レサカテクノロジーズの年次報告

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-K

(Mark One)

☒

ACT OF 1934

For the fiscal year ended

June 30, 2023

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND

EXCHANGE ACT OF 1934

For the transition period from

Commission file number:

000-31203

LESAKA TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Florida

98-0171860

(State or other jurisdiction

(IRS Employer

of incorporation or organization)

Identification No.)

President Place

4th Floor

Cnr. Jan Smuts Avenue and Bolton Road

Rosebank, Johannesburg

2196

South Africa

(Address of principal executive offices, including zip code)

Registrant’s telephone number,

including area code:

343-2000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange

on which registered

Common stock, par value $0.001 per share

LSAK

NASDAQ

Global Select Market

Securities registered pursuant to Section 12(g) of the Act:

Indicate by check

mark if the

registrant is a

well-known seasoned issuer, as

defined in Rule

405 of the

Securities

Act.

Yes

☐

☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)

of the Act.

Yes

☐

☒

Indicate by check mark whether

the registrant (1) has filed

all reports required to be

filed by Section 13 or

15(d)

the

Securities

Exchange

Act

1934

during

the

preceding

months

(or

for

such

shorter

period

that

the

registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required

days.

Yes

☒

☐

submitted

pursuant

Rule

405

Regulation

S-T

(§232.405

this

chapter)

during

the

preceding

months (or for such shorter period that the registrant was required to submit such files).

Yes

☒

☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated

filer, smaller

reporting company

or an

emerging growth

company. See the

definitions of

“large accelerated

filer,”

“accelerated

filer,”

“smaller

reporting

company,”

and

“emerging

growth

company”

Rule 12b-2

the

Exchange Act (check one):

☐

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

If an

emerging

growth company,

indicate by

check mark

if the

registrant has

elected not

to use

the extended

transition period

for complying

with any

new or

revised financial

accounting standards

provided pursuant

Section 13(a) of the Exchange Act.

☐

Indicate

check

mark

whether

the

registrant

has

filed

report

and

attestation

its

management’s

assessment

the

effectiveness

its

internal

control

over

financial

reporting

under

Section

404(b)

the

Sarbanes-Oxley Act

(15

U.S.C.

7262(b)) by

the registered

public

accounting firm

that prepared

issued its

audit report.

☒

If securities

are registered

pursuant to

Section 12(b)

of the

Act, indicate

by check

mark whether

the financial

statements of the registrant included in the filing reflect the correction of an error to previously issued financial

statements.

☐

Indicate by check mark

whether any of those

error corrections are restatements

that required a

recovery analysis

incentive-based

compensation

received

any

the

registrant’s

executive

officers

during

the

relevant

recovery period pursuant to §240.10D-1(b).

☐

Indicate by

check mark

whether the

registrant is

a shell

company (as

defined in

Rule 12b-2

of the

Exchange

Act). Yes

☐

☒

The

aggregate

market

value

the

registrant’s

common

stock

held

non-affiliates

the

registrant

December 31,

2022

(the

last

business day

the registrant’s

most

recently completed

second fiscal

quarter),

based upon the closing price of the common stock as reported by The NASDAQ Global Select Market on such

date, was $

187,560,764

. This calculation

does not reflect

a determination that

persons are affiliates

for any other

purposes.

As of September 12, 2023,

61,516,860

shares of the registrant’s common stock, par value $0.001 per share, net

of treasury shares, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain

portions

the

definitive

Proxy

Statement

for

our

2023

Annual

Meeting

Shareholders

are

incorporated by reference into Part III of this Form 10-K.

LESAKA TECHNOLOGIES, INC

INDEX TO ANNUAL REPORT ON FORM 10-K

Year

Ended June 30, 2023

Page

PART

Unresolved Staff Comments

Mine Safety Disclosures

PART

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer

Purchases of Equity Securities

Item 6.

[

Reserved]

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Item 8.

Financial Statements and Supplementary Data

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial

Disclosures

Item 9A.

Controls and Procedures

Item 9B.

Other Information

Item 9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART

III

Item 10.

Directors, Executive Officers and Corporate Governance

Item 11.

Executive Compensation

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related

Stockholder Matters

Item 13.

Certain Relationships and Related Transactions, and Director Independence

Item 14.

Principal Accountant Fees and Services

PART

Item 15.

Exhibits and Financial Statement Schedules

PART

FORWARD

LOOKING STATEMENTS

In addition

to historical

information, this

Annual Report

on Form

10-K contains

forward-looking statements

that involve

risks

and uncertainties

that could

cause our

actual results

to differ

materially from

those projected,

anticipated or

implied in

the

forward-

looking statements. Factors

that might cause or

contribute to such differences

include, but are not

limited to, those discussed

in Item

1A—“Risk Factors.”

In some

cases, you

can identify

forward-looking

statements by

terminology such

as “may,”

“will,” “should,”

“could,”

“would,” “expects,”

“plans,”

“intends,” “anticipates,”

“believes,”

“estimates,” “predicts,”

“potential” or

“continue”

or the

negative of such terms and other comparable terminology.

You

should not place undue reliance on these forward-looking statements,

which reflect our

opinions only as of

the date of this Annual

Report. We

undertake no obligation to

release publicly any revisions

the forward-looking

statements after

the date

of this

Annual Report.

You

should carefully

review the

risk factors

described in

other

documents we file from

time to time with the Securities

and Exchange Commission (the

“SEC”), including the Quarterly Reports

Form 10-Q to be filed by us during our 2024

fiscal year, which runs from July 1, 2023 to June 30, 2024.

All

references

“the

Company,”

“we,”

“us,”

“our”

are

references

Lesaka

Technologies,

Inc.

and

its

consolidated

subsidiaries, collectively, and all references to “Lesaka” are to Lesaka Technologies, Inc. only, except as otherwise indicated or where

the context indicates otherwise.

ITEM 1.

BUSINESS

Overview

At Lesaka, our

core purpose is

to improve people’s lives by

bringing financial inclusion to

South Africa’s underserved consumers

and merchants.

achieve

this through

our ability

to efficiently

digitize the

last mile

of financial

inclusion,

providing

a full-service

fintech

platform serving both cash and digital, and facilitating the secular shift from

cash to digital that is currently taking place.

Lesaka uses its proprietary banking and payment technologies

to distribute low-cost financial and value-added

services to small

businesses, primarily

in the

informal sector,

and to

consumers, the

majority of

whom are

grant beneficiaries,

both largely

excluded

from financial services.

Our vision

is to

build and

operate the

leading full-service

fintech platform

in Southern

Africa, offering

cash management

and

digitization, card acquiring and payment processing, Value

Added Services (“VAS”),

and growth capital to micro, small and medium

enterprises

(“MSME”)

merchants

and

financial

services

underserved

consumers.

Our

dual-sided

financial

ecosystem

has

two

overlapping divisions: Merchants and Consumers.

Customers

—

our

B2C

Consumer

Division

focus

specifically

South

Africa’s

social

grant

beneficiaries,

who

have

historically been

excluded from

traditional financial

services. Our

products are

designed for

consumers at

the lower

socioeconomic

end of the

market within Living

Standards Measures (“LSMs”) 1

to 6, which

comprises approximately 26 million

people. We currently

have approximately 1.3 million active consumers.

In our B2B Merchant Division we

focus on MSME operating in

the informal and formal sectors of

the South African economy.

The informal

sector merchants are

generally smaller

and operate

in rural

areas or in

informal urban

areas and do

not have

access to

traditional banking

products. The

formal merchants

are generally

in urban

areas, have

larger turnovers

and have

access to

multiple

service providers. We operate separate brands in these two sectors of the economy. The informal market consists of approximately 1.4

million

merchants

and

the

formal

market

approximately

700,000

merchants.

Our

Merchant

Division

currently

has

over

82,000

customers using our solutions.

Products

—We offer

a comprehensive set of products and services to our consumer and merchant

customers.

In our Consumer Division, our products include transactional banking, short-term loans, a digital wallet as well as insurance and

various VAS to underserved consumers in South

Africa, aligning with

our purpose of

improving people’s lives and increasing

financial

inclusion. Our value proposition and products are designed to be simple,

relevant and cost effective for our target market.

In our

Merchant Division,

to informal

and formal

MSME customers,

we offer

cash management

and digitization

through our

proprietary vault technology, card acquiring, innovative growth capital, bill and supplier payment solutions, and a wide range of VAS

products for

our merchants

to sell.

the larger

enterprise level

merchants, we

offer bill

and supplier

payments and

VAS

products

through our proprietary financial switch, as well as Ingenico point of sale device and maintenance, bank and SIM card production and challenges is the deep distrust and a lack of understanding of cash alternatives, which is driven by low levels of financial literacy.

other specialized technology products.

Market Opportunity

There

are

real

challenges

delivering

financial

inclusion

and

digitization

the

South

African

market.

One

these

major

Adding to this

challenge are the

relatively high connectivity

costs and the

low smartphone penetration

in South Africa,

where many

South

Africans

still use

older style

feature phones.

Together,

this means

that although

almost 90%

of South

Africans have

a bank

account, a significant majority treat them as post boxes and withdraw all their money in one

transaction. This has real implications for

both merchants and consumers.

For merchants

this means less

than 8% have

access to formal

credit and

less than 4%

of informal

merchants are able

to accept

digital payments. For consumers, only

an estimated 20% of the approximately

26 million South African consumers in

LSM 1-6 have

access to

credit and

savings,

and a

significant majority

of the

12 million

permanent social

grant recipients

require immediate

cash

withdrawals of their grant.

These sources

of friction

and challenges present

a significant market

opportunity for

Lesaka to provide

innovative solutions

both merchants

and consumers,

and more

importantly,

to facilitate

wider financial

inclusion and

digitization. Lesaka

has for

a long

time been at the forefront of providing financial inclusion and digitization

for consumers and merchants in this space.

Consumer financial

services for

the unbanked:

Our focus

is on

the LSM

1 to

6 population

in South

Africa, which

represents

approximately

million

adults

the

country.

Within

that,

estimate

there

approximately

million

people

reliant

permanent grants.

South Africa is

primarily a

cash-based economy,

with approximately

60% of transactions

still conducted

in cash.

In the Consumer Division, we currently have 1.3 million active account holders which represents approximately 4% share of our total

addressable market.

Our focus is

on South

African government

social grant

recipients the

majority of

whom are

being inadequately

served by the current system. Lesaka is well

placed to address the needs of these consumers with

its large informal market distribution

and affordable financial services.

Merchant payment

solutions and financial

services for MSMEs:

There are

approximately 2.1

million MSMEs in

South Africa,

of which

around 1.4

million operate

in the

informal market,

and it

is estimated

that only

4% of

these can

accept digital

payments.

Lesaka

has

comprehensive

product

suite

cash

and

digital

solutions

which

provide

significant

opportunity

assist

these

businesses to grow,

reduce cash related operating

risks and become more

efficient. This is an

underserved market and increasing

our

penetration is

more about

providing solutions

that encourage

the adoption

of more

formalized and

non-cash transacting

than about

taking market share from competitors.

While the informal market presents a major growth opportunity,

Lesaka also has a comprehensive offering to the formal MSME

and enterprise market.

Competition

With

our comprehensive

offering

to consumers

and merchants

we compete

with a

wide range

of service

providers. There

are

competitors for

individual products and

services, although

few with an

end-to-end offering,

particularly at

the lower

socioeconomic

end of the consumer market and the informal merchant market, where we

have a significant footprint and penetration.

In our

Consumer Division,

there are

a number

of traditional

and digital

providers of

low-cost transactional

bank accounts

and

micro financial services. These include South African banks such as

FNB, Standard Bank, Absa, Nedbank, African Bank and Capitec,

the South African

Post Bank, and digital

banks such as, Tyme

Bank and Bank

Zero. In the South

African ATM

network market, we

compete against the South African banks, ATM

Solutions and Spark ATM

Systems, which collectively have a market share in excess

of 90%.

In the informal merchant sector, there

are no competitors which offer a comprehensive product

set of cash, card, payment, VAS

and capital

solutions, such

as ours.

In the

formal merchant

sector there

is significantly

more competition,

with banks

and non-bank

fintech companies targeting these merchants.

In card acquiring, competitors include

Yoco,

iKhokha, Sureswipe and the South African

banks; in VAS

and bill payments, they

include Flash, Blue Label, Shop2Shop, Pay@ and Ukeshe; in lending, they

include Lulalend, Merchant Capital, Retail Capital and the

South African banks; and in cash management, they include Fidelity,

G4S, Cashnet and the South African banks.

At an enterprise level, our financial switch and VAS and bill payments business competes with BankservAfrica, Pay@, eCentric

and Transaction Junction.

Human Capital Resources

Over

the

last

two

years

have

built

diverse

team

high-caliber

individuals,

from

different

organizations,

form

our

leadership group. This

leadership group is

deeply committed to

building a high-performance

culture that is

based on our core

values

and a commitment to the care and development of our people.

Lesaka’s Core Values:

•

Entrepreneurial spirit;

•

Integrity;

•

Collective wisdom; and

•

A bias to action.

These are our

values that underpin

our mission

to enable

Merchants to compete

and grow,

and Grant

Beneficiaries to improve

their lives, by providing innovative financial technology and value

-creating solutions.

Employee training and skills development

We strongly believe that learning

is an ongoing process and that the majority of learning is in the doing. As such, while we offer

a range of formal

programs (as listed further

below), more importantly,

we continue to encourage

a culture of learning

in everything

that we do.

Sustainable

employee

training and

development

programs impact

employee

retention,

and

we believe

that our

willingness to

invest

employee

development

contributes

employee

satisfaction

and

belonging.

This

increases

loyalty,

which

will

turn

contribute

to employee retention. We

offer the following development programs to enhance employee

performance and skills:

•

unemployed and employed learnerships;

•

internships;

•

leadership development programs;

•

training programs;

•

other in-house and cross-functional training to aid with career advancement;

and

•

succession planning – training interventions.

Equal opportunity

Having an inclusive

and diverse workforce

which reflects our

economically active population

and society in

general, is crucial

for helping the organization attract and retain talent and is important for long-term organizational success. Our

human resources team

emphasizes recruiting

and retaining

a talented

and diverse

workforce with

special focus

on hiring

previously disadvantaged

groups

whenever possible. We

are committed to hiring qualified candidates without regard

to their personal status, while taking into account

the

unique

circumstances

affecting

our

operations

South

Africa

and

the

need

uplift

previously

disadvantaged

groups.

This

commitment extends to all levels of our organization,

including within senior management and our board of directors.

As of June 30, 2023, the composition of our workforce was:

•

55% female and 45% male;

•

35% between 18 and 34 years old, 60% between 35 and 54 years old, and 5% over

55 years old; and

•

67% Black, 11% two or more races, 7% Indian and 15%

White.

We have no

female named executive officers.

continue

to strive

to build

a more

inclusive workforce

and to

enhance our

pay structures

by taking

measures to

eliminate

potential remuneration discrimination

and to help close gender pay gaps

to progress towards gender equality

at work. We

have taken

positive strides towards a rewards philosophy that rewards

high performance,

is externally benchmarked and focuses on equal people

for equal work.

Employee compensation programs

are committed

ensuring

that

all

our

employees

are

paid

fair

and

competitive

remuneration. To

that

end,

offer the

following to our employees:

•

Access to a comprehensive medical, dental, and vision plan that our employees

have the option to join;

•

Access to a defined contribution retirement plan that our employees have

the option to join;

•

Paid sick, study, annual

and family responsibility leave;

•

Maternity benefits;

•

Life and disability insurance coverage;

•

Employee assistance programs; and

•

Product discounts.

Annual

increases

and

incentive

compensation

are

based

merit,

which

communicated

employees

onboarding

and

documented as part of our annual performance review process.

Our number

of employees

allocated

on a

segmental

and

group

basis as

of the

years ended

June 30,

2023,

2022 and

2021,

presented in the table below:

Number of employees

2023

2022

2021

Consumer

(1)

1,306

1,826

2,920

Merchant

(1)

990

824

155

Total segments

2,296

2,650

3,075

Group

(1)

Total

2,303

2,657

3,079

(1) Consumer includes one executive officer for each of fiscal 2023,

2022 and 2021. Merchant includes one executive officer for

each of

fiscal 2023

and 2022

and none

for fiscal

2021.

Group includes

two executive

officers for

fiscal 2023

and three

for each

fiscal 2022 and 2021.

On a functional basis,

four of our employees

are our named executive

officers,

332 were employed in

sales and marketing, 253

were employed in finance and administration, 221 were employed in information technology and 1,493 were employed in operations.

Health and safety laws and regulations

are

subject

to various

South

African

laws and

regulations

that

regulate

the health

and

safety of

our

South

African-based

workforce, including

those laws monitored

by the

South African

Department of

Employment and

Labour which

stipulates the

legal

framework within

which we

need to

function. This

framework comprises

the Occupational

Health and

Safety Act,

Act 85

of 1993

(“OHSA”),

the

Compensation

for

Occupational

Injuries

and

Diseases

Act,

Act

130

1993

(“COIDA”),

the

Basic

Conditions

Employment Act,

Act 75

of 1997

(“BCEA”) and

the Labour

Relations Act,

Act 66

of 1995

(“LRA”). Compliance

with COVID-19

regulations remains

regulated by the

National Institute of

Occupational Health (“NIOH”),

and the Occupational

Health Surveillance

System

(“OHSS”),

the

Centre

for

Scientific

Industrial

Research

(“CSIR”)

and

the

National

Institute

for

Communicable

Diseases

(“NICD”).

have

implemented

and regularly

update human

capital-related

policies that

are designed

to ensure compliance

with

applicable South African laws and regulations.

Our Executive Officers

The table below presents our executive officers, their

ages and their titles:

Name

Age

Title

Chris Meyer

Group Chief Executive Officer and Director

Naeem E. Kola

Group Chief Financial Officer, Treasurer,

Secretary, and Director

Lincoln C. Mali

Chief Executive Officer: Southern Africa, and Director

Steven J. Heilbron

Executive, and Director

Christopher

Meyer

has

been

our

Group

Chief Executive

Officer

since July

1, 2021.

Prior to

joining

Lesaka,

Mr.

Meyer

was

the Head of Corporate & Investment Banking and Joint Managing Director at Investec Bank Plc (“Investec”), an LSE-listed specialist

bank

and wealth

manager,

having

served

in many

different

roles

within

the Investec

Group

since 2001.

He was

also

an executive

director for various international and regional subsidiaries of Investec Bank Plc. Mr. Meyer is a member of the

South African Institute

of Chartered Accountants, holds an MSc Finance from the London

Business School and a Post Graduate Diploma in Accounting from

the University of Cape Town.

Naeem E.

Kol

a has

been our

Group Chief

Financial Officer,

Treasurer

and Secretary

since March

1, 2022.

Mr.

Kola has

held

progressively

senior

finance

roles

Dubai,

most

notably

Chief

Financial

Officer

the

Emerging

Markets

Payments

Group

(“EMP”), a high-growth

fintech business that grew

materially and successfully

concluded and integrated

five acquisitions during his

six-year

tenure

Chief

Financial

Officer.

Prior

becoming

Chief

Financial

Officer,

Mr.

Kola

was

Senior

Vice

President

for

Investments, Strategy and

Business Planning at

EMP.

Since the acquisition

of EMP by Network

International in 2017,

Mr. Kola

has

been an Operations Director

and Strategic Advisor to

the emerging market private equity

firm Actis, where he

again focused on fintech

businesses.

Lincoln

Mali

has

been

our

Chief

Executive

Officer:

Southern

Africa

since

May

2021.

Mr.

Mali

financial

services

executive with over 25 years in the

industry. Until April 2021, he was the Head of Group

Card and Payments at Standard Bank

Group,

and previously served

in many different

roles within that

organization since

2001. Mr.

Mali chaired the

board of directors

of Diners

Club South Africa until

April 2021, and was

a member of the Central

and Eastern Europe, Middle

East and Africa Business

Council

for Visa. Mr.

Mali holds Bachelor of Arts (BA) and Bachelor of Laws (LLB) degrees from Rhodes University,

an MBA from Henley

Management College, various diplomas and attended an Advanced

Management Program at Harvard Business School.

Steven J. Heilbron

has been the Chief

Executive Officer of the Connect Group since

2013 and joined us

following the acquisition

of Connect in April 2022

in the same capacity.

Mr. Heilbron has two

decades of financial services experience,

having spent 19 years

working

for

Investec in

South

Africa

and

the

UK,

where

he served

as Global

Head

Private Banking

and

Joint

Chief

Executive

Officer of Investec. He led a private consortium that acquired Cash Connect

Management Solutions (Pty) Ltd (“CCMS”) in 2013. Mr.

Heilbron has

presided over

significant organic

growth in

the rebranded Connect,

as well

as spearheading

the successful

acquisition

and integration of Kazang and EFTpos acquired from the Paycorp Group in February 2020. He is a member of the South African Financial Information about Geographical Areas and Operating Segments

Institute of Chartered Accountants.

Refer

Note

our

audited

consolidated

financial

statements

included

this

annual

report

contains

detailed

financial

information about our operating segments for fiscal 2023, 2022 and 2021. Revenues based on the geographic location from which the

sale originated and geographic location where long-lived assets are held for the years ended June 30, are presented in the table below:

Revenue

(1)

Long lived assets

2023

2022

2021

2023

2022

2021

$'000

South Africa

505,558

215,046

127,468

300,104

359,725

50,754

India (MobiKwik)

76,297

Rest of the world

22,413

7,563

3,318

2,197

2,811

6,962

Total

527,971

222,609

130,786

378,598

438,833

134,013

(1)

Refer

Note

our

audited

consolidated

financial

statements

included

this

annual

report

which

contains

detailed

financial information about our revenue for fiscal 2023, 2022

and 2021.

Corporate history

Lesaka was incorporated

in Florida in

May 1997 as

Net 1

UEPS Technologies, Inc. and

changed its name

to Lesaka Technologies,

Inc. on May 12, 2022. In 2004, Lesaka acquired Net1 Applied Technology

Holdings Limited (“Aplitec”), a public company listed on

the Johannesburg

Stock Exchange

(“JSE”). In

2005, Lesaka

completed an

initial public

offering

and listed

on the

NASDAQ Stock

Market. In

2008, Lesaka

listed on

the JSE

in a

secondary listing,

which enabled

the former

Aplitec shareholders

(as well

as South

African residents generally) to hold Lesaka common stock directly.

Available information

We maintain a website at

www.lesakatech.com. Our annual report on Form

10-K, quarterly reports on

Form 10-Q, current

reports

on Form 8-K, and amendments to those

reports,

as well as our proxy statements,

are available free of charge through the

“SEC filings”

portion of our website, as soon

as reasonably practicable after they are filed

with the SEC. The information contained

on, or accessible

through, our website is not incorporated into this Annual Report on Form 10-K.

The SEC

maintains a

website at

www.sec.gov

that contains

reports, proxy

and information

statements, and

other information

regarding issuers that file electronically with the SEC.

ITEM 1A. RISK FACTORS

OUR OPERATIONS

AND FINANCIAL

RESULTS

ARE SUBJECT

TO VARIOUS

RISKS AND

UNCERTAINTIES,

INCLUDING

THOSE

DESCRIBED

BELOW,

THAT

COULD

ADVERSELY

AFFECT

OUR

BUSINESS,

FINANCIAL

CONDITION, RESULTS

OF OPERATIONS,

CASH FLOWS, AND THE TRADING PRICE OF OUR COMMON STOCK

Risks Relating to Our Business

To achieve our mission, our

strategy is to

build and operate

the leading South

African full service

fintech

platform offering cash management, payment

and financial services.

Our future success, and our ability

return

profitability

and

positive

cash

flow

substantially

dependent

our

ability

complete

the

implementation of this strategy successfully.

Our board conducted an extensive

review of our business strategy

and operations in July 2020,

and decided to focus on

our South

African

operations

and

other

business

opportunities

South

Africa

and,

lesser

extent,

the

rest

the

African

continent.

The

restructuring

the

consumer

business

and

acquisition

Connect

were

integral

parts

the

strategy

return

the

business

profitability and positive cash flow. We have made significant progress on both of these initiatives however we cannot assure you that

we will be able to complete our strategy successfully and return to profitability and

positive cash flow.

Even if we do return to profitability, achieving net income does not necessarily

ensure positive cash flows. Future periods of net

losses

from

operations

could

result

negative

cash

flow

and

may

hamper

ongoing

operations

prevent

from

sustaining

expanding our business. We cannot assure you that we will achieve, sustain or increase profitability in the future and if we do not, our

business will be materially and adversely affected.

In 2017

and 2018 we

suffered significant

reputational damage

as a result

of irregularities in

the awarding of

the South African

Social Security Agency (“SASSA”)

grant distribution contract in

2012 and allegations of abuse

of group companies’ access to social

grant recipients.

An entirely new

board and management

team were appointed

to develop and

execute the new

strategy however we

cannot provide assurance that issues related to those events will not resurface

and adversely affect the business.

have a

significant amount

of indebtedness that

requires us

to comply with

restrictive and financial

covenants. If we are unable to comply with these

covenants, we could default on this debt, which would have

a material adverse effect on our business and financial condition.

June

30,

2023,

had

aggregate

long-term

borrowing

outstanding

ZAR

2.5

billion

($133.1

million

translated

exchange rates

as of June

30, 2023). We

financed our acquisition

of Connect

in April 2022

through South

African bank borrowings

of ZAR 1.1 billion

($71.7 million, translated at

closing date exchange

rate (as defined in the

Sale Agreement) of $1:ZAR

14.65165).

The borrowings

are secured

by a

pledge of

certain of

our bank

accounts, and

the cession

of Lesaka’s

shareholding

in certain

of its

subsidiaries. These borrowings contain customary covenants that require Lesaka Technologies

(Pty) Ltd (“Lesaka SA”) to maintain a

specified total asset

cover ratio and restrict

the ability of

Lesaka, Lesaka SA,

and certain of its

subsidiaries to make

certain distributions

with respect

to their

capital stock,

prepay other

debt, encumber

their assets,

incur additional

indebtedness,

make investment

above

specified levels, engage in certain business combinations and engage in

other corporate activities.

The loan agreements also include a credit enhancement mechanism of ZAR

350 million ($23.9 million, translated at closing date

exchange rate), which has been provided by investment

funds managed by Lesaka’s

largest shareholder, Value

Capital Partners (Pty)

Ltd (“VCP”)

which includes

a contingent

subscription for

new shares.

There can

be no

assurance that

VCP will

perform under

the

commercially agreed

terms and failure

by it to

fulfil its obligation

under the credit

enhancement mechanism

may put our

funding or

future repayments at risk.

We also

have borrowings through

Connect. Connect’s

credit facilities include (i)

an overdraft facility (general

banking facility)

of ZAR 205.0

million (of which

ZAR 170.0 million

has been utilized);

(ii) Facility A

of ZAR 700.0

million; (iii) Facility

B of ZAR

550.0

million

(both fully

utilized);

and

(iv)

an asset-backed

facility of

ZAR

200.0

million

(of which

ZAR

149.1

million

has been

utilized).

These borrowings are

secured by a

pledge of,

among other things,

Cash Connect Management

Solutions’(“CCMS”) entire

equity interests

in its

subsidiaries and

investments and

any claims

outstanding. These

borrowings contain

customary covenants

that

require CCMS to maintain specified debt service, interest cover and leverage ratios.

Within our merchant lending

operations, we have

borrowing arrangements through

Cash Connect Capital

(Pty) Limited (“CCC”).

CCC has a

ZAR 300

million revolving

credit facility agreement.

have utilized

approximately ZAR

222.3 million

as of June

30,

2023.

This

facility

contains

customary

covenants

that

require

the

borrowing

parties

collectively

maintain

specified

capital

adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock,

encumber their assets,

incur additional indebtedness, make investments, engage in certain

business combinations and engage in other corporate activities.

These security arrangements and covenants may

reduce our operating flexibility or

our ability to engage in

other transactions that

may

beneficial

us.

are

unable

comply

with

the

covenants,

could

default

and

the

indebtedness

could

accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as

a result, our business, financial condition and stock price would suffer.

need to

significantly grow

our consumer

operations in

order to

ensure their

profitability and

long-

term sustainability.

Following the conclusion of our contract with SASSA, we

refocused our resources and technology on the

provision of financial

inclusion

services

our

target

market

and

currently

have

established

base

approximately

1.3

million

customers

which

approximately

1.1 million

are permanent

grant recipients.

Our strategy

involves significantly

expanding this

base over

the coming

years. While we believe that our financial services offerings are convenient and cost-effective, the success of our strategy will depend

on the extent to which we successfully market our offering to

grow the customer base.

Factors that may prevent us from successfully operating and expanding our

Consumer Division include, but are not limited to:

•

insufficient adoption and utilization of our products and

services;

•

inability to access sufficient funding for our ATM

infrastructure;

•

increased

competition

the

marketplace

and

restrictions

imposed

SASSA

the

South

African

government

the

manner in which grant recipients may transact;

•

political interference and changes in the regulatory environment;

•

failure to comply with laws and regulations related to our Consumer lending

business;

•

failure to comply with anti-money laundering and anti-corruption laws and

regulations;

•

cyber-attacks, data breaches and data leaks;

•

further civil unrest similar to that experienced in July 2021;

•

loss of key technical and operations staff;

•

expired property leases disrupting business operations; and

•

logistical and communications challenges, including scheduled and unscheduled

power supply disruptions.

We may undertake acquisitions

that could

increase our

costs or

liabilities or

be disruptive

to our

business.

Acquisitions are

an integral part

of our new

growth strategy

as we seek

to expand our

business and deploy

our technologies

new markets

in Southern

Africa. However,

we may

not be

able to

locate suitable

acquisition

candidates at

prices that

we consider

appropriate.

identify an

appropriate

acquisition

candidate,

may

not be

able to

successfully

negotiate

the

terms

the

transaction, finance it

or, if the

transaction occurs, integrate the

new business into

our existing business.

These transactions may

require

debt financing or additional equity financing, resulting in additional leverage

or dilution of ownership.

Acquisitions of businesses

or other material

operations and the

integration of these

acquisitions or their

businesses will require

significant attention

from members

of our senior

management team,

which may

divert their

attention from

our day-to-day

business.

The difficulties

of integration

may be

increased by

the necessity

of integrating

personnel with

disparate business

backgrounds

and

combining

different

corporate cultures.

also may

not be

able to

retain key

employees or

customers

of an

acquired business

realize

cost

efficiencies

synergies

other

benefits

that

anticipated

when

selecting

our

acquisition

candidates.

Acquisition

candidates may have liabilities or adverse operating issues that we fail to

discover through due diligence prior to the acquisition.

may

need

to record

write-downs

from future

impairments of

goodwill or

other intangible

assets, which

could reduce

our

future reported earnings.

Geopolitical

conflicts,

including

the

conflict

between

Russia

and

Ukraine,

may

adversely

affect

our

business and results of operations.

The

current

conflict

between

Russia

and

Ukraine

creating

substantial

uncertainty

about

the

future

the

global

economy.

Countries across the globe are instituting sanctions and other

penalties against Russia. The retaliatory measures that

have been taken,

and could

be taken

in the

future, by

the U.S.,

NATO,

and other

countries have

created global

security concerns

that could

result in

broader European military and political conflicts and otherwise have a substantial impact on regional and

global economies, any or all

of which could adversely affect our business.

While the broader consequences are

uncertain at this time,

the continuation and/or escalation of

the Russian and Ukraine

conflict,

along

with

any

expansion

of the

conflict

surrounding

areas, create

number

of risks

that

could

adversely

impact

our

business,

including:

•

increased inflation and significant volatility in the macroeconomic

environment;

•

disruptions to our technology infrastructure, including through cyberattacks,

ransom attacks or cyber-intrusion;

•

adverse changes in international trade policies and relations;

•

disruptions in global supply chains; and

•

constraints, volatility or disruption in the credit and capital markets.

All of these risks could

materially and adversely affect

our business and results of operations.

We are

continuing to monitor the

situation in Ukraine and globally and assessing the potential impact on our business.

A prolonged economic

slowdown or lengthy

or severe recession

in South Africa

or elsewhere could

harm

our operations.

A prolonged economic

downturn or recession

in South Africa

could materially

impact our results

from operations, particularly

in light of

on-going electricity disruptions

during calendar 2022

and 2023, a

significantly weak USD/

ZAR exchange rate

compared

with previous periods, and our strategic decision to focus on our South African operations. Economic confidence in South Africa, our

main operating

environment, is

currently low

and, as

a result, the

risk of

a prolonged

economic downturn

is increased, which

could

have a negative impact on merchants and retailers; mobile phone operators; our account holders; the

level of transactions we process;

the take-up of

the financial services

we offer and

the ability of our

customers to repay

our loans or to

pay their insurance

premiums.

financial

institutions

and

retailers experience

decreased

demand

for

their products

and services,

our

hardware,

software,

technology sales and processing revenue could decrease.

Our investment in MobiKwik

subjects us to certain

risks, including the possibility

of fluctuations in the

carrying value based on readily determinable fair values. In addition, our ability to dispose of our interest in

MobiKwik on acceptable terms, or at all, may be limited under certain circumstances.

have elected to

account for our

investment in MobiKwik

at cost minus impairment,

if any,

plus or minus changes

resulting

from observable

price changes

in orderly

transactions for

the identical

or similar

instrument of

the same

issuer because

it does

not

have a readily determinable fair value. The determination of the fair value of an investment requires us to make significant judgments

and estimates and we are required to

base our estimates on assumptions which

we believe to be reasonable, but

these assumptions may

be unpredictable and inherently uncertain. The value of our investment in MobiKwik as of

June 30, 2023 and 2022, was $76.3 million

and was determined

based on a

share issuance concluded

by MobiKwik in

June 2021, implying

a fair

value per equity

share of $12.275.

did not identify

any observable price

changes during either

of fiscal 2023

and 2022 and therefore

did not adjust

the value of

our

investment during the years ended June 30, 2023 and 2022. We recorded

a non-cash fair value adjustment of $49.3 million during the

year ended June 30, 2021, which increased the fair value to $76.3

million.

MobiKwik filed its draft

red herring prospectus in July

2021, with the original intention

of completing its initial public

offering

in November 2021. However, MobiKwik decided to delay its initial public offering given

prevailing market conditions at the time and

has indicated its intention to pursue an initial public listing in calendar 2024.

may

need to

record a

write-down of

the carrying

value of

our investment

in MobiKwik

in the

future (i)

if it

is unable

successfully complete its contemplated initial public offering, (ii) due to fluctuations in its market price upon listing, including during

the lock up

period after its

initial public

offering, or

(iii) if it

has not listed,

there is an

observable transaction

indicating a

fair value

per share

which is

lower than

our

June 30,

2023 price

per share.

Furthermore,

it may

be difficult

to dispose

of some

or all

of our

investment on acceptable terms, if at all, if MobiKwik fails to list.

Our

ability

fund

our

ATM

network

requires

that

continue

have

access

sufficient

lending

facilities, which requires compliance with restrictive and financial covenants.

The operational

maintenance

of our

ATM

network,

along with

an increase

in our

consumer

banking

client base,

necessitates

access to large

amounts of cash

to stock the

ATMs

and maintain uninterrupted

service levels. We

have credit facilities

from a South

African

bank

which

includes

security

arrangements

well

restrictive

and

financial

covenants.

The

security

arrangements

and

covenants included in our lending facilities may reduce our operating flexibility or our ability to engage in other transactions that may

be beneficial to us. If we are unable to comply

with the covenants in South Africa, we could be in default

and the indebtedness could

be accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and

as a result, our business and financial condition would suffer.

We may not be able to extend the terms

of these debt facilities or

refinance them, in each case, on

commercially reasonable terms

or at all. Our

ability to continue the

uninterrupted operation of

our ATM

network will be adversely

impacted by our failure

to renew

our debt facilities, any adverse change to the terms

of our credit facilities, or a

significant reduction in the amounts available under our

credit facilities,

or our

failure to

increase our

facilities if

required. We

may also

suffer reputational

damage if

our service

levels are

negatively impacted due to the unavailability of cash.

have

purchased

significant

amount

prepaid

airtime

voucher

inventory

which

exposes

market risk for this inventory as well as losses if the mobile network operators are unable to perform.

Historically,

have

purchased

significant

amount

prepaid

airtime

inventory

vouchers

order

take

advantage

discounted

pricing for

this inventory.

