and equipment 1,938 1,565 1,497 Acquisition of intangible assets ( 3,900 ) ( 294 ) ( 419 ) Proceeds from disposal of equity securities (Note 6 and 9) 16,441 - - Acquisitions, net of cash acquired (Note 3) ( 12,946 ) ( 1,583 ) - Proceeds from disposal of equity-accounted investment (Note 9) - 3,508 656 Repayment of loans by equity-accounted investments - 250 112 Loans to equity-accounted investment (Note 9) - - ( 112 ) Net change in settlement assets 4,324 ( 7,196 ) ( 2,036 ) Net cash used in investing activities ( 11,342 ) ( 16,415 ) ( 16,458 ) Cash flows from financing activities Proceeds from bank overdraft (Note 12) 98,616 182,990 520,065 Repayment of bank overdraft (Note 12) ( 90,309 ) ( 199,642 ) ( 547,271 ) Long-term borrowings utilized (Note 12) 190,061 23,728 24,355 Repayment of long-term borrowings (Note 12) ( 149,511 ) ( 20,073 ) ( 17,512 ) Non-refundable deal origination fees/ guarantee fees (Note 12) ( 970 ) - ( 100 ) Acquisition of treasury stock ( 13,660 ) ( 1,495 ) ( 1,287 ) Proceeds from exercise of stock options 116 165 481 Dividends paid to non-controlling interest ( 432 ) - - Net change in settlement obligations ( 4,179 ) 7,214 2,148 Net cash provided by (used in) financing activities 29,732 ( 7,113 ) ( 19,121 ) Effect of exchange rate changes on cash 1,453 2,025 ( 10,999 ) Net increase (decrease) in cash, cash equivalents and restricted cash 10,721 7,286 ( 46,168 ) Cash, cash equivalents and restricted cash – beginning of period 65,918 58,632 104,800 Cash, cash equivalents and restricted cash – end of period (Note 20) $ 76,639 $ 65,918 $ 58,632 See accompanying notes to consolidated financial statements LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-12 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION Description of Business Lesaka Technologies, Inc. (“Lesaka” and collectively with its consolidated subsidiaries, the “Company”), formerly named Net 1 UEPS Technologies, Inc., was incorporated in the State of Florida on May 8, 1997. The Company is a provider of financial technology, or fintech, products and services, primarily in South Africa and neighboring countries, to unbanked and underbanked consumers, and fintech solutions for merchants operating in formal and informal markets. The Company offers an integrated multiproduct platform that provides transactional accounts (banking), lending, insurance, payouts, card acquiring, cash management, software and Alternative Digital Products (“ADP”). ADP includes the Company’s prepaid solutions and supplier enabled payments. By providing a full-service fintech platform in its connected ecosystem, the Company facilitates the digitization of commerce in its markets and participate in the secular shift from cash to digital. Basis of presentation The accompanying consolidated financial statements include subsidiaries over which Lesaka exercises control and have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Revision of Previously Issued Financial Statements In April 2025, the Company identified that it had misclassified certain of its long-term borrowings. The Company’s CCC Revolving Credit Facility was scheduled to be repaid in full on November 2024, at the date of issue of the June 30, 2024 consolidated financial statements, but this was extended a number of times and was ultimately refinanced in September 2025 (refer to Note 12). The Company incorrectly classified amounts due under its CCC Revolving Credit Facility as long-term borrowings instead of as current portion of long-term borrowings in its audited balance sheet as of June 30, 2024. The table below presents the impact of the revision of the Company’s financial statements for the year ended June 30, 2024: Consolidated balance sheet As of June 30, 2024 As previously reported Correction Revised Current portion of long-term borrowings $ 3,878 $ 11,841 $ 15,719 Long-term borrowings $ 139,308 $ ( 11,841 ) $ 127,467 The correction did not impact the Company’s audited consolidated statements of operations, consolidated statements of comprehensive (loss) income, consolidated statement of changes in equity, or consolidated statements of cash flows for the year ended June 30, 2024 and, except as noted above, the Company’s audited balance sheet as of June 30, 2024. The misclassification did not affect compliance with any debt covenants. The Company assessed the materiality of this error and change in presentation on prior period consolidated financial statements in accordance with SEC Staff Accounting Bulletin (“SAB”) No. 99 “Materiality” and SAB No. 108, “Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in the Current Year Financial Statements.” Based on this assessment, the Company has concluded that previously issued financial statements were not materially misstated based upon overall considerations of both quantitative and qualitative factors. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-13 2. SIGNIFICANT ACCOUNTING POLICIES Principles of consolidation The financial statements of entities which are controlled by Lesaka, referred to as subsidiaries, are consolidated. Inter-company accounts and transactions are eliminated upon consolidation. The Company, if it is the primary beneficiary, consolidates entities which are considered to be variable interest entities (“VIE”). The primary beneficiary is considered to be the entity that will absorb a majority of the entity's expected losses, receive a majority of the entity's expected residual returns, or both. The Company has an obligation to absorb the financial losses of the Lesaka ESOP Trust and also has the ability to control this trust and therefore it has been consolidated. This trust does not generate significant losses or residual returns. Business combinations The Company accounts for its business acquisitions under the acquisition method of accounting. The total value of the consideration paid for acquisitions is allocated to the underlying net assets acquired, based on their respective estimated fair values. The Company uses a number of valuation methods to determine the fair value of assets and liabilities acquired, including discounted cash flows, external market values, valuations on recent transactions or a combination thereof, and believes that it uses the most appropriate measure or a combination of measures to value each asset or liability. The Company recognizes measurement-period adjustments in the reporting period in which the adjustment amounts are determined. Use of estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Translation of foreign currencies The primary functional currency of the consolidated entities is the South African Rand (“ZAR”) and the Company’s reporting currency is the U.S. dollar. Assets and liabilities are translated at the exchange rates in effect at the balance sheet date. Revenues and expenses are translated at average rates for the period. Translation gains and losses are reported in accumulated other comprehensive income in total equity. The Company releases the foreign currency translation reserve included in accumulated other comprehensive income attributable to a foreign entity upon sale or complete, or substantially complete, liquidation of the investment in that foreign entity and includes the release in the gain or loss reported related to the