LESAKA TECHNOLOGIES INC 10-Q

Item 1. Financial Statements LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Balance Sheets September 30, June 30, 2025 2025 (In thousands, except share data) ASSETS CURRENT ASSETS Cash and cash equivalents $ 72,162 $ 76,520 Restricted cash related to ATM funding and credit facilities (Note 9) 122 119 Accounts receivable, net and other receivables (Note 3) 44,790 42,525 Finance loans receivable, net (Note 3) 80,860 74,110 Inventory (Note 4) 18,957 23,551 Total current assets before settlement assets 216,891 216,825 Settlement assets 23,653 27,098 Total current assets 240,544 243,923 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - September: $ 55,748 June: $ 55,086 (Note 1) 46,277 44,924 OPERATING LEASE RIGHT-OF-USE (Note 17) 9,876 9,691 EQUITY-ACCOUNTED INVESTMENTS (Note 6) 170 199 GOODWILL (Note 7) 204,979 199,395 INTANGIBLE ASSETS, NET (Note 7) 134,664 139,215 DEFERRED INCOME TAXES 12,325 12,554 OTHER LONG-TERM ASSETS (Note 6 and 8) 4,020 3,809 TOTAL ASSETS 652,855 653,710 LIABILITIES CURRENT LIABILITIES Short-term credit facilities (Note 9) 12,488 24,469 Accounts payable 19,138 19,867 Other payables (Note 10) 75,026 72,079 Operating lease liability - current (Note 17) 4,258 4,007 Current portion of long-term borrowings (Note 9) 12,581 11,956 Income taxes payable 1,961 1,400 Total current liabilities before settlement obligations 125,452 133,778 Settlement obligations 23,822 26,695 Total current liabilities 149,274 160,473 DEFERRED INCOME TAXES 32,773 33,921 OPERATING LEASE LIABILITY - LONG TERM (Note 17) 6,041 6,129 LONG-TERM BORROWINGS (Note 9) 195,516 188,813 OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 8) 3,029 2,991 TOTAL LIABILITIES 386,633 392,327 REDEEMABLE COMMON STOCK 88,957 88,957 EQUITY COMMON STOCK (Note 11) Authorized: 200,000,000 with $ 0.001 par value; Issued and outstanding shares, net of treasury - September: 81,463,899 ; June: 81,249,097 103 103 PREFERRED STOCK Authorized shares: 50,000,000 with $ 0.001 par value; Issued and outstanding shares, net of treasury: September: - ; June: - - - ADDITIONAL PAID-IN-CAPITAL 428,811 426,950 TREASURY SHARES, AT COST: September: 29,934,044 ; June: 29,934,044 ( 298,523 ) ( 298,523 ) ACCUMULATED OTHER COMPREHENSIVE LOSS (Note 12) ( 178,462 ) ( 185,664 ) RETAINED EARNINGS 218,422 222,719 TOTAL LESAKA EQUITY 170,351 165,585 NON-CONTROLLING INTEREST 6,914 6,841 TOTAL EQUITY 177,265 172,426 TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY $ 652,855 $ 653,710 See Notes to Unaudited Condensed Consolidated Financial Statements LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Statements of Operations 3 Three months ended September 30, 2025 2024 (In thousands, except per share data) REVENUE (Note 16) $ 171,448 $ 153,568 EXPENSE Cost of goods sold, IT processing, servicing and support, exclusive of depreciation and amortization shown separately below 118,440 118,909 Selling, general and administration, exclusive of depreciation and amortization shown separately below 39,637 26,698 Depreciation and amortization 12,894 6,276 Transaction costs related to Adumo, Recharger and Bank Zero acquisitions (Note 2) 94 1,730 OPERATING INCOME (LOSS) 383 ( 45 ) NET LOSS ON IMPAIRMENT OF EQUITY-ACCOUNTED INVESTMENT (Note 6) 584 - INTEREST INCOME 539 586 INTEREST EXPENSE 4,898 5,032 LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE ( 4,560 ) ( 4,491 ) INCOME TAX (BENEFIT) EXPENSE (Note 19) ( 146 ) 78 NET LOSS BEFORE EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS ( 4,414 ) ( 4,569 ) EARNINGS FROM EQUITY-ACCOUNTED INVESTMENTS (Note 6) - 27 NET LOSS $ ( 4,414 ) $ ( 4,542 ) ADD NET LOSS ATTRIBUTABLE TO NON-CONTROLLING INTEREST 117 - NET LOSS ATTRIBUTABLE TO LESAKA ( 4,297 ) ( 4,542 ) Net loss per share, in United States dollars (Note 14): Basic loss attributable to Lesaka shareholders $ ( 0.05 ) $ ( 0.07 ) Diluted loss attributable to Lesaka shareholders $ ( 0.05 ) $ ( 0.07 ) See Notes to Unaudited Condensed Consolidated Financial Statements LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income 4 Three months ended September 30, 2025 2024 (In thousands) Net loss $ ( 4,414 ) $ ( 4,542 ) Other comprehensive income, net of taxes Movement in foreign currency translation reserve 6,842 10,525 Release of foreign currency translation reserve related to disposal of equity securities 550 - Total other comprehensive income, net of taxes 7,392 10,525 Comprehensive income 2,978 5,983 Less comprehensive income attributable to non-controlling interest ( 73 ) - Comprehensive income attributable to Lesaka $ 2,905 $ 5,983 See Notes to Unaudited Condensed Consolidated Financial Statements LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Statements of Changes in Equity 5 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 For the three months ended September 30, 2024 (dollar amounts in thousands) 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 Restricted stock granted (Note 13) 32,800 32,800 - - Stock-based compensation charge (Note 13) - 2,377 2,377 2,377 Reversal of stock-based compensation charge (Note 13) ( 3,100 ) ( 3,100 ) - - - Net loss - ( 4,542 ) ( 4,542 ) - ( 4,542 ) Other comprehensive income (Note 12) 10,525 10,525 - 10,525 Balance – September 30, 2024 89,865,751 $ 83 ( 25,563,808 ) $ ( 289,733 ) 64,301,943 $ 346,016 $ 305,681 $ ( 177,830 ) $ 184,217 $ - $ 184,217 $ 79,429 LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Statements of Changes in Equity 6 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 For the three months ended September 30, 2025 (dollar amounts in thousands) Balance – July 1, 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 Restricted stock granted (Note 13) 225,595 225,595 - - Stock-based compensation charge (Note 13) - - 1,873 1,873 1,873 Reversal of stock-based compensation charge (Note 13) ( 10,793 ) ( 10,793 ) ( 12 ) ( 12 ) ( 12 ) Net loss ( 4,297 ) ( 4,297 ) ( 117 ) ( 4,414 ) Other comprehensive income (Note 12) 7,202 7,202 190 7,392 Balance – September 30, 2025 111,397,943 $ 103 ( 29,934,044 ) $ ( 298,523 ) 81,463,899 $ 428,811 $ 218,422 $ ( 178,462 ) $ 170,351 $ 6,914 $ 177,265 $ 88,957 LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Statements of Cash Flows 7 Three months ended September 30, 2025 2024 (In thousands) Cash flows from operating activities Net loss $ ( 4,414 ) $ ( 4,542 ) Depreciation and amortization 12,894 6,276 Movement in allowance for doubtful accounts receivable and finance loans receivable 2,606 1,499 Earnings from equity-accounted investments (Note 6) - ( 27 ) Fair value adjustment related to financial liabilities ( 1 ) 190 Interest payable ( 107 ) 1,693 Facility fee amortized 78 69 Net loss on disposal of equity-accounted investments (Note 6) 584 - Profit on disposal of property, plant and equipment ( 30 ) ( 27 ) Stock-based compensation charge (Note 13) 1,861 2,377 Changes in net working capital (Increase) Decrease in accounts receivable and other receivables ( 1,230 ) 7,692 Increase in finance loans receivable ( 6,903 ) ( 1,590 ) (Decrease) Increase in inventory 5,148 ( 889 ) Decrease in accounts payable and other payables ( 594 ) ( 17,177 ) Increase in taxes payable 512 765 Decrease in deferred taxes ( 1,481 ) ( 446 ) Net cash provided by (used in) operating activities 8,923 ( 4,137 ) Cash flows from investing activities Capital expenditures ( 3,980 ) ( 3,965 ) Proceeds from disposal of property, plant and equipment 452 850 Acquisition of intangible assets ( 1,139 ) ( 173 ) Net change in settlement assets 4,206 3,570 Net cash (used in) provided by investing activities ( 461 ) 282 Cash flows from financing activities Proceeds from bank overdraft (Note 9) 27,974 23,893 Repayment of bank overdraft (Note 9) ( 40,661 ) ( 31,028 ) Long-term borrowings utilized (Note 9) 2,763 774 Repayment of long-term borrowings (Note 9) ( 1,148 ) ( 5,472 ) Non-refundable deal origination fees (Note 9) ( 33 ) - Net change in settlement obligations ( 3,633 ) ( 3,648 ) Net cash used in financing activities ( 14,738 ) ( 15,481 ) Effect of exchange rate changes on cash 1,921 3,226 Net decrease in cash, cash equivalents and restricted cash ( 4,355 ) ( 16,110 ) Cash, cash equivalents and restricted cash – beginning of period 76,639 65,919 Cash, cash equivalents and restricted cash – end of period (Note 15) $ 72,284 $ 49,809 See Notes to Unaudited Condensed Consolidated Financial Statements 8 LESAKA TECHNOLOGIES, INC Notes to the Unaudited Condensed Consolidated Financial Statements for the three months ended September 30, 2025 and 2024 (All amounts in tables stated in thousands or thousands of U.S. dollars, unless otherwise stated) 1. Basis of Presentation and Summary of Significant Accounting Policies Unaudited Interim Financial Information The accompanying unaudited condensed consolidated financial statements include all majority-owned subsidiaries over which the Company exercises control and have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) and the rules and regulations of the United States Securities and Exchange Commission for Quarterly Reports on Form 10- Q and include all of the information and disclosures required for interim financial reporting. The results of operations for the three months ended September 30, 2025 and 2024, are not necessarily indicative of the results for the full year. The Company believes that the disclosures are adequate to make the information presented not misleading. These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2025. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair representation of financial results for the interim periods presented. References to “Lesaka” are references solely to Lesaka Technologies, Inc. References to the “Company” refer to Lesaka and its consolidated subsidiaries, collectively, unless the context otherwise requires. Revision of Previously Issued Financial Statements In October 2025, the Company identified that it had understated its June 30, 2025, amounts of cost and accumulated depreciation for computer equipment as well as the totals for cost and accumulated depreciation by $ 6.5 million in the notes to the audited consolidated financial statements for the years ended June 30, 2025, 2024 and 2023. The carrying value of property, plant and equipment reported as of June 30, 2025, was not impacted by the misstatement. The Company has recast its accumulated depreciation presented on the condensed consolidated balance sheet as of June 30, 2025, to increase the amount from $ 48,636 to $ 55,086 . Recent accounting pronouncements adopted In December 2023, the Financial Accounting Standards Board (“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 was effective for the Company beginning July 1, 2025 for its year ended June 30, 2026. Recent accounting pronouncements not yet adopted as of September 30, 2025 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. 