As of

June 30,

2023, the

carrying

value of

this inventory

is $4.0

million (ZAR

74.7

million

translated at exchange rates applicable as of

June 30, 2023). We expect to sell this inventory

over the next three months which

exposes

us to market risk for this inventory. The underlying service related to these

airtime vouchers is provided by South Africa’s four largest

mobile network

operators operating

in South

Africa and

therefore we

are also

exposed to

performance

risk by

these operators.

would be unable

to sell these prepaid

airtime vouchers if

the mobile network

operators were unable

to provide their

services and we

would need to

write this inventory

off. Failure

to recover the

carrying value of

this inventory

may have a

material adverse effect

our results of operations or financial condition.

We may be unable to recover the carrying value of certain Cell C

airtime that we own.

own a

substantial amount

of Cell

C airtime

inventory ($8.6

million translated

at exchange

rates applicable

as of

June 30,

2023). In support of

Cell C’s liquidity

position and pursuant to Cell

C’s recapitalization

process, we limited the resale

of this airtime

through

our

distribution

channels.

September

30,

2022,

Cell

concluded

its

recapitalization

process

and

entered

into

agreement with Cell C under which

Cell C agreed to repurchase, from

October 2023, up to ZAR 10 million

of Cell C inventory from

us per month. The amount to be

repurchased by Cell C will be calculated

as ZAR 10 million less the face

value of any sales made by

the Company during that month. The Company continued to sell a minimum amount of Cell C airtime through its internal channels in

late

fiscal

2022/

early

fiscal 2023

in support

Cell C’s

liquidity

position.

However,

our

ability

sell this

airtime

has

improved

significantly since

the acquisition

of Connect because

Connect is a

significant reseller

of Cell C

airtime. As

a result, we

sold higher

volumes of airtime through this channel than we did prior to the

Cell C recapitalization, however, continued

sales at these volumes is

dependent on

prevailing conditions continuing

in the airtime

market. If

we are able

to sell at

least ZAR 10

million a month

through

this channel

from October 1,

2023, then

Cell C would

not be required

to repurchase any

airtime from us

during any specific

month.

have agreed

to notify

Cell C

prior to

selling any

of this

airtime, however,

there is

no restriction

placed on

us on

the sale

of the

airtime.

Historical and current limitations

on our ability to freely dispose

of this Cell C airtime time

inventory exposes us to market

risk

for this inventory. Due to wholesale discounts in the distribution market for this airtime, it is not readily saleable in the current market

without realising a loss. In light of this, we recorded

a loss of $1.3 million during fiscal 2020, related

to this airtime inventory.

While

no further

losses were

recorded

in fiscal

2023,

2022 and

2021, we

may be

required to

record further

losses in

the future

if we

are

unable to recover the carrying

value of this airtime inventory

or if Cell C is unable

to repurchase the inventory

as per our agreement.

Failure to

recover the

carrying value

of this

inventory may

have a

material adverse

effect

on our

results of

operations or

financial

condition.

Our

consumer

microlending

loan

book

and

merchant

lending

book

expose

credit

risk

and

our

allowance for doubtful finance loans receivable may not be sufficient to absorb future write-offs.

All of our microfinance loans made are for a period of six months or less and all of our merchant lending through Connect is for

a period

of less

than 12

months. We

have created

an allowance

for doubtful

finance loans

receivable related

to these

books. When

creating the allowance,

management considered

factors including the

period of the

finance loan outstanding,

creditworthiness of

the

customers and the past payment history of the borrower. We consider this policy to be appropriate as it takes into account factors such

as historical bad debts, current

economic trends and changes in our

customer payment patterns. However,

additional allowances may

be required should the ability

of our customers to

make payments when due

deteriorate in the future.

A significant amount of judgment

is required to assess the ultimate recoverability of these microfinance

loan receivables.

We may face competition from other

companies that offer innovative

payment technologies and payment

processing,

which

could

result

the

loss

our

existing

business

and

adversely

impact

our

ability

successfully market additional products and services.

Our primary competitors in

the payment processing

market include other independent

processors, as well

as financial institutions,

independent

sales

organizations,

new

digital

and

fintech

entrants

and,

potentially

card

networks.

Many

our

competitors

are

companies who

are larger

than we

are and

have greater

financial and

operational resources

than we

have. These

factors may

allow

them to offer better pricing

terms or incentives to customers, which

could result in a loss of our potential

or current customers and/or

force us to lower our prices. Either of these actions could have a significant effect

on our revenues and earnings.

Our

future

success

will

depend

part

our

ability

attract,

integrate,

retain

and

incentivize

key

personnel

and

sufficient

number

skilled

employees,

particularly

the

technical,

sales

and

senior

management areas.

We believe our management team has the right experience

and skills to execute on our strategy. However,

in order to succeed in

our product

development and

marketing efforts,

we may

need to identify

and attract new

qualified technical

and sales personne

l, as

well as motivate and retain our

existing employees. As a result, an

inability to hire and retain such

employees would adversely affect

our ability to

achieve our strategic

goals and maintain

our technological relevance.

We may face difficulty in

assimilating, transitioning

and integrating

newly-hired

personnel or

management of

any future

acquisitions into

our existing

management team,

and this

may

adversely affect

our business. Competitors

may attempt

to recruit

our top

management and

employees. In

order to attract

and retain

personnel in

a competitive

marketplace, we

must provide

competitive pay

packages, including

cash and equity

-based compensation

and

the

volatility

our

stock

price

may

from

time

adversely

affect

our

ability

recruit

or retain

employees.

not

maintain

any

“key

person”

life

insurance

policies.

fail

attract,

integrate,

retain

and

incentivize

key

personnel

and

skilled

employees, our ability to manage and grow our

business could be harmed and our product

development and marketing activities could

be negatively affected.

System failures, including breaches in the security of our system, could harm our business.

may experience

system failures

from time

to time,

and any

lengthy interruption

in the availability

of our

back-end system

computers could harm our business and severely affect our customer relationships. Frequent or persistent interruptions in our services

could cause current or potential

customers and users to

believe that our systems are

unreliable, leading them to

avoid our technology

altogether, and could permanently harm our reputation and brands. These interruptions would increase the burden on our staff, which,

in turn, could delay our

introduction of new applications and

services. Finally, because our customers may use our products

for critical

transactions,

any

system

failures

could

result

damage

our

customers’

businesses.

These

customers

could

seek

significant

compensation from us for their losses. Even if unsuccessful, this type of

claim could be time-consuming and costly for us to address.

Although certain of our systems

have been designed to reduce

downtime in the event of

outages or catastrophic occurrences, they

remain vulnerable to damage or interruption from earthquakes, floods, fires, power loss, telecommunication

failures, terrorist attacks,

computer viruses, computer denial-of-service attacks and similar events. Some of

our systems are not fully

redundant, and our disaster

recovery planning may not be sufficient for all eventualities.

Protection against fraud is of key

importance to the purchasers and end

users of our solutions. We

incorporate security features,

including encryption

software, biometric

identification and

secure hardware,

into our solutions

to protect

against fraud in

electronic

transactions and

to provide for

the privacy and

integrity of cardholder

data. Our solutions

may be vulnerable

to breaches in

security

due to

defects in

the security

mechanisms, the

operating system

and applications

or the

hardware platform.

Security vulnerabilities

could

jeopardize

the

security

information

transmitted

using

our

solutions.

the

security

our

solutions

compromised,

our

reputation and marketplace acceptance

of our solutions may be adversely

affected, which would cause our

business to suffer,

and we

may become subject to damage claims. We

have not yet experienced any significant security breaches affecting

our business.

Despite any precautions we may take, the occurrence of a natural disaster or other unanticipated problems with our

system could

result in lengthy interruptions

to our services. Our current

business interruption insurance may

not be sufficient to

compensate us for

losses that may result from interruptions in our service as a result of system failures.

Cash

Paymaster

Services,

CPS,

has

been

placed

into

liquidation.

While

claim

has

been

made

against Lesaka for CPS’ obligations, we cannot provide assurance that no such claim will be made.

CPS has significant obligations and ongoing litigation related to its SASSA contract and has been placed into liquidation. While

no claim has been made against Lesaka to be held liable for CPS’ current

obligations or any future obligations under any future court

judgments, and while we do not believe that there would be a legitimate legal basis for any such claims, we cannot assure you that no

such claim

will be

made against

us. If

SASSA or

another

third party

were to

seek and

ultimately succeed

in obtaining

a judgment

against us in respect of CPS’ liabilities, any such judgment would have a material

adverse effect on our financial condition, results of

operations and cash flows.

Defending

our

intellectual

property

rights

defending

ourselves

infringement

suits

that

may

brought against us is expensive and time-consuming and may not be successful.

Litigation to

enforce our

patents, trademarks

or other

intellectual property

rights or

to protect

our trade

secrets could

result in

substantial costs and may not be successful. Any loss of, or inability to protect, intellectual property in our technology could diminish

our competitive advantage and also seriously harm our business. In addition, the laws of certain foreign countries may not protect our

intellectual property

rights to

the same

extent as

do the

laws in

countries where

we currently

have patent

protection. Our

means of

protecting our intellectual property rights in countries where we currently have patent or trademark protection, or any other country in

which we operate, may not be

adequate to fully protect our intellectual

property rights. Similarly, if third parties claim that we infringe

their intellectual property rights, we may be required to incur significant costs and

devote substantial resources to the defense of such

claims,

discontinue

using

and

selling

any

infringing

technology

and

services,

expend

resources

develop

non-infringing

technology or

to purchase

licenses or

pay royalties

for other

technology.

In addition,

if we

are unsuccessful

in defending

any such

third-party

claims, we

could

suffer

costly judgments

and

injunctions

that could

materially

adversely

affect

our business,

results of

operations or financial condition.

may incur

material losses

in connection

with our

movement of

cash through

our infrastructure

South Africa.

In our merchant

business we collect

and process large

volumes of cash

from our customers,

assuming the

risk of loss

from the

moment that cash is

deposited into our vaults.

We are then responsible for its

collection and transportation to

processing centers, which

we outsource to various cash in transit service providers. These services extend

across all areas of South Africa.

South Africa

suffers from

high levels of

crime and in

particular cash in

transit heists. We

cannot insure

against certain risks

loss or

theft of

cash from

our delivery

and collection

vehicles and

we will

therefore bear

the full

cost of

certain uninsured

losses or

theft in connection with the cash handling process, and such losses could materially and adversely affect our financial condition, cash

flows and results of operations. We

have not incurred any material losses

resulting from cash distribution in

recent years, but there is

no assurance that we will not incur any such material losses in the future.

We depend upon third-party suppliers, making us vulnerable to supply shortages and price fluctuations,

which could harm our business.

We obtain

our smart cards, ATMs,

POS devices, components for our

safe assets, and the other hardware

we use in our business

from a limited number of

suppliers, and do not

manufacture this equipment ourselves. We generally do not have long-term

agreements

with our manufacturers

or component suppliers.

If our suppliers become

unwilling or unable to

provide us with adequate

supplies of

parts or products when we need

them, or if they increase their

prices, we may not be

able to find alternative sources in

a timely manner

and could be faced

with a critical shortage.

This could harm our

ability to meet customer

demand and cause our

revenues to decline.

Even

if we

are able

to secure

alternative

sources in

a timely

manner,

our costs

could increase

as a

result of

supply or

geopolitical

shocks, which may lead to an increase in the prices of goods and services from third

parties. A supply interruption, such as the current

global shortage of semiconductors, or an increase in

demand beyond current suppliers’ capabilities could harm our ability

to distribute

our equipment and thus

to acquire new customers

who use our technology.

Any interruption in the supply

of the hardware necessary

to operate

our technology,

or our

inability to

obtain substitute

equipment at

acceptable prices

in a

timely manner,

could impair

our

ability to meet the demand of our customers, which would have an adverse

effect on our business.

Our Smart Life business exposes us to risks typically experienced by life assurance companies.

Smart Life is a life insurance company and exposes us to risks typically experienced by life assurance companies. Some of these

risks

include

the

extent

which

are

able

continue

reinsure

our

risks

acceptable

costs,

reinsurer

counterparty

risk,

maintaining regulatory capital adequacy, solvency and

liquidity requirements, our ability

to price our

insurance products appropriately,

the risk

that actual

claims experience

may exceed

our estimates, the

ability to

recover policy

premiums from

our customers

and the

competitiveness of the South African insurance market. If we are unable to maintain our desired level of reinsurance

at prices that we

consider acceptable, we would have to either

accept an increase in our risk exposure

or reduce our insurance writings. If our reinsurers

are unable

to meet

their commitments

to us

in a

timely manner,

or at

all, we may

be unable

to discharge

our obligations

under our

insurance contracts. As such, we are exposed to counterparty risk, including

credit risk, of these reinsurers.

Our

product

pricing

includes

long-term

assumptions

regarding

investment

returns,

mortality,

morbidity,

persistency

and

operating

costs

and

expenses

the

business.

Using

the

wrong

assumptions

price

our

insurance

products

could

materially

and

adversely affect our financial

position, results of

operations and cash flows.

If our actual

claims experience is

higher than our

estimates,

as we have seen

during the recent COVID-19 pandemic, our

financial position, results of operations and

cash flows could be

adversely

affected. Finally, the South African

insurance industry is

highly competitive. Many

of our competitors

are well-established, represented

nationally and market similar products and we therefore may not be able to

effectively penetrate the South African insurance market.

Risks Relating to Operating in South Africa and Other Foreign Markets

Operating in Southern Africa,

an emerging market, subjects

us to greater risks

than those we would

face

if we operated in more developed markets.

Emerging markets such as

Southern Africa are subject

to greater risks

than more developed markets.

While we focus

our business

primarily

emerging

markets

because

that

where

perceive

the

greatest

opportunities

market

our

products

and

services

successfully, the political, economic and market conditions these markets present risks that could make it more difficult to operate our

business successfully.

Some of these risks include:

•

political, legal and economic instability,

including higher rates of inflation and currency fluctuations;

•

high levels of corruption, including bribery of public officials;

•

loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection;

•

lack

well-developed

legal

systems

which

could

make

difficult

for

enforce

our

intellectual

property

and

contractual rights;

•

logistical, utilities (including electricity and water supply) and communications

challenges;

•

potential

adverse

changes

laws

and

regulatory

practices,

including

import

and

export

license

requirements

and

restrictions, tariffs, legal structures and tax laws;

•

difficulties in staffing and managing operations

and ensuring the safety of our employees;

•

restrictions on the right to convert or repatriate currency or export assets;

•

greater risk of uncollectible accounts and longer collection cycles;

•

indigenization and empowerment programs;

•

exposure to liability under the UK Bribery Act; and

•

exposure to

liability under

U.S. securities

and foreign

trade laws,

including the

Foreign Corrupt

Practices Act,

or FCPA,

and regulations established by the U.S. Department of Treasury’s

Office of Foreign Assets Control, or OFAC.

not

achieve

applicable

Broad-Based

Black

Economic

Empowerment

objectives in

our

South

African businesses, we

may be subject

to fines and

we risk losing

our government and/or

private contracts.

In addition,

it is

possible that

we may

be required

to increase

the Black

shareholding of

our company

in a

manner that

could dilute

your ownership

and/or change

the companies

from which

we purchase

goods or

procure services (to companies with a better BEE Status Level).

The legislative framework for the promotion of Broad-Based Black Economic Empowerment (“BEE”), in South Africa

has been

established through

the Broad-Based

Black Economic

Empowerment

Act, No.

53 of

2003, as

amended from

time to

time, and

the

Amended

BEE

Codes

Good

Practice,

2013,

BEE

Codes,

and

any

sector-specific

codes

good

practice,

Sector

Codes,

published pursuant

thereto. Sector

Codes are

fully binding

between and

among businesses

operating in

a sector

for which

a Sector

Code has been

published. Achievement

of BEE objectives

is measured by

a scorecard which

establishes a weighting

for the various

elements. Scorecards

are independently

reviewed by

accredited BEE

verification agencies

which issue

a verification

certificate that

presents an

entity’s

BEE Status

Level. This

BEE verification

process must

be conducted

on an

annual basis,

and the

resultant BEE

verification certificate is only

valid for a period

of 12 months from the

date of issue of the verification

certificate.

We currently

have

a level 5 BEE rating for our South African business.

Certain of our South African

businesses are subject to either

the Amended Information and

Communication Technology

Sector

Code, or ICT Sector Code, or the

Amended Financial Services Sector Code,

or the FS Sector Code. The ICT

Sector Code and the FS

Sector Code have been amended and aligned with the new

BEE Codes and were promulgated in November 2016 and December

2017,

respectively.

Licensing

and/

regulation

authorities

overseeing

these

South

African

businesses

may

set

minimum

adherence

requirements to BEE standards as a condition for an operating license to trade

The BEE scorecard includes

a component relating to management

control, which serves to determine

the participation of Black

people

within

the

board,

well

various

levels

management

within

measured

entity

(including,

inter

alia

Executive

Management, Senior

Management, Middle

Management and

Junior Management).

The BEE

Codes and/or

Sector Codes

define the

terms

Senior

Management

Middle

Management

and

Junior

Management

those

occupational

categories

determined

accordance

with

the

Employment

Equity

Regulations,

with

specific

emphasis

improving

participation

proportion

the

demographics

of the

Economically Active

Population

of South

Africa,

as published

by Statistics

South

Africa,

from time

to time.

Employment Equity legislation

seeks to drive the

alignment of the workforce

with the racial composition

of the economically active

population

South

Africa

and

accelerate

the

achievement

employment

equity

targets,

introducing

monetary

fines

for

non-

compliance

with

the Employment

Equity

legislation

and misrepresented

submissions.

Annexure

EEA9

to the

Employment

Equity

Regulations sets out the various occupational levels which are determined in accordance with the relevant grading systems applied by

the measured entity and referred to in said Annexure.

have taken a

number of actions

as a company

to increase empowerment

of Black (as

defined under applicable

regulations)

South Africans.

For instance,

the South

African competition

authorities approved

the Connect

transaction subject

to certain

public

interest conditions

relating to

employment, increasing

the spread

of ownership

by historically

disadvantaged people

(“HDPs”), and

investing

in both

enterprise and

supplier development.

Further to

increasing the

spread of

ownership

by HDPs,

we are

required

establish

Employee

Ownership

Plan

scheme

(“ESOP”)

within

months

the

implementation

the

transaction

that

complies with certain design principles. This will benefit the workers of the merged entity and result in them receiving a shareholding

in our

company equal

in value

to at

least 3%

of the

issued shares

in our

company as

of April

14, 2022.

If within

24 months

of the

implementation date of the transaction, we generate a positive net profit for three consecutive quarters, the ESOP shall increase to 5%

of the issued

shares in our company

as of April 14,

2022. The final structure

of the ESOP is

contingent on shareholder

approval and

relevant regulatory and

governance approvals. The

ESOP had not been

established as of the

date of this Annual

Report on Form

10-

During fiscal 2023, we

made a donation to

The Association for Savings

and Investment South Africa (“ASISA”),

an organization

which serves as a unifying force for the South

Africa's asset managers, collective investment scheme

management companies, linked

investment service providers, multi-managers, and life insurance companies. We

provided donations to eight of our suppliers in order

to enable

them to

promote growth

and strengthen

their capacity

to provide

valuable products

and services

to the

market they

serve.

also contributed

to a

non-profit organization

that focuses

on education,

health services,

and sports

development in

underserved

communities, and we

believe our contribution

creates a positive impact

on society and promoting

holistic development among

those

who face

challenges in accessing

essential resources.

However,

it is possible

that these actions

may not

be sufficient

to enable us

achieve the applicable BEE objectives set out for specific

financial years. In that event, in order to

maintain competitiveness with both

government

and

private

sector

clients,

may

have

seek

increase

compliance

through

other

means,

including

selling

placing additional

shares of Lesaka

or of our

South African subsidiaries

to Black

South Africans

(either directly

or indirectly),

over

and above what

has already been

approved. Such sales

or placements of

shares could have

a dilutive impact

on your ownership

interest,

which could cause the market price of our stock to decline.

expect that our

BEE Status Level

will be important

in order for

us to remain

competitive in the

South African marketplace

and we continually

seek ways to

improve our BEE

Status Level, especially

the ownership element

(so-called “equity element”)

thereof.

may not be

able to effectively

and efficiently

manage the disruption

to our operations

as a result

erratic electricity supply in

South Africa, which could

adversely affect our, financial position, cash flows

and

future growth.

Our businesses in

South Africa are

dependent on electricity

generated and supplied

by the state-owned

utility,

Eskom, in order

to operate, and Eskom has been unable to generate and

supply the amount of electricity required by the South African economy which

has resulted in significant and

often unpredictable electricity supply disruptions. Eskom has

implemented a number of short- and

long-

term mitigation plans

to correct these issues

but supply disruptions

continue to occur

regularly and with

no predictability.

As part of

our

business continuity

programs, we

have

installed back-up

diesel generators

in order

for

us to

continue

to operate

our

core data

processing

facilities

the

event

intermittent

disruptions

our

electricity

supply.

have

perform

regular

monitoring

and

maintenance of these

generators and also

source and manage

diesel fuel levels.

may also be

required to replace

these generators

on a more frequent basis due to the additional burden placed on them.

Our results of operations, financial position, cash flows

and future growth could be adversely affected if Eskom is

unable to raise

sufficient funding to operate

and/or commission new electricity-generating

power stations in accordance with its

plans, or at all, or if

we are unable to effectively and efficiently test, maintain,

source fuel for, and replace, our generators.

Fluctuations in

the value

of the

South African

rand have

had, and

will continue

to have,

a significant

impact

our

reported

results

operations,

which

may

make

difficult

evaluate

our

business

performance between reporting periods and may also adversely affect our stock price.

The South

African rand,

or ZAR,

is the

primary operating

currency for

our business

operations while

our financial

results are

reported in U.S. dollars. Therefore, any depreciation in

the ZAR against the U.S. dollar, would negatively impact

our reported revenue

and net

income. The

U.S. dollar/ZAR

exchange rate

has historically

been volatile

and we

expect this

volatility to

continue (refer

Item

7—“Management’s

Discussion

and

Analysis

Financial

Condition

and

Results

Operations—Currency

Exchange

Rate

Information.”).

Due

the

significant

fluctuation

the

value

the

ZAR

and

its

impact

our

reported

results,

you

may

find

difficult to

compare our results

of operations between

financial reporting periods

even though we

provide supplemental information

about our

results of

operations determined

on a

ZAR basis.

Similarly,

depreciation in

the ZAR

may negatively

impact the

prices at

which our stock trades.

We generally do not engage in any currency hedging

transactions intended to reduce the

effect of fluctuations in foreign currency

exchange rates on our results of

operations, other than economic hedging

using forward contracts relating to

our inventory purchases

which are settled in U.S.

dollars or euros. We

cannot guarantee that we will

enter into hedging transactions

in the future or,

if we do,

that these transactions will successfully protect us against currency fluctuations.

South Africa’s

high levels of

poverty, unemployment

and crime may

increase our costs

and impair our

ability to maintain a qualified workforce

While South Africa has a highly developed financial and legal infrastructure, it also has high levels of crime and unemployment,

relative to peer

countries in Africa

and other emerging

economies, and there

are significant differences

in the level

of economic and

social development among its people,

with large parts of the population,

particularly in rural areas, having limited

access to adequate

education, healthcare, housing and other

basic services, including water

and electricity. In addition, South Africa has

a high prevalence

of HIV/AIDS and tuberculosis. Government policies aimed at alleviating and redressing the disadvantages suffered by the majority of

citizens

under

governments

may

increase

our

costs and

reduce

our

profitability,

all of

which

could

negatively

affect

our

business.

These

problems

may

prompt

emigration

skilled

workers,

hinder

investment

into

South

Africa

and

impede

economic

growth. As a result, we may have difficulties attracting and retaining

qualified employees.

The

economy

South

Africa

exposed

high

rates

inflation,

interest

and

corporate

tax,

which

could

increase

our

operating

costs

and

thereby

reduce

our

profitability.

Furthermore,

the

South

African

government requires additional

income to fund

future government

expenditures and may

be required,

among

other things, to

increase existing income

tax rates, including

the corporate income tax

rate, amend existing

tax legislation or introduce additional taxes.

The economy of

South Africa in the

past has been, and

in the future may

continue to be, characterized

by rates of inflation

and

interest that

are substantially

higher than

those prevailing

in the United

States and

other highly-developed

economies. High

rates of

inflation could increase our South African-based costs and decrease our operating margins. High interest rates increase the cost of our

debt financing, though conversely, they also

increase the amount

of income we

earn on any

cash balances. The

South African corporate

income tax rate, of 27%, is higher than the

U.S. federal income tax rate, of 21%. Any increase

in the effective South African corporate

income tax rate would adversely impact our profitability and cash flow generation.

Risks Relating to Government Regulation

are required to

comply with

certain laws

and regulations, including

economic and trade

sanctions,

which could adversely impact our future growth.

are

subject

to U.S.

and

other

trade

controls,

economic sanctions

and

similar

laws and

regulations,

including

those in

the

jurisdictions

where

operate.

Our

failure

comply

with

these

laws

and

regulations

could

subject

civil,

criminal

and

administrative

penalties

and

harm

our

reputation.

These

laws and

regulations

place

restrictions

our

operations,

trade

practices,

partners

and

investment

decisions.

In particular,

our operations

are subject

to U.S.

and

foreign

trade

control laws

and

regulations,

including various export controls and economic sanctions programs, such as those administered by OFAC. We monitor compliance in

accordance with

the 10

principles as

set out

in the

United Nations

Global Compact

Principles, the

Organisation

for Economic

Co-

operation and

Development recommendations

relating to

corruption, and

the International

Labor Organization

Protocol in

terms of

certain of the items to be

monitored. As a result of doing business

in foreign countries and with foreign

partners, we are exposed to a

heightened risk of violating trade control laws as well as sanctions regulations.

Violations

trade

control

laws and

sanctions

regulations

are

punishable

by civil

penalties,

including

fines,

denial

of export

privileges,

injunctions,

asset seizures,

debarment

from

government

contracts

and revocations

or restrictions

of licenses,

well

criminal fines and imprisonment.

We have

developed policies and procedures as

part of a company-wide compliance

program that is

designed to

assist our compliance

with applicable

U.S. and international

trade control laws

and regulations,

including trade controls

and sanctions programs administered

by OFAC,

and provide regular training

to our employees to create awareness

about the risks of

violations of trade

control laws and

sanctions regulations and

to ensure compliance

with these laws

and regulations.

However, there

can be no assurance that all of our employees, consultants,

partners, agents or other associated persons will not act in violation

of our

policies and these laws and regulations, or that our policies and

procedures will effectively prevent us from violating these regulations

in every transaction

in which we

may engage, or

provide a defense

to any alleged

violation. In particular,

we may be

held liable for

the actions that our

local, strategic or joint venture

partners take inside or outside

of the United States, even

though our partners may

not be

subject to

these laws.

Such a

violation, even

if our

policies prohibit

it, could

materially and

adversely affect

our reputation,

business,

results

operations

and

financial

condition.

Any

expansion

into

developing

countries,

and

our

development

new

partnerships and joint venture relationships, could increase the risk

of OFAC violations in the

future.

In addition,

our payment

processing and

financial services

activities are

subject to

extensive

regulation.

Compliance with

the

requirements under the various

regulatory regimes may cause

us to incur significant

additional costs and failure

to comply with such

requirements could result in the shutdown of

the non-complying facility, the imposition of liens, fines and/or civil or

criminal liability.

are

required

comply

with

anti-corruption

laws

and

regulations,

including

the

FCPA

and

Bribery Act, in the

jurisdictions in which we

operate our business, which could

adversely impact our future

growth.

The FCPA prohibits

us from providing anything of value to foreign

officials for the purposes of obtaining or retaining business,

securing

any

improper

business

advantage,

and

requires

keep

books

and

records

that

accurately

and

fairly

reflect

our

transactions.

As part

our

business,

may

deal

with

state-owned

business

enterprises,

the

employees

which

are

considered

foreign

officials

for

purposes of

the FCPA.

The UK

Bribery

Act includes

provisions

that extend

beyond bribery

of foreign

public

officials and also apply to

transactions with individuals not employed

by a government and

the act is also

more onerous than the FCPA

in a number of other respects, including

jurisdiction, non-exemption of facilitation

payments and penalties. Some of the international

locations in which we operate or have investments lack a developed

legal system and have higher than normal levels of corruption.

Any

failure

adopt

appropriate

compliance

procedures

and

ensure

that

our

employees,

agents

and

business

partners

comply with

the anti-corruption

laws and

regulations could

subject us

to substantial

penalties, and

the requirement

that we

comply

with these laws could

put us at a

competitive disadvantage against

companies that are not

required to comply.

For example, in many

emerging

markets,

there

may be

significant

levels

of official

corruption,

and

thus, bribery

of public

officials

may

a comm

only

accepted cost

of doing

business. Our

refusal to

engage in

illegal behavior,

such as

paying bribes,

may result

in us not

being able

obtain business that we

might otherwise have been able

to secure or possibly

even result in unlawful,

selective or arbitrary action being

taken against us.

Violations of anti-corruption laws and regulations are punishable by civil penalties, including fines, as well as criminal fines and

imprisonment. We

have developed policies

and procedures as part

of a company-wide

compliance program that

is designed to assist

our compliance with applicable U.S.,

South African and other international

anti-corruption laws and regulations,

and provide regular

training to our

employees to comply

with these laws

and regulations. However,

there can be

no assurance that

all of our

employees,

consultants, partners, agents or other associated persons will not take actions in violation of our policies or

these laws and regulations,

or that our

policies and procedures

will effectively prevent

us from violating

these regulations in every

transaction in which

we may

engage, or

provide a defense

to any alleged

violation. In

particular,

we may be

held liable for

the actions

that our

local, strategic

joint venture

partners take inside

or outside

of the United

States, even though

our partners may

not be subject

to these

laws. Such a

violation,

even

our

policies

prohibit

it,

could

materially

and

adversely

affect

our

reputation,

business,

results

operations

and

financial condition.

do not

have a South

African banking license

and, therefore, we

provide our EPE

solution through

an arrangement with

a third-party bank,

which limits our

control over this

business and the

economic benefit

we derive from it.

If this arrangement were

to terminate, we would

not be able to operate

our EPE business

without alternate means of access to a banking license.

The

South

African

retail

banking

market

highly

regulated.

Under

current

law

and

regulations,

our

EasyPay

Everywhere

(“EPE”) business activities require

us to be registered as

a bank in South Africa

or to have access to an

existing banking license.

are not currently so registered,

but we have an agreement

with Grindrod Bank, a subsidiary

of African Bank Limited, that

enables us

to implement

our EPE

program in

compliance

with the

relevant laws

and regulations.

If this

agreement

were to

be terminated,

would

not

able

operate

these

services

unless

were

able

obtain

access

banking

license

through

alternate

means.

Furthermore, we

have to

comply with

the strict

anti-money laundering

and customer

identification regulations

of the South

African

Reserve Bank (“SARB”),

when we open

new bank accounts

for our customers

and when they

transact. Failure to

effectively implement

and monitor responses to these regulations may result in significant fines or prosecution

of Grindrod Bank and ourselves.

addition,

the

South

African

Financial

Advisory

and

Intermediary

Services

Act,

2002,

requires

persons

who

act

intermediaries between financial product suppliers and consumers

in South Africa to register

as financial service providers. Smart

Life

was granted an Authorized Financial Service Provider, or FSP,

license on June 9, 2015, and EasyPay Financial Services (Pty) Ltd and

Net1

Mobile

Solutions

(Pty) Ltd

were

each granted

FSP licenses

July

11,

2017.

our

FSP licenses

are

cancelled,

may

stopped from continuing our financial

services businesses in South Africa

unless we are able

to enter into a

representative arrangement

with a third party FSP.

Furthermore, the proposed

Conduct of Financial

Institutions Bill will make

significant changes to

the current licensing

regime.

The second

draft of

the Conduct

of Financial

Institutions Bill

was published

for public

comment on

29 September

2020. While

the

proposals currently

indicate that

existing licenses

will be converted,

if we are

not successful in

our efforts

to obtain

a conversion

the existing

licenses or

cannot comply

with the

new conduct

standards to

be published

at the

same time

under the

Financial Sector

Regulation Act, No. 9 of 2017, we may be stopped from continuing

our financial services businesses in South Africa.

may

subject

regulations

regarding

privacy,

data

use

and/or

security,

which

could

adversely

affect our business.

We are

subject to regulations in

a number of the countries

in which we operate

relating to the processing

(which includes,

inter

alia

, the collection, use, retention, security and transfer) of

personal information about the people (whether natural or juristic)

who use

our products

and services.

The interpretation

and application

of user

data protection

laws are

in a

state of

flux. These

laws may

interpreted

and

applied

inconsistently

from

country

and

our

current

data

protection

policies

and

practices

may

not

consistent with those interpretations and applications. Complying

with these varying requirements could cause us to incur

substantial

costs or

require us

to change

our business

practices in

a manner

adverse to

our business.

Any failure,

or perceived

failure, by

us to

comply with any regulatory requirements or international

privacy or consumer protection-related laws and regulations could

result in

proceedings

actions

against

governmental

entities

others,

subject

significant

penalties

and

negative

publicity.

addition, as

noted above,

we are

subject to

the possibility

of security

breaches, which

themselves may

result in

a violation

of these

laws.

Amendments to

the NCA

were signed into

law in

South Africa

in August 2019.

Compliance with

these

amendments may adversely impact our micro-lending operations in South Africa.

In August 2019, the National Credit Amendment Bill, or debt-relief bill, was signed into law in South Africa.

The effective date

of the debt-relief

bill has not

yet been announced

and has been

significantly delayed.

believe that the

debt-relief bill will

restrict

the ability of financial services providers to provide lending

products to certain low-income earners and will increase the

cost of credit

these

consumers.

As a

result,

compliance

with

the debt

-relief

bill

may

adversely

impact

our

micro-lending

operations

South

Africa. Furthermore, we expect that it will take us, and other financial services providers, some time to fully understand, interpret and

implement this new legislation in

our lending processes and practices.

Non-compliance with the provisions of this

new legislation may

result in financial loss and penalties, reputational loss or other administrative

punishment.

Risks Relating to our Common Stock

If we were

deemed an “investment

company” under the

Investment Company Act,

applicable restrictions

could make it impractical for

us to conduct our business as

an operating company and could

have a material

adverse effect on our business.

are an operating

company whose business is

focused on developing

and offering payment

solutions, transaction processing

services and financial technologies across

multiple industries directly and through

our wholly-owned subsidiaries. Our conduct,

public

filings and

announcements

hold us

out as

such an

operating

company

and

do not

hold

us out

as being

engaged

in the

business of

investing, reinvesting or trading

in securities. We own, and

in the

past have owned,

certain assets that

may be deemed

to be

“investment

securities” within

the meaning

of Section

3(a)(2) of

the Investment

Company

Act. The

fluctuating

value of

our assets

that may

deemed to be investment securities, could cause us to be deemed to be an

“investment company” under the Investment Company Act

if the value of such investment securities exceeds certain defined thresholds.

If we are deemed

an investment company

and not entitled to

an exception or

exemption from registration

under the Investment

Company Act, we would have to register as

an investment company, modify our asset profile or otherwise change our business so that

it falls outside

the definition

of an investment

company under the

Investment Company

Act. Registering as

an investment

company

pursuant to

the Investment

Company Act

could, among

other things,

materially limit

our ability

to borrow

funds or

engage in

other

transactions and

otherwise would

subject us

to substantial

and costly

regulation. Failure

to register,

if required,

would significantly

impair our ability to continue to engage in our business and would have a material

adverse impact on our business and operations.

Our stock price has been and may continue to be volatile.

Our stock price has periodically experienced significant volatility. During the 2023 fiscal year, our stock

price ranged from a low

of $3.02 to a high of $5.97. We

expect that the trading price of our common stock may

continue to be volatile as a result of a number

of factors, including, but not limited to the following:

•

any adverse developments in litigation or regulatory actions in which we are

involved;

•

fluctuations in currency exchange rates, particularly the U.S. dollar/ZAR exchange

rate;

•

announcement

additional

BEE

transactions,

especially

one

involving

the

issuance

potential

issuance

equity

securities or dilution or sale of our existing business in South Africa;

•

quarterly variations in our operating results;

•

significant fair value adjustments or impairment in respect of investments or

intangible assets;

•

announcements of acquisitions or disposals;

•

the timing of, or delays in the commencement, implementation or completion

of major projects;

•

large purchases or sales of our common stock; and

•

general conditions in the markets in which we operate.

Additionally,

shares of

our common

stock can

be expected

to be

subject to

volatility resulting

from purely

market forces

over

which we have no control.