sale or liquidation of the foreign entity. Foreign exchange transactions are translated at the spot rate ruling at the date of the transaction. Monetary items are translated at the closing spot rate at the balance sheet date. Transactional gains and losses are recognized in selling, general and administration expense on the Company’s consolidated statement of operations for the period. Cash, cash equivalents and restricted cash Cash and cash equivalents include cash on hand and funds deposited in bank accounts with financial institutions that are liquid, unrestricted and readily available. Restricted cash represents cash which is legally or contractually restricted as to use and includes cash related to cash withdrawn from the Company’s debt facilities to fund ATMs as well cash in certain bank accounts that have been ceded to under certain of the Company’s borrowings. Allowance for credit losses The Company uses historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for its lending books. The allowance for credit losses related to Consumer finance loans receivables is calculated by multiplying the lifetime loss rate with the month-end outstanding lending book. The allowance for credit losses related to Merchant finance loans receivables is calculated by adding together actual receivables in default plus multiplying the lifetime loss rate with the month-end outstanding lending book. The Company writes off microlending finance loans receivable and related service fees and interest if a borrower is in arrears with repayments for more than three months or is deceased. The Company writes off merchant and working capital finance receivables and related fees when it is evident that reasonable recovery procedures, including where deemed necessary, formal legal action, have failed. Prior to July 1, 2023, the Company regularly reviewed the ageing of outstanding amounts due from borrowers and adjusted its allowance based on management’s estimate of the recoverability of the finance loans receivable. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-14 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Allowance for credit losses (continued) The Company uses a lifetime loss rate by expressing write-off experience as a percentage of corresponding invoice amounts (as opposed to outstanding balances). The allowance for credit losses related to these receivables has been calculated by multiplying the lifetime loss rate with recent invoice/origination amounts. Prior to July 1, 2023, a specific provision is established where it is 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 recovered. Non- recoverability is assessed based on a quarterly review by management of the ageing of outstanding amounts, the location and the payment history of the customer in relation to those specific amounts. Inventory Inventory is valued at the lower of cost and net realizable value. Cost is determined on a first-in, first-out basis and includes transport and handling costs. Property, plant and equipment Property, plant and equipment are shown at cost less accumulated depreciation. Property, plant and equipment are depreciated on the straight-line basis at rates which are estimated to amortize the assets to their anticipated residual values over their useful lives. Within the following asset classifications, the expected economic useful lives are approximately: Vaults 10 years Computer equipment 3 to 8 years Office equipment 2 to 10 years Vehicles 3 to 8 years Furniture and fittings 3 to 10 years The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognized in income. Leases The Company determines whether an arrangement is a lease at inception. Operating leases are included in operating lease right- of-use assets (“ROU”), operating lease liability - current, and operating lease liability – long term in its consolidated balance sheets. The Company does not have any significant finance leases as of June 30, 2025 and 2024, respectively, but its policy is to include finance leases in property and equipment, other payables, and other long-term liabilities in its consolidated balance sheets. A ROU asset represents the Company’s right to use an underlying asset for the lease term and the lease liabilities represent its obligation to make lease payments arising from the lease arrangement. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the Company generally uses its incremental borrowing rate based on the estimated rate of interest for collateralized borrowing over a similar term of the lease payments at commencement date. The operating lease ROU asset also includes any lease prepayments made and excludes lease incentives. The terms of the Company’s lease arrangements may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company does not recognize right-of-use assets and lease liabilities for lease arrangements with a term of twelve months or less. The Company accounts for all components in a lease arrangement as a single combined lease component. Costs incurred in the adaptation of leased properties to serve the requirements of the Company (leasehold improvements) are capitalized and amortized over the shorter of the estimated useful life of the asset and the remaining term of the lease. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-15 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Equity-accounted investments The Company uses the equity method to account for investments in companies when it has significant influence but not control over the operations of the company. Under the equity method, the Company initially records the investment at cost and thereafter adjusts the carrying value of the investment to recognize its proportional share of the equity-accounted company’s net income or loss. In addition, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee is added to the current basis of the Company’s previously held interest and the equity method would be applied subsequently from the date on which the Company obtains the ability to exercise significant influence over the investee. The Company releases a pro rata portion of the foreign currency translation reserve related to an equity-accounted investment that is included in accumulated other comprehensive income to earnings upon the sale of a portion of its ownership interest in the equity-accounted investment. The release of the pro rata portion of the foreign currency translation reserve is included in the measurement of the gain or loss on sale of a portion of the Company’s ownership interest in the equity-accounted investment. The Company does not recognize cumulative losses in excess of its investment or loans in an equity-accounted investment except if it has an obligation to provide additional financial support. Dividends received from an equity-accounted investment reduce the carrying value of the Company’s investment. The Company has elected to classify distributions received from equity method investees using the nature of the distribution approach. This election requires the Company to evaluate each distribution received on the basis of the source of the payment and classify the distribution as either operating cash inflows or investing cash inflows. The Company reviews its equity-accounted investments for impairment whenever