9 1. Basis of Presentation and Summary of Significant Accounting Policies (continued) Recent accounting pronouncements not yet adopted as of September 30, 2025 (continued) On September 18, 2025, the FASB issued guidance regarding Intangibles—Goodwill and Other— Internal-Use Software (Subtopic 350-40) which amends certain aspects of the accounting for and disclosure of software costs under ASC 350-40. The new guidance makes targeted improvements to existing guidance but does not fully align the framework for accounting for internally developed software costs that are subject to ASC 350-40 with the framework applied to software to be sold or marketed externally that is subject to guidance regarding Costs of Software to Be Sold, Leased, or Marketed (Subtopic ASC 985-20) . The new guidance also does not amend the guidance on costs of software licenses that are within the scope of ASC 985 -20. The amendments supersede the guidance on website development costs in guidance regarding Website Development Costs (Subtopic ASC 350-50) and relocate that guidance, along with the recognition requirements for development costs specific to websites, to ASC 350 -40. This guidance is effective for the Company beginning July 1, 2028, and interim reporting periods during that fiscal year. Early adoption is permitted. Entities may apply the guidance prospectively, retrospectively, or via a modified prospective transition method. The modified prospective transition approach would allow entities to account for an in-process project that, before the transition date, met the capitalization requirements but would no longer meet the requirements for capitalization under the new guidance by derecognizing the capitalized costs for that in-process project through a cumulative-effect adjustment to the opening balance of retained earnings. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures. 2. Acquisitions Refer to Note 3 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025, for additional information regarding the acquisition of Recharger Proprietary Limited (“Recharger”) and the proposed acquisition of Bank Zero Mutual Bank (“Bank Zero”) (which transaction remains conditional). The Company did not close any acquisitions during the three months ended September 30, 2025. 2026 Proposed acquisitions of Bank Zero On June 26, 2025, Lesaka Technologies Proprietary Limited (“Lesaka SA”) entered into a Transaction Implementation Agreement (the “Transaction Implementation Agreement”) with Zero Research Proprietary Limited (“Zero Research”), 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. The Company incurred transaction-related expenditures of $ 0.1 million during the three months ended September 30, 2025, related to the proposed acquisition of Bank Zero. The Company’s accruals presented in Note 10 of as September 30, 2025, includes an accrual of transaction related expenditures of $ 0.3 million and the Company expects to incur further transaction costs of $ 0.3 million during the 2026 fiscal year. 2025 Acquisitions 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 SA agreed to acquire, and the Seller agreed to sell, all of the outstanding equity interests in Recharger. The transaction closed on March 3, 2025. 10 2. Acquisitions (continued) 2025 Acquisitions (continued) The Company completed the purchase price allocation related to the Recharger acquisition during the three months ended September 30, 2025. There were no changes to the preliminary purchase price allocation as of June 30, 2025. The final purchase price allocation of the Recharger acquisition, translated at the foreign exchange rates applicable on the date of acquisition, is provided in the table below: Final purchase price allocation Recharger Cash and cash equivalents $ 1,720 Accounts receivable 17 Inventory 194 Property, plant and equipment 39 Operating lease right of use asset 401 Goodwill 3,614 Intangible assets 16,171 Deferred income taxes assets 81 Accounts payable ( 149 ) Other payables ( 1,439 ) Operating lease liability - current ( 185 ) Income taxes payable ( 4 ) Deferred income taxes liabilities ( 4,366 ) Operating lease liability - long-term ( 269 ) Fair value of assets and liabilities on acquisition $ 15,825 Transaction costs and certain compensation costs The Company did no t incur any transaction costs related to the Bank Zero acquisition during the three months ended September 30, 2024. The table below presents transaction costs incurred related to the acquisitions of Adumo and Recharger, and the proposed acquisition of Bank Zero during the three months ended September 30, 2025 and 2024: Three months ended September 30, 2025 2024 Bank Zero transaction costs $ 82 $ - Adumo transaction costs - 1,702 Recharger transaction costs (1) 12 28 Total $ 94 $ 1,730 (1) Recharger transactions costs for the three months ended September 30, 2024, of $ 0.03 million have been allocated from Selling, general and administration to Transaction costs related to Adumo, Recharger and Bank Zero acquisitions in the unaudited c ondensed consolidated statement of operations for the three months ended September 30, 2024. 11 3. Accounts receivable, net and other receivables and finance loans receivable, net Accounts receivable, net and other receivables The Company’s accounts receivable, net, and other receivables as of September 30, 2025, and June 30, 2025, are presented in the table below: September 30, June 30, 2025 2025 Accounts receivable, trade, net $ 22,145 $ 16,433 Accounts receivable, trade, gross 23,961 18,186 Less: Allowance for doubtful accounts receivable, end of period 1,816 1,753 Beginning of period 1,753 1,241 Reversed to statement of operations ( 150 ) ( 521 ) Charged to statement of operations 229 1,856 Write-offs ( 67 ) ( 847 ) Foreign currency adjustment 51 24 Current portion of amount outstanding related to sale of interest in Carbon, net of allowance: September 2025: $ 750 ; June 2025: $ 750 - - Current portion of total held to maturity investments - - Other receivables 22,645 26,092 Total accounts receivable, net and other receivables $ 44,790 $ 42,525 Trade receivables include amounts due from customers which generally have a very short-term life from date of invoice or service provided to settlement. The duration is less than a year in all cases and generally less than 30 days in many instances. The short-term nature of these exposures often results in balances at month-end that are disproportionately small compared to the total invoiced amounts. The month-end outstanding balance are more volatile than the monthly invoice amounts because they are affected by operational timing issues and the fact that a balance is outstanding at month-end is not necessarily an indication of increased risk but rather a matter of operational timing. Credit risk in respect of trade receivables are generally not significant and the Company has not developed a sophisticated model for these basic credit exposures. The Company determined to use 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. Management actively monitors performance of these receivables over short periods of time. Different balances have different rules to identify an account in distress. Once balances in distress are identified, specific allowances are immediately created. Subsequent recovery from distressed accounts is not significant. O ther receivables include prepayments, deposits, income taxes receivable and other receivables. 12 3. Accounts receivable, net and other receivables and finance loans receivable, net (continued) Finance loans receivable, net The Company’s finance loans receivable, net, as of September 30, 2025, and June 30, 2025, is presented in the table below: September 30, June 30, 2025 2025 Microlending finance loans receivable, net $ 60,329 $ 52,492 Microlending finance loans receivable, gross 64,600 56,140 Less: Allowance for doubtful finance loans receivable, end of period 4,271 3,648 Beginning of period 3,648 1,947 Reversed to statement of operations - ( 161 ) Charged to statement of operations 2,223 4,301 Write-offs ( 1,714 ) ( 2,499 ) Foreign currency adjustment 114 60 Merchant finance loans receivable, net 20,531 21,618 Merchant finance loans receivable, gross 22,374 23,214 Less: Allowance for doubtful finance loans receivable, end of period 1,843 1,596 Beginning of period 1,596 2,697 Reversed to statement of operations ( 19 ) ( 22 ) Charged to statement of operations 323 2,576 Write-offs ( 107 ) ( 3,709 ) Foreign currency adjustment 50 54 Total finance loans receivable, net $ 80,860 $ 74,110 Total finance loans receivable, net, comprises microlending finance loans receivable related to the Company’s microlending operations in South Africa as well as its merchant finance loans receivable related to Connect’s lending activities in South Africa. Certain merchant finance loans receivable with an aggregate balance of $ 19.7 million as of September 30, 2025 have been pledged as security for the Company’s revolving credit facility (refer to Note 9). Allowance for credit losses Microlending finance loans receivable Microlending finance loans receivable is related to the Company’s microlending operations in South Africa whereby it provides unsecured short-term loans to qualifying customers. Loans to customers have a tenor of up to nine months, with the majority of loans originated having a tenor of six months. The Company analyses this lending book as a single portfolio because the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk of the lending book. Refer to Note 5 related to the Company risk management process related to these receivables. The Company has operated this lending book for more than five years and uses historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for 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. The lifetime loss rate as of each of June 30, 2025 and September 30, 2025, was 6.50 %. The performing component (that is, outstanding loan payments not in arrears) of the book exceeds more than 98 %, of the outstanding lending book as of each of June 30, 2025 and September 30, 2025. Merchant finance loans receivable Merchant finance loans receivable is related to the Company’s Merchant lending activities in South Africa whereby it provides unsecured short-term loans to qualifying customers. Loans to customers have a tenor of up to twelve months, with the majority of loans originated having a tenor of approximately eight months. The Company analyses this lending book as a single portfolio because the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk o f the lending book. Refer to Note 5 related to the Company risk management process related to these receivables. 