The put

right we granted

to the IFC

Investors on the

occurrence of certain

triggering events may

have

adverse impacts on us.

In May

2016, we

issued an

aggregate of

9,984,311

shares of

our common

stock to

the IFC Investors,

of which,

as of

June 30,

2023,

the

IFC

Investors

held

7,366,866

shares.

granted

the

IFC

Investors

certain

rights,

including

the

right

require

repurchase

any

share held

by the

IFC Investors

pursuant

the

May

2016 transaction

upon

the occurrence

of specified

triggering

events,

which

we refer

to as

“put

right.”

The put

price

per share

will be

the higher

of the

price

per share

paid

to us

the IFC

Investors and

the volume-weighted

average price

per share prevailing

for the 60

trading days preceding

the triggering

event, except

that with respect

to a put right

triggered by rejection

of a bona

fide offer,

the put price

per share will

be the highest

price offered

the offeror.

If a put triggering event occurs, it could adversely impact

our liquidity and capital resources. In addition, the

existence of

the put right could also affect whether or on what terms a third party might in the future offer to purchase our company.

Our response

to any such offer could also be complicated, delayed or otherwise influenced

by the existence of the put right.

Approximately

37%

our

outstanding

common

stock

owned by

two shareholders.

The

interests of

these shareholders may conflict with those of our other shareholders.

There is a concentration of ownership

of our outstanding common stock because

approximately 37% of our outstanding common

stock is owned by two

shareholders. Based on their most

recent SEC filings disclosing

ownership of our shares, Value Capital Partners

(Pty) Ltd, or VCP,

and IFC Investors, beneficially own approximately 25% and 12% of our outstanding common

stock as of June 30,

2023, respectively.

The interests of

VCP and the

IFC Investors may

be different

from or conflict

with the interests

of our other

shareholders. As a

result of

the significant

combined ownership

by VCP

and the

IFC Investors,

they may

be able,

if they

act together,

to significantly

influence the

voting outcome

of all

matters requiring

shareholder approval.

This concentration

of ownership

may have

the effect

delaying or preventing

a change of control of

our company,

thus depriving shareholders

of a premium for

their shares, or facilitating

a change of control that other shareholders may oppose.

We may seek to raise

additional financing by

issuing new securities

with terms or

rights superior to

those

of shares of our common stock, which could adversely affect the market price of such shares.

may require

additional financing

to fund future

operations, including

expansion in

current and new

markets, programming

development and acquisition,

capital costs and

the costs of any

necessary implementation of

technological innovations or

alternative

technologies, or to fund acquisitions. We may also wish to raise additional equity funding to

reduce the amount of debt funding on our

balance sheet. Because of the exposure to market risks associated

with economies in emerging markets, we may not

be able to obtain

financing on favorable terms or at all.

If we raise additional funds by

issuing equity securities, the percentage ownership of our

current

shareholders will be reduced, and the holders of the new equity securities may have rights superior to those of the holders of shares of

common stock,

which could

adversely affect

the market

price and

voting power

of shares

of common

stock. If

we raise

additional

funds by issuing debt securities, the holders of these debt securities would similarly have some rights senior

to those of the holders of

shares of common stock, and the terms of these debt securities could impose restrictions on operations and

create a significant interest

expense for us.

Issuances

of significant

amounts of

stock in

the future

could potentially

dilute

your equity

ownership

and adversely affect the price of our common stock.

believe that

it is necessary

to maintain

a sufficient

number of

available authorized

shares of our

common stock

in order

provide

with

the flexibility

issue shares

for

business

purposes

that

may

arise

from time

time.

For example,

could

sell

additional shares to raise

capital to fund our

operations, to reduce debt

or to acquire other

businesses, issue shares in

a BEE transaction,

issue additional shares under our stock incentive plan or declare a stock dividend. Our board may authorize

the issuance of additional

shares of common stock without notice to, or further

action by, our shareholders, unless shareholder approval is required by law or the

rules of the NASDAQ Stock

Market. The issuance of additional

shares could dilute the equity

ownership of our current shareholders

and any such additional shares would likely be freely tradable, which could

adversely affect the trading price of our common

stock.

Failure to maintain effective internal control over financial

reporting in accordance with Section 404

of the

Sarbanes-Oxley

Act, especially

over companies

that we

may acquire,

could have

a material

adverse

effect on our business and stock price.

Under Section 404

of the Sarbanes-Oxley

Act of 2002,

or Sarbanes, we

are required to

furnish a management

certification and

auditor attestation regarding the

effectiveness of our internal

control over financial reporting.

We are

required to report, among other

things, control deficiencies that constitute a “material weakness”

or changes in internal control that

materially affect, or are reasonably

likely

materially

affect,

internal

control

over

financial

reporting.

“material

weakness”

deficiency,

combination

deficiencies, in internal

control over financial

reporting such that

there is a

reasonable possibility that

a material misstatement

of annual

or interim financial statements will not be prevented or detected on

a timely basis.

The

requirement

evaluate

and

report

our

internal

controls

also

applies

companies

that

acquire.

Some

these

companies may not

be required

to comply with

Sarbanes prior

to the

time we

acquire them.

The integration of

these acquired

companies

into our internal

control over financial

reporting could require

significant time and

resources from our

management and other

personnel

and may increase our compliance costs.

If we fail to successfully

integrate the operations of these

acquired companies into our internal

control over financial reporting, our internal control over financial reporting

may not be effective.

While

continue

dedicate

resources

and

management

time

ensuring

that

have

effective

controls

over

financial

reporting, failure to

achieve and maintain

an effective internal

control environment could

have a material

adverse effect on

the market’s

perception of our business and our stock price.

You

may

experience

difficulties

effecting

service

legal

process,

enforcing

foreign

judgments

bringing

original

actions

based

upon

U.S.

laws,

including

federal

securities

laws

other

foreign

laws,

against us or certain of our directors and officers and experts.

While Lesaka is incorporated in the state of Florida, United States, the company is headquartered in Johannesburg, South Africa

and substantially all of the company’s

assets are located outside the United

States. In addition, the majority of

Lesaka’s directors

and

all

its

officers

reside

outside

the

United

States

and

the

majority

our

experts,

including

our

independent

registered

public

accountants, are based in South Africa.

As a

result, even

though you

could effect

service of

legal process

upon Lesaka,

as a

Florida corporation,

in the

United States,

you may not be able

to collect any judgment obtained

against Lesaka in the United

States, including any judgment based

on the civil

liability

provisions

U.S.

federal

securities

laws,

because

substantially

all

our

assets

are

located

outside

the

United

States.

Moreover, it may not be possible for

you to effect service of legal process upon the majority of

our directors and officers or upon our

experts within

the United

States or

elsewhere outside

South Africa

and any

judgment obtained

against any

of our

foreign directors,

officers and experts in

the United States, including

one based on the

civil liability provisions of the

U.S. federal securities laws,

may

not be collectible in the United States and may not be enforced by a South

African court.

South Africa

is not

a party

to any

treaties regarding

the enforcement

of foreign

commercial judgments,

as opposed

to foreign

arbitral awards. Accordingly, a foreign judgment that

is not recognized in

South Africa has

no extra territorial effect, and

is not directly

enforceable in South Africa, but

constitutes a cause of action

which may be recognized and enforced

by South African courts provided

that:

•

the court which

pronounced the judgment

had international jurisdiction

and competence to entertain

the case according to

the principles recognized by South African law with reference to the jurisdiction

of foreign courts;

•

the judgment is final and conclusive (that is, it cannot be altered by the court which

pronounced it);

•

the judgment has not lapsed;

•

the recognition and

enforcement of the

judgment by South African

courts would not

be contrary to public

policy in South

Africa, including observance of the rules of natural justice which require

that no award is enforceable unless the defendant

was duly served with documents

initiating proceedings, that he

or she was given a

fair opportunity to be

heard and that he

or she enjoyed the right to be legally represented in a free and fair trial before an impartial

tribunal;

•

the judgment was not obtained by improper or fraudulent means;

•

the

judgment

does

not involve

the

enforcement

of a

penal

foreign

revenue

law or

any

award

of multiple

or punitive

damages; and

•

the enforcement of the judgment is not otherwise precluded by the provisions of

the Protection of Business Act 99 of 1978

(as amended), of the Republic of South Africa.

It has been the policy

of South African courts to award

compensation for the loss or damage

actually sustained by the person

whom the compensation is awarded. South African courts have awarded compensation to shareholders who have suffered damages as

a result

of a

diminution in

the value

of their

shares based

on various

actions by

the corporation

and its

management. Although

the

award

of punitive

damages

is generally

unenforceable

in the

South

African legal

system, that

does not

mean

that such

awards are

necessarily

contrary

public

policy.

The

award

punitive

damages

governed

the

relevant

South

African

legislation,

the

Conventional Penalties Act 15 of 1962 (as amended).

Whether a judgment

was contrary to

public policy

depends on the

facts of each

case. Exorbitant,

unconscionable, or

excessive

awards will generally be contrary to public policy. South African courts cannot enter into the merits of a foreign judgment and cannot

act as a court of appeal or review over the foreign court. Further, if a foreign judgment is enforced by a South African court,

it will be

payable in South African currency unless approval is obtained from SARB or an Authorised Dealer of SARB, to settle the judgement

in another

currency.

Also, under

South Africa’s

exchange control

laws, the

approval of

SARB or

an Authorised

Dealer is

required

before a defendant

resident in South Africa

may pay money to

a non-resident plaintiff

in satisfaction of a

foreign judgment enforced

by a court in South Africa.

It is

doubtful

whether an

original action

based on

United States

federal

securities laws

may

be brought

before South

African

courts. A plaintiff who

is not resident in South Africa may

be required to provide security for

costs in the event of proceedings being

initiated in

South Africa.

Furthermore, the

Rules of

the High

Court of

South Africa

require that

documents executed

outside South

Africa must be authenticated for the purpose of use in South African courts. In reaching the foregoing conclusions in respect of South

Africa, we consulted with our South African legal counsel, Werksmans

Inc.

ITEM 1B.

UNRESOLVED

STAFF COMMENTS

None.

ITEM 2.

PROPERTIES

We lease our corporate

headquarters facility which consists of approximately 87,000 square feet in Johannesburg,

South Africa.

We also lease properties throughout South

Africa, including an

approximately 36,000 square foot

manufacturing facility in Lazer

Park,

Johannesburg, 194 financial

services branches, 26 financial service

express stores and 22 satellite

branches. We

also lease additional

office space

in Johannesburg,

Cape Town

and Durban, South

Africa; and Gaborone,

Botswana. These leases

expire at various

dates

through

2028,

assuming

the

exercise

options

extend.

believe

that

have

adequate

facilities

for

our

current

business

operations.

ITEM 3.

LEGAL PROCEEDINGS

Litigation related to CPS

result

significant

obligations

relating

to,

and

ongoing

litigation

arising

out

of,

CPS’

SASSA

contract,

including

the

exhaustion

of CPS’

legal appeals

against a

court judgment

to repay

additional SASSA

implementation

costs, CPS

was placed

into

liquidation in October

2020. As a

result, CPS’ liquidators

are currently in

control of the CPS

liquidated estate

and are managing

the

affairs in

relation thereto.

have proven

our claims

and are

noted as

a creditor

along with

other creditors

in the

liquidated estate.

See Item

1A—“Risk Factors

—Cash Paymaster

Services, or

CPS, has

been placed

into liquidation.

While no

claim has

been made

against Lesaka for CPS’ obligations, we cannot provide assurance that

no such claim will be made” for additional information.

There are no other material pending legal proceedings, other than ordinary

routine litigation incidental to our business, to which

we are a party or of which any of our property is the subject.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

PART

ITEM 5.

MARKET FOR REGISTRANT’S COMMON EQUITY,

RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF

EQUITY SECURITIES

Market information

Our common stock is listed on The NASDAQ Global Select Market, or Nasdaq, in the United States under

the symbol “LSAK”

and on the JSE in South Africa under the symbol “LSK.” The Nasdaq is our

principal market for the trading of our common stock and

we have a secondary listing on the JSE.

Our transfer

agent in

the United

States is

Computershare

Shareowner Services

LLC, 480

Washington

Blvd, Jersey

City,

New

Jersey,

07310.

According

the

records

our

transfer

agent,

August

31,

2023,

there

were

shareholders

record

our

common stock.

believe that

a substantially

greater number

of beneficial

owners of

our common

stock hold

their shares

though

banks, brokers,

and other financial

institutions (i.e. “street

name”). Our transfer

agent in South

Africa is JSE

Investor Services (Pty)

Ltd, One Exchange Square, 2 Gwen Lane, Sandown, Sandton, 2196,

South Africa.

Dividends

have not

paid any

dividends on

shares of

our common

stock during

our last

two fiscal

years and

presently intend

to retain

future earnings to finance the expansion of the

business. We do not anticipate paying any cash dividends in the

foreseeable future. The

future dividend policy will depend on our earnings, capital requirements, debt commitments, expansion plans, financial condition and

other relevant factors.

Issuer purchases of equity securities

February

2020,

our

board

directors

approved

the

replenishment

our

existing

repurchase

authorization

repurchase up to an aggregate of $100 million of common stock. The authorization

has no expiration date.

The table

below presents

information relating

to purchases

of shares

of our

common stock

during the

fourth quarter

of fiscal

2023:

Period

(a)

Total

number of

shares purchased

(b)

Average price

paid per share ($)

(c)

Total

number of shares

purchased as part of

publicly announced

plans or programs

(d)

Maximum dollar value

of shares that may yet

be purchased under the

plans or programs ($)

April 2023

100,000,000

May 2023

(1)

246,606

3.26

100,000,000

June 2023

(1)

2,881

3.96

100,000,000

Total

249,487

(1) Relates to the delivery of shares of our common

stock to us by certain of our employees to settle their income

tax liabilities.

These shares do not reduce the repurchase authority under the share repurchase

program.

Share performance graph

The chart

below compares

the five-year

cumulative return,

assuming the

reinvestment of

dividends, where

applicable, on

our

common stock with that of the S&P 500 Index and the NASDAQ Industrial Index. This graph assumes

$100 was invested on June 30,

2018, in each of our common stock, the companies in the S&P 500 Index, and the companies in the

NASDAQ Industrial Index.

ITEM 6.

[RESERVED]

ITEM 7.

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND

RESULTS

OF OPERATIONS

The following

discussion and

analysis should

be read

in conjunction

with Item

8—“Financial Statements

and Supplementary

Data.” In

addition

to historical

consolidated

financial

information,

the following

discussion

and

analysis contains

forward-looking

statements that involve risks, uncertainties and assumptions. See Item 1A—

“Risk Factors” and “Forward Looking Statements.”

U.S. securities laws

require that when

we publish any

non-GAAP measures, we

disclose the reason

for using these

non-GAAP

measures

and

provide

reconciliations

the

most

directly

comparable

GAAP

measures.

discuss

why

consider

useful

present these non-GAAP

measures and the

material risks and

limitations of these

measures, as well

as a reconciliation

of these non-

GAAP measures

to the

most directly

comparable GAAP

financial measure

below at

“—Results of Operations

—Use of Non-GAAP

Measures” below.

Overview

We are a provider of financial technology,

or fintech, products and services to unbanked and underbanked individuals and small

businesses, predominantly

in South Africa.

have developed and

own most of

our payment technologies,

and where possible,

utilize this technology to

provide financial and

value-added services to

our customers by

including them in the

formal financial system.

Sources of Revenue

generate our

revenues by

charging

transaction fees

to merchants,

financial service

providers, utility

providers, bill

issuers

and consumers;

by selling

pinned airtime

to merchants;

by providing

loans to

merchants and

consumers, and

insurance products

consumers and by selling hardware, licensing software and providing

related technology services to merchants.

We act

as a service provider whereby we

own and operate the technology and

apply it in a system ourselves,

charging one-time

and ongoing fees for the use of the system either on

a fixed or ad valorem basis. For instance, through

the acquisition of Connect, we

now provide cash management and payment services to merchant customers through a digital vault (safe asset) which is located at the

customer’s premises and

generate processing revenue from

the provision of these services.

We also

offer merchant customers

access

to platforms through

which we (a) generate

revenue from the sale

of prepaid airtime and

(b) generate fees from

distribution of VAS,

including prepaid

airtime, prepaid

electricity,

gaming voucher,

and other

services, to

users of

our platforms.

also generate

fees

from debit

and credit

card transaction

processing and

interest revenue

from qualifying

merchant

customers

who are

able to

access

short-term loans. The revenue and costs associated with these services and

sales are included in our merchant operating segment.

provide consumers with

bank accounts from

which we generate

a monthly fee

and also charge

fees on an ad

valorem basis

for goods

and services

purchased. Usage

of our

bank accounts

also provides

our customers

with access

to short-term

loans and

life

insurance products.

also generate

fees from

consumers utilizing

our ATM

network. The

revenue and

costs associated

with this

approach are reflected in our consumer operating segment.

Developments during Fiscal 2023

Fiscal 2023 represents a milestone for Lesaka. We

made significant progress in our turnaround strategy and delivered continued

growth for Lesaka despite challenging macroeconomic and socio-political

conditions.

reported a

net loss

attributable to

us of

$35.1 million

(ZAR 629.2

million) during

fiscal 2023

compared with

a net

loss of

$43.9 million (ZAR 666.8 million) during fiscal 2022. Our Consumer Division (“Consumer”) returned to

profitability and contributed

three

sequential

quarters

positive

Segment

Adjusted

EBITDA,

with

our

Merchant

Division

“(Merchant”)

continuing

display

strong

growth

and

Segment

Adjusted

EBITDA

profitability

during

the

entire

fiscal

year.

delivered

Group

Adjusted

EBITDA

profit,

a non-GAAP measure, of ZAR 497.6 million ($27.7 million) in fiscal 2023, compared with a Group Adjusted EBITDA loss of

ZAR 267.7

million ($17.6

million) in

fiscal 2022, demonstrating

successful execution

against a

carefully considered

transformation

and growth strategy.

Group Adjusted EBITDA

is a non-GAAP measure,

refer to reconciliation below

at “—Results of Operations—

Use of Non-GAAP Measures”.

Our mission at Lesaka is

to enable merchants to compete and

grow, and to improve the lives of

South Africa’s grant beneficiaries

by providing access

to innovative financial

technology and value

creating solutions. We

achieve this through our

vision to build

and

operate the

leading full-service

fintech platform

in Southern

Africa, offering

cash management,

payment processing,

Value

Added

Services (“VAS”),

capital and financial services to merchants and underserved consumers.

Merchant Division outperformance

Our Merchant Division has

shown significant growth in our offering

to MSME, which is supported

by the robust secular trends

underpinning financial inclusion, cash management and digitalization

for MSMEs.

Performance in our Merchant division has been driven by:

●

Kazang, which is our VAS and Supplier Payments Business, has seen

strong adoption by MSMEs in

the informal sector, with

a 47% year-on-year

growth in the

number of devices

deployed. We

had approximately

75,000 devices deployed

as of June

30, 2023, compared to approximately 51,000 devices one year ago;

●

provide card acquiring

solutions in the informal

sector via Kazang

Pay and in

the formal sector we

provide this service

through

Card

Connect.

Card-enabled

POS

devices

increased

approximately

44,900

June

30,

2023,

compared

approximately 22,650 a year ago, a growth of 98% in deployed devices;

●

We provide merchants access to credit through Capital

Connect and Kazang Pay

Advance. We continue to see strong demand

for this merchant

credit offering

and disbursed

just over ZAR

1.0 billion

during the

year, compared

to approximately

ZAR

0.6 billion in the comparable period last year, representing

growth of 62%.

●

Our automated cash management and payments business, Cash

Connect, effectively puts the “bank” in approximately

4,390

merchants’ stores (compared to approximately 4,080 merchants’

stores a year ago). Cash

Connect is a provider of

robust cash

vaults in the

formal sector,

and is building

a presence

in the informal

sector.

Cash Connect enables

our merchant

customer

base to significantly mitigate their operational risks pertaining to cash management

and security.

Consumer Division contributing sequential positive Segment Adjusted EBITDA

and poised for growth

Over the past four quarters we have consistently referenced the

three levers underpinning our strategy of returning the Consumer

Division

profitability

growing

active

EasyPay

Everywhere

(“EPE”)

account

numbers,

increasing

average

revenue

per

user

(“ARPU”) through cross-selling and cost optimization.

The progress on our three key initiatives is as follows:

●

Driving customer acquisition

○

Our total active EPE transactional account base

stood at approximately 1.3 million at

the end of June 2023,

of which

approximately

1.1 million

(or approximately

85%) are

permanent grant

recipients. The

balance

comprises Social

Relief of

Distress (“SRD”)

grant

recipients, which

was introduced

during the

COVID pandemic

and extended

calendar 2023. As of the end of June

2023, we increased our permanent grant account base by 2% on

a net basis and

our

total

grant

base

10%

net

basis,

compared

the

prior

year.

The

net

growth

our

permanent

grant

recipient base has

been slower

than anticipated as

we continue to

transition the business

into a

sales driven, customer-

centric, financial services provider.

○

Our priority

is to grow

our permanent

grant recipient

customers base,

where we

can build

deeper relationships

offering other products such as insurance and lending. We do not offer the same breadth of service to the SRD grant

base due to the temporary nature of the grant.

○

We continue to focus our efforts on designing and implementing products and services that we believe will enhance

the lives of these people and their families. This in turn should improve account

activation and utilization.

●

Progress on cross

selling

EasyPay Loans

o

We originated approximately 850,000 loans in fiscal 2023 with our net consumer loan book increasing 19% to ZAR

415

million

June

30,

2023,

compared

ZAR

349

million

June

30,

2022.

The

loan

conversion

rate

continues to

improve following

the implementation

of a

number of

targeted loan

campaigns over

the last

quarter.

The portfolio loss ratio,

calculated as the loans

written off during the

period as a percentage

of the total loan book,

remains encouragingly low at approximately 6% per annum.

EasyPay Insurance

o

Our insurance product sales

continues

to grow and

is a material

contributor to the

improvement in our

overall ARPU.

have been

able to improve

customer penetration

to approximately

30% of our

active permanent

grant account

base as of June 30, 2023, compared to just below 20% as of June 30, 2022. Over 124,700 new policies were written

during fiscal 2023, compared to approximately 27,600 in the comparable period in fiscal 2022. The total number of

active policies has

grown by 36%

to approximately 335,000 policies

as of June

30, 2023, compared to

June 30, 2022.

o

have experienced

a reduction in

the number of

insurance claims incurred

following the cancellation

of certain

offerings and also as a result of reduction in the number of pandemic

-related deaths.

ARPU

o

ARPU for our

permanent client base

has increased

to approximately ZAR

80 for the

fourth quarter of

fiscal 2023,

from approximately ZAR 74 in the fourth quarter of fiscal 2022.

●

Cost optimization

o

Successful execution

of the

cost optimization

initiatives has

contributed

to our

achievement of

three consecutive

quarters of positive

Segment Adjusted EBITDA.

These initiatives included

branch rationalizations, deployment

our

ATMs

third

party

merchant

stores

and

reductions

our

cash

management

expenditures.

continue

evaluate

and

implement

further

optimization

measures,

particularly

around

our

branch

infrastructure

and

ATM

network, as we grow our Consumer Division.

Strengthening our relationships with key

stakeholders

We continue to build our relationship with the South African Social Security Agency (“SASSA”) through proactive engagement

at a local, provincial, and national level.

have

also

made

good

progress

enhancing

our

relationships

with

our

shareholders,

regulators,

suppliers

and

other

key

participants across our industry.

Economic Environment and Impact of loadshedding

The

trading

environment

remains

challenging

South

Africa.

High

interest

rates,

inflation

and

unemployment

are

being

compounded by daily power

cuts (known as load-shedding

in South Africa). The power

disruptions adversely impact our

customers,

especially in our

Merchant Division, where

they lose valuable

trading hours if

they do not

have access to

alternative power supplies

and

back-up

facilities

process

electronic

payments

and

value-added

services.

The

negative

impact

is,

however,

some

extent

mitigated as our customer base is geographically diversified, and the rotational nature of load-shedding results in

localized power cuts

over shorter time periods.

According to data published by EskomSePush, our customers experienced significantly higher level of load-shedding during the

first six months of calendar 2023 of just over five hours, on average, per day,

compared with just over two hours, on average,

per day

during calendar 2022. Specifically, these power cuts intensified during

the fourth quarter of

fiscal 2023, frequently exceeding 10 hours

per day.

This deterioration

has severely

impacted our

merchant’s

ability to

make up

lost trading

hours and

recharge back

up power

supplies where available.

Notwithstanding

the

challenging

operating

environment

our

teams

have

delivered

growth

the

Merchant

and

Consumer

Divisions, demonstrating the resilience of our business model which is firmly underpinned by

the relevance and value of our offering

to our target market.

Improvement in our Broad Based Black Economic

Empowerment (“B-BBEE”) rating to level 5

B-BBEE is

key

strategic priority

for us.

Achievement

of B-BBEE

objectives

is measured

by a

scorecard which

establishes a

weighting

for

various

elements.

Scorecards

are

independently

reviewed

accredited

BEE

verification

agencies

which

issue

certificate that presents

an entity’s

BEE Contributor Status

Level, with level 1

being the highest and

“no rating” (a level

below level

8) as the lowest.

During fiscal 2023, we

made significant progress in terms

of improving our empowerment credentials

and are pleased

to report

that our

independently

verified

B-BBEE rating

has improved

to a

level 5

rating from

a level

8 rating.

Together

with the

various other B-BBEE initiatives and programmes being

rolled out, including our Youth

Employment Services (“YES”) programme,

we aim to achieve a level 4 rating by the end of fiscal year 2024.

Employee Share Ownership Plan (“ESOP”)

Under

the

South

African

Competition

Tribunal’s

approval

the

Connect

acquisition,

are

required

establish

ESOP

within 36 months of

the implementation of the

transaction that complies with certain

design principles. This will

benefit the workers

of the merged

entity and result in

them receiving a shareholding

in our company equal

in value to at

least 3% of the

issued shares in

our company as of April 14, 2022. If within 24 months of the implementation date of the transaction, we generate a positive net profit

for three consecutive

quarters, the

ESOP shall

increase to

5% of

the issued

shares in

our company

as of

April 14,

2022. We

expect

that the majority

of our South African

workforce will be

eligible to participate

in the ESOP.

expect that participating

employees

will be required

to earn the

shares awarded over

a period of

time, currently

estimated at approximately

seven years,

but this vesting

period, as well as other

terms of ESOP,

have not been finalized

as of the date of

filing this Annual Report

on Form 10-K and

will be

subject to shareholder approval.

currently

expect to

issue up

to 5%

of our

issued share

capital to

the ESOP

and

we believe

that this

transaction

will be

qualifying transaction under South Africa’s Broad Based Black Economic Empowerment

Act, and is a key strategic imperative for us

in achieving a target BBEE level 4 rating by 30

June 2024. We are

pleased to report that we progressed well on this

initiative and are

confident that we will achieve this condition of the Connect acquisition within

the time frames agreed.

Critical Accounting Policies

Our audited consolidated

financial statements have

been prepared in accordance

with U.S. GAAP,

which requires management

make

estimates

and

assumptions

about

future

events

that

affect

the

reported

amount

assets

and

liabilities

and

disclosure

contingent

assets and liabilities. As future

events and their effects

cannot be determined with

absolute certainty,

the determination of

estimates requires

management’s

judgment based

on a

variety of

assumptions and

other determinants

such as

historical experience,

current

and

expected

market

conditions

and

certain

scientific

evaluation

techniques.

Management

believes

that

the

following

accounting policies

are critical due

to the degree

of estimation required

and the impact

of these policies

on the understandi

ng of the

results of our operations and financial condition.

Business Combinations and the Recoverability of Goodwill

A significant component

of our growth

strategy is to acquire

and integrate businesses

that complement

our existing operations.

The purchase

price of

an acquired

business is

allocated to

the tangible

and intangible

assets acquired

and liabilities

assumed

based

upon their estimated

fair value at the

date of purchase.

The difference between

the purchase price and

the fair value of

the net assets

acquired is

recorded as goodwill.

In determining

the fair value

of assets acquired

and liabilities assumed

in a business

combination,

we use various

recognized valuation methods, including

present value modeling.

Further, we make assumptions

using certain valuation

techniques, including discount rates and timing of future cash flows.

We review the carrying value of goodwill annually

or more frequently if circumstances indicating impairment have occurred. In

performing this review,

we are required to estimate

the fair value of goodwill that

is implied from a valuation of

the reporting unit to

which the goodwill

has been allocated

after deducting the

fair values of

all the identifiable

assets and liabilities

that form part

of the

reporting

unit.

The determination

the fair

value

of a

reporting

unit requires

make

significant

judgments

and estimates.

determining the fair value of reporting units for

fiscal 2023

and 2022, we considered entity-specific growth rates, future expected cash

flows

used

our

discounted

cash

flow

model,

and

the

weighted-average

cost

capital

applicable

peer

and

industry

comparables of the reporting units.

We base

our estimates on assumptions

we believe to be reasonable

but that are unpredictable and

inherently uncertain. In addition, we make

judgments and assumptions in allocating assets

and liabilities to each of

our reporting units.

The results of our impairment tests during fiscal 2023

indicated that the fair value of our reporting units exceeded

their carrying

values,

with

the

exception

the

$7.0

million

goodwill

impaired

during

fiscal

2023,

discussed

Note

our

audited

consolidated financial statements. The

results of our impairment tests

during fiscal 2022

indicated that the fair value

of our reporting

units exceeded their carrying values and so did not require impairment.

Intangible Assets Acquired Through Acquisitions

The

fair values

of the

identifiable

intangible

assets acquired

through

acquisitions

were determined

by management

using

the

purchase

method

of accounting.

completed

the acquisition

Connect

during

fiscal 2022

where

identified

and

recognized

intangible assets. We

used the relief

from royalty

method to value

identified brands

and the multi-period

excess earnings method

value the

integrated platform

and identified

customer relationships.

have used

the relief

from royalty

method, the

multi-period

excess earnings method, the income approach and the cost approach

to value other historic acquisition-related intangible assets. In so

doing,

made

assumptions

regarding

expected

future

revenues

and

expenses

develop

the

underlying

forecasts,

applied

contributory asset charges, discount rates, exchange rates,

cash tax charges and useful lives.

The valuations were based on information available at the

time of the acquisition and the expectations and

assumptions that were

deemed reasonable by us. No assurance can be given, however,

that the underlying assumptions or events associated with such assets

will occur as

projected. For these

reasons, among others,

the actual cash

flows may vary

from forecasts of

future cash flows.

the

extent actual cash flows vary, revisions to the useful life or impairment of intangible assets may be necessary.

Management assess the

useful life of

the acquired intangible

assets upon initial

recognition and revisions

to the useful

life or impairment

of these intangible

assets may be necessary in the future.

Revenue recognition – principal versus agent considerations

We generate

revenue from the provision of transaction-processing

services through our various platforms

and service offerings.

use

these

platforms

(a)

sell

prepaid

airtime

and

(b)

distribute

VAS,

including

prepaid

airtime,

prepaid

electricity,

gaming

voucher, and other services, to

users of our

platforms. The determination

of whether we

act as

a principal or

as an agent

when providing

these services

requires a

significant amount

of judgement

and is based

on whether

(i) we

are primarily

responsible for

fulfilling the

promise to provide the specified goods or service, (ii) we have inventory risk before the specified good

or service has been transferred

to a customer

and (iii) we

have discretion

in establishing

the price

for the specified

good or

service. When

we are the

principal in

transaction,

such as

when we

purchase (and

thus control

and assume

inventory risk)

prepaid airtime

before selling

it to

customers

utilizing our platform,

revenue is reported

on a gross

basis. When we

are an agent

in a transaction,

such as when

we distribute VAS

on behalf of our customers, and do not control the good or service to be provided, revenue is recognized

based on the amount that we

are contractually entitled to receive for performing the distribution

service on behalf of our customers using our platform.

Valuation

of investment in Cell C

We have elected to measure

our investment in

Cell C, an

unlisted equity security, at fair

value using the

fair value option.

Changes

the

fair

value

this

equity

security

are

recognized

the

caption

“change

fair

value

equity

securities”

our

audited

consolidated statements of operations. The tax impact related to the change in

fair value of equity securities is included in income tax

expense in our audited

consolidated statements of operation.

The determination of

the fair value of this

equity security requires us

make significant judgments

and estimates.

We base our estimates

on assumptions we

believe to be

reasonable but that

are unpredictable

and inherently uncertain. Refer

to Note 6

of our audited consolidated

financial statements regarding the

valuation inputs and

sensitivity

related to our investment in Cell C.

We used a discounted cash flow model to determine the fair value of our investment in Cell C as of June 30, 2023 and 2022, and

valued Cell C at

$0.0 (zero) as

of each of

June 30, 2023

and 2022. We

utilized the latest approved

business plan provided

by Cell C

management for

the period

ended December

31, 2025,

for the

June 30,

2023

and 2022

valuations, and

the following

key valuation

inputs were used:

Weighted Average

Cost of Capital:

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

Long-term growth rate:

4.5% (3% as of June 30, 2022)

Marketability discount:

20% (10% as of June 30, 2022)

Minority discount:

24% (15% as of June 30, 2022)

Net adjusted external debt - June 30, 2023:

(1)

ZAR 8.1 billion ($0.4 billion), no lease liabilities included

Net adjusted external debt - June 30, 2022:

(2)

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

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

as of June 30, 2023.

(2) translated from ZAR to U.S. dollars at exchange rates applicable

as of June 30, 2022.

believe the

Cell C

business plan

is reasonable

based on

the current

performance and

the expected

changes in

the business

model. Refer to the sensitivity analysis included in

Note 6 to our audited consolidated financial statements

related to our valuation of

Cell C as of June 30, 2023.

Recoverability of equity securities and equity-accounted investments

review our

equity securities

and equity-accounted

investments for

impairment whenever

events or

circumstances indicate

that the

carrying amount

of the

investment may

not be

recoverable.

In performing

this review,

we are

required to

estimate the

fair

value of our

equity-accounted investments and other

equity securities. The

determination of the

fair value of

these investments requires

us to make significant judgments and estimates.

Other equity securities include our investments in MobiKwik and CPS. These equity securities do not have readily determinable

fair

values

and

therefore

have

elected

measure

these

investments

cost

minus

impairment,

any,

plus

minus

changes

resulting

from

observable

price

changes

orderly

transactions

for

the

identical

similar

investment

the

same

issuer.

identify an impairment indicator related

to these equity

securities, we are required

to assess the

carrying value of these

equity securities

against their fair

value. We

did not identify

any impairment indicators

during each

of fiscal 2023,

2022

and 2021,

and therefore did

not recognize any impairment losses related to these equity securities during

those years.

The determination of the fair value of an investment requires us to make significant judgments and estimates. We are required to

base our

estimates on

assumptions

which we

believe to

be reasonable,

but these

assumptions may

be unpredictable

and inherently

uncertain.

The Company did not

identify any observable transactions during

either of the

years ended June 30,

2023

and 2022, and therefore

there was no

change in the

fair value of

MobiKwik during

the year.

During the year

ended June 30,

2021, MobiKwik

entered into a

number of separate

agreements with new

shareholders to raise

additional capital through the

issuance of additional

shares. Specifically,

we used the

following transactions as

the basis for

our fair value

adjustments to our

investment in MobiKwik

during the year

ended

June 30, 2021: (i) in

early November 2020, $135.54 per

share; (ii) in March 2021, $170.33

per share; and (iii) in June

2021, $245.50

per share. We

considered each of these transactions to

be an observable price change in

an orderly transaction for similar or

identical

equity securities issued by MobiKwik. Accordingly,

the carrying value of our investment in MobiKwik increased

from $27.0 million

as of June 30, 2020, to $76.3 million as of June 30, 2021. The change in the fair value

of MobiKwik for the year ended June 30, 2021,

$49.3

million,

included

the

caption

“Change

fair

value

equity

securities”

our

audited

consolidated

statement

operations for the year ended June 30, 2021.

We did

not identify any impairment indicators

during fiscal 2022 and therefore

did not recognize any impairment

losses related

to our

equity-accounted investments

during that

year.

performed impairment

assessments

during fiscal

2023

and 2021,

for our

investment in

Finbond Group

Limited “(Finbond”)

following the

identification of

certain impairment

indicators. The

results of

our

impairment tests during

fiscal 2023

and 2021, resulted

in impairments of

$1.1 million and

$21.1 million, respectively,

related to our

equity-accounted investments. These impairments are discussed in

Note 9 to our audited consolidated financial statements.