events or circumstances indicate that the carrying amount of the investment may not be recoverable. Goodwill Goodwill represents the excess of the purchase price of an acquired enterprise over the fair values of the identifiable assets acquired and liabilities assumed based upon their estimated fair value at the date of purchase. The Company reviews the carrying value of goodwill annually or more frequently if circumstances indicate impairment has occurred. Circumstances that could trigger an impairment test include but are not limited to: a significant adverse change in the business climate or legal factors; an adverse action or assessment by a regulator; unanticipated competition; loss of key personnel; the likelihood that a reporting unit or significant portion of a reporting unit will be sold or otherwise disposed; and results of testing for recoverability of a significant asset group within a reporting unit. If goodwill is allocated to a reporting unit and the carrying amount of the reporting unit exceeds the fair value of that reporting unit, an impairment loss is recorded in the statement of operations. Measurement of the fair value of a reporting unit is based on present value techniques of estimated future cash flows. Intangible assets Intangible assets are shown at cost less accumulated amortization. Intangible assets are amortized over the following useful lives: Customer relationships 1 to 15 years Software, integrated platform and unpatented technology 3 to 10 years FTS patent 10 years Exclusive licenses 7 years Brands and trademarks 0.5 to 20 years Intangible assets are periodically evaluated for recoverability, and those evaluations take into account events or circumstances that warrant revised estimates of useful lives or that indicate that impairment exists. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-16 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Debt and equity securities Debt securities The Company is required to classify all applicable debt securities as either trading securities, available for sale or held to maturity upon investment in the security. Held to maturity Debt securities acquired by the Company which it has the ability and the positive intent to hold to maturity are classified as held to maturity debt securities. The Company is required to make an election to classify these debt securities as held to maturity and these securities are carried at amortized cost. The amortized cost of held to maturity debt securities is adjusted for amortization of premiums and accretion of discounts to maturity. Interest received from the held to maturity security together with this amortization is included in interest income in the Company’s consolidated statement of operations. The Company had a held to maturity security as of June 30, 2025 and 2024, respectively, refer to Note 4. The Company uses historical default experience over the lifetime of debt securities in order to calculate a lifetime loss rate for its held to maturity debt securities. As of each of June 30, 2024, and June 30, 2025, the carrying value of the Company’s held to maturity debt securities was $ 0 . Impairment of debt securities Up until the adoption of guidance regarding Measurement of Credit Losses on Financial Instruments on July 1, 2023, the Company’s available for sale and held to maturity debt securities with unrealized losses are reviewed quarterly to identify other-than- temporary impairments in value. With regard to available for sale and held to maturity debt securities, the Company considers (i) the ability and intent to hold the debt security for a period of time to allow for recovery of value (ii) whether it is more likely than not that the Company will be required to sell the debt security; and (iii) whether it expects to recover the entire carrying amount of the debt security. The Company records an impairment loss in its consolidated statement of operations representing the difference between the debt securities carrying value and the current fair value as of the date of the impairment if the Company determines that it intends to sell the debt security or if that it is more likely than not that it will be required to sell the debt security before recovery of the amortized cost basis. However, the impairment loss is split between a credit loss and a non-credit loss for debt securities that the Company determines that it does not intend to sell or that it is more likely than not that it will not be required to sell the debt securities before the recovery of the amortized cost basis. The credit loss portion, which is measured as the difference between the debt security’s cost basis and the present value of expected future cash flows, is recognized in the Company’s consolidated statement of operations. The non-credit loss portion, which is measured as the difference between the debt security’s cost basis and its current fair value, is recognized in other comprehensive income, net of applicable taxes. Equity securities Equity securities are measured at fair value. Changes in the fair value of equity securities are recorded in the Company’s consolidated statement of operations within the caption titled “change in fair value of equity securities”. The Company may elect to measure equity securities without readily determinable fair values at its cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer (“cost minus changes in observable prices equity securities”). Changes in the fair value of the Company’s cost minus changes in observable prices equity securities are discussed in Note 9. During the Company’s second and third quarter of fiscal 2025, the Company recorded changes in the fair value of equity securities as a result of changes in market prices related to its investment in One MobiKwik Limited (“MobiKwik”). During the fourth quarter of fiscal 2025, the Company disposed of its entire interest in MobiKwik and incurred a loss on disposal. The changes in fair value and the loss on disposal are included in the caption change in fair value of equity securities during the year ended June 30, 2025. There were no changes in the fair value of the Company’s cost minus changes in observable prices equity securities during the years ended June 30, 2024 and 2023, respectively. The Company performs a qualitative assessment on a quarterly basis and recognizes an impairment loss if there are sufficient indicators that the fair value of the equity security is less than its carrying value. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-17 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Policy reserves and liabilities Reserves for policy benefits and claims payable The Company determines its reserves for policy benefits under its life insurance products using a model which estimates claims incurred that have not been reported and total present value of disability claims-in-payment at the balance sheet date. This model allows for best estimate assumptions based on experience (where sufficient) plus prescribed margins, as required in the markets in which these products are offered, namely South Africa. The best estimate assumptions include (i) mortality and morbidity assumptions reflecting the company’s most recent experience and (ii) claim reporting delays reflecting Company specific and industry experience. Most of the disability claims-in-payment reserve is reinsured and the reported values were based on the reserve held by the relevant reinsurer. The values of matured guaranteed endowments are increased by late payment interest (net of the asset management fee and allowance for tax on investment income). Deposits on investment contracts For the Company’s interest-sensitive life contracts, liabilities approximate the policyholder’s account value. Reinsurance contracts held The Company enters into reinsurance contracts with reinsurers under which the Company is compensated for the entire amount or a portion of losses arising on one or more of the insurance contracts it issues. The expected benefits to which the Company is entitled under its reinsurance contracts held are recognized as reinsurance assets. These assets consist of short-term balances due from reinsurers (classified within Accounts receivable, net and other receivables) as well as long-term receivables (classified within other long-term assets) that are dependent on the expected claims and benefits arising under the related reinsurance contracts. Amounts recoverable from or due to reinsurers are measured consistently with the amounts associated with the reinsured contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets are assessed for impairment at each balance sheet date. If there is reliable objective evidence that amounts due may not be recoverable, the Company reduces the carrying amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss in its consolidated statement of operations. Reinsurance premiums are recognized when due for payment under each reinsurance contract. Redeemable common stock Common stock that is redeemable (1) at a fixed or determinable price on a fixed or determinable date, (2) at the option of the holder, or (3) upon the occurrence of an event that is not solely within the control of Company is presented outside of total Lesaka equity (i.e. permanent equity). Redeemable common stock is initially recognized at issuance date fair value and the Company does not adjust the issuance date fair value if redemption is not probable. The Company re-measures the redeemable common stock to the maximum redemption amount at the balance sheet date once redemption is probable. Reduction in the carrying amount of the redeemable common stock is only appropriate to the extent that the Company has previously recorded increases in the carrying amount of the redeemable equity instrument as the redeemable common stock may not be carried at an amount that is less than the initial amount reported outside of permanent equity. Redeemable common stock is reclassified as permanent equity when presentation outside permanent equity is no longer required (if, for example, a redemption feature lapses, or there is a modification of the terms of the instrument). The existing carrying amount of the redeemable common stock is reclassified to permanent equity at the date of the event that caused the reclassification and prior period consolidated financial statements are not adjusted. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-18 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition The Company recognizes revenue upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted for as separate performance obligations based on observable standalone selling prices. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental authorities. Nature of products and services Prepaid airtime sold The Company purchases airtime vouchers for resale to customers and acts as a principal in these transactions. Airtime purchased for resale is included in inventory and released to cost of goods sold, IT processing, servicing and support upon sale of the inventory. The Company negotiates and agrees sales prices for airtime sales with its customers and revenue is measured at the agreed contractual price. The Company recognizes revenue when the airtime is delivered to the customer. Processing fees The Company earns processing fees from transactions processed for its customers. The Company provides its customers with transaction processing services that involve the collection, transmittal and retrieval of all transaction data in exchange for consideration upon completion of the transaction and recognizes revenue from these activities at a point in time. In certain instances, the Company also provides a funds collection and settlement service for its customers and recognizes revenue from these activities at a point in time. The Company also provides customers with cash management and digitization services which enables its merchant customers to deposit cash into digital vaults operated by the Company, after which the funds are then electronically accessible by customers to either transfer to their nominated bank account or to pay certain pre-selected suppliers and recognizes revenue from these activities at a point in time. The Company considers each of these services as a single performance obligation. The Company’s contracts specify a transaction price for services provided. Processing revenue fluctuates based on the type and the volume of transactions processed. Revenue is recognized on the completion of the processed transaction. The Company provides rental and support services under a master rental agreement with customers. Control of the rental asset is transferred through the right of use on a monthly basis as per the master rental agreement terms. Customers are required to pay the monthly rental and support fee in advance . The performance obligation for the service component is provided over the month and revenue is recognized at the end of the month. The Company recognizes revenue from these activities over time. The Company, as a transaction processor and in the capacity of an agent, facilitates the delivery of ADP to its customers (including prepaid airtime vouchers, prepaid electricity and gaming vouchers) and earns a commission once these services are delivered to the customer. The Company recognizes revenue from these activities at a point in time. Revenue from these transactions fluctuates based on the volume of ADP services distributed. Customers serviced by the Company’s Consumer operating segment that have a bank account managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant point of sale device (“POS”). The Company also earns processing fees from transactions processed for these customers. The Company’s contracts specify a transaction price for each service provided (for instance, ATM withdrawal, balance enquiry, etc.). Processing revenue fluctuates based on the type and volume of transactions performed by the customer. Revenue is recognized on the completion of the processed transaction at a point in time. Account holder fees The Company provides bank accounts to customers and this service is underwritten by a regulated banking institution because the Company is not a bank. The Company charges its customers a fixed monthly bank account administration fee for all active bank accounts regardless of whether the account holder has transacted or not. The Company recognizes account holder fees on a monthly basis on all active bank accounts, which are earned over time and billed on a monthly basis. Revenue from account holders’ fees fluctuates based on the number of active bank accounts. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-19 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Revenue recognition (continued) Nature of products and services (continued) Lending revenue The Company provides short-term loans to customers (consumers) in South Africa and charges up-front initiation fees, interest and monthly service fees. Interest earned from customers is recognized using the effective interest rate method, which requires the utilization of the rate of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan initiation fees or costs, premium, or discount existing at the origination or acquisition of the loan. Monthly service fee revenue is recognized under the contractual terms of the loan. The monthly service fee are earned over time and is fixed upon initiation and does not change over the term of the loan and is recognized when billed on a monthly basis. Interest earned from customers The Company provides short-term loans to merchants in South Africa and levies interest on the amount lent. The Company does not charge these customers up-front initiation fees or monthly service fees. Interest earned from customers is recognized using the effective interest rate method, which requires the utilization of the rate of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan fees or costs, premium, or discount existing at the origination or acquisition of the loan. The interest rate included in the contract with the customer generally changes with changes to benchmark rates of interest set by the South African Reserve Bank (“SARB”). Technology products The Company supplies hardware and licenses for its customers to use the Company’s technology. Hardware includes the sale of POS devices, SIM cards and other consumables which can occur on an ad hoc basis. The Company recognizes revenue from hardware at the transaction price specified in the contract as the hardware is delivered to the customer. Licenses include the right to access certain technology developed by the Company and the associated revenue is recognized ratably over the license period. Insurance revenue The Company writes life insurance contracts, and policy holders pay the Company a monthly insurance premium at the beginning of each month. Premium revenue is recognized on a monthly basis net of policy lapses. Policy lapses are provided for on the basis of expected non-payment of policy premiums. Accounts Receivable, Contract Assets and Contract Liabilities The Company recognizes accounts receivable when its right to consideration under its contracts with customers becomes unconditional. The Company has no contract assets or contract liabilities. Research and development expenditure Research and development expenditure is charged to net income in the period in which it is incurred. During the years ended June 30, 2025, 2024 and 2023, the Company incurred research and development expenditures of $ 0.5 million, $ 0.5 million and $ 0.5 million, respectively. Computer software development Product development costs in respect of software intended for sale to licensees are expensed as incurred until technological feasibility is attained. Technological feasibility is attained when the Company’s software has completed system testing and has been determined to be viable for its intended use. Once technological feasibility is reached, the Company capitalized such costs and amortizes these costs over the products’ estimated life. The time between the attainment of technological feasibility and completion of software development is generally short with insignificant amounts of development costs incurred during this period. Costs in respect of the development of software for the Company’s internal use are expensed as incurred, except to the extent that these costs are incurred during the application development stage. All other costs including those incurred in the project development and post-implementation stages are expensed as incurred. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-20 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Income taxes The Company provides for income taxes using the asset and liability method. This approach recognizes the amount of income taxes payable or refundable for the current year, as well as deferred tax assets and liabilities for the future tax consequence of events recognized in the financial statements and tax returns. Deferred taxes are adjusted to reflect the effects of changes in tax laws or rates in the period of enactment. The majority of the Company’s income taxes and deferred tax balances arise in the South Africa. The Company used the enacted statutory tax rate of 27 % for the years ended June 30, 2025, 2024 and 2023 to measure current tax expense (benefit) and deferred tax expense (benefit) in South Africa. There was a change in the South African enacted tax rate during the year ended June 30, 2023, from 28 % to 27 %. The Company measured its South African current tax expense for the years ended June 30, 2025 and 2024 and its South African deferred tax assets and liabilities as of June 30, 2025 and 2024, using the enacted statutory tax rate in South Africa of 27 %. In establishing the appropriate deferred tax asset valuation allowances, the Company assesses the realizability of its deferred tax assets, and based on all available evidence, both positive and negative, determines whether it is more likely than not that the deferred tax assets or a portion thereof will be realized. The Company does not consider future reversals of existing taxable temporary differences associated with indefinite lived assets where the timing of the reversal cannot be predicted as a source of income to support deferred tax assets for carryforward that do not expire. Unrecognized tax benefits are recorded in the financial statements for positions which are not considered more likely than not, based on the technical merits of the position, of being sustained upon examination by the taxing authorities. For positions that meet the more likely than not standard, the measurement of the tax benefit recognized in the financial statements is based upon the largest amount of tax benefit that, in management’s judgement, is greater than 50% likely of being realized based on a cumulative probability assessment of the possible outcomes. The Company’s policy is to include interest related to income taxes in interest expense and penalties in selling, general and administration in the consolidated statements of operations. The Company has elected the period cost method and records U.S. inclusions in taxable income related to global intangible low taxed income (“GILTI”) as a current-period expense when incurred. Stock-based compensation Stock-based compensation represents the cost related to stock-based awards granted. The Company measures equity-based stock- based compensation cost at the grant date, based on the estimated fair value of the award, and recognizes the cost as an expense on a straight-line basis (net of estimated forfeitures) over the requisite service period. In respect of awards with only service conditions that have a graded vesting schedule, the Company recognizes compensation cost