13 3. Accounts receivable, net and other receivables and finance loans receivable, net (continued) Finance loans receivable, net (continued) Allowance for credit losses (continued) Merchant finance loans receivable (continued) The Company uses historical default experience over the lifetime of loans generated thus far in order to calculate a lifetime loss rate for the lending book. The allowance for credit losses related to these 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 lifetime loss rate as of each of June 30, 2025 and September 30, 2025, was approximately 1.14 %. 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. The performing component, under- performing component and non-performing component of the book represents approximately 93 %, 6 % and 1 %, respectively, of the outstanding lending book as of September 30, 2025. 4. Inventory The Company’s inventory comprised the following categories as of September 30, 2025, and June 30, 2025: September 30, June 30, 2025 2025 Raw materials $ 2,424 $ 2,963 Work-in-progress 375 293 Finished goods 16,158 20,295 $ 18,957 $ 23,551 5. Fair value of financial instruments Initial recognition and measurement Financial instruments are recognized when the Company becomes a party to the transaction. Initial measurements are at cost, which includes transaction costs. Risk management The Company manages its exposure to currency exchange, translation, interest rate, credit, microlending credit and equity price and liquidity risks as discussed below. Currency exchange risk The Company is subject to currency exchange risk because it purchases components for its vaults, that the Company assembles, and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar. The Company has used forward contracts in order to limit its exposure in these transactions to fluctuations in exchange rates between the South African rand (“ZAR”), on the one hand, and the U.S. dollar and the euro, on the other hand. Translation risk Translation risk relates to the risk that the Company’s results of operations will vary significantly as the U.S. dollar is its reporting currency, but it earns a significant amount of its revenues and incurs a significant amount of its expenses in ZAR. The U.S. dollar to the ZAR exchange rate has fluctuated significantly over the past three years. As exchange rates are outside the Company’s control, there can be no assurance that future fluctuations will not adversely affect the Company’s results of operations and financial condition. 14 5. Fair value of financial instruments (continued) Risk management (continued) Interest rate risk As a result of its normal borrowing activities, the Company’s operating results are exposed to fluctuations in interest rates, which it manages primarily through regular financing activities. Interest rates in South Africa have been trending downwards in recent quarters and as of the date of this Quarterly 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. Therefore, ignoring the impact of changes to the margin on its borrowings (refer to Note 9) and value of borrowings outstanding, the Company expects its cost of borrowing to decline moderately in the foreseeable future, however, the Company would expect a higher cost of borrowing if interest rates were to increase in the future. The Company periodically evaluates the cost and effectiveness of interest rate hedging strategies to manage this risk. The Company generally maintains surplus cash in cash equivalents and held to maturity investments and has occasionally invested in marketable securities. Credit risk Credit risk relates to the risk of loss that the Company would incur as a result of non-performance by counterparties. The Company maintains credit risk policies in respect of its counterparties to minimize overall credit risk. These policies include an evaluation of a potential counterparty’s financial condition, credit rating, and other credit criteria and risk mitigation tools as the Company’s management deems appropriate. With respect to credit risk on certain financial instruments, the Company maintains a policy of entering into such transactions only with South African and European financial institutions that have a credit rating of “B” (or its equivalent) or better, as determined by credit rating agencies such as Standard & Poor’s, Moody’s and Fitch Ratings. Consumer microlending credit risk The Company is exposed to credit risk in its Consumer microlending activities, which provides unsecured short-term loans to qualifying customers. Credit bureau checks as well as an affordability test are conducted as part of the origination process, both of which are in line with local regulations. The Company considers this policy to be appropriate because the affordability test it performs takes into account a variety of factors such as other debts and total expenditures on normal household and lifestyle expenses. Additional allowances may be required should the ability of its customers to make payments when due deteriorate in the future. Judgment is required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer. Merchant lending The Company maintains an allowance for doubtful finance loans receivable related to its Merchant services segment with respect to short-term loans to qualifying merchant customers. The Company’s risk management procedures include adhering to its proprietary lending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks. The Company considers these procedures to be appropriate because it takes into account a variety of factors such as the customer’s credit capacity and customer-specific risk factors when originating a loan. Equity price and liquidity risk Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded price of equity securities that it holds. The market price of these securities may fluctuate for a variety of reasons and, consequently, the amount that the Company may obtain in a subsequent sale of these securities may significantly differ from the reported market value. Equity liquidity risk relates to the risk of loss that the Company would incur as a result of the lack of liquidity on the exchange on which those securities are listed. The Company may not be able to sell some or all of these securities at one time, or over an extended period of time without influencing the exchange-traded price, or at all. 15 5. Fair value of financial instruments (continued) Financial instruments The following section describes the valuation methodologies the Company uses to measure its significant financial assets and liabilities at fair value. In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology would apply to Level 1 investments. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. These investments would be included in Level 2 investments. In circumstances in which inputs are generally unobservable, values typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model- based techniques that include option pricing models, discounted cash flow models, and similar techniques. Investments valued using such techniques are included in Level 3 investments. Asset measured at fair value using significant unobservable inputs – investment in Cell C The Company’s Level 3 asset represents an investment of 75,000,000 class “A” shares in Cell C Limited (“Cell C”), a significant mobile telecoms provider in South Africa. The Company used a discounted cash flow model developed by the Company to determine the fair value of its investment in Cell C as of September 30, 2025 and June 30, 2025, respectively, and valued Cell C at $ 0.0 (zero) and $ 0.0 (zero) as of September 30, 2025, and June 30, 2025, respectively. The Company assumes that Cell C’s deferred tax assets would be utilized over the forecast period. The Company has assumed a marketability discount of 15 % (June 2025: 15%) and a minority discount of 17 % (June 2025: 17%). The Company utilized the latest business plan provided by Cell C management for the period ended May 31, 2030, for the September 30, 2025, and June 30, 2025, valuations. The following key valuation inputs were used as of September 30, 2025, and June 30, 2025: Weighted Average Cost of Capital ("WACC"): 23 % ( 24 % as of June 30, 2025) Long term growth rate: 4.5 % ( 4.5 % as of June 30, 2025) Marketability discount: 15 % ( 15 % as of June 30, 2025) Minority discount: 17 % ( 17 % as of June 30, 2025) Net adjusted external debt - September 30, 2025: (1) ZAR 8.8 billion ($ 0.5 billion), no lease liabilities included Net adjusted external debt - June 30, 2025: (2) ZAR 8.3 billion ($ 0.5 billion), no lease liabilities included (1) translated from ZAR to U.S. dollars at exchange rates applicable as of September 30, 2025. (2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2025. The fair value of Cell C as of September 30, 2025, utilizing the discounted cash flow valuation model developed by the Company is sensitive to the following inputs: (i) the ability of Cell C to achieve the forecasts in their business case; (ii) the WAC C rate used; and (iii) the minority and marketability discount used. Utilization of different inputs, or changes to these inputs, may result in a significantly higher or lower fair value measurement. The following table presents the impact on the carrying value of the Company’s Cell C investment of a 2.5 % decrease and 2.5 % increase in the WACC rate and the EBITDA margins respectively used in the Cell C valuation on September 30, 2025, all amounts translated at exchange rates applicable as of September 30, 2025: Sensitivity for fair value of Cell C investment 2.5% increase 2.5% decrease WACC rate $ - $ 64 EBITDA margin $ 1,720 $ - The aggregate fair value of the Cell C’s shares as of September 30, 2025, represented 0.0 % of the Company’s total assets, including these shares. The Company expects that there will be short-term equity price volatility with respect to these shares given t hat Cell C remains in a turnaround process. 