For fiscal 2023, in determining the fair value of Finbond,

as it is listed on the Johannesburg Stock Exchange,

its market price as

of the impairment assessment dates,

adjusted for a liquidity discount

of 25%. For fiscal 2021,

in determining the fair value of

certain

of our equity-accounted investments, we

have considered (i) for Finbond

specifically, its market price as of the

impairment assessment

date, adjusted for a liquidity discount of 15%,

and (ii) the net asset

value of the equity-accounted investment being assessed as a proxy

of fair value because reasonable cash flow forecasts were not available.

base our estimates on

assumptions we believe to

be reasonable but that

are unpredictable and inherently

uncertain. The fair

value of our investment in Finbond is sensitive to movements in its market price, which is quoted in ZAR, because we use the market

price as the basis of our valuation.

Deferred Taxation

estimate

our

tax

liability

through

the

calculations

done

for

the

determination

our

current

tax

liability,

together

with

assessing temporary

differences

resulting

from the

different

treatment of

items for

tax and

accounting purposes.

These differ

ences

result in deferred tax assets and liabilities which are disclosed on our balance

sheet.

Management then

has to assess

the likelihood

that deferred tax

assets are more

likely than not

to be realized

in the foreseeable

future. A valuation allowance is

created if it is determined

that a deferred tax asset will not

be realized in the foreseeable

future. Any

change to the valuation allowance

would be charged or

credited to income in the period

such determination is made. In

assessing the

need for a valuation allowance,

historical levels of income, expectations

and risks associated with estimates of

future taxable income

and ongoing prudent and

practicable tax planning strategies

are considered. During fiscal 2023

and 2022, respectively we recorded

net decrease

of $8.0 million

and $1.7 million,

to our valuation

allowance, and during

fiscal 2021 we

recorded a net

increase of $1.5

million. As of June 30,

2023 and 2022, the valuation

allowance related to deferred

tax assets was $109.1 million

and $117.1 million,

respectively.

Stock-based Compensation

Management is required to make estimates and assumptions related to our valuation and recording of stock-based

compensation

charges under

current accounting

standards. These standards

require all share-based

compensation to employees

to be recognized

the

statement

operations

based on

their

respective

grant date

fair

values

over

the requisite

service

periods

and

also

requires

estimation of forfeitures when calculating compensation expense.

We utilize the Cox Ross

Rubinstein binomial model to

measure the fair

value of stock

options granted to

employees and directors.

have also utilized

a bespoke adjusted Monte

Carlo simulation discounted

cash flow model to

measure the fair value

of restricted

stock with market

conditions granted to

employees and directors.

The stock-based compensation

cost related to

these valuations has

been

recognized

straight-line

basis.

These

valuation

models

require

estimates

number

key

valuation

inputs

including

expected volatility, expected dividend yield, expected term and

risk-free interest rate. Our

management has estimated forfeitures based

historic

employee

behavior

under

similar

compensation

plans.

The

fair

value

stock

options

affected

the

assumptions

selected. The fair value calculation is especially sensitive

to our valuation assumption with respect to expected volatility. For instance,

a 5% increase (to 55%) or decrease (to 45%) in the expected volatility used (of 50%) to value stock options granted in February 2022,

would

result

in a

charge

that was

higher

(if 55%

were used)

or 9%

lower (if

45%

were used).

Net

stock-based

compensation

expense from continuing operations was $7.3 million, $3.0 million and $0.3

million for fiscal 2023, 2022 and 2021, respectively.

Accounts Receivable and Allowance for Doubtful Accounts Receivable

We maintain an allowance for doubtful accounts receivable

related to our Merchant

and Consumer segments with respect

to sales

or rental

of hardware,

support and

maintenance

services provided;

or sale

of licenses

to customers;

or the

provision of

transaction

processing services to our customers.

Our

policy

regularly

review

the

aging

outstanding

amounts

due

from

customers

and

adjust

the

provision

based

management’s estimate of

the recoverability of the amounts outstanding.

Management

considers

factors including

period outstanding,

creditworthiness

of the

customers, past

payment

history and

the

results

discussions

our

credit

department

(and

some cases

including

our

sales and

finance

teams)

with

the

customer.

consider this policy to be appropriate taking into account factors such as historical

bad debts, current economic trends and changes in

our customer

payment patterns.

Additional provisions

may be

required should

the ability

of our

customers to

make payments

when

due

deteriorate

the

future.

Judgment

required

assess

the

ultimate

recoverability

these

receivables,

including

ongoing

evaluation of the creditworthiness of each customer.

Lending

Merchant lending

We maintain

an allowance for doubtful finance loans

receivable related to our Merchant services

segment with respect to short-

term loans

to qualifying

merchant

customers.

Our policy

is to

regularly

review

the ageing

of outstanding

amounts due

from

these

merchants and

an allowance is

created for

the full amount

outstanding if

the customer is

in arrears for

more than 15

days. We

write

off

loans and

interest and

fees when

it is

evident

that reasonable

recovery

procedures,

including

where

deemed

necessary,

formal legal action, have failed.

Our

risk

management

procedures

include

adhering

our

proprietary

lending

criteria

which

uses

online-system

loan

application process, obtaining necessary customer transaction-history data and credit bureau checks.

We consider these procedures to

appropriate

because

it takes

into

account

variety

factors

such

as the

customer’s

credit

capacity

and

customer-specific

risk

factors when originating a loan.

Consumer microlending

We maintain an allowance for doubtful finance

loans receivable related to our Consumer services segment with respect to short-

term loans to qualifying customers.

Our policy is to

regularly review the ageing

of outstanding amounts due from

borrowers and adjust

the provision based on management’s

estimate of the recoverability of finance loans receivable. We

write off microlending loans and

related service fees if a borrower is in arrears with repayments for more than three months or

dies.

Credit bureau checks as well as an affordability test are

conducted as part of the origination process, both of which being in

line

with local regulations. We consider this policy to be appropriate because the affordability

test we perform takes into account a variety

factors

such

other

debts

and

total

expenditures

normal

household

and

lifestyle

expenses.

Additional

allowances

may

required should the ability of our customers to make payments when

due deteriorates in the future. A significant amount of

judgment

is required to assess the ultimate recoverability of these

finance loan receivables, including ongoing evaluation of the creditworthiness

of each customer.

Recent Accounting Pronouncements

Recent accounting pronouncements adopted

Refer

Note

2 of

our

audited consolidated

financial

statements for

a full

description

of recent

accounting

pronouncements,

including the dates of adoption and effects on financial

condition, results of operations and cash flows.

Recent accounting pronouncements not yet adopted as of June 30, 2023

Refer to Note 2

of our audited consolidated

financial statements for a

full description of recent

accounting pronouncements not

yet adopted as of June 30, 2023, including the expected dates of adoption and effects on financial condition, results of operations and The actual exchange rates for and at the end of the periods presented were as follows:

cash flows.

Currency Exchange Rate Information

Actual exchange rates

Table 1

June 30,

2023

2022

2021

ZAR : $ average exchange rate

17.7641

15.2154

15.4146

Highest ZAR : $ rate during period

19.7558

16.2968

17.6866

Lowest ZAR : $ rate during period

16.2034

14.1630

13.4327

Rate at end of period

18.8376

16.2903

14.3010

Translation Exchange Rates

We are required

to translate our results of operations from ZAR to U.S. dollars on a monthly

basis. Thus, the average rates used

to translate this data for the years ended June 30, 2023, 2022 and 2021, vary slightly from the averages shown in the table above. The

translation rates we use in presenting our results of operations are the rates shown

in the following table:

Table 2

June 30,

2023

2022

2021

Income and expense items: $1 = ZAR

17.9400

15.1978

15.7162

Balance sheet items: $1 = ZAR

18.8376

16.2903

14.3010

Results of operations

The discussion

of our

consolidated overall

results of

operations is

based on

amounts

as reflected

in our

audited consolidated

financial statements which are prepared in accordance

with U.S. GAAP.

We analyze our

results of operations both in U.S. dollars, as

presented in the audited consolidated financial statements, and supplementally in ZAR, because ZAR is the functional currency of the

entities which contribute the majority of our results and is the currency

in which the majority of our transactions are initially incurred

and

measured.

Presentation

our

reported

results

ZAR

non-GAAP

measure.

Due

the

significant

impact

currency

fluctuations between

the U.S. dollar

and ZAR on

our reported

results and

because we

use the

U.S. dollar as

our reporting

currency,

we believe that

the supplemental presentation

of our results

of operations in

ZAR is useful

to investors to

understand the changes

the underlying trends of our business.

Our

operating

segment

revenue

presented

“—Results

operations

operating

segment”

represents

total

revenue

per

operating segment before intercompany

eliminations. A reconciliation between

total operating segment revenue and

revenue,

as well

as the reconciliation because our segment performance measure and net loss before tax (benefits) expense, is presented in our audited

consolidated financial

statements in

Note 21

to those

statements. Our

chief operating

decision maker

is our

Group Chief

Executive

Officer

and

evaluates

segment

performance

based

segment

earnings

before

interest,

tax,

depreciation

and

amortization

(“EBITDA”), adjusted for

items mentioned in

the next sentence

(“Segment Adjusted EBITDA”)

for each operating

segment. We

not

allocate

once-off

items

(as

defined

below),

stock-based

compensation

charges,

depreciation

and

amortization,

impairment

goodwill or other intangible

assets, certain lease charges

(“Lease adjustments”), other

items (including gains or

losses on disposal of

investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest

income, interest expense,

income tax

expense or

loss from

equity-accounted investments

to our

reportable segments.

Once-off

items represents

non-recurring

expense items, including costs related to acquisitions and

transactions consummated or ultimately not pursued. The Lease

adjustments

reflect lease charges and the Stock-based compensation adjustments reflect stock-based

compensation expense and are both excluded

from

the

calculation

Segment

Adjusted

EBITDA

and

are

therefore

reported

reconciling

items

reconcile

the

reportable

segments’ Segment Adjusted EBITDA to our loss before income tax

expense.

Group

Adjusted

EBITDA

represents

Segment

Adjusted

EBITDA

after

deducting

group

costs.

Refer

also

“Results

Operations—Use of Non-GAAP Measures” below.

Fiscal 2023 includes

Connect for

the entire fiscal

year and

fiscal 2022 includes

consolidation of

Connect from

April 14, 2022.

Refer also to Note 3 to the audited consolidated financial statements for

additional information regarding this transaction.

We analyze our business and operations in terms of two

inter-related but independent operating segments: (1) Merchant Division

and (2)

Consumer Division.

In addition,

corporate activities

that are

impracticable to

allocate directly

to the

operating segments,

well as

any inter-segment

eliminations, are

included in

Group costs.

Inter-segment revenue

eliminations are

included in

Corporate/

Eliminations.

Fiscal 2023 Compared to Fiscal 2022

The following factors had

a significant influence on

our results of

operations during fiscal

2023 as compared

with the same

period

in the prior year:

●

Higher revenue:

Our revenues

increased by

180.0% in

ZAR, primarily

due to

the contribution

from Connect

in Merchant

and an increase in account fees and insurance revenues in Consumer;

●

Lower operating

losses:

Operating

losses decreased,

delivering

an improvement

of 55%

in ZAR

compared

with the

prior

period

primarily

due

the

contribution

from

Connect,

strong

hardware

sales,

and

the

implementation

various

cost

reduction

initiatives

Consumer,

which

was

partially

offset

increase

acquisition

intangible

asset

amortization;

●

Higher

net

interest

charge:

The

net

interest

charge

increased

ZAR

299.9

million

from

ZAR

56.8

million

due

the

additional borrowings

incurred in

order to

fund the

acquisition of

Connect as

well as

the debt

acquired within

the Connect

business itself;

●

Significant transaction costs:

We expensed $6.0 million of transaction

costs related to

the Connect acquisition in

fiscal 2022;

and

●

Foreign exchange movements:

The U.S. dollar was 18.0% stronger against the ZAR during fiscal 2023, which impacted our Consolidated overall results of operations

reported results.

This discussion is based on the amounts prepared in accordance with U.S. GAAP.

The following tables show the changes in the items comprising our statements of operations,

both in U.S. dollars and in ZAR:

Table 3

In U.S. Dollars

Year

ended June 30,

2023

2022

$ %

$ ’000

change

Revenue

527,971

222,609

137%

Cost of goods sold, IT processing, servicing and support

417,544

168,317

148%

Selling, general and administration

95,050

74,993

27%

Depreciation and amortization

23,685

7,575

213%

Impairment loss

7,039

Reorganization costs

5,894

Transaction costs related to Connect acquisition

6,025

Operating loss

(15,347)

(40,195)

(62%)

Gain related to fair value adjustment to currency options

3,691

Loss on disposal of equity-accounted investment

205

376

(45%)

Gain on disposal of equity securities

720

Interest income

1,853

2,089

(11%)

Interest expense

18,567

5,829

219%

Loss before income tax (benefit) expense

(32,266)

(39,900)

(19%)

Income tax (benefit) expense

(2,309)

327

Net loss before loss from equity-accounted investments

(29,957)

(40,227)

(26%)

Loss from equity-accounted investments

(5,117)

(3,649)

40%

Net loss attributable to us

(35,074)

(43,876)

(20%)

Table 4

In South African Rand

Year

ended June 30,

2023

2022

ZAR %

ZAR ’000

change

Revenue

9,471,800

3,383,166

180%

Cost of goods sold, IT processing, servicing and support

7,490,739

2,558,047

193%

Selling, general and administration

1,705,196

1,139,728

50%

Depreciation and amortization

424,909

115,123

269%

Impairment loss

126,280

Reorganization costs

89,576

Transaction costs related to Connect acquisition

91,567

Operating loss

(275,324)

(610,875)

(55%)

Gain related to fair value adjustment to currency options

56,095

Loss on disposal of equity-accounted investment

3,678

5,714

(36%)

Gain on disposal of equity securities

10,942

Interest income

33,243

31,748

Interest expense

333,092

88,587

276%

Loss before income tax (benefit) expense

(578,851)

(606,391)

(5%)

Income tax (benefit) expense

(41,423)

4,970

Net loss before loss from equity-accounted investments

(537,428)

(611,361)

(12%)

Loss from equity-accounted investments

(91,799)

(55,457)

66%

Net loss attributable to us

(629,227)

(666,818)

(6%)

Revenue increased by $305.4 million (ZAR 6.1 billion), or 137.2% (in ZAR, 180.0%), primarily due to the inclusion of Connect

for

the entire

fiscal year,

which has

substantial low

margin

prepaid

airtime sales

in addition

to its

core processing

revenue and

increase in account fees and insurance revenues.

Cost of

goods sold,

IT processing,

servicing and

support increased

by $249.2

million (ZAR

4.9 billion),

or 148.1%

(in ZAR,

192.8%), primarily due to the inclusion of Connect,

which were partially offset by the benefits of

various cost reduction initiatives in

Consumer and lower insurance-related claims.

Selling, general and administration expenses increased by $20.1 million (ZAR 0.6 billion), or 26.7% (in ZAR, 49.6%), primarily

due

higher

employee-related

expenses

the

expansion

our

senior

management

team,

the

year-over-year

impact

inflationary

increases

employee-related

expenses

and

the

inclusion

expenses

Connect’s

operations,

which

were

partially offset by the benefits of various cost reduction initiatives in Consumer.

Depreciation and

amortization expense

increased by $16.1

million (ZAR 0.3

billion), or 212.7%

(in ZAR, 269.1%),

due to the

inclusion of acquisition-related intangible asset amortization related

to intangible assets identified pursuant to

the Connect acquisition,

as well as the inclusion of depreciation expense related to Connect’s

property, plant and equipment.

During fiscal 2023, we

recorded an impairment loss

of $7.0 million related

to the impairment of

our hardware/ software supply

business

unit’s

allocated

goodwill.

Refer

Note

our

audited

consolidated

financial

statements

for

additional

information

regarding these impairment losses.

We embarked on a retrenchment process on January 10, 2022, and incurred reorganization expenses of $5.9 million during fiscal

2022.

Transaction

costs related

to Connect

acquisition in

fiscal 2022

includes fees

paid to

external service

providers associated

with

the contract drafting and negotiations; corporate finance advisory services; legal, financial and tax due diligence

activities performed;

warranty and

indemnity insurance

related to the

transaction; and other

advisory services procured;

as well as

our portion

of the fees

paid to competition authorities related to the regulatory filings made in

various jurisdictions.

Our operating loss

margin in fiscal

2023

and 2022

was

(2.9%) and

(18.1%), respectively.

discuss the

components of operating

loss margin under “—Results of operations by operating

segment.”

did

not

record

any

changes

the

fair

value

equity

interests

MobiKwik

and

Cell

during

fiscal

2023

and

2022,

respectively.

We continue

to carry our investment

in Cell C at $0

(zero). Refer to Note

9 to our consolidated financial

statements for

the methodology

and inputs used

in the fair

value calculation for

MobiKwik and Note

6 for the

methodology and

inputs used in

the

fair value calculation for Cell C.

Gain related to fair value adjustment to currency

options represents the realized gain related to foreign exchange

option contracts

entered into in November 2021

in order to manage the risk of

currency volatility and to fix

the USD amount to be utilized

for part of

the Connect purchase

consideration settlement. The

foreign exchange option

contracts matured on

February 24, 2022.

Refer to Note

6 to our consolidated financial statements for additional information

related to these currency options.

recorded

net

loss

$0.2

million

comprising

loss

$0.4

million

the

disposal

minor

portion

our

investment in Finbond and a $0.25 million gain related to

the disposal of our entire interest in Carbon

during fiscal 2023. We recorded

a loss of $0.4 million related to the disposal

of a minor portion of our investment in Finbond during fiscal

2022. Refer to Note 9 to our

consolidated financial statements for additional information regarding

these disposals.

We recorded

a gain of $0.7 million related to the disposal of our entire interest

in an equity security during fiscal 2022. Refer to

Note 9 to our consolidated financial statements for additional information

regarding this gain.

Interest on surplus cash decreased to $1.9 million (ZAR

33.2 million) from $2.1 million (ZAR 31.7 million), primarily

due to the

inclusion of Connect, which was partially offset by lower overall surplus

cash balances following the acquisition of Connect.

Interest expense increased

to $18.6 million

(ZAR 333.1 million)

from $5.8 million

(ZAR 88.6 million),

primarily as a result

additional

interest

expense

incurred

borrowings

obtained

partially

fund

the acquisition

Connect,

interest

expenses

incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our

ATMs,

which was also coupled with an increase in base interest rates.

Fiscal 2023

tax benefit was $(2.3) million (ZAR (41.4) million) compared

to a tax expense of $0.3 million (ZAR 5.0 million) in

fiscal 2022. Our effective tax rate for fiscal 2023 was impacted by a reduction in

the enacted South African corporate income tax rate

from

28%

27%

from

January

2023

(but

backdated

July

2022),

the

tax

expense

recorded

our

profitable

South

African

operations, a deferred

tax benefit related to

acquisition-related intangible asset

amortization, non-deductible

expenses, a deferred tax

benefit related

to an

expense paid

by Connect

before we

acquired the

business and

which subsequently

has been

determined to

deductible

for

tax

purposes,

the

on-going

losses

incurred

certain

our

South

African

businesses

and

the

associated

valuation

allowances created related to the deferred tax assets recognized regarding

net operating losses incurred by these entities.

Our effective

tax rate

for fiscal

2022 was

impacted by

the tax

expense recorded

by our

profitable South

African operations,

deferred

tax

benefit

acquisition-related

intangible

asset

amortization,

non-deductible

expenses

(including

transaction

expenses

the

acquisition

Connect),

the

on-going

losses

incurred

certain

our

South

African

businesses

and

the

associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these Finbond is listed on the Johannesburg Stock Exchange and reports its six-month results during our first half and its annual results

entities.

during

our fourth

quarter.

recorded

impairment

losses related

our investment

in Finbond

in fiscal

2023

following

on-going

losses reported

by Finbond

and its

lower listed

share price.

Refer to

Note 9

to our

consolidated

financial statements

for additional

information regarding the impairments.

The table below presents the relative loss from our equity accounted investments:

Table 5

Year

ended June 30,

2023

2022

$ %

$ ’000

change

Finbond

(5,206)

(3,665)

42%

Share of net (loss) income

(4,096)

(3,665)

12%

Impairment

(1,110)

Other

456%

Share of net income (loss)

456%

Total

loss from equity-accounted investment

(5,117)

(3,649)

40%

Results of operations by operating segment

The composition of revenue and the contributions of our business activities to operating

(loss) income are illustrated below:

Table 6

In U.S. Dollars

Year

ended June 30,

2023

% of

2022

% of

Operating Segment

$ ’000

total

$ ’000

total

change

Consolidated revenue:

Merchant

463,701

88%

156,689

70%

196%

Consumer

62,801

12%

65,932

30%

(5%)

Subtotal: Operating segments

526,502

100%

222,621

100%

137%

Not allocated to operating segments

1,469

Corporate/Eliminations

(12)

Total

consolidated revenue

527,971

100%

222,609

100%

137%

Group Adjusted EBITDA:

Merchant

33,531

121%

12,646

(72%)

165%

Consumer

(1)

3,314

12%

(21,674)

123%

Group costs

(9,109)

(33%)

(8,587)

49%

Group Adjusted EBITDA (non-GAAP)

(2)

27,736

100%

(17,615)

100%

(1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes reorganization

cost of $5.9 million.

(2) Group Adjusted EBITDA is a non-GAAP measure, refer to reconciliation

below at “—Results of Operations—Use of Non-

GAAP Measures”.

Table 7

In South African Rand

Year

ended June 30,

2023

% of

2022

% of

Operating Segment

ZAR ’000

total

ZAR ’000

total

change

Consolidated revenue:

Merchant

8,318,796

88%

2,381,323

70%

249%

Consumer

1,126,650

12%

1,002,021

30%

12%

Subtotal: Operating segments

9,445,446

100%

3,383,344

100%

179%

Not allocated to operating segments

26,354

Corporate/Eliminations

(178)

Total

consolidated revenue

9,471,800

100%

3,383,166

100%

180%

Group Adjusted EBITDA:

Merchant

601,546

121%

192,197

(72%)

213%

Consumer

(1)

59,453

12%

(329,403)

123%

Group costs

(163,415)

(33%)

(130,503)

49%

25%

Group Adjusted EBITDA (non-GAAP)

(2)

497,584

100%

(267,709)

100%

(1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes

reorganization cost of ZAR 89.6 million.

(2) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Merchant

Segment

revenue

increased

due

the

contribution

from

Connect

for

the

full fiscal

year

compared

with

only

two

and a

half

months in fiscal

2022. This increase

was partially offset

by lower hardware

sales revenue given

the lumpy nature

of bulk sales.

The

increase in

Segment Adjusted

EBITDA is

also due

to the inclusion

of Connect,

which was partially

offset by

lower hardware

sales.

Connect records a significant proportion of its airtime sales in revenue and cost of sales, while only earning a relatively small margin.

This significantly depresses the Segment Adjusted EBITDA margins

shown by the business.

Our Segment

Adjusted EBITDA

(loss) margin

(calculated as

Segment Adjusted

EBITDA (loss)

divided by

revenue) in

fiscal

2023

and 2022 was 7.2% and 8.1%, respectively.

Consumer

Segment revenue increased primarily due to higher insurance revenues and higher account holder fees, though this was partially

offset by

lower ATM

transaction fees.

embarked on a

retrenchment process

during the third

quarter of fiscal

2022 and recorded

an expense of

$5.9 million which is

included in Segment

Adjusted EBITDA loss. The

cost reduction initiatives

we initiated in

fiscal

2022 delivered

a significant

reduction in

Consumer’s operating

expenses which

resulted in

a significantly

lower Segment

Adjusted

EBITDA

loss

compared

with

fiscal

2022.

Specifically,

expenses

associated

with

operating

mobile

distribution

network

were

discontinued

early

fiscal

2022,

and

have

streamlined

our

fixed

distribution

network

through

reductions

certain

expenses

including

employee-related

costs,

security,

guarding

and

premises costs.

June

2022

recalibrated

our

allowance

for

doubtful

microlending finance

loans receivable

from 10%

of the

lending book

outstanding to

6.5% of

the lending

book, which

resulted in

release from the allowance in fiscal 2022.

Our Segment

Adjusted EBITDA loss

margin in

fiscal 2023

and 2022

was 5.3% and

(32.9%), respectively.

After adjusting for

the

reorganization

charge

our fiscal

2022

Segment

Adjusted

EBITDA

loss margin

was

(23.9%).

Segment

Adjusted

EBITDA

loss

margin before the reorganization charge is a non-GAAP measure. We believe that the presentation of our Segment Adjusted EBITDA

loss margin

before the

reorganization

charge

is useful

to investors

to understand

the improvement

in the

operating performance

Consumer, before the reorganization

charge, in fiscal 2023 compared with fiscal 2022.

Group costs

Our group

costs primarily

include employee

related costs

in relation

to employees

specifically hired

for group

roles and

costs

directly

managing

the

US-listed

entity;

expenditures

compliance

with

the

Sarbanes-Oxley

Act

2002;

non-

employee directors’ fees; legal fees; group and US-listed related audit

fees; and directors’ and officers’ insurance premiums.

Our

group

costs

for

fiscal

2023

increased

compared

with

the

prior

period

due

higher

employee

costs

and

increase

directors’ and officers’ insurance premiums.

Fiscal 2022 Compared to Fiscal 2021

The following factors had

a significant influence on

our results of

operations during fiscal

2022 as compared with

the same period

in the prior year:

●

Higher revenue:

Our revenues increased

by 64.6% in

ZAR, primarily due

to the contribution

from Connect, an

increase in

hardware

sales,

increase

merchant

transaction

processing

fees,

and

moderate

increase

lending

and

insurance

revenues;

●

Lower operating

losses:

Operating

losses decreased,

delivering

an improvement

of 28%

in ZAR

compared

with the

prior

period

primarily

due

the

positive

contribution

from

Connect,

the

closure

the

loss-making

IPG

operations

and

the

implementation of

various cost reduction

initiatives in our

Consumer business,

which was partially

offset by

an increase in

acquisition

intangible

asset

amortization

and

transaction

costs.

During

fiscal

2022,

recorded

reorganization

charge of $5.9 million related to the retrenchment process we

commenced in January 2022;

●

Significant transaction costs:

We expensed $6.0 million of transaction

costs related to

the Connect acquisition in

fiscal 2022;

and

●

Foreign exchange movements:

The U.S. dollar was 3.3% stronger

against the ZAR during fiscal 2022,

which impacted our

reported results.

The following tables show the changes in the items comprising our statements of

operations, both in U.S. dollars and in ZAR:

Table 8

In U.S. Dollars

Year

ended June 30,

2022

2021

$ %

$ ’000

change

Revenue

222,609

130,786

70%

Cost of goods sold, IT processing, servicing and support

168,317

96,248

75%

Selling, general and administration

74,993

84,063

(11%)

Depreciation and amortization

7,575

4,347

74%

Reorganization costs

5,894

Transaction costs related to Connect acquisition

6,025

Operating loss

(40,195)

(53,872)

(25%)

Change in fair value of equity securities

49,304

Gain related to fair value adjustment to currency options

3,691

Loss on disposal of equity-accounted investment

376

2,792%

Gain on disposal of equity securities

720

Loss on disposal of equity-accounted investment - Bank Frick

472

Interest income

2,089

2,416

(14%)

Interest expense

5,829

2,982

95%

Loss before income tax expense

(39,900)

(5,619)

610%

Income tax expense

327

7,560

(96%)

Net loss before loss from equity-accounted investments

(40,227)

(13,179)

205%

Loss from equity-accounted investments

(3,649)

(24,878)

(85%)

Net loss attributable to us

(43,876)

(38,057)

15%

Table 9

In South African Rand

(US GAAP)

Year

ended June 30,

2022

2021

ZAR %

ZAR ’000

change

Revenue

3,383,166

2,055,459

65%

Cost of goods sold, IT processing, servicing and support

2,558,047

1,512,653

69%

Selling, general and administration

1,139,728

1,321,151

(14%)

Depreciation and amortization

115,123

68,318

69%

Reorganization costs

89,576

Transaction costs related to Connect acquisition

91,567

Operating loss

(610,875)

(846,663)

(28%)

Change in fair value of equity securities

774,872

Gain related to fair value adjustment to currency options

56,095

Loss on disposal of equity-accounted investment

5,714

204

2,701%

Gain on disposal of equity securities

10,942

Loss on disposal of equity-accounted investment - Bank Frick

7,418

Interest income

31,748

37,970

(16%)

Interest expense

88,587

46,866

89%

Loss before income tax expense

(606,391)

(88,309)

587%

Income tax expense

4,970

118,814

(96%)

Net loss before loss from equity-accounted investments

(611,361)

(207,123)

195%

Loss from equity-accounted investments

(55,457)

(390,988)

(86%)

Net loss attributable to us

(666,818)

(598,111)

11%

Revenue increased

by $91.8

million (ZAR

1.3 billion),

or 70.2%

(in ZAR,

64.6%), primarily

due to

the inclusion

of Connect,

which has

substantial low

margin prepaid

airtime sales

in addition

to its

core processing

revenue, an

increase in

hardware sales,

increase in merchant transaction processing fees, and moderate increases in lending

and insurance revenues.

Cost of goods

sold, IT processing,

servicing and support

increased by $72.1

million (ZAR 1.0

billion), or 74.9%

(in ZAR, 69.1%),

primarily due

to the

inclusion of

Connect, an

increase in

the cost

of hardware

sales, higher

costs related

to transaction

fees and

increase in insurance-related claims experience, which

were partially offset by the benefits of various cost reduction

initiatives in our

Consumer business.

Selling, general and administration expenses decreased by $9.1

million (ZAR 0.2 billion), or 10.8% (in ZAR, 13.7%), primarily

due

lower

IPG-related

expenses

incurred

following

its

closure,

some

benefits

from

our

cost

reduction

initiatives,

well

recalibration, in June 2022, of

our allowance for doubtful microlending finance loans

receivable, in our Consumer business, from 10%

of the

lending book

outstanding to

6.5% of

the lending

book, which

resulted in

a release

from the

allowance in

fiscal 2022.

These

reductions were partially offset by the

inclusion of expenses related to

Connect’s operations, higher employee-related expenses related

the

expansion

our

senior

management

team,

and

the

year-over-year

impact

inflationary

increases

employee-related

expenses.

Depreciation and amortization expense increased by $3.2 million (ZAR 46.8 million), or 74.3% (in ZAR, 68.5%),

increased due

the

inclusion

acquisition-related

intangible

asset

amortization

intangible

assets

identified

pursuant

the

Connect

acquisition, as well as the inclusion of depreciation expense related to

Connect’s property,

plant and equipment.

We embarked on a retrenchment process on January 10, 2022, and incurred reorganization expenses of $5.9 million during

fiscal

2022.

Transaction

costs related

Connect

acquisition

includes

fees

paid

external

service

providers

associated

with

the

contract

drafting and

negotiations; corporate

finance advisory

services; legal,

financial and

tax due

diligence activities

performed; warranty

and indemnity

insurance related

to the

transaction; and

other advisory

services procured;

as well

as our

portion

of the

fees paid

competition authorities related to the regulatory filings made in various jurisdictions

Our operating loss margin

in fiscal 2022 and 2021

was

(18.1%) and

(41.2%),

respectively. Adjusting

for the restructuring and

transaction costs incurred, the underlying

operating loss margin in fiscal

2022 was (12.7%). We

discuss the components of operating

loss margin under “—Results of operations by operating

segment.”

The

change

fair

value

equity

securities

during

fiscal

2021

represents

non-cash

fair

value

adjustment

gain

MobiKwik. We

continue to

carry our investment

in Cell C

at $0 (zero).

Refer to Note

9 to our

consolidated financial

statements for

the methodology and inputs used in the fair value calculation for MobiKwik and Note 6 for the methodology and inputs used in the Gain related to fair value adjustment to currency options represents the realized gain related to foreign exchange option contracts

fair value calculation for Cell C.

entered into in November 2021

in order to manage the risk of

currency volatility and to fix

the USD amount to be utilized

for part of

the Connect purchase

consideration settlement. The

foreign exchange

option contracts matured

on February 24,

2022. Refer to

Note

6 to our consolidated financial statements for additional information

related to these currency options.

We recorded

a gain of $0.7 million related to the disposal of our

entire interest in an equity security during fiscal 2022.

Refer to

Note 9 to our consolidated financial statements for additional information

regarding this gain.

recorded a

loss of $0.4

million related

to the

disposal of

a minor

portion of

our investment

in Finbond

during fiscal

2022.

Refer to Note 9 to our consolidated financial statements for additional information

regarding these disposals.

We recorded

a loss of $0.5 million related to the disposal of Bank Frick during fiscal 2021.

Interest on surplus cash decreased to $2.1 million (ZAR

31.7 million) from $2.4 million (ZAR 38.0 million),

primarily due to the

utilization of a significant portion

of our surplus cash

reserves to acquire Connect as

well as lower average daily

cash balances in fiscal

2022.

Interest

expense increased

to $5.8

million (ZAR

88.6) million

from $3.0

million (ZAR

46.9 million),

primarily

as a

result of

additional

interest

expense

incurred

borrowings

obtained

partially

fund

the acquisition

Connect,

interest

expenses

incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our

ATMs

Fiscal 2022 tax expense

was $0.3 million (ZAR

5.0 million) compared

to $7.6 million (ZAR

118.8 million)

in fiscal 2021. Our

effective tax rate for fiscal 2022 was impacted

by the tax expense recorded by our profitable South

African operations, a deferred tax

benefit related to acquisition-related intangible asset amortization, non-deductible expenses (including transaction expenses related to

the

acquisition

Connect),

the

on-going

losses

incurred

certain

our

South

African

businesses

and

the

associated

valuation

allowances created related to the deferred tax assets recognized regarding

net operating losses incurred by these entities.

Our effective tax rate for fiscal 2021 was

impacted by the tax effect on the

change in the fair value

of our equity securities, which

is at

a lower

tax rate

than

the South

African

statutory

rate, the

tax charge

to our

profitable

South

African operations,

non-

deductible expenses, the on-going losses incurred by certain of our

South African businesses and the associated valuation allowances

created related to the deferred

tax assets recognized regarding net

operating losses incurred by these

entities, which was partially offset

by the reversal of the deferred tax liability related to one of our equity-accounted

investments following its impairment.

The disposal of certain of our equity-accounted investments in

fiscal 2021, as well as a number of impairments,

has impacted the

comparability of our

loss from

equity-accounted investments. We disposed of

our investment

in Bank Frick

in fiscal

2021.

recorded

an impairment loss related to our investment in Finbond in fiscal 2021

following a slow-down in its business activity and lower listed

share price.

Refer to Note 9

to our audited consolidated financial statements

for additional information regarding our equity-accounted

investments, including disclosure regarding the disposals and impairments.

The table below presents the relative loss from our equity accounted investments:

Table 10

Year

ended June 30,

2022

2021

$ ’000

$ % change

Finbond

(3,665)

(22,009)

(83%)

Share of net (loss) income

(3,665)

(4,359)

(16%)

Impairment

(17,650)

Bank Frick

1,156

Share of net income

1,156

Other

(4,025)

Share of net loss

(531)

Impairment

(3,494)

Total

loss from equity-accounted investments

(3,649)

(24,878)

(85%)

Results of operations by operating segment

The composition of revenue and the contributions of our business activities to

operating income are illustrated below:

Table 11

In U.S. Dollars

Year

ended June 30,

2022

% of

2021

% of

Operating Segment

$ ’000

total

$ ’000

total

change

Consolidated revenue:

Merchant

156,689

70%

62,944

48%

149%

Consumer

65,932

30%

66,149

51%

(0%)

Subtotal: Operating segments

222,621

100%

129,093

99%

72%

Not allocated to operating segments

1,693

Corporate/Eliminations

(12)

Total

consolidated revenue

222,609

100%

130,786

100%

70%

Group Adjusted EBITDA:

Merchant

12,646

(72%)

5,411

(14%)

134%

Consumer

(1)

(21,674)

123%

(25,962)

68%

(17%)

Not allocated to operating segments

(10,899)

28%

Group costs

(8,587)

49%

(6,965)

18%

23%

Group Adjusted EBITDA (non-GAAP)

(2)

(17,615)

100%

(38,415)

100%

(54%)

(1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes

reorganization cost of $5.9 million.

