What changed in this filing

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Item 1A. Risk Factors

2025-11-05 compared with 2025-05-07 · 7 added, 311 removed, 1 unchanged (100% of the section changed)

(iii) government

regulation, and (iv) our common stock.

as set forth below, there have been no material

changes from the risk factors previously

disclosed in our Annual Report on Form 10-K for the fiscal year ended June 30,

We may not be able

to successfully integrate Adumo and Recharger’s operations

with our business.

On October 1, 2024, we announced the closing of our ZAR 1.67 billion ($96.2 million) investment to acquire a 100% interest in

million ($27.0

million) investment

Integrating these

businesses into

significant attention

senior management

which may divert their attention from our day-to-day business.

The difficulties of integration may be increased by cultural differences

organizations

employees and management team.

The services of some of these individuals will be important to the continued growth and success of

Adumo and Recharger’s business and to our ability to integrate those businesses

If we were to lose the

services of these key

sufficiently integrate

these businesses

successfully would

materially and

adversely impacted.

As such, if we are unable to successfully integrate Adumo and Recharger’s

operations into our business we could be required to

record material impairments, and as a result, our financial condition,

results of operations, cash flows and stock price could suffer.

third-party suppliers,

vulnerable to

supply shortages

fluctuations, which

our business.

smart cards, ATMs,

electronic payment

and POS devices,

components for our

safe assets, components

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,

increase their prices,

find alternative

timely manner

with a critical shortage.

could harm our ability to meet customer

demand and cause our revenues

Even if we are

to secure alternative sources in a timely manner,

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

interruption,

semiconductors, or

beyond current

suppliers’ capabilities

to distribute

our equipment

acquire new customers

interruption in the

supply of the

hardware necessary to

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.

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.

this arrangement were

to terminate,

without alternate

also required

requirements of

payment schemes,

our services under

partnerships with South

African banks.

provide our payments

and card-acquiring

businesses if we

fail to comply

with payment scheme

rules, and/or fails

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.

(“EPE”) business activities require

us to be registered as

a bank in South Africa

or to have access to an

existing banking license.

are not currently so registered,

but we have an agreement

with Grindrod Bank, a subsidiary

of African Bank Limited, that

relevant laws

and regulations.

be terminated,

Furthermore, we have

to comply with the

South African Financial

Intelligence Centre Act,

2001 and money

laundering and terrorist

implement and

monitor responses

legislation and

regulations may

significant fines

or prosecution

and ourselves.

requirements of

payment schemes,

including VISA

and Mastercard.

have deployed

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.

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,

processing services

in partnership

largest banks

these agreements

be terminated,

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 scheme's and

regulatory bodies.

addition, if we

were to lose our

PASA registrations

or fail to have them renewed, it would be unable to operate its payment services.

Compliance with the requirements under these various regulatory regimes may

cause us to incur significant additional costs and

such requirements

the non-complying

the imposition

and/or civil or criminal liability.

intermediaries between financial product

suppliers and consumers in

South Africa to register

as financial service providers.

Insurance was

granted a Financial

Service Provider,

license on June

EasyPay Financial

Services (Pty) Ltd

suspended, we

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

Institutions Bill

significant changes

current licensing

however, the current proposal is that existing licences will be converted.

The second draft of the Conduct of

Financial Institutions Bill

was published for public comment on September 29, 2020.

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

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.

African Reserve

Bank (“SARB”)

certain draft

regulatory documents

for commentary

a substantial

business namely:

activities within

(the “Directive”);

“Designation by the

Prudential Authority of

specific activities conducted

in the national

payment system which

shall be deemed

to constitute

‘the business

paragraph (cc)

(the “Exemption

(iii) the National

Payment System

Bill”), which

existing National

Payment System

proposed regulations

available for

detailed comments

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

regulations also aim

to promote financial

inclusion, competition, the

prevention of financial

crime, and the

fair treatment and

while introducing

an activity-based

licensing and

authorization

the Directive

authorisation from the

SARB to undertake

such activity.

Under the Exemption

Notice, certain payment

activities are exempted

the definition of ‘the business of a bank’.

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

Exemption Notice,

these activities

undertaken by

non-banks, subject

including EasyPay Everywhere,

Adumo and Kazang Pay,

currently undertake activities which

would qualify as “payment

Directive and

the NPS Bill.

current regulatory

framework, these

activities are

undertaken in

partnership with

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.

regulations will

non-bank such

relevant Lesaka

authorised by the

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

requirements, and

authorization with

respect thereto.

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.

There have been no material changes from the risk factors previously disclosed in our Annual

Report on Form 10-K for the fiscal year ended June 30, 2025.

Unregistered Sales of Equity Securities and

Use of Proceeds

Defaults upon Senior Securities

Mine Safety Disclosures

Not applicable.

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

What changed 10-Q

Item 1A. Risk Factors