16 5. Fair value of financial instruments (continued) The following table presents the Company’s assets measured at fair value on a recurring basis as of September 30, 2025, according to the fair value hierarchy: Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Investment in Cell C $ - $ - $ - $ - Related to insurance business: Cash, cash equivalents and restricted cash (included in other long-term assets) 130 - - 130 Fixed maturity investments (included in cash and cash equivalents) 2,633 - - 2,633 Total assets at fair value $ 2,763 $ - $ - $ 2,763 The following table presents the Company’s assets measured at fair value on a recurring basis as of June 30, 2025, according to the fair value hierarchy: Quoted Price in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets Investment in Cell C $ - $ - $ - $ - Related to insurance business Cash and cash equivalents (included in other long-term assets) 125 - - 125 Fixed maturity investments (included in cash and cash equivalents) 4,739 - - 4,739 Total assets at fair value $ 4,864 $ - $ - $ 4,864 There have been no transfers in or out of Level 3 during the three months ended September 30, 2025 and 2024, respectively. There was no movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level 3, during the three months ended September 30, 2025 and 2024. Summarized below is the movement in the carrying value of assets and liabilities measured at fair value on a recurring basis, and categorized within Level 3, during the three months ended September 30, 2025: Carrying value Assets Balance as of June 30, 2025 $ - Foreign currency adjustment (1) - Balance as of September 30, 2025 $ - (1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar on the carrying value. 17 5. Fair value of financial instruments (continued) Summarized below is the movement in the carrying value of assets and liabilities measured at fair value on a recurring basis, and categorized within Level 3, during the three months ended September 30, 2024: Carrying value Assets Balance as of June 30, 2024 $ - Foreign currency adjustment (1) - Balance as of September 30, 2024 $ - (1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar on the carrying value. Assets measured at fair value on a nonrecurring basis The Company measures equity investments without readily determinable fair values at fair value on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the asset exceeds its fair value and the excess is determined to be other-than-temporary. The Company has no liabilities that are measured at fair value on a nonrecurring basis. 6. Equity-accounted investments and other long-term assets Refer to Note 9 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025, for additional information regarding its equity -accounted investments and other long-term assets. Equity-accounted investments The Company’s ownership percentage in its equity-accounted investments as of September 30, 2025, and June 30, 2025, was as follows: September 30, June 30, 2025 2025 Sandulela Technology (Pty) Ltd (“Sandulela”) 49.0 % 49.0 % SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”) 50.0 % 50.0 % SmartSwitch Namibia The Company recorded a loss on impairment of equity-accounted investment of $ 0.6 million during the three months ended September 30, 2025, which primarily includes the release of accumulated other comprehensive loss (refer to Note 12). Other long-term assets Summarized below is the breakdown of other long-term assets as of September 30, 2025, and June 30, 2025: September 30, June 30, 2025 2025 Investment in 5 % of Cell C (June 30, 2025: 5 %) at fair value (Note 5) - - Investment in 87.5 % of CPS (June 30, 2025: 87.5 %) at fair value (1)(2) - - Policy holder assets under investment contracts (Note 8) 130 125 Reinsurance assets under insurance contracts (Note 8) 2,055 1,837 Other long-term assets 1,835 1,847 Total other long-term assets $ 4,020 $ 3,809 (1) The Company determined that CPS does not have a readily determinable fair value and therefore elected to record its investment at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. (2) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that CPS be placed into liquidation. 18 6. Equity-accounted investments and other long-term assets (continued) Other long-term assets (continued) Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of September 30, 2025: Cost basis Unrealized holding Unrealized holding Carrying gains losses value Equity securities: Investment in CPS $ - $ - $ - $ - Total $ - $ - $ - $ - Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of June 30, 2025: Cost basis Unrealized holding Unrealized holding Carrying gains losses value Equity securities: Investment in CPS $ - $ - $ - $ - Held to maturity: Investment in Cedar Cellular notes - - - - 7. Goodwill and intangible assets, net Goodwill Summarized below is the movement in the carrying value of goodwill for the three months ended September 30, 2025: Gross value Accumulated impairment Carrying value Balance as of June 30, 2025 $ 236,109 $ ( 36,714 ) $ 199,395 Foreign currency adjustment (1) 6,453 ( 869 ) 5,584 Balance as of September 30, 2025 $ 242,562 $ ( 37,583 ) $ 204,979 (1) – The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar on the carrying value. Goodwill has been allocated to the Company’s reportable segments as follows: Merchant Consumer Enterprise Carrying value Balance as of June 30, 2025 $ 179,634 $ 6,027 $ 13,734 $ 199,395 Foreign currency adjustment (1) 5,027 170 387 5,584 Balance as of September 30, 2025 $ 184,661 $ 6,197 $ 14,121 $ 204,979 (1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar o n the carrying value. 19 7. Goodwill and intangible assets, net (continued) Intangible assets, net Carrying value and amortization of intangible assets Summarized below is the carrying value and accumulated amortization of intangible assets as of September 30, 2025, and June 30, 2025: As of September 30, 2025 As of June 30, 2025 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value Finite-lived intangible assets: Software, integrated platform and unpatented technology $ 142,015 $ ( 47,034 ) $ 94,981 $ 137,099 $ ( 41,925 ) $ 95,174 Customer relationships 54,970 ( 20,509 ) 34,461 53,369 ( 18,568 ) 34,801 Brands and trademarks (1) 18,746 ( 13,524 ) 5,222 18,233 ( 8,993 ) 9,240 FTS patent 2,219 ( 2,219 ) - 2,158 ( 2,158 ) - Total finite-lived intangible assets $ 217,950 $ ( 83,286 ) $ 134,664 $ 210,859 $ ( 71,644 ) $ 139,215 (1) During early calendar 2025, the Company’s executive considered the unification of the Company’s merchant segments operations and the realignment of the Company’s brands under the master brand “Lesaka”. The Company’s Board of Directors approved the realignment of certain of the Company’s brands to the master brand in May 2025. The Company has identified the steps and timing to realign the affected brands under the master brand and expects 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 lives of certain of the Company’s brand and trademark intangible assets which has resulted in an increase (excluding the impact on Adumo and GAAP brands) in amortization expense of $ 3.1 million during the three months ended September 30, 2025 compared with the three months ended September 30, 2024. The change in the useful lives resulted in a $ 2.3 million increase in the Company’s net loss from continuing operations for the three months ended September 30, 2025, and did not have a significant impact on loss per share. The change did not impact prior periods. Aggregate amortization expense on the finite-lived intangible assets for the three months ended September 30, 2025 and 2024, was $ 9.2 million and $ 3.8 million, respectively. Future estimated annual amortization expense for the next five fiscal years and thereafter, assuming exchange rates that prevailed on September 30, 2025, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors. Fiscal 2026 (excluding three months ended September 30, 2025) $ 21,615 Fiscal 2027 21,507 Fiscal 2028 20,994 Fiscal 2029 20,034 Fiscal 2030 18,662 Thereafter 31,852 Total future estimated annual amortization expense $ 134,664 20 8. Assets and policyholder liabilities under insurance and investment contracts Reinsurance assets and policyholder liabilities under insurance contracts Summarized below is the movement in reinsurance assets and policyholder liabilities under insurance contracts during the three months ended September 30, 2025: Reinsurance Assets (1) Insurance contracts (2) Balance as of June 30, 2025 $ 1,837 $ ( 2,644 ) Increase in policyholder benefits under insurance contracts 107 ( 3,062 ) Claims and decrease in policyholders’ benefits under insurance contracts 55 2,882 Foreign currency adjustment (3) 56 ( 78 ) Balance as of September 30, 2025 $ 2,055 $ ( 2,902 ) (1) Included in other long-term assets (refer to Note 6); (2) Included in other long-term liabilities; (3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar. The Company has agreements with reinsurance companies in order to limit its losses from various insurance contracts, however, if the reinsurer is unable to meet its obligations, the Company retains the liability. The value of insurance contract liabilities is based on the best estimate assumptions of future experience plus prescribed margins, as required in the markets in which these products are offered, namely South Africa. The process of deriving the best estimate assumptions plus prescribed margins includes assumptions related to claim reporting delays (based on average industry experience). Assets and policyholder liabilities under investment contracts Summarized below is the movement in assets and policyholder liabilities under investment contracts during the three months ended September 30, 2025: Assets (1) Investment contracts (2) Balance as of June 30, 2025 $ 133 $ ( 125 ) Increase in policy holder benefits under investment contracts 1 ( 1 ) Foreign currency adjustment (3) ( 4 ) ( 4 ) Balance as of September 30, 2025 $ 130 $ ( 130 ) (1) Included in other long-term assets (refer to Note 6); (2) Included in other long-term liabilities; (3) Represents the effects of the fluctuations of the ZAR against the U.S. dollar. The Company does not offer any investment products with guarantees related to capital or returns. 