(2) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Table 12

In South African Rand

Year

ended June 30,

2022

% of

2021

% of

Operating Segment

ZAR ’000

total

ZAR ’000

total

change

Consolidated revenue:

Merchant

2,381,323

70%

989,241

48%

141%

Consumer

1,002,021

30%

1,039,611

51%

(4%)

Subtotal: Operating segments

3,383,344

100%

2,028,852

99%

67%

Not allocated to operating segments

26,607

Corporate/Eliminations

(178)

Total

consolidated revenue

3,383,166

100%

2,055,459

100%

65%

Group Adjusted EBITDA:

Merchant

192,197

(72%)

85,040

(14%)

126%

Consumer

(1)

(329,403)

123%

(408,024)

68%

(19%)

Not allocated to operating segments

322,984

28%

Group costs

(130,503)

49%

(109,463)

18%

19%

Group Adjusted EBITDA (non-GAAP)

(2)

(267,709)

100%

(603,738)

100%

(56%)

(1) Consumer Segment Adjustment EBITDA for fiscal 2022 includes

reorganization cost of ZAR 89.6 million.

(2) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Merchant

Segment revenue

increased due

to the

inclusion of

Connect for

two and

a half

months and

an increase

in hardware

sales and

processing fees. The

increase in Segment

Adjusted EBITDA is

primarily due to

the inclusion of

Connect, which was

partially offset

by higher costs related

to processing fees

and higher employee-related expenses. Connect

records a significant proportion

of its airtime

sales in revenue

and cost of

sales, while only

earning a relatively

small margin. This depresses

the Segment Adjusted EBITDA

margins

shown by the business.

Our Segment Adjusted EBITDA margin for fiscal 2022

and 2021

was 8.1% and 8.6%, respectively.

Consumer

The underlying decrease in revenue was primarily due to

lower processing fees, partially offset by higher insurance

and lending

revenue

and account

holder fees.

embarked

on a

retrenchment process

during

the third

quarter of

fiscal 2022

and recorded

expense

$5.9

million

which

included

the

Segment

Adjusted

EBITDA

loss,

refer

Note

our

consolidated

financial

statements for

additional information

regarding this

process.

Segment Adjusted

EBITDA loss,

excluding the

reorganization charge,

has

decreased

primarily

due

the

implementation

various

cost

reduction

initiatives

and

recalibration,

June

2022,

our

allowance for doubtful microlending finance loans receivable from 10% of the lending book outstanding to 6.5% of the lending book,

which resulted in a release from the allowance in

fiscal 2022, which decreases were partially offset by an increase in

insurance-related

claims experience.

Our Segment Adjusted EBITDA

loss margin for fiscal

2022

and 2021 was

(32.9%) and

(39.2%), respectively.

After adjusting

for the reorganization

charge our fiscal 2022

Segment Adjusted EBITDA loss

margin was (23.9%)

believe that the presentation

of our Segment Adjusted EBITDA loss margin before

the reorganization charge is useful to investors to understand

the improvement

in the operating performance in Consumer, before

the reorganization charge, in fiscal 2022

compared with fiscal 2021.

Group costs

Our group costs increased primarily due to higher employee

costs, an increase in audit fees and directors’

and officers’

insurance

premiums.

Use of Non-GAAP Measures

U.S. securities laws

require that when

we publish any

non-GAAP measures, we

disclose the reason

for using these

non-GAAP

measures and provide reconciliations to the most directly comparable GAAP measures. The presentation of Group Adjusted EBITDA

non-GAAP

measure.

provide

this

non-GAAP

measure

enhance

our

evaluation

and

understanding

our

financial

performance.

Non-GAAP Measures

Group

Adjusted

EBITDA

earnings

before

interest,

tax,

depreciation

and

amortization

(“EBITDA”),

adjusted

for

non-

operational transactions (including loss on disposal

of equity-accounted investments, gain related to

fair value adjustments to currency

options), (earnings) loss from

equity-accounted investments, stock-based compensation charges, lease

adjustments and once-off items.

Lease

adjustments

reflect

lease

charges

and

once-off

items

represents

non-recurring

expense

items,

including

costs

acquisitions and transactions consummated or ultimately not pursued.

The table below presents the reconciliation between GAAP net loss attributable

to Lesaka to Group Adjusted EBITDA:

Table 13

Years

ended June 30,

2023

2022

2021

$ ’000

Loss attributable to Lesaka - GAAP

(35,074)

(43,876)

(38,057)

Loss from equity accounted investments

5,117

3,649

24,878

Net loss before loss from equity-accounted investments

(29,957)

(40,227)

(13,179)

Income tax (benefit) expense

(2,309)

327

7,560

Loss before income tax expense

(32,266)

(39,900)

(5,619)

Interest expense

18,567

5,829

2,982

Interest income

(1,853)

(2,089)

(2,416)

Gain on disposal of equity securities

(720)

Net loss on disposal of equity-accounted investment

205

376

Loss on sale of Bank Frick

472

Gain related to fair value adjustment to currency options

(3,691)

Change in fair value of equity securities

(49,304)

Operating loss

(15,347)

(40,195)

(53,872)

Impairment loss

7,039

PPA amortization

(amortization of acquired intangible assets)

15,149

3,826

360

Depreciation

8,536

3,749

3,987

Stock-based compensation charges

7,309

2,962

344

Lease adjustments

2,906

3,955

4,148

Once-off items

(1)

1,922

8,088

6,618

Unrealized Loss FV for currency adjustments

222

Group Adjusted EBITDA - Non-GAAP

27,736

(17,615)

(38,415)

(1) The table below presents the components of once-off

items for the periods presented:

Table 14

Years

ended June 30,

2023

2022

2021

$ ’000

Non-recurring revenue not allocated to segments

(1,469)

Employee misappropriation of company funds

1,202

Transaction costs

850

6,460

1,879

Expenses incurred related to closure of legacy businesses

639

Indirect taxes provision

438

Separation of employee expense

262

Legacy processing adjustments

1,628

Allowance for doubtful EMI loans receivable

4,739

Total once-off

items

1,922

8,088

6,618

Once-off items are non-recurring in nature, however, certain

items may be reported in

multiple quarters. For instance, transaction

costs include costs incurred related to acquisitions and

transactions consummated or ultimately not pursued. The transactions can span

multiple quarters, for instance in fiscal 2022 we

incurred significant transaction costs related to the acquisition Connect over

a number

of quarters, and the transactions are generally non-recurring.

Non-recurring revenue not

allocated to segments

includes once off

revenue recognized that

we believe does

not relate to

either

our Merchant

or Consumer

divisions. Employee

misappropriation of

company funds

represents a

once-off

loss incurred.

Expenses

incurred

legacy

businesses

represents

costs

incurred

subsidiaries

which

are

the

process

deregistering/ liquidation

and therefore we

consider these costs non-operational

and ad hoc in

nature. Indirect tax

provision includes

non-recurring indirect taxes

which have been

provided related to

prior periods following

an on-going

investigation from a

tax authority.

incurred separation

costs related

to the

termination of

certain senior-level

employees, including

an executive

officer and

senior

managers, during

the fiscal

year and

we consider

these specific

terminations to

be of

a non-recurring

nature. The

legacy processing

adjustments represents amounts we

identified during fiscal 2022

related to prior

periods that are

payable to third

parties.

The allowance

for doubtful EMI loans receivable relates to provision created in fiscal 2021 related to loan provided to certain of our then equity-At June 30, 2023, our unrestricted cash and cash equivalents were $35.5 million and comprised of ZAR-denominated balances

accounted investments.

Liquidity and Capital Resources

of ZAR

0.6 million ($29.2

million), U.S. dollar-denominated

balances of $4.5

million, and other

currency deposits, primarily

Botswana

pula, of

$1.8 million,

all amounts translated

at exchange

rates applicable

as of

June 30,

2023. The

decrease in

our unrestricted

cash

balances

from

June

30,

2022,

was

primarily

due

the

utilization

cash

reserves

fund

certain

scheduled

repayments

our

borrowings, fully settle our revolving credit facility, purchase ATMs

and safe assets, and to make an investment in working capital in

our

Consumer

and

Merchant

operation,

which

was

partially

offset

the

utilization

our

available

borrowings

and

positive

contribution from Connect and certain of our Consumer operations.

We generally

invest any surplus cash held by our

South African operations in overnight

call accounts that we maintain at

South

African banking institutions,

and any surplus

cash held by

our non-South African

companies in

U.S. dollar-denominated money market

accounts.

Historically,

we have financed

most of our

operations, research and

development, working capital,

and capital expenditures,

well

acquisitions

and

strategic

investments,

through

internally

generated

cash

and

our

financing

facilities.

When

considering

whether to borrow under our financing

facilities, we consider the cost

of capital, cost of financing, opportunity cost

of utilizing surplus

cash and

availability of

tax efficient

structures to

moderate financing

costs. For

instance, in

fiscal 2022,

we obtained

loan facilities

from RMB

to fund

a portion

of our

acquisition of

Connect.

Following the

acquisition of

Connect, we

now utilize

a combination

short

and

long-term

facilities to

fund our

operating

activities and

a long-term

asset-backed

facility to

fund

the acquisition

of POS

devices and

safe assets.

Refer to

Note 12

to our

consolidated financial

statements for

the year

ended June

30, 2023,

for additional

information related to our borrowings.

Available short-term

borrowings

Summarized below are our short-term facilities available and utilized as of

June 30, 2023:

Table 15

RMB Facility E

RMB Indirect

RMB Connect

Nedbank

$ ’000

ZAR ’000

$ ’000

ZAR ’000

$ ’000

ZAR ’000

$ ’000

ZAR ’000

Total

short-term facilities

available, comprising:

Overdraft

10,882

205,000

Overdraft restricted as to

use

(1)

74,319

1,400,000

Total overdraft

74,319

1,400,000

10,882

205,000

Indirect and derivative

facilities

(2)

7,167

135,000

8,311

156,556

Total

short-term facilities

available

74,319

1,400,000

7,167

135,000

10,882

205,000

8,311

156,556

Utilized short-term

facilities:

Overdraft

9,025

170,000

Overdraft restricted as to

use

(1)

23,021

433,654

Indirect and derivative

facilities

(2)

1,757

33,100

112

2,110

Total

short-term facilities

available

23,021

433,654

1,757

33,100

9,025

170,000

112

2,110

Interest rate, based on South

African prime rate

11.75%

11.65%

(1) Overdraft may only be used to fund ATMs

and upon utilization is considered restricted cash.

(2) Indirect and derivative facilities may only be used for guarantees, letters of credit and forward

exchange contracts to support

guarantees issued by RMB and Nedbank to various third parties on our behalf.

Long-term borrowings

We have

aggregate long-term borrowing

outstanding of ZAR 2.5 billion

($133.1 million translated at exchange

rates as of June

30, 2023) as

described in Note

12. These borrowings

include outstanding

long-term borrowings

obtained by Lesaka

SA of ZAR

0.9

billion,

including

accrued

interest,

which

was

used

partially

fund

the

acquisition

Connect.

The

Lesaka

borrowing

arrangements were amended

in March 2023

to include a

ZAR 200 million

revolving credit facility.

The revolving credit

facility had

been repaid in full as of June 30, 2023, and the entire balance is available for utilization. In contemplation of the Connect transaction,

Connect obtained

total facilities

of approximately

ZAR 1.3

billion, which

were utilized

to repay

its existing

borrowings,

to fund

portion of its capital expenditures and to settle obligations under the transaction documents, and which has subsequently been upsized

for its

operational requirements

and has

an outstanding

balance as

of June

30, 2023,

of ZAR

1.2 billion,

also have

a revolving

credit facility, of ZAR 300.0 million

which is utilized to fund a portion of our merchant finance loans receivable book.

Restricted cash

have credit

facilities with RMB

in order

to access cash

to fund

our ATMs

in South Africa.

Our cash, cash

equivalents and

restricted cash

presented in

our consolidated

statement of

cash flows

as of

June 30,

2023, includes

restricted cash

of approximately

$23.0

million

cash withdrawn

from

our

debt

facility

fund

ATMs.

This

cash

may

only

used

fund

ATMs

and

considered restricted as to use and therefore is classified as restricted cash on

our consolidated balance sheet.

have also

entered into

cession and

pledge agreements

with Nedbank

related to

our Nedbank

credit facilities

and we

have

ceded and

pledged certain

bank accounts

to Nedbank.

The funds

included in

these bank

accounts are

restricted as

they may

not be

withdrawn without

the express permission

of Nedbank. Our

cash, cash equivalents

and restricted cash

presented in our

consolidated

statement of cash flows as of June 30, 2023, includes restricted cash of approximately

$0.2 million that has been ceded and pledged.

Cash flows from operating activities

Net cash provided

by operating activities

during fiscal

2023

was $0.4 million

(ZAR 7.4 million)

compared to

net cash utilized

operating

activities

$37.2

million

(ZAR

565.3

million)

during

fiscal

2022.

Excluding

the

impact

income

taxes,

our

cash

provided by operating activities

during fiscal 2023

was impacted by

the positive contribution from

Connect and certain

business within

our consumer

business, which was

partially offset

by growth

in our consumer

and merchant finance

loans receivable

books. During

fiscal 2023, we

observed fluctuations in

our working capital, primarily

within our merchant business,

as a result of

monthly changes

in our inventory and prepayment

account balances as a result of

payments made to secure prepaid

airtime inventory.

Certain of these

purchases were funded from our borrowing arrangements and the

impact of the funding is included in financing activities.

Net cash used in operating activities during fiscal 2022 was $37.2 million (ZAR 565.3 million) compared to $58.4 million (ZAR

887.1 million) generated during fiscal

2021. Excluding the impact of income

taxes, our cash used in operating activities during

fiscal

2022 was impacted by

the cash losses incurred by

the majority of our

continuing operations, the reorganization

costs paid during the

third quarter of

fiscal 2022, and

transactions costs paid

related to our

acquisition of Connect.

In fiscal 2022,

we absorbed $5

million

into working capital compared to a $4.7 million release from working capital

in fiscal 2021.

During fiscal 2023,

we paid our

first provisional South

African tax payments

of $3.0 million

(ZAR 50.8 million)

related to our

2023

tax year. During fiscal 2023, we

also made our second

provisional South African tax

payments

of $4.1 million (ZAR

76.1 million

related to our 2023 tax

year and received tax refunds

of $0.2 million (ZAR (3.8)

million). We

also paid taxes totaling $0.4

million in

other tax jurisdictions, primarily in the Botswana.

During fiscal 2022,

we made our

first provisional South

African tax payments

of $0.6 million

(ZAR 9.1 million)

related to our

2022

tax year. During fiscal 2022, we

also made our second

provisional South African tax

payments

of $0.7 million (ZAR

10.9 million

related to our 2022 tax year and made an additional tax payment of $0.0 million (ZAR

0.0 million) related to our 2021 tax year.

During fiscal 2021, we made our first provisional South

African tax payments

of $0.8 million (ZAR 11.9 million)

related to our

2021

tax year. During fiscal 2021, we also

made our second provisional South African

tax payments

of $0.5 million (ZAR 8.0

million)

related to our 2021 tax year and made an additional

tax payment of $0.8 million (ZAR 11.6

million) related to our 2020 tax year.

also paid taxes totaling $4.3 million in other tax jurisdictions, primarily in the U.S.

Taxes paid during

fiscal 2023, 2022 and 2021 were as follows:

Table 16

Year

ended June 30,

2023

2022

2021

2023

2022

2021

ZAR

‘000

First provisional payments

2,955

585

825

50,798

9,142

11,934

Second provisional payments

4,079

691

470

76,089

10,929

8,038

Taxation paid related

to prior years

782

273

11,620

Tax refund received

(210)

(300)

(1,339)

(3,756)

(4,542)

(19,245)

Total South African

taxes paid

6,839

977

738

123,404

15,548

12,347

Foreign taxes paid

361

161

4,263

6,482

2,482

62,302

Total

tax paid

7,200

1,138

5,001

129,886

18,030

74,649

We expect to make additional provisional

income tax payments in South Africa related to our 2023 tax year in the first quarter of

fiscal 2024, however, the amount was not quantifiable

as of the date of the filing of this Annual Report on Form 10-K.

Cash flows from investing activities

Cash used

in investing

activities for

fiscal 2023

included capital

expenditures of

$16.2 million

(ZAR 289.8

million), primarily

due to the

acquisition of ATMs

During fiscal 2023,

we received proceeds

of $0.25 million

related to the

first tranche (of

two) from

the disposal of our entire equity interest in Carbon and $0.4 million related to

the sale of minor positions in Finbond.

During fiscal

2022, we

paid approximately

$4.6 million

(ZAR 69.3

million), primarily

due to

the roll

out of

our new

express

branches, acquisitions of ATMs and the acquisition of

computer equipment. During fiscal

2022, we paid approximately

$202.2 million

(ZAR 2.9 billion), net of cash acquired, for 100% of Connect. We

also received funds totaling approximately $11.4

million related to

the sale of Bank

Frick in fiscal

2021, proceeds from sale of

property, plant and equipment of $4.2 million,

and proceeds of $0.9

million

and $0.7 million, respectively, related to the sale of minor positions in Finbond and from the disposal of our entire interest in Revix in

fiscal 2022.

During

fiscal

2021,

we paid

approximately

$4.3 million

(ZAR 65.1

million),

primarily

for

the acquisition

of motor

vehicles,

which largely comprised a fleet of customized mobile ATMs

used to deliver a service to rural communities, computer equipment

and

leasehold improvements in South

Africa. In February 2021, we disposed

of our investment in Bank

Frick and received $18.6 million

of the $30.0 million

sales proceeds, the remainder

of which was expected

to be received in

fiscal 2022 and 2023.

received $20.1

million in September 2020 related to the sale of our South Korean

business in fiscal 2020 following the successful refund application

the

amounts

withheld

and

paid

the

South

Korean

tax

authorities

pursuant

that

transaction.

received

$6.0

due

the

remaining deferred sale proceeds related to the fiscal 2020 sale of DNI. We also extended loan funding of $1.0 million to V2 and $0.2

million to Revix.

Cash flows from financing activities

During fiscal 2023, we utilized approximately $520.1

million from our South African overdraft facilities to fund

our ATMs

and

our cash management business through Connect and repaid

$547.3 million of these facilities. We utilized approximately $24.4 million

of our long-term

borrowings to settle approximately

$10.5 million of our

revolving credit facilities,

fund our merchant

finance loans

receivable business, and to fund the acquisition of certain capital expenditures

We repaid approximately

$17.5 million of these long-

term, including approximately $10.5 million to settle our

revolving credit balance in full. We

received $0.5 million from the exercise

of stock options. We also paid $1.3 million to repurchase shares from employees in order for the employees to settle taxes due related

to the vesting of shares of restricted stock and to settle the strike price due and taxes

due related to the exercise of stock options.

During fiscal 2022, we utilized approximately $570.9 million

from our South African overdraft facilities to fund our ATMs

and

our cash management business through Connect and

repaid $525.5 million of these facilities.

We utilized approximately $78.9 million

of our long-term borrowings

to fund a portion

of the acquisition of Connect,

to fund our merchant

finance loans receivable business,

and to fund the acquisition

of certain capital expenditures. We

repaid approximately $5.6 million

of these long-term borrowings.

also received $0.8 million from the exercise of stock options.

During fiscal 2021, we utilized approximately $360.1 million

from our South African overdraft facilities to fund our ATMs

and

repaid $365.4 million of these facilities.

Contractual Obligations

The following table sets forth our contractual obligations as of June 30, 2023:

Table 17

Payments due by Period, as of June 30, 2023 (in $ ’000s)

Total

Less than 1

year

2-3 years

3-5 years

Thereafter

Short-term credit facilities

(A)

32,046

Long-term borrowings

Principal repayments

(A)(B)

133,118

3,663

68,901

60,554

Interest payments

(A)(B)

55,766

16,861

28,313

10,592

Operating lease liabilities, including imputed interest

(C)

5,813

2,123

2,055

1,635

Purchase obligations

3,010

Capital commitments

Other long-term obligations reflected on our balance

sheet

(D)(E)

1,982

Total

231,789

57,757

99,269

72,781

1,982

(A) – Refer to Note 12 to our audited consolidated financial statements.

(B) – Long-term

borrowings principal

repayments for the

3-5 year period

includes all unamortized

fees as of

June 30, 2023.

Interest payments based on

applicable interest rates as of

June 30, 2023, and expected

outstanding long-term borrowings over

the period. All amounts converted from ZAR to USD using the June 30, 2023,

USD/ ZAR exchange rate.

(D) – Includes policyholder liabilities of $1.8 million related to

our insurance business. All amounts are translated at exchange

rates applicable as of June 30, 2023.

(E) –

have excluded

cross-guarantees in

the aggregate

amount of

$0.1 million

issued as

of June

30, 2023,

to RMB

and

Nedbank

to secure

guarantees it

has issued

to third

parties on

our behalf

as the

amounts that

will be

settled in

cash are

not

known and the timing of any payments is uncertain.

Off-Balance Sheet Arrangements

We have no off

-balance sheet arrangements.

Capital Expenditures

Capital expenditures for the years ended June 30, 2023, 2022 and 2021

were as follows:

Table 18

2023

2022

2021

2023

2022

2021

ZAR

‘000

Consumer

3,170

1,712

3,433

56,870

26,019

52,174

Merchant

12,986

2,846

852

232,969

43,253

12,949

Total

16,156

4,558

4,285

289,839

69,272

65,123

Our capital expenditures

for fiscal 2023,

2022 and 2021, are

discussed under “—Liquidity

and Capital Resources—Cash

flows

from investing activities.”

All of our capital expenditures

for the past three fiscal

years were funded through

internally-generated funds, except

for certain

capital

expenditures

POS devices

and

safe

assets, made

Connect

which

were funded

through

the utilization

of asset-backed

borrowings.

had

outstanding

capital commitments

as of

June 30,

2023,

of $0.1

million.

expect

to fund

these expenditures

through

internally-generated

funds.

addition

these

capital

expenditures,

expect

that

capital

spending

for

fiscal

2024

will

include acquisition of POS devices, safe assets, vehicles, computer and office equipment, as well as for our ATM infrastructure and ITEM 7A.

branch

network

South

Africa.

These

assets

will

funded

through

the

use

internally-generated

funds

and

our

asset-backed

borrowing arrangement.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We seek to manage our exposure to currency exchange, translation, interest rate, credit, microlending credit and equity price and

liquidity risks as discussed below.

Currency Exchange Risk

are subject

to currency

exchange risk

because we

purchase components

for safe

assets, that

we assemble,

and inventories

that we

are required

to settle

in other

currencies, primarily

the euro,

renminbi, and

U.S. dollar.

have used

forward contracts

order to limit our exposure in these transactions to

fluctuations in exchange rates between the South African rand (“ZAR”), on the one

hand, and the U.S. dollar and the euro, on the other hand.

had no outstanding foreign exchange contracts as of June 30,

2023 and 2022.

Translation Risk

Translation risk relates to the risk that our

results of operations will vary significantly as

the U.S. dollar is our

reporting currency,

but we earn a significant amount of our revenues and

incur a significant amount of our expenses in ZAR. The U.S. dollar

to the ZAR

exchange rate has

fluctuated significantly over

the past three

years. As exchange rates

are outside our

control, there can

be no assurance

that future fluctuations will not adversely affect our results

of operations and financial condition.

Interest Rate Risk

As a result

of our normal borrowing

activities, our operating results

are exposed to fluctuations

in interest rates,

which we manage

primarily through regular

financing activities. Interest

rates in South

Africa are trending upwards

and we expect higher

interest rates

in the foreseeable future which will increase our cost of

borrowing. We periodically evaluate the cost and effectiveness of interest rate

hedging strategies

to manage this

risk. We

generally maintain

investments in

cash equivalents and

held to maturity

investments and

have occasionally invested in marketable securities.

We have

short and long-term borrowings in South

Africa as described in Note 12

to our consolidated financial statements which

attract interest

at rates

that fluctuate

based on

changes in

the South

African prime

and 3-month

JIBAR interest

rates. The

following

table illustrates the effect on

our annual expected interest charge,

translated at exchange rates

applicable as of June 30,

2023, as a result

of changes in the South African prime and 3-month JIBAR interest

rates, using our outstanding short and long-term borrowings

as of

June 30, 2023. The effect of a hypothetical 1% (i.e. 100 basis points) increase and a 1% decrease in the interest rates applicable to the

borrowings as of June 30,

2023, are shown. The

selected 1% hypothetical change does

not reflect what could be considered

the best-

or worst-case scenarios.

Table 19

As of June 30, 2023

Annual expected

interest charge

($ ’000)

Hypothetical

change in

interest rates

Impact of

hypothetical

change in

interest rates

($ ’000)

Estimated annual

expected interest

charge after

hypothetical change

in interest rates

($ ’000)

Interest on South Africa borrowings

21,111

1,663

22,774

(1%)

(1,660)

19,451

Credit Risk

Credit risk

relates to

the risk of

loss that we

would incur

as a

result of non-performance

by counterparties.

maintain credit

risk

policies

respect

our

counterparties

minimize

overall

credit

risk.

These

policies

include

evaluation

potential

counterparty’s

financial

condition,

credit

rating,

and

other

credit

criteria

and

risk

mitigation

tools

our

management

deems

appropriate.

With

respect to

credit risk

on financial

instruments,

we maintain

a policy

of entering

into such

transactions only

with

South African and European financial institutions that have a credit rating

of “B” (or its equivalent) or better, as determined

by credit

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

and Fitch Ratings.

Consumer microlending credit risk

We are exposed

to credit risk in our Consumer microlending activities, which provides unsecured short-term loans

to qualifying

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

which are line

with local regulations.

consider this policy to be appropriate because the affordability test we perform takes into account a variety

factors

such

other

debts

and

total

expenditures

normal

household

and

lifestyle

expenses.

Additional

allowances

may

required should the

ability of our customers

to make payments when

due deteriorate in

the future. A significant

amount of judgment

is required to assess the ultimate recoverability of these

finance loan receivables, including ongoing evaluation of the creditworthiness

of each customer.

Merchant lending

maintain an allowance

for doubtful finance

loans receivable related

to its Merchant

services segment with

respect to short-

term loans

to qualifying

merchant customers.

Our risk

management procedures

include adhering

to our

proprietary lending

criteria

which uses an online-system loan

application process, obtaining necessary customer transaction-history data and

credit bureau checks.

consider these procedures to be appropriate because it

takes into account a variety of

factors such as the customer’s credit capacity

and customer-specific risk factors when originating a loan.

Equity Securities Price Risk

Equity price risk relates to the risk

of loss that we would incur as

a result of the volatility in the exchange

-traded price of equity

securities that we hold. As of June 30, 2023, we did not have any equity securities that

were exchange-traded and held as available for

sale. Historically, exchange

-traded equity securities held as available for sale were expected to be held for an extended period of time

and we were

not concerned with

short-term equity price volatility

with respect to

these securities provided that

the underlying business,

economic and management characteristics of the company remained

sound.

The market price of these exchange-traded equity securities may fluctuate for a variety of reasons

and, consequently, the amount

we may obtain in a subsequent sale of these securities may significantly differ

from the reported market value.

Equity Securities Liquidity Risk

Equity liquidity risk

relates to the

risk of loss

that we would

incur as a

result of the

lack of liquidity

on the exchange

on which

those securities are

listed.

may not

be able to

sell some or

all of these

securities at one

time, or over

an extended period

of time

without influencing the exchange-traded price, or at all.

We monitor these investments for impairment and make appropriate reductions in carrying value when an impairment is deemed

to be other-than-temporary.

We hold approximately 27.8% of the issued share capital

of Finbond which are exchange-traded equity

securities, however, from

April 1, 2016,

we have accounted

for them using

the equity method.

The fair value

of these securities

of $4.6 million

as of June

30,

2023,

represented approximately 0.8% of our total assets, including these securities.

ITEM 8.

FINANCIAL STATEMENTS

AND SUPPLEMENTARY

DATA

Our

audited

consolidated

financial

statements,

together

with the

report of

our

independent

registered

public

accounting

firm,

appear on pages F-1 through F-72 of this Annual Report on Form 10-K.

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND

FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

Evaluation of disclosure controls

and procedures

Under the supervision and

with the participation of

our management, including our

Group Chief Executive Officer and

our Group

Chief Financial

Officer,

we conducted

an evaluation

of our

disclosure controls

and procedures,

as such

term is

defined under

Rule

13a-15(e) under the

Securities Exchange Act

of 1934, as amended

(the “Exchange Act”).

Based on this evaluation,

our Group Chief

Executive Officer and Group Chief Financial Officer

concluded that our disclosure controls and procedures

were effective as of June

30, 2023.

Internal Control over Financial Reporting

Internal control over financial reporting is a process designed by, or under the supervision of,

our Group Chief Executive Officer

and Group Chief Financial Officer, or persons performing

similar functions, and effected by our board of directors, management, and

other

personnel,

provide

reasonable

assurance

regarding

the

reliability

financial

reporting

and

the

preparation

financial

statements for external purposes in accordance with U.S. GAAP.

Internal control over financial reporting includes

those policies and procedures that

(1) pertain to the

maintenance of records that,

in reasonable detail, accurately and fairly

reflect the transactions and dispositions of

our assets; (2) provide reasonable

assurance that

transactions are recorded as

necessary to permit preparation of

financial statements in accordance

with U.S. GAAP,

and that receipts

and expenditures of the company are being made only in accordance with authorizations of our officers and directors; and (3) provide

reasonable assurance regarding prevention

or timely detection of unauthorized

acquisition, use or disposition

of our assets that could

have a material effect on our audited consolidated financial statements.

Inherent Limitations in Internal Control

over Financial Reporting

Internal control over financial reporting cannot provide absolute assurance of achieving

financial reporting objectives because of

its inherent

limitations.

Internal

control

over

financial reporting

is a

process that

involves

human

diligence

and

compliance

and

subject

lapses

judgment and

breakdowns

resulting

from human

failures.

Internal

control over

financial

reporting

also

can

circumvented by collusion or improper

management override. Because of such

limitations, there is a risk that

material misstatements

may not

be prevented

or detected

on a

timely basis

by internal

control over

financial reporting.

However,

these inherent

limitations

are known features of the financial reporting

process. Therefore, it is possible to design into the process safeguards

to reduce, though

not eliminate, this risk.

Management’s

Report on Internal Control Over Financial Reporting

Management, including our Group Chief

Executive Officer and our Group

Chief Financial Officer, is responsible for

establishing

and maintaining

adequate internal control

over our financial

reporting. Management

conducted an evaluation

of the effectiveness

internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued

by the

Committee

of Sponsoring

Organizations

of the

Treadway

Commission

(COSO). Based

on this

evaluation, management

concluded

that our internal control over financial reporting was effective as of

June 30, 2023. Deloitte & Touche (South Africa), our independent

registered public accounting firm, has issued an audit report on our internal control

over financial reporting.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting during the most recent fiscal quarter ended June 30, 2023,

that have materially affected, or are reasonably likely to

materially affect, our internal control over financial reporting.

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the shareholders

and the Board of Directors of Lesaka Technologies,

Inc.

Opinion on Internal Control over Financial Reporting

We have audited

the internal control over financial reporting of Lesaka Technologies,

Inc. and subsidiaries (the “Company”) as

June

30,

2023,

based

criteria

established

Internal

Control

—

Integrated

Framework

(2013)

issued

the

Committee

Sponsoring Organizations

of the Treadway

Commission (COSO).

In our

opinion, the

Company maintained,

in all material

respects,

effective internal

control over financial

reporting as of

June 30, 2023,

based on criteria

established in

Internal Control

— Integrated

Framework (2013)

issued by COSO.

have

also audited,

in accordance

with the

standards of

the Public

Company Accounting

Oversight Board

(United States)

(PCAOB), the

consolidated

financial statements

as of

and for

the year

ended June

30, 2023,

of the

Company and

our report

dated

September 12, 2023, expressed an unqualified opinion on those financial

statements.

Basis for Opinion

The

Company’s

management

responsible

for

maintaining

effective

internal

control

over

financial

reporting

and

for

its

assessment of

the effectiveness

of internal

control over

financial reporting,

included in

the accompanying

Management’s

Report on

Internal Control over Financial Reporting. Our

responsibility is to express

an opinion on the Company’s internal control over financial

reporting based

on our

audit. We

are a

public accounting

firm registered

with the

PCAOB and

are required

to be

independent with

respect to the

Company in accordance

with the U.S. federal

securities laws and

the applicable rules

and regulations of

the Securities

and Exchange Commission and the PCAOB.

We conducted

our audit in accordance with

the standards of the PCAOB. Those

standards require that we plan

and perform the

audit to

obtain reasonable

assurance about

whether effective

internal control

over financial

reporting was

maintained in

all material

respects. Our audit

included obtaining an understanding

of internal control over

financial reporting, assessing

the risk that a

material

weakness

exists,

testing

and

evaluating

the

design

and

operating

effectiveness

internal

control

based

the

assessed

risk,

and

performing such

other procedures as

we considered necessary

in the circumstances.

believe that our

audit provides a

reasonable

basis for our opinion.

Definition and Limitations of Internal Control over Financial Reporting

company’s

internal

control

over

financial

reporting

process

designed

provide

reasonable

assurance

regarding

the

reliability of financial

reporting and the

preparation of financial

statements for external

purposes in accordance with

generally accepted

accounting principles. A company’s internal

control over financial reporting includes those policies and procedures that (1) pertain to

the maintenance of records that, in reasonable detail, accurately and

fairly reflect the transactions and dispositions of the assets of the

company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in

accordance with generally accepted

accounting principles, and that

receipts and expenditures of the

company are being made only

accordance

with

authorizations

management

and

directors

the

company;

and

(3)

provide

reasonable

assurance

regarding

prevention or timely detection of

unauthorized acquisition, use, or disposition

of the company’s assets that could have

a material effect

on the financial statements.

Because

its

inherent

limitations,

internal

control

over

financial

reporting

may

not

prevent

detect

misstatements.

Also,

projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of

changes in conditions, or that the degree of compliance with the policies or

procedures may deteriorate.

/s/ Deloitte & Touche

Deloitte & Touche

Registered Auditors

Johannesburg, South Africa

September 12, 2023

ITEM 9B.

OTHER INFORMATION

Not applicable.

ITEM 9C.

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT

INSPECTIONS

Not applicable.

PART

III

ITEM 10.

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE

GOVERNANCE

Information

about

our

executive

officers

set

out

Part

Item

under

the

caption

“Our

Executive

Officers.”

The

other

information required

by this

Item is incorporated

by reference

to the

sections of

our definitive

proxy statement

for our

2023 annual

meeting of shareholders entitled “Board of Directors and Corporate

Governance” and “Additional Information.”

ITEM 11.

EXECUTIVE COMPENSATION

The information required by this Item is incorporated by reference to the sections of our definitive proxy

statement for our 2023

annual meeting of shareholders entitled

“Executive Compensation,” “Board of

Directors and Corporate Governance—Compensation

of Directors” and “—Remuneration Committee Interlocks and Insider Participation.”

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

AND RELATED STOCKHOLDER

MATTERS

The information required by this Item is incorporated by reference to the sections of our definitive

proxy statement for our 2023

annual

meeting

shareholders

entitled

“Security

Ownership

Certain

Beneficial

Owners

and

Management”

and

“Equity

Compensation Plan Information.”

ITEM 13.

CERTAIN

RELATIONSHIPS

AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE

The information required by this Item is incorporated by reference to the sections of our definitive proxy

statement for our 2023

annual

meeting

shareholders

entitled

“Certain

Relationships

and

Transactions”

and

“Board

Directors

and

Corporate

Governance.”

ITEM 14.

PRINCIPAL ACCOUNTANT

FEES AND SERVICES

The information required by this Item is incorporated by reference to the sections of our definitive proxy

statement for our 2023

annual meeting of shareholders entitled “Audit and Non-Audit Fees.”

PART

ITEM 15.

EXHIBITS AND FINANCIAL STATEMENT

SCHEDULES

The following documents are filed as part of this report

1. Financial Statements

The following financial statements are included on pages F-1 through F-72.

Report of the Independent Registered Public Accounting Firm

– Deloitte & Touche (South

Africa) (PCAOB

Firm ID 0

1130

)

F-2

Consolidated balance sheets as of June 30, 2023 and 2022

F-4

Consolidated statements of operations for the years ended June 30, 2023,

2022 and 2021

F-5

Consolidated statements of comprehensive (loss) income for the years ended June 30, 2023, 2022 and 2021

F-6

Consolidated statements of changes in equity for the years ended June 30, 2023, 2022 and 2021

F-7

Consolidated statements of cash flows for the years ended June 30, 2023, 2022 and 2021

F-10

Notes to the consolidated financial statements

F-11

2. Financial Statement Schedules

Financial statement schedules have been

omitted since they are

either not required, not

applicable, or the

information is otherwise

included.