on a straight-line basis over the requisite service period for the entire award. The forfeiture rate is estimated using historical trends of the number of awards forfeited prior to vesting. The expense is recorded in the statement of operations and classified based on the recipients’ respective functions. The Company records deferred tax assets for awards that result in deductions on the Company’s income tax returns, based on the amount of compensation cost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income tax return are recorded in income tax expense in the consolidated statement of operations. Equity instruments issued to third parties Equity instruments issued to third parties for services provided represents the cost related to equity instruments granted. The Company measures this cost at the grant date, based on the estimated fair value of the award, and recognizes the cost as an expense on a straight-line basis (net of estimated forfeitures) over the requisite service period. The forfeiture rate is estimated based on the Company’s expectation of the number of awards that will be forfeited prior to vesting. The Company records deferred tax assets for equity instrument awards that result in deductions on the Company’s income tax returns, based on the amount of equity instrument cost recognized and the Company’s statutory tax rate in the jurisdiction in which it will receive a deduction. Differences between the deferred tax assets recognized for financial reporting purposes and the actual tax deduction reported on the Company’s income tax return are recorded in the statement of operations. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-21 2. SIGNIFICANT ACCOUNTING POLICIES (continued) Settlement assets and settlement obligations The Company provides customers with cash management and digitization services which enable its merchant customers to deposit cash into digital vaults operated by the Company, after which the funds are then electronically accessible by customers to either transfer to their nominated bank account or to pay certain pre-selected suppliers. Settlement assets comprise (1) cash received from merchant customers from cash deposits into the Company’s safe assets, which are then electronically accessible by customers to either transfer to their nominated bank account or to pay certain pre-selected suppliers, and (2) cash received from credit card companies (as well as other types of payment services) which have business relationships with merchants selling goods and services that are the Company’s customers and on whose behalf it processes the transactions between various parties. Settlement obligations comprise (1) amounts that the Company is obligated to disburse to merchant customers or to their nominated pre-selected suppliers, and (2) amounts that the Company is obligated to disburse to merchants selling goods and services that are the Company’s customers and on whose behalf it processes the transactions between various parties and settles the funds from the credit card companies to the Company’s merchant customers. The balances at each reporting date may vary widely depending on the timing of the receipts and payments of these assets and obligations. Recent accounting pronouncements adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued guidance regarding Segment Reporting (Topic 280) to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. In addition, the guidance enhances interim disclosure requirements, clarifies circumstances in which an entity can disclose multiple segment measures of profit or loss, provides new segment disclosure requirements for entities with a single reportable segment, and contains other disclosure requirements. This guidance was effective for the Company beginning July 1, 2024 for its year ended June 30, 2025, and for interim periods commencing from July 1, 2025 (i.e. for the quarter ended September 30, 2025). Refer to Note 21. Recent accounting pronouncements not yet adopted as of June 30, 2025 In December 2023, the FASB issued guidance regarding Income Taxes (Topic 740) to improve income tax disclosure requirements. The guidance requires entities, on an annual basis, to (1) disclose specific categories in the income tax rate reconciliation and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than five percent of the amount computed by multiplying pre-tax income or loss by the applicable statutory income tax rate). This guidance is effective for the Company beginning July 1, 2025. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures. In November 2024, the FASB issued guidance regarding Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) which requires disaggregated disclosure of income statement expenses for public business entities. The guidance does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories in disclosures within the footnotes to the financial statements. This guidance is effective for the Company beginning July 1, 2027. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures. In July 2025, the FASB issued guidance regarding Financial Instruments-Credit Losses (Topic 326) Measurement of Credit Losses for Accounts Receivable and Contract Assets which amends current guidance to provide a practical expedient (for all entities) and an accounting policy election (for all entities, other than public business entities, that elect the practical expedient) related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under Revenue From Contracts With Customers (Topic 606). This guidance is effective for the Company beginning July 1, 2026, and interim reporting periods during that fiscal year. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-22 3. ACQUISITIONS The Company did not make any acquisitions during the year ended June 30, 2023. The cash paid, net of cash received related to the Company’s acquisition during the years ended June 30, 2025 and 2024, is summarized in the table below: 2025 2024 Total cash paid $ 24,161 $ 2,248 Less: cash acquired 11,215 665 Total cash paid, net of cash received $ 12,946 $ 1,583 2025 Acquisitions October 2024 acquisition of Adumo On May 7, 2024, the Company entered into a Sale and Purchase Agreement (the “Purchase Agreement”) with Lesaka SA, and Crossfin Apis Transactional Solutions (Pty) Ltd and Adumo ESS (Pty) Ltd (“the Sellers”). Pursuant to the Purchase Agreement and subject to its terms and conditions, Lesaka, through its subsidiary, Lesaka SA, agreed to acquire, and the Sellers agreed to sell, all of the outstanding equity interests and certain claims in the Adumo (RF) Proprietary Limited (“Adumo”). The transaction closed on October 1, 2024. Adumo is an independent payments and commerce enablement platform in Southern Africa, with operations across South Africa, Namibia, Botswana and Kenya. For more than two decades, Adumo has facilitated physical and online commerce between retail merchants and end-consumers by offering a unique combination of payment processing and integrated software solutions, which currently include embedded payments, integrated payments, reconciliation services, merchant lending, customer engagement tools, card issuing program management and data analytics. Adumo operates across three businesses, which provide payment processing