21 9. Borrowings Refer to Note 12 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025, for additional information regarding its borrowings. Reference rate reform After the transition away from certain interbank offered rates in foreign jurisdictions (“IBOR reform”), the reforms to South Africa’s reference interest rate are now accelerating rapidly. The Johannesburg Interbank Average Rate (“JIBAR”) will be replaced by the new South African Overnight Index Average (“ZARONIA”). Certain of the Company’s borrowings reference JIBAR as a base interest rate. ZARONIA reflects the interest rate at which rand-denominated overnight wholesale funds are obtained by commercial banks. There is uncertainty surrounding the timing and manner in which the transition would occur and how this would affect our borrowings. The Company is in regular contact with its lenders and will update existing borrowing agreements to the new base rate when ZARONIA is adopted by the financial industry and lenders as the new reference rate. South Africa The JIBAR, an average of 3 month negotiable certificates of deposit (“NCD”) rates, on September 30, 2025, was 7.00 %. The prime rate, the benchmark rate at which private sector banks lend to the public in South Africa, on September 30, 2025, was 10.50 %. Movement in short-term credit facilities Summarized below are the Company’s short-term facilities as of September 30, 2025, and the movement in the Company’s short- term facilities from as of June 30, 2025 to as of September 30, 2025: RMB RMB Nedbank GBF Other Facilities Total Short-term facilities available as of September 30, 2025 $ 40,584 $ 5,831 $ 9,065 $ 55,480 Overdraft 40,584 - - 40,584 Indirect and derivative facilities - 5,831 9,065 14,896 Movement in utilized overdraft facilities: No restrictions as to use 24,469 - - 24,469 Balance as of June 30, 2025 24,469 - - 24,469 Utilized 27,974 - - 27,974 Repaid ( 40,661 ) - - ( 40,661 ) Foreign currency adjustment (1) 706 - - 706 Balance as of September 30, 2025 12,488 - - 12,488 No restrictions as to use $ 12,488 $ - $ - $ 12,488 Interest rate as of September 30, 2025 (%) (2) 10.00 N/A N/A Interest rate as of June 30, 2025 (%) (2) 10.25 N/A N/A Movement in utilized indirect and derivative facilities: Balance as of June 30, 2025 $ - $ 1,864 $ 119 $ 1,983 Foreign currency adjustment (1) - 53 3 56 Balance as of September 30, 2025 $ - $ 1,917 $ 122 $ 2,039 (1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) RMB GBF interest is set at prime less 0.50 %. Interest expense incurred under the Company’s South African short-term borrowings and included in the caption interest expense on the condensed consolidated statement of operations during the three months ended September 30, 2025 and 2024, was $ 0.8 million and $ 0.6 million, respectively. 22 9. Borrowings (continued) Movement in long-term borrowings Summarized below is the movement in the Company’s long-term borrowing from as of June 30, 2025 to as of September 30, 2025: Facilities Lesaka A Lesaka B Asset backed CCC Total Included in current $ - $ 8,448 $ 3,508 $ - $ 11,956 Included in long-term 120,375 47,873 3,671 16,894 188,813 Opening balance as of June 30, 2025 120,375 56,321 7,179 16,894 200,769 Facilities utilized - - 1,791 972 2,763 Facilities repaid - - ( 1,148 ) - ( 1,148 ) Non-refundable fees paid - - - ( 33 ) ( 33 ) Non-refundable fees amortized 75 - 2 3 80 Foreign currency adjustment (1) 3,384 1,582 218 482 5,666 Closing balance as of September 30, 2025 123,834 57,903 8,042 18,318 208,097 Included in current - 8,685 3,896 - 12,581 Included in long-term 123,834 49,218 4,146 18,318 195,516 Unamortized fees ( 990 ) - - ( 31 ) ( 1,021 ) Due within 2 years - 11,581 2,521 - 14,102 Due within 3 years - 17,371 1,313 - 18,684 Due within 4 years 124,824 20,266 312 18,349 163,751 Due within 5 years $ - $ - $ - $ - $ - Interest rates as of September 30, 2025 (%): 10.25 10.15 11.25 11.45 Base rate (%) 7.00 7.00 10.50 10.50 Margin (%) 3.25 3.15 0.75 0.95 (2) (3) (4) (5) Interest rates as of June 30, 2025 (%): 10.54 10.44 11.50 11.70 Base rate (%) 7.29 7.29 10.75 10.75 Margin (%) 3.25 3.15 0.75 0.95 Footnote number (2) (3) (4) (5) (1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar. (2) Interest on Facility A and Facility B is based on the JIBAR in effect from time to time plus an initial margin of 3.25 % per annum until June 30, 2025. From July 1, 2025, the margin on Facility A is determined with reference to the Net Debt to EBITDA Ratio, and the margin will be either (i) 3.25 %, if the Net Debt to EBITDA Ratio is greater than or equal to 2.5 times; or (ii) 2.5 %, if the Net Debt to EBITDA Ratio is less than 2.5 times. (3) Interest on Facility B is calculated based on JIBAR from time to time plus an initial margin of 3.15 % per annum until June 30, 2025. From July 1, 2025, the margin on Facility B is determined with reference to the Net Debt to EBITDA Ratio, and the margin will be either (i) 3.15 %, if the Net Debt to EBITDA Ratio is greater than or equal to 2.5 times; or (ii) 2.4 %, if the Net Debt to EBITDA Ratio is less than 2.5 times. (4) Interest is charged at prime plus 0.75 % per annum on the utilized balance. (5) Interest is charged at prime plus 0.95 % per annum on the utilized balance. Interest expense incurred under the Company’s South African long-term borrowings and included in the caption interest expense on the condensed consolidated statement of operations during the three months ended September 30, 2025 and 2024, was $ 3.8 million and $ 4.2 million, respectively. Prepaid facility fees amortized included in interest expense during the three months ended September 30, 2025 and 2024, respectively, were $ 0.1 million and $ 0.1 million, respectively. Interest expense incurred under the Company’s South African long-term borrowings to fund its Consumer lending book (for the three months ended September 30, 2025) and interest incurred under the Company’s CCC and K2020 facilities relates to borrowings utilized to fund a portion of the Company’s merchant finance loans receivable were $ 1.6 million and $ 0.4 million, respectively, and is included in the caption cost of goods sold, IT processing, servicing and support on the condensed consolidated statement of operations f or the three months ended September 30, 2025 and 2024. 23 10. Other payables Summarized below is the breakdown of other payables as of September 30, 2025, and June 30, 2025: September 30, June 30, 2025 2025 Vendor wallet balances $ 20,136 $ 19,529 Accruals 9,062 8,469 Provisions 5,402 8,497 Clearing accounts 8,433 6,766 Value -added tax payable 3,042 2,391 Deferred consideration due to seller of Recharger 14,225 13,837 Payroll-related payables 3,931 1,931 Other 10,795 10,659 $ 75,026 $ 72,079 Other includes deferred income, client deposits and other payables. 11. Capital structure The following table presents a reconciliation between the number of shares, net of treasury, presented in the unaudited condensed consolidated statement of changes in equity as of September 30, 2025 and 2024, respectively: September 30, September 30, 2025 2024 Number of shares, net of treasury: Statement of changes in equity 81,463,899 64,301,943 Non-vested equity shares that have not vested as of end of period 2,357,269 2,035,845 Number of shares, net of treasury, excluding non-vested equity shares that have not vested 79,106,630 62,266,098 12. Accumulated other comprehensive loss The table below presents the change in accumulated other comprehensive loss per component during the three months ended September 30, 2025: Three months ended September 30, 2025 Accumulated foreign currency translation reserve Total Balance as of July 1, 2025 $ ( 185,664 ) $ ( 185,664 ) Release of foreign currency translation reserve related to liquidation of equity -accounted investment 550 550 Movement in foreign currency translation reserve 6,652 6,652 Balance as of September 30, 2025 $ ( 178,462 ) $ ( 178,462 ) 24 12. Accumulated other comprehensive loss (continued) The table below presents the change in accumulated other comprehensive loss per component during the three months ended September 30, 2024: Three months ended September 30, 2024 Accumulated foreign currency translation reserve Total Balance as of July 1, 2024 $ ( 188,355 ) $ ( 188,355 ) Movement in foreign currency translation reserve 10,525 10,525 Balance as of September 30, 2024 $ ( 177,830 ) $ ( 177,830 ) During the three months ended September 30, 2025, the Company reclassified losses of $ 0.6 million from accumulated other comprehensive loss (accumulated foreign currency translation reserve) to net loss related to the impairment on liquidation of an equity-accounted investment. There were no reclassifications from accumulated other comprehensive loss to net (loss) income during the three months ended September 30, 2024. 13. Stock-based compensation The Company’s Amended and Restated 2022 Stock Incentive Plan (“20 22 Plan”) and the vesting terms of certain stock-based awards granted are described in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025. Stock option and restricted stock activity Options The following table summarizes stock option activity for the three months ended September 30, 2025 and 2024: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($'000) Weighted average grant date fair value ($) Outstanding - June 30, 2025 5,866,904 8.71 3.55 703 1.20 Outstanding - September 30, 2025 5,866,904 8.71 3.29 485 1.20 Outstanding - June 30, 2024 4,918,248 8.70 4.51 889 1.77 Forfeited ( 13,333 ) 11.23 - - 8.83 Outstanding - September 30, 2024 4,904,915 8.67 4.33 1,117 1.76 No stock options were awarded during the three months ended September 30, 2025 and 2024. No stock options were exercised during the three months ended September 30, 2025 and 2024. Employees forfeited an aggregate of 13,333 stock options during the three months ended September 30, 2024. The following table presents stock options vested and expected to vest as of September 30, 2025: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Vested and expecting to vest - September 30, 2025 5,866,904 8.71 3.29 485 These options have an exercise price range of $ 3.01 to $ 14.00 . 