(b) Exhibits

Incorporated by Reference Herein

Exhibit

No.

Description of Exhibit

Included

Herewith

Form

Exhibit

Filing Date

2.1

Sale of Shares Agreement, dated October 31, 2021,

by and among Net1 Applied Technologies South

Africa Proprietary Limited; Net1 UEPS

Technologies, Inc.; Old Mutual Life Assurance

Company (South Africa) Limited; Lirast (Mauritius)

Company Limited; SIG International Investment

(BVI) Limited; Aldgate International Limited; Ivan

Michael Epstein; PFCC (BVI) Limited; PCF

Investments (BVI) Limited; Ovobix (RF) Proprietary

Limited; Luxanio 227 Proprietary Limited; Vista

Capital Investments Proprietary Limited; Vista

Treasury Proprietary Limited; K2021477132 (South

Africa) Proprietary Limited; and Cash Connect

Management Solutions Proprietary Limited.

8-K

10.1

November 2, 2021

3.1

Amended and Restated Articles of Incorporation

8-K

3.1

May 17, 2022

3.2

Amended and Restated By-Laws of Lesaka

Technologies, Inc.

8-K

3.2

May 17, 2022

4.1

Form of common stock certificate

10-K

4.1

September 9, 2022

4.2

Description of registrant’s securities

10.1*

Form of Restricted Stock Agreement

10-Q

10.49

February 7, 2023

10.2*

Form of Stock Option Agreement

10-Q

10.50

February 7, 2023

10.3*

Form of Restricted Stock Agreement (non-employee

directors)

10-Q

10.51

February 7, 2023

10.4*

Form of Indemnification Agreement

10-K

10.4

September 9, 2022

10.5*

Form of non-employee director agreement

10-K

10.5

August 24, 2017

10.6*

Amended and Restated 2022 Stock Incentive Plan of

Lesaka Technologies, Inc.

14A

September 30, 2022

10.7*

Contract of Employment, dated as of June 30, 2021,

between Net1 Applied Technologies South Africa

(Pty) Ltd and Christopher Guy Butt Meyer

8-K

10.1

June 30, 2021

10.8*

Restrictive Covenants Agreement, dated as of June

30, 2021, between Net1 Applied Technologies South

Africa (Pty) Ltd and Christopher Guy Butt Meyer

8-K

10.2

June 30, 2021

10.9*

Employment Agreement, dated as of June 30, 2021,

between Net 1 UEPS Technologies, Inc. and

Christopher Guy Butt Meyer

8-K

10.3

June 30, 2021

10.10*

Restrictive Covenants Agreement, dated as of June

30, 2021, between Net 1 UEPS Technologies, Inc.

and Christopher Guy Butt Meyer

8-K

10.4

June 30, 2021

10.11*

Contract of Employment, effective February 5, 2021,

between Net1 Applied Technologies South Africa

Proprietary Limited and Lincoln Mali

8-K

10.1

February 11, 2021

10.12*

Restrictive Covenants Agreement, effective February

5, 2021, between Net1 Applied Technologies South

Africa Proprietary Limited and Lincoln Mali

8-K

10.2

February 11, 2021

10.13*

Contract of Employment, dated as of December 9,

2021, between Net1 Applied Technologies South

Africa (Pty) Ltd and Naeem Kola

8-K

10.1

December 10, 2021

10.14*

Restrictive Covenants Agreement, dated as of

December 9, 2021, between Net1 Applied

Technologies South Africa (Pty) Ltd and Naeem Kola

8-K

10.2

December 10, 2021

10.15*

Employment Agreement, dated as of December 9,

2021, between Net 1 UEPS Technologies, Inc. and

Naeem Kola

8-K

10.3

December 10, 2021

10.16*

Restrictive Covenants Agreement, dated as of

December 9, 2021, between Net 1 UEPS

Technologies, Inc. and Naeem Kola

8-K

10.4

December 10, 2021

10.17*

Employment Agreement, dated as of February 8,

2023, between Lesaka Technologies, Inc. and Steven

John Heilbron

10-Q

10.52

May 9, 2023

10.18*

Restrictive Covenants Agreement, dated as of

February 8, 2023, between Lesaka Technologies, Inc.

and Steven John Heilbron

10-Q

10.53

May 9, 2023

10.19*

Contract of Employment, effective March 1, 2018,

between Net1 Applied Technologies South Africa

Proprietary Limited and Alexander Michael Ramsay

Smith

8-K

10.80

March 1, 2018

10.20*

Restrictive Covenants Agreement, effective March 1,

2018, between Net1 Applied Technologies South

Africa Proprietary Limited and Alexander Michael

Ramsay Smith

8-K

10.81

March 1, 2018

10.21*

Employment Agreement, effective March 1, 2018,

between Net 1 UEPS Technologies, Inc. and

Alexander Michael Ramsay Smith

8-K

10.82

March 1, 2018

10.22*

Restrictive Covenants Agreement, effective March 1,

2018, between Net 1 UEPS Technologies, Inc. and

Alexander Michael Ramsay Smith

8-K

10.83

March 1, 2018

10.23*

Addendum to Contract of Employment, dated as of

December 9, 2021, between Net1 Applied

Technologies South Africa (Pty) Ltd and Alex M.R.

Smith

8-K

10.5

December 10, 2021

10.24*

Amendment to Employment Agreement, dated as of

December 9, 2021, between Net 1 UEPS

Technologies, Inc. and Alex M.R. Smith

8-K

10.6

December 10, 2021

10.25*

Mutual Separation Agreement, dated January 11,

2023, by and between the Lesaka Technologies, Inc.

and Alex M.R. Smith

8-K

10.1

January 17, 2023

10.26*

Mutual Separation Agreement, dated January 11,

2023, by and between the Lesaka Technologies (Pty)

Ltd and Alex M.R. Smith

8-K

10.2

January 17, 2023

10.27*

First Amendment to Restrictive Covenant

Agreements, dated as of December 9, 2021

8-K

10.7

December 10, 2021

10.28*

Consulting Agreement, dated August 5, 2020, by and

between the Company and Ali Mazanderani

8-K

10.2

August 5, 2020

10.29

Agreement of Lease, Memorandum of an agreement

entered into by and between Buzz Trading 199 (Pty)

Ltd and Net 1 Applied Technologies South Africa

(Pty) Ltd dated May 7, 2013

10-Q

10.25

May 9, 2013

10.30

Addendum to the Lease Agreement made and entered

into by and between Buzz Trading 199 (Pty) Ltd and

Net 1 Applied Technologies South Africa (Pty) Ltd

dated 14 June 2022

10-K

10.26

September 9, 2022

10.31

Facility Letter between Nedbank Limited and Net1

Applied Technologies South Africa Limited and

certain of its subsidiaries dated as of December 13,

2013 and First Addendum thereto dated as of

December 18, 2013

8-K

10.27

December 19, 2013

10.32

Letter from Nedbank Limited to Net1 Applied

Technologies South Africa Proprietary Limited and

certain of its subsidiaries, dated December 7, 2016

8-K

10.50

December 9, 2016

10.33

Policy Agreement, dated April 11, 2016, among the

Company and the IFC Investors

8-K

10.32

April 12, 2016

10.34

Cooperation Agreement, dated May 13, 2020, by and

between Net 1 UEPS Technologies, Inc. and VCP

(Proprietary) Limited

8-K

10.1

May 14, 2020

10.35

Amendment No. 1 to Cooperation Agreement, dated

December 9, 2020, by and between Net 1 UEPS

Technologies, Inc. and Value Capital Partners (Pty)

Ltd

8-K

10.1

December 10, 2020

10.36

Amendment No. 2 to Cooperation Agreement, dated

March 22, 2022, by and between Net 1 UEPS

Technologies, Inc. and Value Capital Partners (Pty)

Ltd

10-K

10.32

September 9, 2022

10.37

Securities Purchase Agreement, dated March 22,

2022, among Net1 UEPS Technologies, Inc., Net1

Applied Technologies South Africa Proprietary

Limited and Value Capital Partners Proprietary

Limited

10-Q

10.58

May 10, 2022

10.38

Amendment No. 1 to Securities Purchase Agreement

dated March 16, 2023, among Lesaka Technologies,

Inc. (formerly Net1 UEPS Technologies, Inc.),

Lesaka Technologies Proprietary Limited (formerly

Net1 Applied Technologies South Africa Proprietary

Limited) and Value Capital Partners Proprietary

Limited

8-K

10.3

March 22, 2023

10.39

Senior Facility E Agreement, dated September 26,

2018, among Net1 Applied Technologies South

Africa Proprietary Limited, FirstRand Bank Limited

(acting through its Rand Merchant Bank division), as

lender, and FirstRand Bank Limited (acting through

its Rand Merchant Bank division), as agent

8-K

10.96

October 2, 2018

10.40

Letter of Amendment, dated August 2, 2021, among

Net1 Applied Technologies South Africa Proprietary

Limited and FirstRand Bank Limited (acting through

its Rand Merchant Bank division), as lender, related

to the amendment to the Senior Facility E Agreement

8-K

10.1

August 2, 2021

10.41

Fifth Amendment and Restatement Agreement, dated

March 16, 2023, between Lesaka Technologies

Proprietary Limited (as borrower), and FirstRand

Bank Limited (acting through its Rand Merchant

Bank division) (as lender), and FirstRand Bank

Limited (acting through its Rand Merchant Bank

division) (as facility agent)

8-K

10.1

March 22, 2023

10.42

First Amendment and Restatement Agreement, dated

March 22, 2023, between Cash Connect Management

Solutions Proprietary Limited (as borrower), arranged

by FirstRand Bank Limited (acting through its Rand

Merchant Bank division) (as mandated lead arranger),

and FirstRand Bank Limited (acting through its Rand

Merchant Bank division) (as facility agent)

8-K

10.2

March 22, 2023

10.43

Revolving Credit Facility Agreement, dated

November 29, 2022, between Cash Connect Capital

Proprietary Limited, the Parties Listed in Part I of

Schedule 1 (the Original Guarantors) and FirstRand

Bank Limited (acting through its Rand Merchant

Bank division) (as Lender)

8-K

10.1

December 5, 2022

Code of Ethics

Subsidiaries of Registrant

Consent of Independent Registered Public

Accounting Firm

31.1

Certification of Principal Executive Officer pursuant

to Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended

31.2

Certification of Principal Financial Officer pursuant

to Rules 13a-14(a) and 15d-14(a) under the Securities

Exchange Act of 1934, as amended

Certification pursuant to 18 USC Section 1350

101.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy

Extension Schema

101.CAL

XBRL Taxonomy

Extension Calculation Linkbase

101.DEF

XBRL Taxonomy

Extension Definition Linkbase

101.LAB

XBRL Taxonomy

Extension Label Linkbase

101.PRE

XBRL Taxonomy

Extension Presentation Linkbase

104

Cover Page Interactive Data File (formatted as inline

XBRL and continued in Exhibit 101)

* Indicates a management contract or compensatory plan or arrangement.

ITEM 16.

FORM 10-K SUMMARY

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange

Act of 1934, as amended, the registrant has duly

caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LESAKA TECHNOLOGIES, INC.

By: /s/ Chris G.B. Meyer

Chris G.B. Meyer

Group Chief Executive Officer and Director

Date: September 12, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report

has been signed below by the

following persons on behalf of the registrant and in the capacities and on the dates indicated.

NAME

TITLE

DATE

/s/ Kuben Pillay

Chairman of the Board and Director

September 12, 2023

Kuben Pillay

/s/ Chris G.B. Meyer

Group Chief Executive Officer and Director (Principal

Executive Officer)

September 12, 2023

Chris G.B. Meyer

/s/ Naeem E. Kola

Group Chief Financial Officer, Treasurer,

Secretary and

Director (Principal Financial and Accounting Officer)

September 12, 2023

Naeem E. Kola

/s/ Antony C. Ball

Director

September 12, 2023

Antony C. Ball

/s/ Nonkululeko N. Gobodo

Director

September 12, 2023

Nonkululeko N. Gobodo

/s/ Javed Hamid

Director

September 12, 2023

Javed Hamid

/s/ Steven J. Heilbron

Director

September 12, 2023

Steven J. Heilbron

/s/ Lincoln C. Mali

Director

September 12, 2023

Lincoln C. Mali

/s/ Ali Mazanderani

Director

September 12, 2023

Ali Mazanderani

/s/ Sharron Venessa

Naidoo

Director

September 12, 2023

Sharron Venessa

Naidoo

/s/ Monde Nkosi

Director

September 12, 2023

Monde Nkosi

/s/ Ekta Singh-Bushell

Director

September 12, 2023

Ekta Singh-Bushell

F-1

LESAKA TECHNOLOGIES, INC.

LIST OF CONSOLIDATED

FINANCIAL STATEMENTS

Report of the Independent Registered Public Accounting Firm – Deloitte & Touche (South Africa)

F-2

Consolidated balance sheets as of June 30, 2023 and 2022

F-4

Consolidated statements of operations for the years ended June 30, 2023, 2022 and 2021

F-5

Consolidated statements of comprehensive (loss) income for the years ended June 30, 2023, 2022 and 2021

F-6

Consolidated statements of changes in equity for the years ended June 30, 2023, 2022 and 2021

F-7

Consolidated statements of cash flows for the years ended June 30, 2023, 2022 and 2021

F-10

Notes to the consolidated financial statements

F-11

F-2

REPORT OF INDEPENDENT REGISTERED

PUBLIC ACCOUNTING FIRM

To the shareholders

and the Board of Directors of Lesaka Technologies,

Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Lesaka Technologies,

Inc. and subsidiaries (the “Company”)

as of June 30, 2023 and 2022, the related consolidated statements of operations, comprehensive

(loss) income, changes in equity,

and

cash flows, for each

of the three years

in the period ended June

30, 2023, and the

related notes (collectively referred to as

the “financial

statements”). In our opinion,

the financial statements present

fairly, in

all material respects, the

financial position of the

Company as

of June 30, 2023 and 2022, and the results of its operations

and its cash flows for each of the three

years in the period ended June 30,

2023, in conformity with accounting principles generally accepted in

the United States of America.

have

also audited,

in accordance

with the

standards of

the Public

Company Accounting

Oversight Board

(United States)

(PCAOB), the Company's

internal control over financial

reporting as of

June 30, 2023,

based on criteria established

Internal Control

— Integrated Framework (2013)

issued by the Committee of Sponsoring

Organizations of the Treadway

Commission and our report

dated September 12, 2023, expressed an unqualified opinion

on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements

are the responsibility

of the Company's

management. Our

responsibility is to express

an opinion on

the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required

independent

with

respect

the

Company

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require

that we plan and perform the

audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether

due to error or

fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due

to error or fraud, and

performing procedures that respond to those risks.

Such procedures included examining, on a

test basis, evidence

regarding the amounts and

disclosures in the financial statements.

Our audits also included evaluating

the accounting principles used

and significant estimates made by

management, as well as evaluating

the overall presentation of the financial

statements. We

believe

that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated

below are matters arising from

the current-period audit of the financial

statements that

were communicated

or required

to be

communicated

to the

audit committee

and that

(1) relates

to accounts

or disclosures

that are

material to the

financial statements and

(2) involved our

especially challenging, subjective, or

complex judgments. The

communication

critical

audit

matters

does

not

alter

any

way

our

opinion

the

financial

statements,

taken

whole,

and

are

not,

communicating

the

critical

audit

matters

below,

providing

separate

opinion

the

critical

audit

matters

the

accounts

disclosures to which they relate.

Goodwill – Potential impairment of reporting units

Refer to Note 10 to the financial statements

Critical Audit Matter Description

Goodwill

represents

the

cost

excess

the

fair

value

the

identifiable

net

assets

from

the

businesses

that

the

Company

acquired.

The Company's

evaluation

of goodwill

for

impairment

involves

the

comparison

the fair

value

reporting

unit

its

carrying value. The Company uses a discounted cash flow model to estimate the

fair value for each reporting unit, which requires the

Company to make significant estimates

and assumptions related to forecasts of

future cash flows. In

addition, the discounted cash flow

model requires the Company to select an appropriate weighted average cost of capital based on current market conditions. Changes in

these assumptions could have a significant impact on either the fair value, the

amount of any goodwill impairment charge, or both.

How the Critical Audit Matter Was

Addressed in the Audit

Our principal audit procedures related to the assessment of forecasts of cash flows and the computation of the weighted average

cost of capital used by the Company to estimate the fair value of each reporting unit

included the following, among others:

●

Tested the effectiveness of controls over the

Company's goodwill impairment evaluation. This

included controls to the

review

of the Company's forecasts of future cash flows and controls over the computation

of the weighted average cost of capital.

●

Verified

the mathematical accuracy of the Discounted Cash Flow (DCF) calculations used by

the Company.

F-3

●

Evaluated the Company's ability to accurately forecast cash flows by:

◾

Performing sensitivity

analyses of

certain significant

assumptions to

evaluate the

changes in

the fair

value of

the

reporting units that would result from changes in these assumptions;

◾

Determining

the reasonableness

of the

revenue

growth rates

against historic

performance,

approved

budgets, and

expected future performance based on industry and entity-specific factors;

and

◾

Assessing forecast revenue to approved forecasts.

●

With the assistance of our fair value specialists, we evaluated

the weighted average cost of capital used by the Company by:

●

Testing the mathematical

accuracy of the Company's calculation of the weighted average cost of capital; and

●

Developing a range of independent estimates of weighted average cost of capital per reporting unit and comparing this range

to the weighted average cost of capital selected by the Company.

Valuation

of One MobiKwik Systems Limited (Mobikwik) – impairment

considerations

Refer to Note 9 to the financial statements

Critical Audit Matter Description

The investment in Mobikwik

is measured at cost minus

impairment, plus or minus

adjustments resulting from observable

price

changes in orderly transactions

for the identical or

a similar investment of the

same issuer minus impairment,

if any.

The subsequent

measurement section of

FASB ASC

Topic

321: Investments — Equity

Securities requires that because

the Investment in MobiKwik

represents

equity

security

without

readily

determinable

fair

value,

should

written

down

its

fair

value

qualitative

assessment indicates that the investment is impaired, and the fair value of

the investment is less than its carrying value.

identified the

qualitative assessment

of impairment

of investments

as a

critical audit

matter due

to the

significance of

the

balance

the

financial

statements

whole,

the

limited

availability

public

information

the

investment

and

the

subjectivity

the

qualitative

factors

involved

the

assessment.

There

were

significant

judgments

and

estimates

made

the

Company in their assessment of various factors (including operating

performance, global and country specific industry prospec

ts and

other company-specific information) to consider whether there were indicators

of impairment present.

This

required

complex

auditor

judgment,

and

increased

extent

audit

effort

performing

procedures,

evaluate

the

reasonableness of management's judgments in reaching this conclusion.

How the Critical Audit Matter Was

Addressed in the Audit

Our principal

audit procedures over

the relevant factors

to be considered

related to the

valuation of the

Company’s

investment

in Mobikwik as an equity security without a readily determinable fair value included

the following, among others:

●

Inquired of the Company to obtain an understanding of the Company's process in

evaluating the indication of impairment.

●

Tested the effectiveness of controls

over the Company's evaluation of the fair value of the investment in Mobikwik at period

end.

●

Assessed whether there

were any

observable transactions (as

defined in ASC

321) and assessed

the relevant factors

considered

by the Company.

●

Considered the completeness of internal and external factors to be

considered in relation to the value of the investment to be

recognized in the financial statements.

●

With the assistance of

our fair value specialists, we performed

an independent assessment of the factors

to consider whether

or not the investment needed to be impaired.

●

Compared the Company's assessment and conclusion to our independent

assessment.

/s/ Deloitte & Touche

Deloitte & Touche

Registered Auditors

Johannesburg, South Africa

September 12, 2023

We have served

as the Company's auditor since 2004.

F-4

June 30,

2023

2022

(In thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

35,499

43,940

Restricted cash related to ATM funding

and short-term credit facilities (Note 12)

23,133

60,860

Accounts receivable, net and other receivables (Note 4)

25,665

28,898

Finance loans receivable, net (Note 4)

36,744

33,892

Inventory (Note 5)

27,337

34,226

Total current assets before settlement assets

148,378

201,816

Settlement assets

15,258

15,916

Total current assets

163,636

217,732

PROPERTY,

PLANT AND EQUIPMENT, NET (Note 7)

27,447

24,599

OPERATING LEASE RIGHT-OF-USE (Note 8)

4,731

7,146

EQUITY-ACCOUNTED INVESTMENTS

(Note 9)

3,171

5,861

GOODWILL (Note 10)

133,743

162,657

INTANGIBLE ASSETS, NET (Note 10)

121,597

156,702

DEFERRED INCOME TAXES

10,315

3,776

OTHER LONG-TERM ASSETS, including reinsurance assets (Note 9 and 11)

77,594

78,092

TOTAL ASSETS

542,234

656,565

LIABILITIES

CURRENT LIABILITIES

Short-term credit facilities for ATM funding (Note 12)

23,021

51,338

Short-term credit facilities (Note 12)

9,025

14,880

Accounts payable

12,380

18,572

Other payables (Note 13)

36,297

34,362

Operating lease liability - current (Note 8)

1,747

2,498

Current portion of long-term borrowings (Note 12)

3,663

6,804

Income taxes payable

1,005

2,140

Total current liabilities before settlement obligations

87,138

130,594

Settlement obligations

14,774

15,276

Total current liabilities

101,912

145,870

DEFERRED INCOME TAXES

46,840

54,211

OPERATING LEASE LIABILITY - LONG TERM (Note 8)

3,138

4,827

LONG-TERM BORROWINGS (Note 12)

129,455

134,842

OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 11)

1,982

2,466

TOTAL LIABILITIES

283,327

342,216

REDEEMABLE COMMON STOCK (Note 14)

79,429

EQUITY

COMMON STOCK (Note 14)

Authorized:

200,000,000

with $

0.001

par value;

Issued and outstanding shares, net of treasury - 2023:

63,640,246

; 2022:

62,324,321

PREFERRED STOCK

Authorized shares:

50,000,000

with $

0.001

par value;

Issued and outstanding shares, net of treasury:

2023:

; 2022:

ADDITIONAL PAID-IN-CAPITAL

335,696

327,891

TREASURY SHARES, AT

COST: 2023:

25,244,286

; 2022:

24,891,292

(288,238)

(286,951)

ACCUMULATED OTHER

COMPREHENSIVE LOSS (Note 15)

(195,726)

(168,840)

RETAINED EARNINGS

327,663

362,737

TOTAL LESAKA EQUITY

179,478

234,920

NON-CONTROLLING INTEREST

TOTAL EQUITY

179,478

234,920

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY (In thousands, except per share data)

542,234

656,565

See accompanying notes to consolidated financial statements.

LESAKA TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT

OF OPERATIONS

for the years ended June 30, 2023, 2022 and 2021

F-5

2023

2022

2021

REVENUE (Note 16)

527,971

222,609

130,786

Services rendered

486,800

178,846

95,398

Loan-based fees received

25,308

22,444

20,511

Sale of goods

15,863

21,319

14,877

EXPENSE

Cost of goods sold, IT processing, servicing and support

417,544

168,317

96,248

Selling, general and administration

95,050

74,993

84,063

Depreciation and amortization

23,685

7,575

4,347

Reorganization costs

5,894

Transaction costs related to Connect acquisition (Note 3)

6,025

Impairment loss (Note 10)

7,039

OPERATING LOSS

(15,347)

(40,195)

(53,872)

CHANGE IN FAIR VALUE

OF EQUITY SECURITIES (Note 6 and 9)

49,304

LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT (Note 9)

205

376

GAIN ON DISPOSAL OF EQUITY SECURITIES (Note 9)

720

GAIN RELATED TO

FAIR VALUE

ADJUSTMENT TO CURRENCY OPTIONS (Note 6)

3,691

LOSS ON DISPOSAL OF BANK FRICK (Note 9)

472

INTEREST INCOME

1,853

2,089

2,416

INTEREST EXPENSE

18,567

5,829

2,982

LOSS BEFORE INCOME TAX (BENFIT) EXPENSE

(32,266)

(39,900)

(5,619)

INCOME TAX (BENEFIT) EXPENSE (Note 18)

(2,309)

327

7,560

LOSS BEFORE LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

(29,957)

(40,227)

(13,179)

LOSS FROM EQUITY-ACCOUNTED INVESTMENTS

(Note 9)

(5,117)

(3,649)

(24,878)

NET LOSS FROM CONTINUING OPERATIONS

(35,074)

(43,876)

(38,057)

NET LOSS ATTRIBUTABLE

TO LESAKA

(35,074)

(43,876)

(38,057)

Net loss per share, in United States dollars

(Note 19):

Basic loss attributable to Lesaka shareholders

(0.56)

(0.75)

(0.67)

Diluted loss attributable to Lesaka shareholders

(0.56)

(0.75)

(0.67)

See Notes to audited Consolidated Financial Statements CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME

LESAKA TECHNOLOGIES, INC.

for the years ended June 30, 2023, 2022 and 2021

F-6

2023

2022

2021

(In thousands)

Net loss

(35,074)

(43,876)

(38,057)

Other comprehensive (loss) income, net of taxes:

Movement in foreign currency translation reserve

(31,183)

(25,413)

27,178

Movement in foreign currency translation reserve related to equity-accounted

investments (Note 15)

3,935

1,239

(1,967)

Release of foreign currency translation reserve related to disposal of

Finbond equity

securities (Note 9 and Note 15)

362

587

Release of foreign currency translation reserve related to liquidation of subsidiaries

(Note 15)

468

605

Release of foreign currency translation reserve related to disposal of

Bank Frick

(Note 9 and Note 15)

(2,462)

Total other comprehensive

(loss) income, net of taxes

(26,886)

(23,119)

23,354

Comprehensive loss

(61,960)

(66,995)

(14,703)

Comprehensive loss attributable to Lesaka Consolidated Statement of Changes in Equity for the year ended June 30, 2021 (dollar amounts in thousands)

(61,960)

(66,995)

(14,703)

See accompanying notes to consolidated financial statements

LESAKA TECHNOLOGIES, INC.

F-7

Lesaka Technologies, Inc. Shareholders

Number of

Amount

Number of

Treasury

Number of

shares, net of

treasury

Additional

Paid-In

Capital

Retained

Earnings

Accumulated

other

comprehensive

loss

Total

Lesaka

Equity

Non-

controlling

Interest

Total

Redeemable

common

stock

Balance – July

1, 2020

82,010,217

(24,891,292)

(286,951)

57,118,925

301,489

444,670

(169,075)

290,213

84,979

Restricted stock granted

254,560

Exercise of stock options

17,335

Stock-based compensation charge (Note

17)

1,430

Reversal of stock-based compensation

charge (Note 17)

(674,200)

(1,086)

Stock-based compensation charge related

to equity-accounted investment (Note 9)

(25)

Proceeds from disgorgement of

shareholders' short-swing profits (Note

23)

Net loss

(38,057)

Other comprehensive income (Note 15)

23,354

Balance – June 30, 2021

81,607,912

(24,891,292)

(286,951)

56,716,620

301,959

406,613

(145,721)

275,980

84,979

LESAKA TECHNOLOGIES, INC.

Consolidated Statement of Changes in Equity for the year ended June 30, 2022 (dollar amounts in thousands)

F-8

Lesaka Technologies, Inc. Shareholders

Number of

Amount

Number of

Treasury

Number of

shares, net of

treasury

Additional

Paid-In

Capital

Retained

Earnings

Accumulated

other

comprehensive

loss

Total

Lesaka

Equity

Non-

controlling

Interest

Total

Redeemable

common

stock

Balance – July 1,

2021

81,607,912

(24,891,292)

(286,951)

56,716,620

301,959

406,613

(145,721)

275,980

84,979

Stock issued

3,185,079

16,655

16,658

Restricted stock granted

2,278,643

Exercise of stock options

249,521

760

Stock-based compensation charge (Note

17)

3,082

Reversal of stock-based compensation

charge (Note 17)

(105,542)

(120)

Stock-based compensation charge

related to equity-accounted investment

(Note 9)

Transfer from redeemable common

stock to additional paid-in-capital (Note

14)

5,550

(5,550)

Net loss

(43,876)

Other comprehensive loss (Note 15)

(23,119)

Balance – June 30, 2022

87,215,613

(24,891,292)

(286,951)

62,324,321

327,891

362,737

(168,840)

234,920

79,429

LESAKA TECHNOLOGIES, INC.

Consolidated Statement of Changes in Equity for the year ended June 30, 2023 (dollar amounts in thousands)

F-9

Lesaka Technologies, Inc. Shareholders

Number of

Amount

Number of

Treasury

Number of

shares, net of

treasury

Additional

Paid-In

Capital

Retained

Earnings

Accumulated

other

comprehensive

loss

Total

Lesaka

Equity

Non-

controlling

Interest

Total

Redeemable

common

stock

Balance – July 1,

2022

87,215,613

(24,891,292)

(286,951)

62,324,321

327,891

362,737

(168,840)

234,920

79,429

Treasury shares repurchased

(352,994)

(1,287)

(352,994)

(1,287)

Shares issued

206,239

Restricted stock granted

1,418,386

Exercise of stock options

158,659

481

Stock-based compensation charge (Note

17)

7,673

Reversal of stock-based compensation

charge (Note 17)

(114,365)

(364)

Stock-based compensation charge

related to equity-accounted investment

(Note 9)

Net loss

(35,074)

Other comprehensive loss (Note 15)

(26,886)

Balance – June 30, 2023

88,884,532

(25,244,286)

(288,238)

63,640,246

335,696

327,663

(195,726)

179,478

79,429

See accompanying notes to consolidated financial statements.

LESAKA TECHNOLOGIES, INC.

CONSOLIDATED STATEMENT

OF CASHFLOWS

for the years ended June 30, 2023, 2022 and 2021

F-10

2023

2022

2021

(In thousands)

Cash flows from operating activities

Net loss

(35,074)

(43,876)

(38,057)

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation and amortization

23,685

7,575

4,347

Impairment loss (Note 10)

7,039

Movement in allowance for doubtful accounts receivable

6,495

1,551

110

Fair value adjustment related to financial liabilities

(20)

(466)

840

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

(468)

(2,849)

480

Stock-based compensation charge (Note 17)

7,309

2,962

344

Change in fair value of equity securities (Note 6 and 9)

(49,304)

Gain on disposal of equity securities (9)

(720)

Loss on disposal of equity-accounted investment (9)

205

376

Loss on disposal of Bank Frick (9)

472

Interest payable

5,069

(1)

Facility fee amortized (Note 12)

864

251

Loss from equity-accounted investments (Note 9)

5,117

3,649

24,878

Movement in allowance for doubtful loans to equity-accounted investments

4,739

Dividends received from equity-accounted investments

155

194

Changes in net working capital

(Increase) Decrease in accounts receivable (Note 20)

(1,687)

11,102

6,505

Increase in finance loans receivable (Note 20)

(12,353)

(2,047)

(2,754)

Decrease (Increase) in inventory

2,172

(4,820)

1,279

Increase (Decrease) in accounts payable and other payables

1,705

(8,851)

(335)

(Decrease) Increase in taxes payable

(800)

1,087

(17,210)

(Decrease) Increase in deferred taxes

(8,890)

(2,324)

5,089

Net cash provided by (used in) operating activities

410

(37,198)

(58,371)

Cash flows from investing activities

Capital expenditures

(16,156)

(4,558)

(4,285)

Proceeds from disposal of property, plant and equipment

1,497

4,217

571

Acquisition of intangible assets

(419)

Proceeds from disposal of equity-accounted investment (Note 9)

656

865

Loans to equity-accounted investment (Note 9)

(112)

(1,238)

Repayment of loans by equity-accounted investments

112

134

Acquisitions, net of cash acquired (Note 3)

(202,159)

Proceeds from disposal of equity-accounted investment - Bank Frick (Note 9)

11,390

18,568

Proceeds from disposal of equity securities (Note 9)

720

Proceeds from disposal of Net1 Korea, net of cash disposed (Note 3)

20,114

Proceeds from disposal of DNI as equity-accounted investment (Note 9 and Note 20)

6,010

Net change in settlement assets

(2,036)

(4,163)

7,901

Net cash (used in) provided by investing activities

(16,458)

(193,688)

47,775

Cash flows from financing activities

Proceeds from bank overdraft (Note 12)

520,065

570,862

360,083

Repayment of bank overdraft (Note 12)

(547,271)

(525,459)

(365,440)

Long-term borrowings utilized (Note 12)

24,355

78,851

Repayment of long-term borrowings (Note 12)

(17,512)

(5,581)

Non-refundable deal origination fees/ guarantee fees (Note 12)

(100)

(1,307)

Acquisition of treasury stock

(1,287)

Proceeds from exercise of stock options

481

759

Proceeds from disgorgement of shareholders' short-swing profits (Note 23)

124

Net change in settlement obligations

2,148

4,134

(7,901)

Net cash (used in) provided by financing activities

(19,121)

122,259

(13,081)

Effect of exchange rate changes on cash

(10,999)

(10,338)

14,957

Net decrease in cash, cash equivalents and restricted cash

(46,168)

(118,965)

(8,720)

Cash, cash equivalents and restricted cash – beginning of period

104,800

223,765

232,485

Cash, cash equivalents and restricted cash – end of period (Note 20)

58,632

104,800

223,765

See accompanying notes to consolidated financial statements

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-11

DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION

Description of Business

Lesaka Technologies, Inc. (“Lesaka” and collectively

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

UEPS Technologies, Inc., was incorporated in

the State of

Florida on May

8, 1997. The

Company is a

provider of financial technology,

or fintech, products and services, primarily in South Africa and neighboring

countries,

to unbanked and underbanked consumers, and

fintech solutions for

merchants operating in formal

and informal markets.

The Company provides

cash management and digitization

services and

card acquiring to

merchants,

and has developed

and provides secure

transaction technology

solutions and services,

and

offers transaction processing, including bill payment and value-added services (including prepaid

airtime and electricity products) and

financial solutions to its customers.

Basis of presentation

The accompanying

consolidated financial

statements include

subsidiaries over

which Lesaka

exercises control

and have

been

prepared in accordance with accounting principles generally accepted

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

Reorganization charge - financial services restructuring

during the year ended June 30, 2022

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

imperative for the Company is to return its South African consumer business to a breakeven

position and then profitability as soon as

possible. As part of a cost

optimization review completed in late calendar 2021,

the Company performed a review of

its labor structure

and determined that a number of its defined employee roles would need to be terminated due to redundancy. The

Company embarked

on a retrenchment process pursuant to Section 189A

of the South African Labour Relations Act (“Labour

Act”) on January 10, 2022.

The

Company

incurred

cash

costs

approximately

6.7

million

(ZAR

103.4

million)

during

the

third

quarter

fiscal

2022,

principally consisting of severance and related

payments and the payment of

unutilized leave days. The Company

recorded an expense

of $

5.9

million in the caption reorganization costs in the Company’s

consolidated statement of operations for the year ended June 30,

2022. The primary difference between the

reorganization charge amount and the total

cash paid relates to

leave pay which was

accrued

in prior periods.

July 2021 civil unrest in South Africa impacting

the year ended June 30, 2022

Two

of South

Africa’s

nine provinces

experienced significant

civil unrest

in July

2021 resulting

in mass

looting, loss

of life,

disruption of

transport and

supply routes,

and widespread

destruction of

property.

In total

337 South

Africans lost

their lives

in the

unrest

– fortunately

none of

the Company’s

employees were

injured or

harmed. There

was widespread

damage to

bank and

ATM

infrastructure in the affected provinces. In

total approximately 1,800 ATMs

and 300 branches were damaged across the industry,

and

the Banking Association

of South

Africa (“BASA”), estimates

that total

damage to banking

infrastructure amounted to

ZAR 1.6

billion.

The

South

African

Special

Risks

Insurance

Association

(“SASRIA”),

public

enterprise

and

non-life

insurance

company

that

provides coverage for damage caused

by special risks such as politically

motivated malicious acts, riots, strikes,

terrorism and public

disorders, estimates that the total damage to property

across South Africa will be between

ZAR 19.0 billion and ZAR 20.0

billion. The

Company suffered

damage at

of its branches

and to

173

ATMs.

The disruption and

related closure of

branches also impacted

the

Company’s efforts to grow EPE customer numbers.

The Company also saw an impact on transaction volumes through its ATMs

with

July 2021 volumes

% lower than June 2021, and August 2021

% lower than July 2021.