and integrated software solutions to different end markets: ● The Adumo Payments business offers payment processing, integrated payments and reconciliation solutions to small-and- medium (“SME”) merchants in South Africa, Namibia and Botswana, and the Adumo Payouts business provides card issuing program management to corporate clients such as Anglo American and Coca-Cola (Adumo Payments was allocated to Merchant operating segment and Adumo Payouts was allocated to the Consumer operating segment); ● The Adumo ISV business, known as GAAP, has operations in South Africa, Botswana and Kenya, and clients in a number of other countries, and is the leading provider of integrated point-of-sales software and hardware to the hospitality industry in Southern Africa, serving clients such as KFC, McDonald’s, Pizza Hut, Nando’s and Krispy Kreme (Adumo ISV was allocated to Merchant operating segment); and ● The Adumo Ventures business offers online commerce solutions (Adumo Online), cloud-based, multi-channel point-of-sales solutions (Humble) and an aggregated payment and credit platform for in-store and online commerce (SwitchPay) to SME merchants and corporate clients in South Africa and Namibia (Adumo Venture was allocated to the Merchant operating segment). The total purchase consideration was ZAR 1.67 billion ($ 96.2 million) and comprised the issuance of 17,279,803 shares of the Company’s common stock (“Consideration Shares”) with a value of $ 82.8 million ( 17,279,803 multiplied by $ 4.79 per share) and cash of $ 13.4 million. The purchase consideration was settled through the combination of the Consideration Shares and a ZAR 232.2 million ($ 13.4 million, translated at the prevailing rate of $1: ZAR 17.3354 as of October 1, 2024) payment in cash. The Company’s closing price on the Johannesburg Stock Exchange on October 1, 2024, was ZAR 83.05 ($ 4.79 using the October 1, 2024, $1: ZAR exchange rate). Certain indirect shareholders of the sellers were investors in Adumo and the Company. These shareholders ultimately received an aggregate of 1,989,162 shares of the Company’s common stock at a price of $ 4.79 which was included in redeemable common stock (refer to Note 14). LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-23 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) October 2024 acquisition of Adumo (continued) The closing of the transaction was subject to customary closing conditions which we fulfilled prior to closing. The Company agreed to file a resale registration statement with the United States Securities and Exchange Commission (“SEC”) covering the resale of the Consideration Shares by the Sellers. The resale registration statement was declared effective by the SEC on December 6, 2024. The Company incurred transaction-related expenditures of $ 1.6 million and $ 2.3 million during the years ended June 30, 2025 and 2024, respectively, related to the acquisition of Adumo. The Company’s accruals presented in Note 13 of as June 30, 2025, includes an accrual of transaction related expenditures of $ 0.1 million and the Company does not expect to incur any further significant transaction costs during the 2026 fiscal year. March 2025 acquisition of Recharger On November 19, 2024, the Company, through Lesaka SA, entered into a Sale of Shares Agreement (the “Recharger Purchase Agreement”) with Imtiaz Dhooma (Recharger’s former chief executive officer) and Ninety Nine Proprietary Limited (“the Seller”). Pursuant to the Recharger Purchase Agreement and subject to its terms and conditions, Lesaka, through its subsidiary, Lesaka SA, agreed to acquire, and the Seller agreed to sell, all of the outstanding equity interests in Recharger Proprietary Limited (“Recharger”). The transaction closed on March 3, 2025. At the same time, Recharger also entered into independent contractor agreement with Recharger’s former chief executive officer which has a term of 12 months and required him, among other things, to support operational activities of the Recharger business, in consultation with Company representatives, facilitate the handover process and assist Recharger in transitioning ownership to Lesaka SA, avail himself for important customer and vendor meetings, attend scheduled weekly management committee meetings regarding operational and business activities of the Recharger business, and providing support on an ad-hoc basis to Company representatives with regard to operational matters and in facilitating the hand over, as and when reasonably required. This acquisition has been reported as part of the Company’s Enterprise operating segment and demonstrates positive advancement of the Company’s strategy in its Enterprise operating segment. The Company expects the acquisition to act as an entry point for it into the South African private utilities space while augmenting Enterprise’s alternative payment offering. The transaction consideration per the Recharger Purchase Agreement was ZAR 503.4 million ($ 27.0 million) and comprised ZAR 328.4 million ($ 17.6 million) in cash and ZAR 175.0 million ($ 9.4 million) in shares of the Company’s common stock, to be settled in two tranches. The share price applied to determine the number of shares of common stock to be issued for the equity consideration is based on the volume-weighted average price of the Company’s common shares for the three-month period prior to the disbursal of each tranche. Lesaka SA extended a ZAR 43.1 million ($ 2.3 million) loan to Recharger at closing which was exclusively used to repay an existing loan due by Recharger to the Seller. The first tranche, comprising ZAR 153.4 million ($ 8.2 million) in cash and 1,092,361 shares of the Company’s common stock with a value of ZAR 98.3 million ($ 5.3 million), was settled at closing. The value of the shares of common stock were calculated using the shares issued multiplied by the Company’s closing price on the Johannesburg Stock Exchange on March 3, 2025, of ZAR 90.00 , and translated to U.S. dollars at the exchange rate of $1: ZAR 18.63 . Lesaka SA delivered the 1,092,361 shares of the Company’s common stock from a pool of shares it purchased in October 2024, and the Company recognized a gain in additional paid-in-capital of $ 0.4 million related to the difference between in the value on March 3, 2025, and the price paid per share in October 2024. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-24 3. ACQUISITIONS (continued) 2025 Acquisitions (continued) March 2025 acquisition of Recharger (continued) The total purchase consideration was ZAR 294.8 million ($ 15.8 million) and comprised the issuance of the 1,092,361 shares of the Company’s common stock with a value of ZAR 98.3 million ($ 5.3 million), the settlement of the pre-existing relationship shareholder loan of ZAR 43.1 million ($ 2.3 million) and cash of ZAR 153.4 million ($ 8.2 ) million. The second and final tranche is due on March 3, 2026, and comprises a contractual cash payment of ZAR 175.0 million ($ 9.4 million) and the delivery of shares of Lesaka’s common stock with a contractual value of ZAR 75.0 million ($ 4.0 million). Pursuant to the Recharger Purchase Agreement, payment of the second tranche in March 2026 was contingent on Recharger’s former chief executive officer’s ongoing service under the independent contractor agreement until June 30, 2025. The second tranche would not be paid if he failed to provide the requisite service, except if failure to provide future services is due to expiry of the contract, mutual agreement or death of the former chief executive officer. The former chief executive officer was also a director of the Seller, and signed the Recharger Purchaser Agreement on behalf of himself, Recharger and the Seller. He also signed an independent contractor agreement under which he is required to provide post-combination service to Recharger until March 2026 (but the vesting of the shares is only for services to June 30, 2025). The Company has determined that as the payment of the second tranche is contingent on these post-combination services, the value of the second tranche is not treated as purchase consideration and rather, under GAAP, represents compensation for post-combination services. In late May 2025, an addendum was signed to reduce the post-combination period from twelve months to four months (i.e. from March 2025 to June 2025). The post-combination services for the year ended June 30, 2025, of $ 13.6 million was calculated as the sum of the future cash payment and the value of future shares to be provided. The value of the future shares to be provided was calculated using the contractual value of ZAR 75.0 million divided by the volume-weighted average price of the Company’s common shares for the three-month period prior to June 30, 2025, and at the applicable exchange rate. The post-combination compensation charge is included in the caption transaction costs related to Adumo, Recharger and Bank Zero acquisitions and certain compensation costs included on the consolidated statement of operations. The Company records stock-based compensation charges that are cash-settled awards in other payables. The liability for the future payments is included in the caption Other payables in the consolidated balance sheet as of June 30, 2025, refer to Note 13. There is no unrecognized compensation costs related to the post-combination compensation charge as of June 30, 2025. The Company incurred transaction-related expenditures of $ 0.4 million during the year ended June 30, 2025, related to the acquisition of Recharger. The Company’s accruals presented in Note 13 of as June 30, 2025, includes an accrual of transaction related expenditures of $ 0.1 million and the Company does not expect to incur any further significant transaction costs during the 2026 fiscal year. Other acquisitions Effective November 1, 2024, the Company, through its wholly owned subsidiary Adumo Technologies Proprietary Limited (“Adumo AT”), acquired the remaining shares (representing 50 % of the issued and outstanding shares) it did not own in Innervation Value Added Services Namibia Pty Ltd (“IVAS Nam”) for $ 0.4 million (ZAR 6.0 million, translated at November 1, 2024 exchange rates). IVAS Nam was accounted for using the equity method prior to the acquisition of a controlling interest in the company. Adumo paid ZAR 2.0 million of the purchase price prior to the acquisition of Adumo by the Company and the balance of ZAR 4.0 million will be paid in two equal tranches, one in March 2025 and the other in September 2025. The Company did not incur any significant transaction costs related to this acquisition. The Company, through Lesaka SA, acquired 100 % of Genisus Risk Proprietary Limited (“Genisus Risk”) for a cash consideration of ZAR 2.0 million ($ 0.1 million). The Company did not incur any significant transaction costs related to this acquisition. The Company, through its wholly owned subsidiary Cash Connect Management Solutions Proprietary Limited (“CCMS”), acquired 100 % of Master Fuel Proprietary Limited (“Master Fuel) for a cash consideration of ZAR 2.0 million ($ 0.1 million). The Company did not incur any significant transaction costs related to this acquisition. LESAKA TECHNOLOGIES, INC. Notes to the consolidated financial statements for the years ended June 30, 2025 and 2024 and 2023 (All amounts stated in thousands of United States Dollars, unless otherwise stated) F-25 3. ACQUISITIONS (continued) 2026 Proposed acquisitions of Bank Zero On June 26, 2025, Lesaka SA entered into a Transaction Implementation Agreement (the “Transaction Implementation Agreement”) with Zero Research Proprietary Limited (“Zero Research”), Bank Zero Mutual Bank (“Bank Zero”), and other parties identified in Annexure A to the Transaction Implementation Agreement (being all of the shareholders of Bank Zero save for Zero Research and Naught Holdings Ltd, the “Bank Zero Sellers”), the parties listed in Annexure B to the Transaction Implementation Agreement (being all of the shareholders of Zero Research save for Naught Holdings Ltd, the “Zero Research Sellers”) and Naught Holdings Ltd. All amounts below translated at the closing rate of $1: ZAR 17.76 as of June 30, 2025. The purchase consideration payable by Lesaka SA in exchange for the relevant shares in Bank Zero and the subscription consideration payable by Lesaka SA in exchange the subscription shares will be settled through a combination of delivery of Lesaka shares of common stock and up to ZAR 91.0 million ($ 5.1 million) in cash. Zero Research will apply the cash and Lesaka shares received by it to settle the repurchase consideration due to the Zero Research Sellers. Following implementation of each of these steps, and subject to the below adjustment, the Bank Zero Sellers, Zero Research Sellers and Naught Holdings Ltd will own approximately 12 % of Lesaka's fully diluted shares at the time of completion of the proposed transaction. The Transaction Implementation Agreement allows a mechanism (in certain circumstances) pursuant to which the Bank Zero Sellers and the Zero Research Sellers may acquire fewer shares in Lesaka and a larger cash consideration. The Transaction Implementation Agreement includes customary interim period undertakings which required each of Zero Research and Bank Zero, among other things (i) to conduct their business in the ordinary course during the period between the execution of the Transaction Implementation Agreement and the closing of the transaction contemplated thereby, and (ii) not to engage in certain kinds of transactions during such period. The Transaction Implementation Agreement is subject to the fulfilment of certain conditions precedent. The Transaction Implementation Agreement will lapse if all of the conditions precedent are not met or not waived by August 6, 2026 (or such later date as may be agreed). Bank Zero and Lesaka SA have agreed to implement a long-term incentive arrangement following implementation of the transaction, under which an agreed portion of a number of shares of Lesaka's shares of common stock calculated will be granted by (i) dividing ZAR 70.0 million ($ 3.9 million) by an agreed value (as defined in the Transaction Implementation Agreement) (the “Retention LTIP Shares”) and (ii) dividing ZAR 30.0 million ($ 1.7 million) by such agreed value (the “Performance LTIP Shares”). The Retention LTIP Shares will be subject to time and certain performance-based vesting conditions. The terms of the long-term incentive plan are required to be considered, and if necessary approved, by Lesaka's remuneration committee.