25 13. Stock-based compensation (continued) Stock option and restricted stock activity (continued) Options (continued) The following table presents stock options that are exercisable as of September 30, 2025: Number of shares Weighted average exercise price ($) Weighted average remaining contractual term (in years) Aggregate intrinsic value ($’000) Exercisable - September 30, 2025 869,570 3.98 3.71 488 No stock options became exercisable during each of the three months ended three months ended September 30, 2025 and 2024. The Company issues new shares to satisfy stock option exercises. Restricted stock The following table summarizes restricted stock activity for the three months ended September 30, 2025 and 2024: Number of shares of restricted stock Weighted average grant date fair value ($’000) Non-vested – June 30, 2025 2,169,900 7,833 Total granted 209,095 964 Granted – July 2025 3,772 17 Granted – August 2025 5,323 25 Granted – September 2025 200,000 922 Total vested ( 10,933 ) 50 Vested – August 2025 ( 10,933 ) 50 Forfeitures ( 10,793 ) 50 Non-vested – September 30, 2025 2,357,269 8,651 Non-vested – June 30, 2024 2,084,946 8,736 Total Granted 32,800 154 Granted – August 2024 32,800 154 Total vested ( 78,801 ) 394 Vested – July 2024 ( 78,801 ) 394 Forfeitures ( 3,100 ) 15 Non-vested – September 30, 2024 2,035,845 8,449 Grants In July, August and September 2025, respectively, the Company granted 3,772 , 5,323 and 200,000 shares of restricted stock to employees which have time-based vesting conditions and which are subject to the employees’ continued employment with the Company through the applicable vesting dates. In August 2024, the Company granted 32,800 shares of restricted stock to employees which have time-based vesting conditions. The Company has agreed to grant an advisor 5,500 shares per month in lieu of cash for services provided to the Company. The Company and the advisor have agreed that the Company will issue the shares to the advisor, in arrears, on a quarterly basis. During the three months ended September 30, 2025, the Company recorded a stock-based compensation charge of $ 0.1 million and included the issuance of 16,500 shares of common stock in its issued and outstanding share count. 26 13. Stock-based compensation (continued) Restricted stock (continued) Vesting In August and September 2025, an aggregate of 10,933 shares of restricted stock granted to employees vested. In July 2024, 78,801 shares of restricted stock granted to our former Group CEO vested. Forfeitures During the three months ended September 30, 2025 and 2024, respectively, employees forfeited 10,793 and 3,100 shares of restricted stock following termination of their employment with the Company. Stock-based compensation charge and unrecognized compensation cost The Company recorded a stock-based compensation charge, net, excluding charges related to the post-combination compensation charges discussed in Note 2, during the three months ended September 30, 2025 and 2024, of $ 1.9 million and $ 2.4 million, respectively, which comprised: Total charge Allocated to cost of goods sold, IT processing, servicing and support Allocated to selling, general and administration Three months ended September 30, 2025 Stock-based compensation charge $ 1,712 $ - $ 1,712 Reversal of stock compensation charge related to ESOP 161 - 161 Reversal of stock compensation charge related to restricted stock forfeited ( 12 ) - ( 12 ) Total - three months ended September 30, 2025 $ 1,861 $ - $ 1,861 Three months ended September 30, 2024 Stock-based compensation charge $ 2,377 $ - $ 2,377 Total - three months ended September 30, 2024 $ 2,377 $ - $ 2,377 The stock-based compensation charges have been allocated to selling, general and administration based on the allocation of the cash compensation paid to the relevant employees. As of September 30, 2025, the total unrecognized compensation cost related to stock options was $ 4.3 million, which the Company expects to recognize over three years . As of September 30, 2025, the total unrecognized compensation cost related to restricted stock awards was $ 5.6 million, which the Company expects to recognize over two years . During the three months ended September 30, 2025 and 2024, the Company recorded a deferred tax benefit of $ 0.2 million and $ 0.3 million, respectively, related to the stock-based compensation charge recognized related to employees of Lesaka. During these periods the Company recorded a valuation allowance related to the full deferred tax benefit recognized because it does not believe that the stock-based compensation deduction would be utilized as it does not anticipate generating sufficient taxable income in the United States. The Company deducts the difference between the market value on the date of exercise by the option recipient and the exercise price from income subject to taxation in the United States. 14. (Loss) Earnings per share The Company has issued redeemable common stock which is redeemable at an amount other than fair value. Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable common stock and is reflected in basic earnings per share using the two-class method. There were no redemptions of common stock, or adjustments to the carrying value of the redeemable common stock during the three months ended September 30, 2025 and 2024. Accordingly, the two- class method presented below does not include the impact of any redemption. The Company’s redeemable common stock is described in Note 14 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025. 27 14. (Loss) Earnings per share (continued) Basic (loss) earnings per share includes shares of restricted stock that meet the definition of a participating security because these shares are eligible to receive non -forfeitable dividend equivalents at the same rate as common stock. Basic (loss) earnings per share has been calculated using the two-class method and basic (loss) earnings per share for the three months ended September 30, 2025 and 2024, reflects only undistributed earnings. The computation below of basic (loss) earnings per share excludes the net loss attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator. Diluted (loss) earnings per share has been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in the calculation of diluted (loss) earnings per share utilizing the treasury stock method and are not considered to be participating securities, as the stock options do not contain non-forfeitable dividend rights. The Company has excluded employee stock options to purchase 158,479 and 65,173 shares of common stock from the calculation of diluted loss per share during the three months ended September 30, 2025 and 2024 because the effect would be antidilutive. The calculation of diluted (loss) earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted (loss) earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions for all awards made are discussed in Note 17 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025. The following table presents net loss attributable to Lesaka and the share data used in the basic and diluted loss per share computations using the two-class method: Three months ended September 30, 2025 2024 (in thousands except percent and per share data) Numerator: Net loss attributable to Lesaka $ ( 4,297 ) $ ( 4,542 ) Undistributed (loss) earnings $ ( 4,297 ) $ ( 4,542 ) Percent allocated to common shareholders (Calculation 1) 97 97 Numerator for (loss) earnings per share: basic and diluted ( 4,179 ) ( 4,399 ) Continuing ( 4,179 ) ( 4,399 ) Denominator Denominator for basic (loss) earnings per share: Weighted-average common shares outstanding 79,094 62,265 Denominator for diluted (loss) earnings per share: adjusted weighted average common shares outstanding and assuming conversion 79,094 62,265 (Loss) Earnings per share: Basic $ ( 0.05 ) $ ( 0.07 ) Diluted $ ( 0.05 ) $ ( 0.07 ) (Calculation 1) Basic weighted-average common shares outstanding (A) 79,094 62,265 Basic weighted-average common shares outstanding and unvested restricted shares expected to vest (B) 81,327 64,293 Percent allocated to common shareholders (A) / (B) 97 97 Options to purchase 6,493,683 shares of the Company’s common stock at prices ranging from $ 4.87 to $ 14.00 per share were outstanding during the three months ended September 30, 2025, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock. Options to purchase 4,224,210 shares of the Company’s common stock at prices ranging from $ 4.87 to $ 14.00 per share were outstanding during the three months ended September 30, 2024, but were not included in the computation of diluted (loss) earnings per share because the options’ exercise price was greater than the average market price of the Company’s common stock. The options, which expire at v arious dates through February 3, 2032, were still outstanding as of September 30, 2025. 28 15. Supplemental cash flow information The following table presents supplemental cash flow disclosures for the three months ended September 30, 2025 and 2024: Three months ended September 30, 2025 2024 Cash received from interest $ 534 $ 581 Cash paid for interest $ 6,001 $ 3,271 Cash paid (refund) for income taxes $ 710 $ ( 45 ) Disaggregation of cash, cash equivalents and restricted cash Cash, cash equivalents and restricted cash included on the Company’s unaudited condensed consolidated statement of cash flows includes restricted cash related to cash withdrawn from the Company’s debt facilities to fund ATMs. This facility was cancelled in November 2024. The Company was only permitted to use this cash to fund ATMs and this cash was considered restricted as to use and therefore was classified as restricted cash. Cash, cash equivalents and restricted cash also includes cash in certain bank accounts that has been ceded to Nedbank. As this cash has been pledged and ceded it may not be drawn and is considered restricted as to use and therefore is classified as restricted cash as well. The following table presents the disaggregation of cash, cash equivalents and restricted cash as of September 30, 2025 and 2024, and June 30, 2025: September 30, 2025 September 30, 2024 June 30, 2025 Cash and cash equivalents $ 72,162 $ 49,687 $ 76,520 Restricted cash 122 122 119 Cash, cash equivalents and restricted cash $ 72,284 $ 49,809 $ 76,639 Leases The following table presents supplemental cash flow disclosure related to leases for the three months ended September 30, 2025 and 2024: Three months ended September 30, 2025 2024 Cash paid for amounts included in the measurement of lease liabilities Operating cash flows from operating leases $ 1,362 $ 1,004 Right-of-use assets obtained in exchange for lease obligations Operating leases $ 1,036 $ 510 29 16. Revenue recognition Disaggregation