The Company’s insurance claims to recover the cost to repair and replace its branches and ATMs have been met in full, with the

Company receiving ZAR

38.6

million from SASRIA during the year ended June 30, 2022.

As a result

of the disruption

to ATM

coverage and

availability,

BASA and the

South Africa’s

banks agreed

that the fee

which

customers

pay

to utilize

other banks’

ATMs

would be

waived for

August and

September 2021.

The Company

lost transaction

fee

revenue of approximately ZAR

6.0

million ($

0.4

million) during the year ended June 30, 2022, as a result of this decision.

Impact of events involving Russia and Ukraine

The Company

does not

expect its

operations

to be

significantly impacted

by events

unfolding

in the

Ukraine.

The Company

believes that these events may adversely impact South

African gross domestic product and rates

of inflation as a result of

the

increases

in crude oil prices

and food, including staple food, which is likely to

impact economic activity in South Africa and therefore indirectly

affect the Company.

It may also lead to higher input prices for certain of the goods and services the Company

procures.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-12

SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation

The financial statements of

entities which are controlled

by Lesaka, referred to as

subsidiaries, are consolidated. Inter-company

accounts and transactions are eliminated upon consolidation.

The Company, if it is the primary beneficiary,

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

The primary beneficiary is considered

to be the entity that will absorb a

majority of the entity's expected losses,

receive a majority of

the entity's expected residual returns, or both. No entities were required to be consolidated as a result of these requirements during the

years ended

June 30,

2023, 2022 and 2021.

Business combinations

The

Company

accounts

for

its

business

acquisitions

under

the

acquisition

method

accounting.

The

total

value

the

consideration paid

for acquisitions is

allocated to

the underlying

net assets acquired,

based on their

respective estimated fair

values.

The Company uses a number

of valuation methods to determine

the fair value of assets

and liabilities acquired, including

discounted

cash

flows,

external

market

values,

valuations

recent

transactions

combination

thereof,

and

believes

that

uses

the

most

appropriate

measure

combination

measures

value

each

asset

liability.

The Company

recognizes

measurement-period

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

Use of estimates

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

that

affect

the

reported

amounts

assets

and

liabilities

and

disclosure

contingent

assets

and

liabilities

the

date

the

financial

statements

and

the reported

amounts

of revenues

and

expenses during

the reporting

period.

Actual results

could

differ

from

those

estimates.

Translation of foreign

currencies

The primary

functional currency

of the

consolidated entities

is the

South African

Rand (“ZAR”)

and the

Company’s

reporting

currency is the U.S. dollar.

Assets and liabilities are translated

at the exchange rates in effect

at the balance sheet date. Revenues

and

expenses are translated at average

rates for the period. Translation

gains and losses are reported in

accumulated other comprehensive

income in total

equity.

The Company releases the

foreign currency translation

reserve included in accumulated

other comprehensive

income attributable

to a foreign

entity upon sale

or complete, or

substantially complete,

liquidation of the

investment in that

foreign

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

liquidation of the foreign entity.

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

the closing

spot rate

at the

balance sheet

date. Transactional

gains and

losses are

recognized

in selling,

general and

administration

expense on the Company’s consolidated

statement of operations for the period.

Cash, cash equivalents and restricted cash

Cash and cash equivalents

include cash on hand and funds

deposited in bank accounts with

financial institutions that are

liquid,

unrestricted and readily available.

Allowance for doubtful accounts receivable

Allowance for doubtful finance loans receivable

The

Company

regularly

reviews the

ageing

of outstanding

amounts

due

from

borrowers

and

adjusts

the

allowance

based

management’s

estimate

the

recoverability

the

finance loans

receivable.

The

Company

writes

off

microlending

finance

loans

receivable and

related service

fees and

interest if

a borrower

is in

arrears with

repayments for

more than

three months

or dies.

The

Company

writes off

merchant and

working capital

finance receivables

and related

fees when

it is

evident that

reasonable recovery

procedures, including where deemed necessary,

formal legal action, have failed.

Allowance for doubtful accounts receivable

A specific

provision is

established where

it is considered

likely that all

or a portion

of the amount

due from customers

renting

safe assets, point of sale (“POS”) equipment, receiving support and maintenance or transaction services

or purchasing licenses or SIM

cards from

the Company

will not

be recovered.

Non-recoverability is

assessed based

on a

review by

management of

the ageing

outstanding amounts, the location and the payment history of the customer

in relation to those specific amounts.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-13

SIGNIFICANT ACCOUNTING POLICIES (continued)

Inventory

is valued

at the

lower of

cost and

net realizable

value. Cost

is determined

on a

first-in,

first-out basis

and includes

transport and handling costs.

Property, plant

and equipment

Property,

plant and

equipment are

shown at

cost less accumulated

depreciation. Property,

plant and

equipment are

depreciated

on the straight-line basis at rates which

are estimated to amortize the assets to

their anticipated residual values over their useful

lives.

Within the following asset classifications, the expected

economic lives are approximately:

Safe assets

years

Computer equipment

years

Office equipment

years

Vehicles

years

Furniture and fittings

years

The gain or loss arising

on the disposal or retirement

of an asset is determined

as the difference between

the sales proceeds and

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

Leases

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

Operating leases are included in operating lease right-

of-use assets (“ROU”),

operating lease liability

- current, and

operating lease liability

– long term

in its consolidated

balance sheets.

The Company

does not

have any

significant finance

leases as

of June

30, 2023

and 2022,

respectively,

but its

policy is

to include

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

long-term liabilities in its consolidated balance sheets.

A ROU asset

represents the

Company’s

right to use

an underlying

asset for the

lease term and

the lease liabilities

represent its

obligation to

make lease

payments arising

from the

lease arrangement.

Operating lease

ROU assets

and liabilities

are recognized

commencement date based on

the present value of

lease payments over the

lease term. As

most of the

Company’s leases do not provide

an implicit rate,

the Company generally

uses its incremental

borrowing rate

based on

the estimated rate

of interest for

collateralized

borrowing over

a similar term

of the lease

payments at commencement

date. The operating

lease ROU asset

also includes any

lease

prepayments made

and excludes lease

incentives. The terms

of the Company’s

lease arrangements may

include options to

extend or

terminate

the

lease

when

it is

reasonably

certain

that

the Company

will exercise

that

option.

Lease

expense

for

lease payments

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

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

less. The Company

accounts for all

components in a

lease arrangement as

a single combined

lease component. Costs

incurred in the

adaptation of leased properties to

serve the requirements of

the Company (leasehold improvements) are

capitalized and amortized over

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

the lease.

Equity-accounted investments

The Company uses the equity

method to account for

investments in companies when

it has significant influence but

not control

over

the operations

of the

company.

Under the

equity method,

the Company

initially records

the investment

at cost

and

thereafter

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

In addition, when an investment qualifies for the equity

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

interest or degree

of influence),

the cost

of acquiring

the additional

interest in

the investee

is added

to the

current basis

of the

Company’s

previously

held interest and the equity method would be

applied subsequently from the date on which

the Company obtains the ability to exercise

significant influence over the investee.

The Company

releases a

pro rata

portion of

the foreign

currency translation

reserve related

to an

equity-accounted investment

that is

included

in accumulated

other comprehensive

income to

earnings upon

the sale

of a

portion of

its ownership

interest in

the

equity-accounted

investment.

The

release

the

pro

rata

portion

the

foreign

currency

translation

reserve

included

the

measurement of

the gain

or loss

on sale

of a

portion of

the Company’s

ownership interest

in the

equity-accounted investment.

The

Company does not recognize cumulative losses in excess of its investment or loans in an equity-accounted

investment except if it has

an obligation to provide additional financial support.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-14

SIGNIFICANT ACCOUNTING POLICIES (continued)

Equity-accounted investments (continued)

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

of the Company’s investment. The Company

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

This election

requires the Company to evaluate

each distribution received on the

basis of the source of the

payment and classify the distribution

either

operating

cash

inflows

investing

cash

inflows.

The

Company

reviews

its

equity-accounted

investments

for

impairment

whenever events or circumstances indicate that the carrying amount of

the investment may not be recoverable.

Goodwill

represents

the

excess

the

purchase

price

acquired

enterprise

over

the

fair

values

the

identifiable

assets

acquired and liabilities assumed. The Company tests for impairment

of goodwill on an annual basis and at any other time if events

circumstances change that would more likely than not

reduce the fair value of the

reporting unit’s goodwill below its carrying amount.

Circumstances that

could trigger

an impairment test

include but are

not limited to:

a significant adverse

change in the

business

climate or legal

factors; an adverse

action or assessment

by a regulator;

unanticipated competition; loss

of key personnel;

the likelihood

that a reporting unit or

significant portion of a reporting

unit will be sold

or otherwise disposed; and results

of testing for recoverability

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

and the carrying amount of the reporting

unit exceeds

the fair value

of that reporting

unit, an impairment

loss is recorded

in the statement

of operations.

Measurement of

the

fair value

of a reporting

unit is based

on one

or more

of the following

fair value

measures: the amount

at which the

unit as a

whole

could be

bought or sold

in a current

transaction between

willing parties; present

value techniques

of estimated future

cash flows; or

valuation techniques based on multiples of earnings or revenue, or

a similar performance measure.

Intangible assets

Intangible assets are shown at

cost less accumulated amortization. Intangible assets

are amortized over the following

useful lives:

Customer relationships

years

Software, integrated platform and unpatented technology

years

FTS patent

years

Exclusive licenses

years

Brands and trademarks

years

Intangible assets

are periodically

evaluated for

recoverability,

and those

evaluations take

into account

events or

circumstances

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

exists.

Debt and equity securities

Debt securities

The Company is required to

classify all applicable debt securities

as either trading securities, available

for sale or held

to maturity

upon investment in the security.

Trading

Debt securities

acquired by

the Company

which it

intends

to sell

in the

short-term

are classified

as trading

securities and

are

initially measured

at fair

value. These

debt securities

are subsequently

measured at

fair value

and realized

and unrealized

gains and

losses

from

these

trading

securities

are

included

the

Company’s

consolidated

statement

operations.

Classification

debt

security as a trading

security is not precluded

simply because the Company

does not intend to sell

the security in the

short term. The

Company had no debt securities that were classified as trading securities as of June

30, 2023 and 2022, respectively.

Available for sale

Debt

securities

acquired

by the

Company

that

have

readily

determinable

fair values

are classified

as available

for

sale if

the

Company has not classified them as trading securities or if it does not have

the ability or positive intent to hold the debt security until

maturity.

The Company is

required to make

an election to

account for these

debt securities as

available for

sale. These available

for

sale debt securities

are initially measured

at fair value. These

debt securities are

subsequently measured at

fair value with unrealized

gains

and

losses

from

available

for

sale

investments

debt

securities

reported

separate

component

accumulated

other

comprehensive income, net of deferred income

taxes, in shareholders’ equity. The Company had no

debt securities that were classified

as available for sale securities as of June 30, 2023 and 2022, respectively.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-15

SIGNIFICANT ACCOUNTING POLICIES (continued)

Debt and equity securities (continued)

Debt securities (continued)

Held to maturity

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

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

securities are carried at amortized cost. The amortized cost

of held to maturity debt securities

is adjusted for amortization of premiums

and accretion of discounts to maturity.

Interest received from the held to

maturity security together with this amortization

is included

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

a held to maturity security as of

June 30,

2023 and 2022, respectively,

refer to Note 4.

Impairment of debt securities

The Company’s

available for sale

and held

to maturity debt

securities with unrealized

losses are reviewed

quarterly to identify

other-than-temporary impairments in value.

With regard to available for sale and held to maturity debt securities, the Company considers (i) the ability and intent to hold the

debt security for a

period of time to

allow for recovery of

value (ii) whether it

is more likely than

not that the Company

will be required

to sell the debt security;

and (iii) whether it expects

to recover the entire carrying

amount of the debt security.

The Company records

an impairment

loss in its

consolidated statement

of operations representing

the difference between

the debt securities

carrying value

and the current fair value as

of the date of the impairment

if the Company determines that

it intends to sell the debt

security or if that

it is

more likely

than not

that it

will be

required to

sell the

debt security

before recovery

of the

amortized cost

basis. However,

the

impairment loss

is split

between a

credit loss

and a

non-credit loss

for debt

securities that

the Company

determines that

it does

not

intend to sell or that it is more likely than not that it will

not be required to sell the debt securities before the recovery of the amortized

cost basis. The credit loss portion, which is measured as the difference

between the debt security’s cost

basis and the present value of

expected future cash flows,

is recognized in the Company’s

consolidated statement of operations.

The non-credit loss portion,

which

is measured

as the

difference between

the debt

security’s

cost basis and

its current

fair value,

is recognized

in other

comprehensive

income, net of applicable taxes.

Equity securities

Equity

securities

are

measured

fair

value.

Changes

the

fair

value

equity

securities

are

recorded

the

Company’s

consolidated statement

of operations within

the caption titled

“change in fair

value of equity

securities”. The

Company may elect

measure equity securities without readily determinable fair

values at its cost

minus impairment, if any, plus or minus changes

resulting

from observable price changes in orderly transactions for the identical or

a similar investment of the same issuer (“cost

minus changes

in observable

prices equity

securities”). Changes

in the fair

value of

the Company’s

cost minus

changes in

observable prices

equity

securities during the year ended June 30,

2023 and 2021, respectively, are discussed in Note 9. There were

no changes in the fair value

the

Company’s

cost

minus

changes

observable

prices

equity

securities

during

the

year

ended

June

30,

2022.

The

Company

performs a qualitative assessment on a quarterly basis and recognizes

an impairment loss if there are sufficient indicators that

the fair

value of the equity security is less than its carrying value.

Policy reserves and liabilities

Reserves for policy benefits and claims payable

The Company determines its reserves for policy benefits under

its life insurance products using a model which estimates claims

incurred

that have

not been

reported

and

total

present

value

of disability

claims-in-payment

the balance

sheet

date. This

model

allows for

best estimate

assumptions based

on experience

(where sufficient)

plus prescribed

margins,

as required

in the

markets in

which these products are offered, namely South Africa.

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

most recent experience

and (ii) claim reporting delays reflecting Company specific and industry experience. Most of the disability claims-in-payment reserve

reinsured

and

the

reported

values

were

based

the

reserve

held

the

relevant

reinsurer.

The

values

matured

guaranteed

endowments are increased by late payment interest (net of the asset management

fee and allowance for tax on investment income).

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-16

SIGNIFICANT ACCOUNTING POLICIES (continued)

Policy reserves and liabilities (continued)

Deposits on investment contracts

For the Company’s interest-sensitive

life contracts, liabilities approximate the policyholder’s account

value.

Reinsurance contracts held

The Company enters into reinsurance

contracts with reinsurers under

which the Company is compensated

for the entire amount

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

The expected benefits to which the Company is

entitled under its reinsurance contracts held are recognized as reinsurance

assets.

These assets consist

of short-term

balances due from

reinsurers (classified within

Accounts receivable,

net and other

receivables) as

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

under the

related reinsurance

contracts. Amounts

recoverable from

or due

to reinsurers

are measured

consistently with

the amounts

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

for impairment at

each balance sheet

date. If there

is reliable

objective evidence that

amounts due may

not be recoverable,

the Company

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

statement of operations. Reinsurance premiums are recognized when

due for payment under each reinsurance contract.

Redeemable common stock

Common stock

that is

redeemable (1)

at a

fixed or

determinable price

on a

fixed or

determinable date,

(2) at

the option

of the

holder,

or (3)

upon the

occurrence of

an event

that is

not solely

within the

control of

Company is

presented outside

of total

Lesaka

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

initially recognized at issuance date fair value

and the Company does not

adjust

the

issuance date

fair value

if redemption

is not

probable.

The Company

re-measures

the redeemable

common

stock

to the

maximum

redemption

amount

the

balance

sheet

date

once

redemption

probable.

Reduction

the

carrying

amount

the

redeemable common stock is

only appropriate to the

extent that the Company

has previously recorded increases

in the carrying amount

of the

redeemable

equity instrument

as the

redeemable common

stock may

not be

carried at

an amount

that is

less than

the initial

amount reported outside of permanent equity.

Redeemable common stock is reclassified as permanent equity when presentation outside

permanent equity is no longer required

(if, for example, a redemption

feature lapses, or there

is a modification of the

terms of the instrument). The

existing carrying amount

of the redeemable common

stock is reclassified to permanent

equity at the date of

the event that caused the

reclassification and prior

period consolidated financial statements are not adjusted.

Revenue recognition

The

Company

recognizes

revenue

upon

transfer

control

promised

products

services

customers

amount

that

reflects

the

consideration

the

Company

expects

receive

exchange

for

those

products

services.

The

Company

enters

into

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

for as separate performance obligations. Revenue is recognized net of allowances

for returns and any taxes collected from customers,

which are subsequently remitted to governmental authorities.

Nature of products and services

Telecom

products and services

The Company

purchases airtime for

resale to customers

and acts as

a principal

in these transactions.

The Company

recognizes

revenue as the airtime is delivered to the customer.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-17

SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Nature of products and services (continued)

Processing fees

The Company

earns processing

fees from

transactions processed

for its

customers. The

Company provides

its customers

with

transaction processing services that

involve the collection, transmittal

and retrieval of

all transaction data

in exchange for

consideration

upon completion of

the transaction. In

certain instances, the

Company also

provides a funds

collection and

settlement service for

its

customers.

The

Company

also

provides

customers

with

cash

management

and

digitization

services

which

enables

its

merchant

customers

deposit

cash

into

digital

vaults

(safe

assets)

operated

the

Company,

after

which

the

funds

are

then

electronically

accessible

customers

either

transfer

their nominated

bank

account

or to

pay

certain

pre-selected

suppliers.

The Company

considers each of these services

as a single performance obligation.

The Company’s

contracts specify a transaction price for

services

provided. Processing

revenue fluctuates

based on

the type

and the

volume of

transactions processed.

Revenue is

recognized on

the

completion of the processed transaction.

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

point of sale

device (“POS”). The

Company earns processing

fees from transactions

processed for

these

customers. The

Company’s

contracts specify

a transaction

price for

each service

provided (for

instance, ATM

withdrawal, balance

enquiry,

etc.). Processing

revenue fluctuates

based on

the type

and volume

of transactions

performed

by the

customer.

Revenue is

recognized on the completion of the processed transaction.

The Company,

as a transaction

processor and in

the capacity of

an agent, facilitates

the delivery value

added services (“VAS”)

to its customers (including prepaid

airtime, prepaid electricity and gaming

vouchers) and earns a commission

once these services are

delivered to the customer. Revenue

from these transactions fluctuates based on the volume of VAS

services distributed.

Account holder fees

The Company

provides bank accounts

to customers

and this service

is underwritten

by a regulated

banking institution

because

the Company is not

a bank. The Company

charges its customers

a fixed monthly

bank account administration

fee for all active

bank

accounts regardless of

whether the account

holder has transacted

or not. The

Company recognizes account

holder fees on a

monthly

basis on all active bank accounts. Revenue from account holders’

fees fluctuates based on the number of active bank accounts.

Lending revenue

The

Company

provides

short-term

loans

customers

(consumers)

South

Africa

and

charges

up-front

initiation

fees

and

monthly service fees.

Initiation fees are

recognized using

the effective interest

rate method, which

requires the utilization

of the rate

of return implicit in the loan, that is, the contractual interest rate adjusted for any net deferred loan fees or costs, premium, or discount

existing at the origination or acquisition of

the loan. Monthly service fee

revenue is recognized under the contractual terms

of the loan.

The monthly service fee amount is fixed upon initiation and does not

change over the term of the loan.

Interest earned from

customers

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

not charge

these customers

up-front initiation

fees or

monthly service

fees. Interest

earned from

customers is

recognized using

the

effective interest

rate method,

which requires

the utilization

of the

rate of

return implicit

in the

loan, that

is, the

contractual interest

rate adjusted

for any net

deferred loan

fees or

costs, premium,

or discount

existing at

the origination

or acquisition

of the

loan. The

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

African Reserve Bank.

Technology

products

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

technology. Hardware includes the sale of

POS devices, SIM cards and other consumables which

can occur on an ad

hoc basis. The Company recognizes revenue from hardware

at the transaction price specified

in the contract as the hardware is

delivered to the customer.

Licenses include the right to use

certain

technology developed by the Company and the associated revenue is recognized

ratably over the license period.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-18

SIGNIFICANT ACCOUNTING POLICIES (continued)

Revenue recognition (continued)

Nature of products and services (continued)

Insurance revenue

The Company writes

life insurance contracts, and

policy holders pay

the Company a

monthly insurance premium at

the beginning

of each month. Premium revenue

is recognized on a monthly basis net of

policy lapses. Policy lapses are provided

for on the basis of

expected non-payment of policy premiums.

Accounts Receivable, Contract Assets and Contract Liabilities

The

Company

recognizes

accounts

receivable

when

its

right

consideration

under

its

contracts

with

customers

becomes

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

Research and development expenditure

Research and

development expenditure

is charged

to net

income in

the period

in which

it is

incurred. During

the years

ended

June 30, 2023,

2022 and 2021, the

Company incurred research

and development expenditures

of $

0.5

million, $

0.5

million and $

0.3

million, respectively.

Computer software development

Product

development

costs in

respect

software

intended

for

sale

licensees

are

expensed

incurred

until

technological

feasibility is attained.

Technological

feasibility is attained

when the Company’s

software has completed

system testing and has

been

determined

viable

for

its

intended

use.

Once

technological

feasibility

reached,

the

Company

capitalized

such

costs

and

amortizes

these costs over

the products’

estimated life. The

time between

the attainment

of technological feasibility

and completion

of software development is generally short with insignificant amounts of development

costs incurred during this period.

Costs in

respect of

the development

of software

for the

Company’s

internal use

are expensed

as incurred,

except to

the extent

that

these

costs

are

incurred

during

the

application

development

stage.

All

other

costs

including

those

incurred

the

project

development and post-implementation stages are expensed as incurred.

Income taxes

The

Company

provides

for

income taxes

using

the asset

and

liability

method.

This

approach recognizes

the amount

of taxes

payable

refundable

for

the

current

year,

well

deferred

tax

assets

and

liabilities

for

the

future

tax

consequence

events

recognized in the financial statements and tax returns. Deferred income

taxes are adjusted to reflect the effects of changes in tax

laws

or enacted tax rates. There was a change in the South African enacted tax

rate during the year ended June 30, 2023, from

% to

and the

Company measured

its South

African income

taxes and

deferred income

taxes for

the year

ended June

30, 2023,

using the

enacted statutory tax

rate in South Africa

%. The Company used

the enacted statutory

tax rate of

% for the years

ended June

30, 2022 and 2021, respectively.

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

assets, and based on all available evidence, both positive

and negative, determines whether it is more likely than not

that the deferred

tax assets or a portion thereof will be realized.

Reserves for uncertain tax positions are recognized in the financial

statements for positions which are not considered more likely

than not

of being

sustained based

on the

technical merits

of the

position on

audit by

the tax

authorities. For

positions that

meet the

likely than

not standard,

the measurement

of the

tax benefit

recognized

in the

financial statements

is based

upon

the largest

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

realized based on a cumulative probability

assessment

the

possible

outcomes.

The

Company’s

policy

include

interest

unrecognized

tax

benefits

interest

expense and penalties in selling, general and administration in the consolidated

statements of operations.

The Company has elected the period cost method

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

intangible low

taxed income (“GILTI”)

as a current-period expense when incurred.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-19

SIGNIFICANT ACCOUNTING POLICIES (continued)

Stock-based compensation

Stock-based compensation represents the

cost related to

stock-based awards granted.

The Company measures

equity-based stock-

based compensation cost at

the grant date, based on

the estimated fair value of

the award, and recognizes the

cost as an expense on

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

service period. In respect of awards with only service

conditions that

have a graded

vesting schedule, the

Company recognizes compensation

cost on a straight-line

basis over the

requisite service period

for the

entire award.

The forfeiture

rate is

estimated using

historical trends

of the

number of

awards forfeited

prior to

vesting.

The

expense is recorded in

the statement of operations and

classified based on the recipients’

respective functions. The Company

records

deferred tax

assets for awards

that result in

deductions on the

Company’s

income tax returns,

based on the

amount of compensation

cost recognized and the Company’s

statutory tax rate in the jurisdiction

in which it will receive a deduction.

Differences between the

deferred tax

assets recognized

for financial

reporting purposes

and the

actual tax

deduction reported

on the

Company’s

income tax

return are recorded in income tax expense in the consolidated statement

of operations.

Equity instruments issued to third parties

Equity instruments issued

to third parties represents

the cost related to

equity instruments granted.

The Company measures this

cost at the grant date, based on the

estimated fair value of the award, and recognizes the cost as

an expense on a straight-line basis (net

of estimated forfeitures) over

the requisite service period. The forfeiture

rate is estimated based on

the Company’s expectation

of the

number of

awards that will

be forfeited

prior to vesting.

The Company

records deferred tax

assets for equity

instrument awards that

result

deductions

the

Company’s

income

tax

returns,

based

the

amount

equity

instrument

cost

recognized

and

the

Company’s

statutory

tax

rate

the

jurisdiction

which

will

receive

deduction.

Differences

between

the

deferred

tax

assets

recognized for financial reporting purposes and the actual tax deduction reported on the Company’s

income tax return are recorded in

the statement of operations.

Settlement assets and settlement obligations

The Company provides customers with cash management and digitization

services which enable its merchant customers to

deposit cash into digital vaults (safe assets) operated by the Company,

after which the funds are then electronically accessible by

customers to either transfer to their nominated bank account or to

pay certain pre-selected suppliers.

Settlement assets comprise (1) cash received from merchant customers

from cash deposits into the Company’s safe assets, which

are

then

electronically

accessible

customers

either

transfer

their

nominated

bank

account

pay

certain

pre-selected

suppliers,

and

(2)

cash

received

from

credit

card

companies

(as

well

other

types

payment

services)

which

have

business

relationships

with

merchants

selling

goods

and

services

that

are

the

Company’s

customers

and

whose

behalf

processes

the

transactions between various parties.

Settlement

obligations

comprise

(1)

amounts

that

the

Company

obligated

disburse

merchant

customers

their

nominated pre-selected suppliers, and (2)

amounts that the Company is obligated

to disburse to merchants selling goods

and services

that are the Company’s customers and on whose behalf it processes

the transactions between various parties and settles the funds from

the credit card companies to the Company’s

merchant customers.

The balances

at each reporting

date may vary

widely depending on

the timing of

the receipts and

payments of these

assets and

obligations.

Recent accounting pronouncements adopted

October

2021,

the

Financial

Accounting

Standards

Board

(“FASB”)

issued guidance which

amends

guidance

Business

Combinations

(Topic

805)

regarding

the recognition

and measurement

of contract

assets and

liabilities

in a

business

combination.

These items are recognized at fair value

on acquisition under current guidance. The new

guidance requires an acquiring entity to apply

guidance

Revenue

Recognition

(Topic

606)

recognize

and

measure

contract

assets

and

contract

liabilities

business

combination. The guidance

became effective for

the Company beginning

July 1, 2022.

The adoption of

this guidance did

not have a

material impact on the Company’s

financial statements and related disclosures.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-20

SIGNIFICANT ACCOUNTING POLICIES (continued)

Recent accounting pronouncements not yet adopted

as of June 30, 2023

June

2016,

the

FASB

issued

guidance

regarding

Measurement

Credit

Losses

Financial

Instruments

The

guidance

replaces

the

incurred

loss

impairment

methodology

current

GAAP

with

methodology

that

reflects

expected

credit losses

and

requires consideration of a

broader range of reasonable

and supportable information to

inform credit loss estimates.

For trade and other

receivables, loans, and other

financial instruments, an entity

is required to use a

forward-looking expected loss model

rather than the

incurred loss

model for

recognizing credit

losses, which

reflects losses

that are

probable. Credit

losses relating

to available-for-sale

debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the

securities. This guidance is effective for

the Company beginning July 1, 2023. The Company

is currently assessing the impact of this

guidance on its financial statements and related disclosures, but does

not expect the impact on its financial results to be material.

In November

2019,

the FASB

issued guidance

regarding

Financial

Instruments—Credit

Losses (Topic

326),

Derivatives and

Hedging

(Topic

815),

and

Leases

(Topic

842).

The

guidance

provides

framework

stagger

effective

dates

for

future

major

accounting

standards

and

amends

the

effective

dates

for

certain

major

new

accounting

standards

give

implementation

relief

certain types

of entities,

including Smaller

Reporting Companies.

The Company

is a Smaller

Reporting Company.

Specifically,

the

guidance changes some effective

dates for certain

new standards on

the following topics

in the FASB Codification, namely Derivatives

and Hedging

(ASC 815);

Leases (ASC

842); Financial

Instruments —

Credit Losses

(ASC 326);

and Intangibles

— Goodwill

and

Other

(ASC

350).

The

guidance

defers

the

adoption

date

guidance

regarding

Measurement

Credit

Losses

Financial

Instruments

by the Company from July 1, 2020 to July 1, 2023. The Company is currently assessing the impact of this guidance on its

financial statements and related disclosures, but does not expect the impact on its financial

results to be material.

ACQUISITIONS

The Company did not make any acquisitions during the years ended June 30, 2023 and 2021. The cash

paid, net of cash received

related to the Company’s acquisition during

the year ended June 30, 2022, is summarized in the table below:

2022

Total cash paid

240,582

Less: cash acquired

38,423

Total cash paid, net

of cash received

(1)

202,159

(1) – represents the cash paid, net of cash acquired, to acquire a controlling

interest in the Connect.

2023

Acquisitions

None.

2022

Acquisitions

April 2022 acquisition of Connect

On October 31, 2021, the Company entered into a

Sale of Shares Agreement (the “Sale Agreement”) with the

Sellers (as defined

the

Sale

Agreement),

Cash

Connect

Management

Solutions

Proprietary

Limited

(“CCMS”),

Ovobix

(RF)

Proprietary

Limited

(“Ovobix”),

Luxiano

227

Proprietary

Limited

(“Luxiano”)

and

K2021477132

(South

Africa)

Proprietary

Limited

(“K2021”

and

together with CCMS, Ovobix

and Luxiano, “Connect”).

Pursuant to the Sale

Agreement, and subject

to its terms and

conditions, the

Company’s

wholly-owned subsidiary,

Lesaka SA (formerly

named Net1 SA),

agreed to acquire,

and the Sellers agreed

to sell, all of

the outstanding equity interests and certain claims in Connect. The transaction

closed on April 14, 2022.

The total

purchase consideration

was ZAR

3.8

billion ($

258.9

million), comprising

ZAR

3.5

billion ($

240.6

million) in

cash,

contingent

consideration

ZAR

23.8

million

1.6

million),

and

ZAR

241.9

million

16.7

million)

3,185,079

the

Company’s common stock. The contingent

consideration related to

a tax matter

which was resolved

in July 2022,

and the consideration

was

settled

cash

September

2022.

The

contingent

consideration

included

the

caption

other

payables

the

Company’s

consolidated balance

sheet as of

June 30,

2022, refer

to Note 13.

The

3,185,079

shares of common

stock are issuable

three

equal

tranches on

each of

the first,

second and

third anniversaries

of the

closing and

was calculated

as ZAR

350.0

million divided

by the

sum of $

7.50

multiplied by the closing date exchange

rate (as defined in the Sale Agreement)

of $1:ZAR

14.65165

. Refer to Note 14

for issuances during the year ended June 30, 2023. The fair value of the purchase consideration settled in shares of common stock of April 2022 acquisition of Connect (continued)

16.7

million

was

calculated

3,185,079

Lesaka

common

stock

multiplied

the

April

13,

2022

closing

price

the

NasdaqGS of $

5.23

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-21

ACQUISITIONS (continued)

2022

Acquisitions (continued)

The

closing

the

transaction

was

subject

customary

closing

conditions,

including

(i)

approval

from

the

competition

authorities of South

Africa, Namibia and

Botswana, (ii) exchange

control approval from

the financial surveillance

department of the

South

African Reserve Bank, and (iii) obtaining certain third-party

consents. In addition, the closing of the transaction was subject to

entry into

definitive financing

agreements by

each of

Lesaka SA

and CCMS

for an

aggregate of

ZAR

2.4

billion in

debt financing

provided by Rand Merchant Bank and satisfying the conditions precedent

for funding thereunder, of which ZAR

1.1

billion relates to

the financing agreements described below and ZAR

1.3

billion related to finance agreements signed between CCMS

and RMB. Of the

ZAR

1.3

billion related to

CCMS, approximately ZAR

250

million related to

new debt as part

of the funding of

the acquisition. The

definitive loan agreements became effective upon closing the transaction

refer to Note 12.

The

South

African

competition

authorities

approved

the

transaction

subject

certain

public

interest

conditions

relating

employment, increasing the spread

of ownership by

historically disadvantaged people (“HDPs”)

and workers, and investing

in supplier

and enterprise development. Further to increasing the

spread of ownership by

HDPs, Lesaka is required to

establish an employee share

ownership scheme

(“ESOP”) within

months of

the implementation

of the

Connect acquisition

that complies

with certain

design

principles for the

benefit of the workers

of the merged

entity to receive

a shareholding in Lesaka

equal in value

to at least

% of the

issued

shares,

approximately

1.8

million

shares,

Lesaka

the

date

the

Connect

acquisition.

within

months

the

implementation date of

the transaction, Lesaka generates

a positive net profit

for three consecutive quarters,

the ESOP shall increase

% of the issued shares, or approximately

3.0

million shares, in Lesaka at the date of the Connect acquisition. The final structure of

the ESOP is

contingent on

Lesaka shareholder

approval and relevant

regulatory and

governance approvals.

The ESOP had

not been

established as of the date of the consolidated annual financial statements.

The

Company

incurred

transaction-related

expenditures

6.0

million

during

the

year

ended

June

30,

2022,

the

acquisition of Connect. On acquisition, the Company recognized

a deferred tax liability of approximately $

50.3

million related to the

acquisition

Connect

intangible

assets

during

the

year

ended

June

30,

2022.

The

final

purchase

price

allocation

the

Connect

acquisition, translated at the foreign exchange rates applicable on the date

of acquisition, is provided in the table below:

Connect

April 2022

Cash and cash equivalents

38,423

Accounts receivable

24,032

Finance loans receivable

15,706

Inventory

11,431

Property, plant and equipment

20,872

Operating lease right of use asset

753

Equity-accounted investment

Goodwill

153,693

Intangible assets

179,484

Deferred income taxes assets

2,284

Short term facilities

(16,903)

Accounts payable

(27,914)

Other payables

(4,793)

Operating lease liability – current

(434)

Current portion of long – term borrowings

Income taxes payable

(982)

Deferred income taxes liabilities

(50,255)

Operating lease liability - long-term

(319)

Long-term borrowings

(86,960)

Settlement assets

13,561

Settlement liabilities

(12,875)

Fair value of assets and liabilities on acquisition

258,877

2021 Acquisitions

None.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-22

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

June 30,

2023, and June

30, 2022, are

presented in the

table below:

June 30,

2023

2022

Accounts receivable, trade, net

11,037

13,904

Accounts receivable, trade, gross

11,546

14,413

Allowance for doubtful accounts receivable, end of period

509

Beginning of period

509

267

Reallocation to allowance for doubtful finance loans receivable

(1)

(418)

Reversed to statement of operations

(31)

(133)

Charged to statement of operations

2,006

779

Utilized

(1,646)

(154)

Foreign currency adjustment

(250)

Loans provided to Carbon, net of allowance: 2022: $

3,000

Current portion of total held to maturity investments

Investment in

7.625

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

8.625

notes

Other receivables

14,628

14,994

Total accounts receivable,

net

25,665

28,898

(1) Represents

reallocation of

a portion

of the

Merchant allowance

for doubtful

finance loans

receivable as

of June

30, 2022,

which was included in the allowance for doubtful accounts receivable as of

June 30, 2022.

Accounts receivable,

trade, gross

includes amounts

due from

customers from

the provision

of transaction

processing services,

from the

sale of hardware,

software licenses and

SIM cards

and rentals

from safe

assets and POS

equipment. The

Company did not

record

any bad

debt expense

during

the year

ended June

30, 202

and

2022, respectively

and

bad debts

incurred

were written

off

against the allowance for doubtful accounts receivable.

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

to the sale of the Company’s

interest in Carbon Tech

Limited (“Carbon”), an equity-accounted investment of $

0.25

million, net of an

allowance for doubtful

loans receivable of

0.25

million and an

amount due related

to the sale

of the loan

(refer below), with

a face

value of $

3.0

million, which was sold in September 2022 for $

0.75

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

0.75

million, refer to Note 9 for additional information.