of revenue The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended September 30, 2025: Merchant Consumer Enterprise Total Processing fees $ 34,463 $ 9,416 $ 11,631 $ 55,510 South Africa 32,614 9,416 11,631 53,661 Rest of Africa 1,849 - - 1,849 Technology products 6,521 84 970 7,575 South Africa 6,460 84 970 7,514 Rest of Africa 61 - - 61 Prepaid airtime sold 82,053 37 1,679 83,769 South Africa 74,337 37 1,679 76,053 Rest of Africa 7,716 - - 7,716 Lending revenue - 6,854 - 6,854 Interest from customers 2,287 4,914 - 7,201 Insurance revenue - 6,872 - 6,872 Account holder fees - 2,148 - 2,148 Other 989 251 279 1,519 South Africa 844 251 279 1,374 Rest of Africa 145 - - 145 Total revenue, derived from the following geographic locations 126,313 30,576 14,559 171,448 South Africa 116,542 30,576 14,559 161,677 Rest of Africa $ 9,771 $ - $ - $ 9,771 30 16. Revenue recognition (continued) Disaggregation of revenue (continued) The following table presents the Company’s revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended September 30, 2024 (previously reported information for the three months ended September 30, 2024, has been recast for the change to the Company’s internal reporting structure in the second quarter of fiscal 2025 as described in Note 21 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025): Merchant Consumer Enterprise Total Processing fees $ 24,370 $ 7,530 $ 6,513 $ 38,413 South Africa 22,568 7,530 6,513 36,611 Rest of Africa 1,802 - - 1,802 Technology products 1,845 2 1,291 3,138 South Africa 1,772 2 1,291 3,065 Rest of Africa 73 - - 73 Prepaid airtime sold 93,875 17 1,578 95,470 South Africa 87,995 17 1,578 89,590 Rest of Africa 5,880 - - 5,880 Lending revenue - 6,956 - 6,956 Interest from customers 1,676 - - 1,676 Insurance revenue - 4,340 - 4,340 Account holder fees - 1,699 - 1,699 Other 1,297 528 51 1,876 South Africa 1,240 528 51 1,819 Rest of Africa 57 - - 57 Total revenue, derived from the following geographic locations 123,063 21,072 9,433 153,568 South Africa 115,251 21,072 9,433 145,756 Rest of Africa $ 7,812 $ - $ - $ 7,812 31 17. Leases The Company has entered into leasing arrangements classified as operating leases under accounting guidance. These leasing arrangements relate to the lease of its corporate head office and sales and administration offices of its Merchant, Consumer and Enterprise businesses. The Company’s operating leases have remaining lease terms of between one and five years . The Company also operates parts of its consumer business from locations which it leases for a period of less than one year . The Company’s operating lease expense during the three months ended September 30, 2025 and 2024 was $ 1.4 million and $ 1.0 million, respectively. The Company has also entered into short-term leasing arrangements, primarily for the lease of branch locations and other locations, to operate its consumer business in South Africa. The Company’s short-term lease expense during the three months ended September 30, 2025 and 2024, was $ 0.4 million and $ 1.0 million, respectively. The following table presents supplemental balance sheet disclosure related to the Company’s right-of-use assets and its operating lease liabilities as of September 30, 2025 and June 30, 2025: September 30, June 30, 2025 2025 Right of use assets obtained in exchange for lease obligations: Weighted average remaining lease term (years) 2.9 2.8 Weighted average discount rate (percent) 9.8 9.8 The maturities of the Company’s operating lease liabilities as of September 30, 2025, are presented below: Maturities of operating lease liabilities Year ended June 30, 2026 (excluding three months to September 30, 2025) $ 4,421 2027 3,813 2028 2,387 2029 1,164 2030 462 Thereafter - Total undiscounted operating lease liabilities 12,247 Less imputed interest 1,948 Total operating lease liabilities, included in 10,299 Operating lease liability - current 4,258 Operating lease liability - long-term $ 6,041 18. Operating segments Operating segments The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in which the entity holds material assets or reports material revenues. A description of the Company’s operating segments is contained in Note 21 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025. Previously reported information for the three months ended September 30, 2024, has been recast for the change to the Company’s internal reporting structure in the second quarter of fiscal 2025 as described in Note 21 to the Company’s audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2025. The Company’s chief operating decision maker is the Company’s Executive Chairman. During the second quarter of fiscal 2025, he changed the Company’s operating and internal reporting structures to present a new segment, Enterprise, separately. The Company currently has three reportable segments: Merchant, Consumer and Enterprise. The Company’s chief operating decision maker (“CODM”) is the Company’s Executive Chairman. The CODM analyzes the Company’s operating performance primarily based on these three operational lines, namely, (i) Merchant, which focuses on both formal and informal sector merchants. Formal sector merchants are generally in urban areas, have higher revenues and have access to multiple service providers. Informal sector merchants, which are often sole proprietors and usually have lower revenues compared with formal section merchants, operate in rural areas or in informal urban areas and do not always have access to a full-suite of traditional banking products; (ii) Consumer, which primarily focuses on individuals who have historically been excluded from traditional financial services and to whom we offer transactional accounts (banking), insurance, lending (short-term loans), payments solutions (digital wallet) and various value-added services; and (iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobile network operators (“MNOs”) and municipalities, and, through Recharger, landlords utilizing Recharger’s prepaid electricity metering s olution. 32 18. Operating segments (continued) Types of products and services from which each segment derives its revenues The Merchant segment includes revenue generated from the sale of Alternative Digital Products (“ADP”) (select prepaid solutions, supplier-enabled payments, international money transfer and other) and card-acquiring services to informal sector merchants. It also includes activities related to the provision of goods and services provided to corporate and other juristic entities. The Company earns fees from processing activities performed (including card acquiring and the provision of a payment gateway services) for its customers, and rental and license fees from the provision of point of sales (“POS”) hardware and software to the hospitality industry. The Company also provides cash management and payment services to merchant customers through a digital vault which is located at the customer’s premises and through which the Company is able to provide the services which generate processing fee revenue. The Merchant segment includes interest earned from the provision of loans to its customers, refer to Note 16. The Consumer segment includes activities related to the provision of financial services to customers, including a bank account, loans and insurance products. The Company charges monthly administration fees for all bank accounts. Customers 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 POS. The Company earns processing fees from transactions processed for these customers. The Company also earns fees on transactions performed by other banks’ customers utilizing its ATM (until June 30, 2023) or POS. The Company provides short -term loans to customers in South Africa for which it earns initiation and monthly service fees, and interest revenue from the second quarter of fiscal 2025, refer to Note 16. The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthly insurance premium. The Company also earns fees from the provision of physical and digital prepaid and secure payout solutions for South African businesses. The Enterprise segment provides its business and government-related customers with transaction processing services that involve the collection, transmittal and retrieval of transaction data. Through Recharger, Enterprise offers landlords access to Recharger’s prepaid electricity metering solution through which Enterprise earns commission revenue from prepaid electricity voucher sales to tenants recharging prepaid meters. This segment also includes sales of hardware and licenses to customers. Hardware includes the sale of POS devices, SIM cards and other consumables which can occur on an ad hoc basis. Licenses include the right to use certain technology developed by the Company. Segment measure of profit or loss The Company evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization (“EBITDA”), adjusted for items mentioned in the sentences below (“Segment Adjusted EBITDA”), the Company’s reportable segments’ measure of profit or loss. The Company obtained a general lending facility in February 2025, which has been partially used to fund a portion of its Consumer lending during the three months ended September 30, 2025, and interest related to these borrowings have been allocated to Consumer. The Company also included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for the three months ended September 30, 2024. The Company does not allocate once-off items, 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), interest income, certain interest expense, income tax expense or loss from equity-accounted investments to its reportable segments. Group costs generally include: employee related costs in relation to employees specifically hired for group roles and related directly to managing the US-listed entity; expenditures related to compliance with the Sarbanes-Oxley Act of 2002; non- employee directors’ fees; legal fees; group and US-listed related audit fees; and directors and officer’s insurance premiums. Once-off items represent non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. Unrealized (loss) gain for currency adjustments represents foreign currency mark-to-market adjustments on certain intercompany accounts. Interest adjustment represents the intercompany interest expense included in the Consumer Segment Adjusted EBITDA during fiscal 2025. The Stock-based compensation adjustments reflect stock-based compensation expense and are excluded from the calculation of Segment Adjusted EBITDA and are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to the Company’s loss before income tax expense. Our CODM does not review the components of segment selling, general and administration expenses and is presented with reports which include revenue, net revenue (a non-GAAP measure) and Segment Adjusted EBITDA. 33 18. Operating segments (continued) The table below presents the reconciliation of revenue from external customers to the reportable segment’s revenue, significant expenditures, the Company’s reportable segment’s measure of profit or loss, and certain other segment information for the three months ended September 30, 2025 and 2024, respectively, is as follows: Three months ended September 30, 2025 Merchant Consumer Enterprise No allocated Total Revenue from external customers $ 126,313 $ 30,576 $ 14,559 $ - $ 171,448 Intersegment revenues 637 - 294 - 931 Segment revenue 126,950 30,576 14,853 - 172,379 Less segment-related expenses: Cost of goods sold, IT processing, servicing and support 98,413 10,437 10,521 - 119,371 Selling, general and administration (1)(2) 19,347 11,646 3,063 - 34,056 Segment adjusted EBITDA $ 9,190 $ 8,493 $ 1,269 $ - $ 18,952 Merchant Consumer Enterprise Group costs Total Depreciation and amortization $ 3,365 $ 309 $ 86 $ 9,134 $ 12,894 Expenditures for long-lived assets $ 4,325 $ 281 $ 513 $ - $ 5,119 Three months ended September 30, 2024 Merchant Consumer Enterprise No allocated Total Revenue from external customers $ 123,063 $ 21,072 $ 9,433 $ - $ 153,568 Intersegment revenues 588 - 2,450 - 3,038 Segment revenue 123,651 21,072 11,883 - 156,606 Less segment-related expenses: Cost of goods sold, IT processing, servicing and support 104,703 8,373 9,702 - 122,778 Selling, general and administration (1)(3) 11,394 8,303 1,819 - 21,516 Segment adjusted EBITDA $ 7,554 $ 4,396 $ 362 $ - $ 12,312 Merchant Consumer Enterprise Group costs Total Depreciation and amortization $ 2,227 $ 202 $ 100 $ 3,747 $ 6,276 Expenditures for long-lived assets $ 3,886 $ 131 $ 121 $ - $ 4,138 34 18. Operating segments (continued) (1) Selling, general and administration includes human capital-related expenses (including base salary and bonus), IT-related expenses (including software licenses, hardware maintenance, hosting, and communication expenses), professional fees (including audit, legal, consulting and other fees), lease and utilities expenses, the allowance for credit losses and other operating and support expenses. (2) Segment Adjusted EBITDA for the three months ended September 30, 2025, includes retrenchment costs for Merchant of $ 0.2 million (ZAR 3.8 million) and Consumer of $ 0.1 million (ZAR 2.6 million). (3) Segment Adjusted EBITDA for the three months ended September 30, 2024, includes retrenchments costs for Consumer of $ 0.06 million (ZAR 1.1 million) and for Merchant, costs of $ 0.01 million (ZAR 0.2 million). The reconciliation of the reportable segments’ measures of profit or loss to loss before income tax expense for the three months ended September 30, 2025 and 2024, is as follows: Three months ended September 30, 2025 2024 Reportable segments measure of profit or loss $ 18,952 $ 12,312 Operating loss: Group costs ( 3,611 ) ( 2,949 ) Once-off costs ( 267 ) ( 1,805 ) Interest adjustment - 831 Unrealized Gain FV for currency adjustments 64 219 Stock-based compensation charge adjustments ( 1,861 ) ( 2,377 ) Depreciation and amortization ( 12,894 ) ( 6,276 ) Loss on impairment of equity-accounted investment ( 584 ) - Interest income 539 586 Interest expense ( 4,898 ) ( 5,032 ) Loss before income tax expense $ ( 4,560 ) $ ( 4,491 ) The segment information as reviewed by the chief operating decision maker does not include a measure of segment assets per segment as all of the significant assets are used in the operations of all, rather than any one, of the segments. The Company does not have dedicated assets assigned to a particular operating segment. Accordingly, it is not meaningful to attempt an arbitrary allocation and segment asset allocation is therefore not presented. 19. Income tax Income tax in interim periods For the purposes of interim financial reporting, the Company determines the appropriate income tax provision by first applying the effective tax rate expected to be applicable for the full fiscal year to ordinary income. This amount is then adjusted for the tax effect of significant unusual items, for instance, changes in tax law, valuation allowances and non-deductible transaction-related expenses that are reported separately, and have an impact on the tax charge. The cumulative effect of any change in the enacted tax rate, if and when applicable, on the opening balance of deferred tax assets and liabilities is also included in the tax charge as a discrete event in the interim period in which the enactment date occurs. For the three months ended September 30, 2025, the Company’s effective tax rate was impacted by the tax expense recorded by the Company’s profitable South African operations and non-deductible expenses (including transaction-related expenditures). The Company’s income tax benefit was impacted by a higher deferred tax benefit as a result of the reduction in the useful lives of certain of the Company’s brand and trademark intangible assets which has resulted in an increase in amortization expense during the three months ended September 30, 2025. For the three months ended September 30, 2024, the Company’s effective tax rate was impacted by the tax expense recorded by the Company’s profitable South African operations, non-deductible expenses (including transaction-related expenditures), the on- going losses incurred by certain of the Company’s South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities. Uncertain tax positions As of three months ended September 30, 2025 and June 30, 2025, the Company had no unrecognized tax benefits. The Company files income tax returns mainly in South Africa, Botswana, Namibia and in the U.S. federal jurisdiction. As of September 30, 2025, the Company’s South African subsidiaries are no longer subject to income tax examination by the South African Revenue Service for periods before June 30, 2020. The Company is subject to income tax in other jurisdictions outside South Africa, none of which are i ndividually material to its financial position, statement of cash flows, or results of operations. 35 20. Commitments and contingencies Guarantees The South African Revenue Service and certain of the Company’s customers, suppliers and other business partners have asked the Company to provide them with guarantees, including standby letters of credit, issued by South African banks. The Company is required to procure these guarantees for these third parties to operate its business. RMB has issued guarantees to these third parties amounting to ZAR 33.1 million ($ 1.9 million, translated at exchange rates applicable as of September 30, 2025) thereby utilizing part of the Company’s short-term facilities. Nedbank has issued guarantees to these third parties amounting to ZAR 2.1 million ($ 0.1 million, translated at exchange rates applicable as of September 30, 2025) thereby utilizing part of the Company’s short-term facilities. The Company pays commission of between 0.47 % per annum to 1.84 % per annum of the face value of these guarantees and does not recover any of the commission from third parties. The Company has not recognized any obligation related to these guarantees in its consolidated balance sheet as of September 30, 2025. The maximum potential amount that the Company could pay under these guarantees is ZAR 35.1 million ($ 2.0 million, translated at exchange rates applicable as of September 30, 2025). The Company has ceded and pledged certain bank accounts to Nedbank as security for the guarantees issued by them with an aggregate value of ZAR 2.1 million ($ 0.1 million, translated at exchange rates applicable as of September 30, 2025). Contingencies The Company is subject to a variety of insignificant claims and suits that arise from time to time in the ordinary course of business. Management currently believes that the resolution of these other matters, individually or in the aggregate, will not have a material adverse impact on the Company’s financial position, results of operations or cash flows. 21. Subsequent events Agreement to sell shares in Cell C As discussed in Note 5, the Company holds, through Lesaka SA, shares in Cell C. It is intended that a restructure of Cell C will be undertaken, which will include the establishment of a new holding company for Cell C, Cell C Holdings Limited (“Cell C Listco”), and the transfer of shares in Cell C by its existing shareholders to Cell C Listco in exchange for Cell C Listco issuing shares to the existing Cell C shareholders (the “Flip-up”). It is further intended that the shares of Cell C Listco will be listed on the securities exchange operated by the JSE Limited (the “Listing”). On October 31, 2025, in considering the proposed restructure and Listing, Lesaka SA entered into an agreement with The Prepaid Company Proprietary Limited (“TPC”) to dispose of its shares in Cell C (or, after the Flip-up is implemented, its shares in Cell C Listco) (“Relevant Shares”), if certain conditions are met. Under the terms of the agreement, if: (1) the Listing occurs by November 30, 2025, and the value of Lesaka SA’s shares in Cell C is less than ZAR 50 million , then Lesaka SA can choose to either hold the shares, or sell the Relevant Shares to TPC for a purchase price equal to ZAR 50 million; or (2) the Listing does not occur by November 30, 2025 (or, earlier than this date, it is determined that the Listing will not proceed), then Lesaka SA will sell the Relevant Shares to TPC for ZAR 35 million. If, after this sale and before April 30, 2026, the Listing occurs and the list price per share (“A”) is more than the price paid per Lesaka share (the aggregate ZAR 35 million) (“B”), then TPC shall pay an amount equal to the difference between A and B, multiplied by the number of Relevant Shares to Lesaka SA as a top-up to the purchase consideration. Issue of guarantee to RMB in October 2025 In October 2025, the Company provided a ZAR 19.0 million ($ 1.1 million) guarantee to RMB in connection with a guarantee facility extended by RMB to Sandulela under the terms of February 2025 Common Terms Agreement. 36