The loan

of $

3.0

million provided

to Carbon

was scheduled

to be

repaid before

June 30,

2020, however,

Carbon requested

payment holiday

as a result

of the impact

of the COVID-19

pandemic on

its business. The

parties had not

agreed to new

repayment

terms as of June 30, 2022. In June 2021, the Company determined to create an allowance for

doubtful loans receivable of $

3.0

million

due to these circumstances and the ongoing operating losses incurred by Carbon.

Investment in

7.625

% of Cedar Cellular

Investment 1 (RF) (Pty) Ltd

8.625

% notes represents the

investment in a note which was

due to mature

in August 2022 and

forms part of

Cell C’s

capital structure. The

carrying value as

of each of

June 30, 2023 and

2022,

respectively was $

(zero).

interest income from the Cedar Cellular note was recorded during the years ended June 30, 2023, 2022

and 2021, respectively.

Interest, if any,

on this investment

will only be

paid, at Cedar

Cellular’s election, on

its maturity which

is in

the process of being extended beyond its original date of August 2022.

The Company does not expect

to recover the amortized cost

basis of the Cedar

Cellular notes due to its

assessment that the equity

in Cell

C currently

has no

value

which

would

result in

there

being

no future

cash flows

to be

collected

from

the debt

security

maturity.

The Company could

not calculate an

effective interest

rate on the

Cedar Cellular note

because the carrying

value was zero

0.0

million) as of June 30, 2023 and 2022. The Company

therefore could not calculate the present value of the expected cash flows

to be collected from the debt security by discounting these cash flows at the interest rate implicit in the security upon acquisition (at a

rate of

24.82

%) because there are no future cash flows to discount.

Other

receivables

includes

prepayments,

deposits,

income taxes

receivable

and other

receivables.

As of

June 30,

2022,

other

receivables also includes transactions-switching funds receivable of $

3.3

million which was received in full in November 2022.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-23

ACCOUNTS RECEIVABLE,

net AND OTHER RECEIVABLES

and FINANCE LOANS RECEIVABLE,

net

(continued)

Contractual maturities of held to maturity investments

Summarized below is the contractual maturity of the Company’s

held to maturity investment as of June 30, 2023:

Cost basis

Estimated

fair

value

(1)

Due in one year or less

Due in one year through five years

(2)

Due in five years through ten years

Due after ten years

Total

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

Company’s portion of the assets held by

Cedar Cellular, namely,

Cedar Cellular’s investment in Cell C.

(2) The cost basis is zero ($

0.0

million).

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of June 30, 2023, and June 30, 2022, is presented in the table

below:

June 30,

2023

2022

Microlending finance loans receivable, net

20,605

20,058

Microlending finance loans receivable, gross

22,037

21,452

Allowance for doubtful finance loans receivable, end of period

1,432

1,394

Beginning of period

1,394

2,349

Reversed to statement of operations

(805)

Charged to statement of operations

1,452

1,268

Utilized

(1,214)

(1,179)

Foreign currency adjustment

(200)

(239)

Merchant finance loans receivable, net

16,139

13,834

Merchant finance loans receivable, gross

18,289

14,131

Allowance for doubtful finance loans receivable, end of period

2,150

297

Beginning of period

297

Reallocation from allowance for doubtful accounts receivable

(1)

418

Reversed to statement of operations

(1,268)

Charged to statement of operations

3,068

442

Utilized

Foreign currency adjustment

(365)

(145)

Total finance

loans receivable, net

36,744

33,892

(1) Represents

reallocation of

a portion

of the

Merchant allowance

for doubtful

finance loans

receivable as

of June

30, 2022,

which was included in the allowance for doubtful accounts receivable as of

June 30, 2022.

Total

finance

loans

receivable,

net,

comprises

microlending

finance

loans

receivable

the

Company’s

microlending

operations

in South

Africa as

well as

its merchant

finance loans

receivable related

to Connect’s

lending activities

in South

Africa.

Certain merchant

finance loans

receivable have

been pledged

as security

for the

Company’s

revolving credit

facility (refer

to Note

12).

During the year ended June 30, 2022, the Company adjusted its microlending finance loans receivable allowance provision from

% of the gross book to

6.5

% of the gross book as a

result of evidence of lower actual losses incurred on the book which

has resulted

in an improvement in the collection rate.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-24

INVENTORY

The Company’s inventory

comprised the following categories as of June 30, 2023, and 2022.

June 30,

2023

2022

Raw materials

2,819

2,446

Work in progress

147

Finished goods

24,488

31,633

27,337

34,226

As of June 30, 2023 and 2022, finished goods includes $

8.6

million and $

13.7

million, respectively, of Cell C airtime inventory

that was

previously classified

as finished

goods subject

to sale restrictions.

In support

of Cell C’s

liquidity position

and pursuant

Cell C’s

recapitalization process,

the Company

limited the

resale of

this airtime

to its

own distribution

channels. On

September 30,

2022, Cell C concluded its recapitalization process and the Company and Cell

C entered into an agreement under which Cell C

agreed

repurchase,

from

October

2023,

ZAR

million

Cell

inventory

from

the

Company

per

month.

The

amount

repurchased by Cell C will be calculated as ZAR

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

The Company continued to sell a minimum amount

of Cell C airtime through its internal channels

in late fiscal 2022/ early fiscal 2023

in support

of Cell

C’s

liquidity position.

However,

its ability

to sell

this airtime

has increased

significantly since

the acquisition

Connect

because

Connect

is a

significant

reseller of

Cell C

airtime.

As a

result,

the Company

has

sold higher

volumes of

airtime

through

this

channel

than

did

prior

the

Cell

recapitalization,

however,

continued

sales

these

volumes

dependent

prevailing conditions

continuing in

the airtime

market. If

the Company

is able

to sell

at least

ZAR

million a

month through

this

channel from

October 1,

2023, then

Cell C would

not be

required to

repurchase any

airtime from

the Company

during any

specific

month. The

Company has

agreed to

notify Cell

C prior

to selling

any of

this airtime,

however,

there is

no restriction

placed on

the

Company on the sale of the airtime.

FAIR VALUE

OF FINANCIAL INSTRUMENTS

Fair value of financial instruments

Initial recognition and measurement

Financial instruments

are recognized

when the

Company becomes

a party

to the

transaction. Initial

measurements are

at cost,

which includes transaction costs.

Risk management

The Company manages its exposure

to currency exchange, translation, interest rate,

credit, microlending credit and equity price

and liquidity risks as discussed below.

Currency exchange risk

The

Company

subject

currency

exchange

risk

because

purchases

components

for

its

safe

assets,

that

the

Company

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

Interest rate risk

As a result of its

normal borrowing activities, the Company’s operating results are exposed to fluctuations in

interest rates, which

it manages primarily through regular financing

activities. Interest rates in

South Africa are trending upwards and

the Company expects

higher interest rates

in the foreseeable future

which will increase its

cost of borrowing.

The Company periodically

evaluates the cost

and

effectiveness

interest

rate

hedging

strategies

manage

this

risk.

The

Company

generally

maintains

surplus

cash

equivalents and held to maturity investments and has occasionally

invested in marketable securities.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-25

FAIR VALUE

OF FINANCIAL INSTRUMENTS (continued)

Risk management (continued)

Credit risk

Credit

risk

relates

the

risk

loss

that

the

Company

would

incur

result

non-performance

counterparties.

The

Company

maintains

credit

risk

policies

respect

its

counterparties

minimize

overall

credit

risk.

These

policies

include

evaluation

potential

counterparty’s

financial

condition,

credit

rating,

and

other

credit

criteria

and

risk

mitigation

tools

the

Company’s

management deems appropriate.

With respect

to credit risk on

financial instruments, the

Company maintains a

policy of

entering

into such

transactions only

with South

African

and European

financial institutions

that have

a credit

rating of

“B” (or

its

equivalent) or better, as determined by credit

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

and Fitch Ratings.

Consumer microlending credit

risk

The Company

is exposed

to credit

risk in

its Consumer

microlending activities,

which provides

unsecured short-term

loans to

qualifying customers.

Credit bureau

checks as

well as

an affordability

test are

conducted as

part of

the origination

process, both

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. A

significant

amount of

judgment is required

to assess the

ultimate recoverability

of these finance

loan receivables,

including ongoing

evaluation

of the creditworthiness of each customer.

Merchant lending

The Company maintains an allowance for

doubtful finance loans receivable related to

its Merchant services segment with

respect

to short-term loans to qualifying merchant customers. The

Company’s risk management procedures include adhering to its proprietary

lending criteria which uses

an online-system loan application

process, obtaining necessary customer transaction-history

data and credit

bureau checks.

The Company considers

these procedures

to be appropriate

because it takes

into account

a variety of

factors such

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

which

those

securities

are

listed.

The

Company

may

not be

able

sell some

all

these

securities

one

time,

over

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

or at all.

Financial instruments

Fair value

is defined

as the price

that would

be received

upon sale

of an

asset or

paid upon

transfer of

a liability

in an orderly

transaction between

market participants

at the

measurement date

and in

the principal

or most

advantageous market

for that

asset or

liability. The

fair value should be calculated based

on assumptions that market participants

would use in pricing the asset

or liability,

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

including the Company’s own credit

risk.

Fair value measurements and inputs are categorized into a

fair value hierarchy which prioritizes the inputs into

three levels based

on the

extent to which

inputs used

in measuring

fair value

are observable

in the

market. Each fair

value measurement

is reported in

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

to the fair value measurement in its entirety.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-26

FAIR VALUE

OF FINANCIAL INSTRUMENTS (continued)

Financial instruments (continued)

These levels are:

●

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

traded in active markets.

●

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

instruments in

markets that

are not

active, and

model-based valuation

techniques for

which all

significant assumptions

are

observable

in the

market or

can be

corroborated

by observable

market

data for

substantially the

full term

of the

assets or

liabilities.

●

Level

–

inputs

are

generally

unobservable

and

typically

reflect

management’s

estimates

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.

The following

section describes

the valuation

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

Asset measured at fair value using significant unobservable inputs – investment

in Cell C

The Company’s

Level 3 asset represents

an investment of

75,000,000

class “A” shares in Cell

C, a significant

mobile telecoms

provider in South Africa.

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

the fair value of

its investment

in Cell

C as of

June 30,

2023 and

June 30, 2022,

respectively,

and valued Cell

C at

0.0

(zero) and

0.0

(zero) as

June 30, 2023, and June 30, 2022, respectively.

The Company incorporates the payments under Cell C’s

lease liabilities into the cash

flow forecasts

and assumes that

Cell C’s

deferred tax

assets would

be utilized over

the forecast period.

The Company has

increased

the

marketability

discount

from

% to

% and

the

minority

discount

from

% to

% due

the reduction

in the

Company’s

shareholding percentage from

% to

% as well as current market conditions. The Company utilized the latest revised business plan

provided

Cell

management

for

the

period

ended

December

31,

2025,

for

the

June

30,

2023,

and

June

30,

2022

valuations.

Adjustments have been made to the WACC

rate to reflect the Company’s

assessment of risk to Cell C achieving its business plan.

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

Weighted Average

Cost of Capital ("WACC"):

Between

% and

% over the period of the forecast

Long-term growth rate:

4.5

% (

% as of June 30, 2022)

Marketability discount:

% (

% as of June 30, 2022)

Minority discount:

% (

% as of June 30, 2022)

Net adjusted external debt - June 30, 2023:

(1)

ZAR

8.1

billion ($

0.4

billion), no lease liabilities included

Net adjusted external debt - June 30, 2022:

(2)

ZAR

13.5

billion ($

0.8

billion), no lease liabilities included

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

June 30, 2023.

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

June 30, 2022.

The fair value

of Cell C

as of June

30, 2023, utilizing

the discounted

cash flow valuation

model developed

by the Company

sensitive to the following inputs: (i) the ability of Cell C to

achieve the forecasts in their business case; (ii) the weighted

average cost

of capital

(“WACC”)

rate used;

and (iii)

the minority

and marketability

discount used.

Utilization of

different inputs,

or changes

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

1.0

% increase and

1.0

decrease in the WACC rate and the

EBITDA margins used in

the Cell C valuation

on June 30, 2023,

all amounts translated at

exchange

rates applicable as of June 30, 2023:

Sensitivity for fair value of Cell C investment

1.0% increase

1.0% decrease

WACC

rate

616

EBITDA margin

1,196

The fair value of

the Cell C shares as

of June 30, 2023,

represented approximately

% of the Company’s

total assets, including

these shares.

The Company expects to

hold these shares for

an extended period

of time and that

there will be short-term

equity price

volatility with respect to these shares particularly given the current situation of

Cell C’s business.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-27

FAIR VALUE

OF FINANCIAL INSTRUMENTS (continued)

Financial instruments (continued)

Derivative transactions - Foreign exchange contracts

As part

of the

Company’s

risk management

strategy,

the Company

enters into

derivative transactions

to mitigate

exposures to

foreign

currencies

using

foreign

exchange

contracts. These

foreign

exchange

contracts

are

over-the-counter

derivative

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

(or equivalent)

or better.

The Company

uses quoted

prices in

active markets

for similar

assets and liabilities

to determine

fair value

(Level 2). The Company has no derivatives that require fair value measurement

under Level 1 or 3 of the fair value hierarchy.

The Company had

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

2022, respectively.

Derivative transactions - Foreign exchange option contracts

The Company held a significant amount of U.S. dollars in early fiscal 2022 and intended to use a portion of these funds

to settle

part of the purchase

consideration related to the

Connect acquisition. The purchase

consideration was expected

to be settled in

ZAR.

Accordingly,

the

Company

entered

into

foreign

exchange

option

contracts

with

FirstRand

Bank

Limited

acting

through

its

Rand

Merchant Bank division (“RMB”) in November 2021

in order to manage the risk of currency volatility and to fix

the ZAR amount to

utilized

for

part

the

purchase

consideration

settlement. These

foreign

exchange

option

contracts,

also

known

synthetic

forwards, were over-the-counter derivative transactions (Level 2). RMB’s long

-term credit rating is “BB”. The Company used quoted

prices in active markets for similar assets and liabilities to determine fair value

of the foreign exchange option contracts (Level 2).

The Company

marked-to-market the synthetic

forwards as of

December 31, 2021,

using a Black-Scholes

option pricing model

which determined

the respective fair

value of the

options utilizing

current market

parameters. During

the year ended

June 30, 2022,

the Company recorded a net gain of $

3.7

million, which comprised a net gain of $

6.1

million (which includes the reversal of the $

2.4

million unrealized

loss which

was previously

recognized) recorded

during the

three months

ended March

2022, and

the unrealized

loss of $

2.4

million recorded during

the three months ended

December 31, 2021.

The net gain is

included in the caption

gain related

to fair value adjustment to currency options in the Company’s consolidated statements of operations for the year ended June 30, 2022.

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2023, according to

the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

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)

258

Fixed maturity investments

(included in cash and cash

equivalents)

3,119

Total assets at fair value

3,377

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-28

FAIR VALUE

OF FINANCIAL INSTRUMENTS (continued)

Financial instruments (continued)

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2022, according to

the fair value hierarchy:

Quoted Price in

Active Markets

for Identical

Assets

(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)

371

Fixed maturity investments

(included in cash and cash

equivalents)

1,196

Total assets at fair value

1,567

There have been

transfers in or out of Level 3 during the years ended June 30, 2023, 2022 and 2021, respectively.

There was

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

3, during the years ended June 30, 2023

and 2022. Summarized below is the movement in

the carrying value of assets measured at fair

value on a recurring basis, and categorized within Level 3, during the year

ended June 30, 2023:

Carrying value

Assets

Balance as of June 30, 2022

Foreign currency adjustment

(1)

Balance as of June 30, 2023

(1) The

foreign currency

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

U.S. dollar

on the carrying value.

Summarized below is the movement in the carrying value of

assets and liabilities measured at fair value on a recurring

basis, and

categorized within Level 3, during the year ended June 30, 2022:

Carrying value

Assets

Balance as at June 30, 2021

Foreign currency adjustment

(1)

Balance as of June 30, 2022

(1) The

foreign currency

adjustment represents

the effects

of the fluctuations

of the South

African rand

against the

U.S. dollar

on the carrying value.

Trade, finance loans and other receivables

Trade,

finance loans

and other

receivables originated

by the

Company

are stated

at cost

less allowance

for doubtful

accounts

receivable. The fair value

of trade, finance loans

and other receivables approximates their

carrying value due to

their short-term nature.

Trade and other payables

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

to their short-term nature.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-29

FAIR VALUE

OF FINANCIAL INSTRUMENTS (continued)

Financial instruments (continued)

Assets and liabilities 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

the

asset

exceeds

its

fair

value

and

the

excess

determined

other-than-temporary.

Refer

Note

for

impairment

charges

recorded during the

reporting periods presented

herein. The Company

has

liabilities that

are measured at

fair value

on a

nonrecurring

basis.

PROPERTY,

PLANT AND EQUIPMENT,

net

Summarized below

is the cost,

accumulated depreciation

and carrying amount

of property,

plant and

equipment as of

June 30,

2023 and 2022:

June 30,

2023

2022

Cost

Safe assets

19,229

16,275

Computer equipment

35,158

32,814

Furniture and office equipment

7,508

7,549

Motor vehicles

2,070

3,195

Plant and machinery

64,010

59,848

Accumulated depreciation:

Safe assets

4,353

939

Computer equipment

25,645

26,420

Furniture and office equipment

5,602

6,060

Motor vehicles

955

1,829

Plant and machinery

36,563

35,249

Carrying amount:

Safe assets

14,876

15,336

Computer equipment

9,513

6,394

Furniture and office equipment

1,906

1,489

Motor vehicles

1,115

1,366

Plant and machinery

27,447

24,599

LEASES

The

Company

has

entered into

leasing

arrangements

classified

as operating

leases under

accounting

guidance.

These leasing

arrangements

relate primarily

to the

lease of

its corporate

head

office,

administration

offices,

a manufacturing

facility,

and branch

locations through which the

Company operates its financial services

business in South Africa.

The Company’s

operating leases have

a remaining

lease term

of between

one year

five years

. The

Company also

operates parts

of its

financial services

business from

locations which it leases for a period of less than

one year

The Company’s

operating lease expense

during the years

ended June 30,

2023, 2022 and

2021, was $

2.9

million, $

4.0

million,

and $

4.1

million, respectively. The Company

does not have any significant leases that have not commenced as of June 30, 2023.

The Company

has entered into

short-term leasing

arrangements, primarily

for the lease

of branch

locations and other

locations

to operate

its financial

services business

in South

Africa.

The Company’s

short-term lease

expense during

the years

ended June

30,

2023, 2022 and 2021, was $ The following table presents supplemental balance sheet disclosure related to our right-of-use assets and our operating leases

4.2

million, $

4.9

million and $

4.1

million, respectively.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-30

LEASES (continued)

liabilities as of June 30, 2023 and 2022:

June 30,

2023

2022

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

Weighted average

remaining lease term (years)

1.77

2.14

Weighted average

discount rate

9.7

9.3

Maturities of operating lease liabilities

2024

2,123

2025

1,182

2026

873

2027

868

2028

767

Thereafter

Total undiscounted

operating lease liabilities

5,813

Less imputed interest

928

Total operating lease liabilities,

included in

4,885

Operating lease liability - current

1,747

Operating lease liability - long-term

3,138

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS

Equity-accounted investments

The Company’s ownership percentage

in its equity-accounted investments as of June 30, 2023 and 2022, was as follows:

June 30,

2023

2022

Finbond Group Limited (“Finbond”)

Sandulela Technology

Proprietary Limited ("Sandulela")

Carbon

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

Finbond

As of June 30, 2023,

the Company owned

220,523,358

shares in Finbond representing approximately

27.80

% of its issued and

outstanding ordinary

shares. Finbond

is listed

on the

Johannesburg

Stock Exchange

and its

closing price

on June

30, 2023,

the last

trading day

of the

month, was

ZAR

0.39

per share.

The market

value of

the Company’s

holding in

Finbond on

June 30,

2023, was

ZAR

86.0

million ($

4.6

million translated

at exchange

rates applicable

as of

June 30,

2023). Lesaka

SA has

pledged, among

other

things, its entire equity interest in Finbond as security for the South African facilities

described in Note 12.

Sale of Finbond shares during the years ended

June 30, 2023 and 2022

The

Company

sold

25,456,545

and

22,841,030

Finbond

for

cash

during

the

years

ended

June

30,

2023

and

2022,

respectively, and recorded a loss of $

0.4

million and $

0.4

million in the caption loss

on equity-accounted investment in the

Company’s

consolidated statement of operations for the years ended June 30,

2023 and 2022.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-31

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Equity-accounted investments (continued)

Finbond (continued)

Sale of Finbond shares during the years ended

June 30, 2023 and 2022 (continued)

The following table presents the

calculation of the loss on disposal

of Finbond shares during the

years ended June 30, 2023

and

2022:

Year

ended June 30,

2023

2022

Loss on disposal of Finbond shares:

Consideration received in cash

265

865

Less: carrying value of Finbond shares sold

(363)

(630)

Less: release of foreign currency translation reserve from accumulated

other

comprehensive loss

(252)

(620)

Add: release of stock-based compensation charge related

to equity-accounted investment

Loss on sale of Finbond shares

(341)

(376)

Finbond impairments

recorded during

the year ended June 30, 2023

The Company

considered the combination

of the ongoing

losses incurred and

reported by Finbond

and its lower

share price as

impairment indicators as of

September 30, 2022. The

Company performed an impairment

assessment of its holding

in Finbond as of

September 30,

2022. The Company

recorded an impairment

loss of $

1.1

million during the

year ended

June 30, 2023,

related to the

other-than-temporary

decrease

Finbond’s

value,

which

represented

the

difference

between

the

determined

fair

value

the

Company’s

interest in Finbond

and the Company’s

carrying value (before

the impairment).

There continues

to be limited

trading in

Finbond

the

JSE

because

small

number

shareholders

own

approximately

its

issued

and

outstanding

between them. The

Company calculated a fair

value per share for

Finbond by applying a

liquidity discount of

% to the September

30,

2022,

Finbond

closing

price

ZAR

0.49

The

Company

increased

the

liquidity

discount

from

(used

the

impairment

assessment)

(used

the

September

30,

2022

assessment)

result

the

ongoing

limited

trading

activity

observed on the JSE.

Finbond impairments

recorded during

the year ended June 30, 2021

Finbond published its

half-year results to

August 2020 in

October 2020, which

included the financial

impact of the

COVID-19

pandemic on its reported results during that reporting period.

Finbond incurred losses during the six months to

August 2020, primarily

due to a slow-down in its lending activities. Finbond

reported that its lending activities had increased again since

August 2020, albeit

at a slower pace compared with the

prior calendar period. Finbond’s share price declined substantially during the period from its

fiscal

year end (February 2020) to September 30, 2020, and the weakness in its traded share

price continued post September 30, 2020.

The

Company

considered

the

combination

the

slow-down

business

activity

and

the

lower

price

impairment

indicators. The

Company performed

an impairment

assessment of

its holding

in Finbond

as of

September 30,

2020. The

Company

recorded

impairment

loss

16.8

million

during

the

quarter

ended

September

30,

2020,

the

other-than-temporary

decrease in Finbond’s value, which represented the difference between the

determined fair value of the

Company’s interest in Finbond

and the

Company’s

carrying value

(before the

impairment). There

was limited

trading in

Finbond shares

on the

JSE because

it had

three

shareholders that owned approximately

% of its issued and outstanding

shares between them. The Company calculated

a fair

value per share for Finbond by applying a liquidity discount of

% to the September 30, 2020, Finbond closing price of ZAR

1.04

The Company performed a

further impairment assessment

of its holding

in Finbond as

of December 31, 2020,

following a modest

further decline

in its

market price

during the

quarter ended December

31, 2020.

The Company

recorded an

impairment loss

of $

0.8

million

during

the

quarter

ended

December

31,

2020,

the

other-than-temporary

decrease

Finbond’s

value,

which

represented the difference between the determined fair value of the Company’s interest in Finbond and the Company’s

carrying value

(before the

impairment). The

Company calculated

a fair

value per

share for

Finbond by

applying a

liquidity discount

% to the

December 31,

2020, Finbond

closing price

of ZAR

0.99

. The

total impairment

charge for

the year

ended June

30, 2021,

was $

17.7

million.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-32

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Equity-accounted investments (continued)

Finbond (continued)

August 2023 agreement to sell our entire

stake in Finbond

August

10,

2023,

the

Company,

through

its

wholly

owned

subsidiary

Net1

Finance

Holdings

(Pty)

Ltd,

entered

into

agreement with Finbond to sell

its remaining shareholding to

Finbond for a cash

consideration of ZAR

64.2

million ($

3.4

million using

exchange rates

applicable as of

June 30,

2023), or

ZAR

0.2911

per share.

The transaction is

subject to certain

conditions, including

regulatory and

shareholder approvals,

and all

conditions are

required to

be fulfilled

on or

before December

31, 2023,

otherwise the

transaction will lapse.

Carbon

In September

2022, the

Company,

through its

wholly-owned subsidiary,

Net1 Applied

Technologies

Netherlands B.V.

(“Net1

BV”),

entered

into

a binding

term

sheet

with the

Etobicoke

Limited

(“Etobicoke”)

to sell

its entire

interest, or

in Carbon

Etobicoke for $

0.5

million and a loan

due from Carbon, with

a face value of

million, to Etobicoke for $

0.75

million. Both the equity

interest and

the loan

had a

carrying value

of $

(zero) at

June 30,

2022. The

parties have

agreed that

Etobicoke pledge

the Carbon

shares purchased as security for the amounts outstanding under the binding term

sheet.

The Company received $

0.25

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

paid as follows:

(i) $

0.25

million on September 30,

2023, and (ii) the

remaining amount, of $

0.75

million in March 2024.

Both amounts are included

in the

caption accounts

receivable, net

and other

receivables in

the Company’s

consolidated balance

sheet as

of June

30, 2023.

The

Company has allocated the $

0.25

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

of the equity interest and then to the loans.

The Company currently

believes that the fair

value of the Carbon

shares provided as security

is $

(zero), which is in

line with

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

doubtful loans receivable related to the $

1.0

million due from

Etobicoke. The Company did not incur any significant

transaction costs. The Company has included the gain of $

0.25

million related

to the

sale of

the Carbon equity

interest in the

caption net gain

on disposal of

equity-accounted investments in

the Company’s unaudited

condensed consolidated statements of operations.

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

in September 2022:

Three months

ended

September 30,

2022

Gain on disposal of Carbon shares:

Consideration received in cash in September 2022

250

Less: carrying value of Carbon

Gain on disposal of Carbon shares:

(1)

250

(1) The Company does

not expect to pay taxes

related to the sale of Carbon

because the base cost of

its investment exceeds the

sales consideration received. The Company does not believe that it will be able to utilize

the loss generated because Net1 BV does not

generate taxable income.

Bank Frick

Sale of entire interest in

Bank Frick in February 2021

On February 3, 2021,

the Company, through its wholly-owned subsidiary, Net1 Holdings LI

AG (“Net1 LI”), entered

into a share

sales agreement

with the Frick

Family Foundation

(“KFS”) to sell

its entire interest,

%, in Bank

Frick to KFS

for $

million.

Lesaka and certain entities within the

IPG group also entered into an

indemnity and release agreement with KFS

and Bank Frick under

which

the

parties

agreed

terminate

all existing

arrangements

with

Bank

Frick

and

settle all

liabilities

the

Company’s

activities with Bank Frick

through the payment of

3.6

million to KFS. The Company

received $

15.0

million, net, on closing, which

comprised $

18.6

million less the

3.6

million due to

KFS to terminate

all existing arrangements

with Bank Frick

and settle all

liabilities

related to IPG’s activities with Bank Frick.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-33

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Equity-accounted investments (continued)

Bank Frick (continued)

Sale of entire interest in

Bank Frick in February 2021 (continued)

The Company included the $

18.6

million within cash flows from investing activities and the

3.6

million within cash flows from

operating activities in the consolidated statement of cash flows for the year

ended June 30, 2021.

The outstanding balance due by KFS was expected to be paid

as follows: (i) $

7.5

million on October 30, 2021, which is included

in the caption accounts receivable, net and other receivables in the

Company’s consolidated balance sheet as of June 30, 2021, and (ii)

the remaining

amount, of

3.9

million on

July 15,

2022 (this

amount was

actually received

in May

2022), which

is included

in the

caption other

long-term assets,

including reinsurance

assets in

the Company’s

consolidated balance

sheet as

of June

30, 2021.

The

parties entered

into a

security and

pledge agreement

under which

KFS pledged

the Bank

Frick shares

purchased as

security for

the

amounts outstanding under the share sales agreement.

The Company incurred transaction costs of approximately $

0.04

million. The following table presents the calculation of the loss

on disposal of Bank Frick on February 3, 2021

February

2021

Loss on sale of Bank Frick:

Consideration received in cash on February 3, 2021

18,600

Consideration received with note on February 3, 2021, refer to (Note 4)

11,400

Less: transaction costs

(42)

Less: carrying value of Bank Frick

(32,892)

Add: release of foreign currency translation reserve from accumulated other

comprehensive loss

2,462

Loss on sale of Bank Frick

(1)

(472)

(1) The Company

did not pay taxes

related to the

sale of Bank

Frick because the

base cost of

its investment exceeded

the sales

consideration received. The Company does not believe that it will be able to utilize any capital loss,

if any, generated because Net1 LI

does not own any other capital assets and has since been deregistered.

V2 Limited

The carrying

value of

the Company’s

investment in

V2 Limited

(“V2”) on

July 1,

2020, was

approximately

0.7

million. V2

continued to experience

operating losses during

the year ended

June 30, 2021,

and in December

2020, the Company

no longer expected

to recover its carrying value in V2

and impaired its remaining interest in V2,

recording an impairment loss of $

0.5

million during the

year ended June 30, 2021. The Company sold its investment in V2

on April 22, 2021, for one dollar.

The

Company

had

also

committed

provide

with

working

capital

facility

5.0

million,

which

was

subject

the

achievement of certain pre-defined objectives, and in June 2020 it provided $

0.5

million to V2 under this facility. In September 2020,

the Company and

V2 agreed to reduce

the $

5.0

million working capital

facility to $

1.5

million. In October

2020, V2 drew down

the

remaining available $

1.0

million of the working

capital facility.

The Company created

an allowance for doubtful

loans receivable of

1.5

million during

the year ended

June 30, 2021,

related to

the full

amount outstanding

as of June

30, 2021.

This amount

was still

outstanding as of June 30, 2023.

DNI

On March 31, 2020, the Company sold its remaining interest in DNI, an investment accounted for using the

equity method at the

date of disposal, to DNI for ZAR

99.2

million ($

5.5

million, translated at exchange rates applicable as of March 31, 2020) through the

issue of

an unsecured

note to

the Company.

The transaction

closed on

April 1,

2020. The

note principal

was repayable

equal

monthly installments of

ZAR

5.5

million ($

0.3

million, translated at

exchange rates applicable

as of June 30,

2020) commencing on

October 31,

2020. The

Company received

0.3

million on

September 30,

2020, and

the full

outstanding amount

of $

5.7

million on

October 26, 2020, for total receipts of $

6.0

million for the year ended June 30, 2021.

Walletdoc

In November 2020, the Company’s

subsidiary, Net1 SA, signed

an agreement with Walletdoc

under which Walletdoc

agreed to

repay the loan due to Net1 SA in full and Net1 SA agreed to dispose of its entire interest in

Walletdoc to Walletdoc.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-34

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Equity-accounted investments (continued)

Summarized

below is

the movement

in equity-accounted

investments during

the years

ended June

30, 2023

and 2022,

which

includes the investment in equity and the investment in loans provided

to equity-accounted investees:

Finbond

Other

(1)

Total

Investment in equity

Balance as of June 30, 2021

9,822

182

10,004

Stock-based compensation

Comprehensive loss:

(2,426)

(139)

(2,565)

Other comprehensive income

1,239

Equity accounted (loss) earnings

(3,665)

(139)

(3,804)

Share of net (loss) income

(3,665)

(3,649)

Impairment

(155)

Sale of shares in equity-accounted investment

(630)

Equity-accounted investment acquired in business combination

Foreign currency adjustment

(2)

(1,020)

(16)

(1,036)

Balance as of June 30, 2022

5,760

101

5,861

Stock-based compensation

Comprehensive (loss) income:

(1,271)

(1,182)

Other comprehensive income

3,935

Equity accounted (loss) earnings

(5,206)

(5,117)

Share of (loss) net income

(4,096)

(4,007)

Impairment

(1,110)

Dividends received

(42)

Sale of shares in equity-accounted investment

(506)

Foreign currency adjustment

(2)

(971)

(17)

(988)

Balance as of June 30, 2023

3,040

131

3,171

Investment in loans:

Balance as of June 30, 2021

Foreign currency adjustment

(2)

Balance as of June 30, 2022

Loans repaid

(112)

Loans granted

112

Foreign currency adjustment

(2)

Balance as of June 30, 2023

Equity

Loans

Total

Carrying amount as of :

June 30, 2022

5,861

June 30, 2023

3,171

(1) Includes Carbon,

Sandulela and SmartSwitch Namibia;

(2) The foreign

currency adjustment represents

the effects

of the fluctuations

of the ZAR,

Nigerian naira

and Namibian dollar,

against the U.S. dollar on the carrying value.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-35

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Equity-accounted investments (continued)

Summary financial information of equity-accounted investments

Summarized

below

is the

financial

information

equity-accounted

investments

(during

the

Company’s

reporting

periods

which investments were carried using the equity-method, unless otherwise noted)

as of the stated reporting period of the investee and

translated at the applicable closing or average foreign exchange rates

(as applicable):

Finbond

(1)

Bank Frick

(2)

Other

(3)

Balance sheet, as of

February 28

June 30

Various

Current assets

(4)

2023

n/a

3,601

2022

n/a

23,207

Long-term assets

2023

269,428

n/a

2022

300,253

n/a

4,933

Current liabilities

(4)

2023

n/a

3,007

2022

n/a

26,324

Long-term liabilities

2023

209,855

n/a

2022

234,154

n/a

5,733

Non-controlling interest

2023

16,414

n/a

2022

11,781

Statement of operations, for the period ended

February 28

June 30

(2)

Various

Revenue

2023

88,305

n/a

4,908

2022

80,656

n/a

4,100

2021

95,847

35,641

6,420

Operating (loss) income

2023

(20,941)

n/a

219

2022

(21,017)

n/a

984

2021

(18,980)

3,860

(2,406)

(Loss) Income from continuing operations

2023

(19,780)

n/a

184

2022

(18,379)

n/a

657

2021

(15,466)

3,303

(2,534)

Net (loss) income

2023

(15,858)

n/a

184

2022

(16,432)

n/a

657

2021

(17,889)

3,303

(2,534)

(1) Finbond balances included were derived from its publicly available information

and presented for its years ended February;

(2) Bank Frick

disposed of in February

2021. Statement of operations

information for Bank

Frick is for the

period from July 1,

2020 to January 31, 2021, and the full twelve months for fiscal 2020.

(3) Includes Carbon, SmartSwitch Namibia,

Sandulela, Revix, Walletdoc

and V2, as appropriate. Balance sheet

information for

Carbon,

Sandulela, and SmartSwitch Namibia is as

of June 30, 2022 and 2021,

respectively. Statement of operations information

for Carbon, SmartSwitch Namibia, Revix, and V2 for the year ended June 30,

and Walletdoc for

the year ended February 28;

(4) Bank Frick and Finbond are banks and do not present current and

long-term assets and liabilities. All assets and liabilities of

these two entities are included under the long-term caption;

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-36

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Other long-term assets

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

2023, and June 30, 2022:

June 30,

2023

2022

Total equity investments

76,297

Investment in

% (June 30, 2022:

%) of MobiKwik

(1)

76,297

Investment in

% of Cell C (June 30, 2022:

%) at fair value (Note 6)

Investment in

87.50

% of CPS (June 30, 2022:

87.50

%) at fair value

(1)(2)

Policy holder assets under investment contracts (Note 11)

257

371

Reinsurance assets under insurance contracts (Note 11)

1,040

1,424

Total other long-term

assets

77,594

78,092

(1)

The Company

determined

that

MobiKwik

and CPS

do not

have

readily

determinable

fair

values and

therefore

elected to

record these investments

at cost minus impairment,

if any,

plus or minus changes

resulting from observable

price changes in orderly

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

(2) On October 16, 2020,

the High Court of

South Africa, Gauteng Division, Pretoria

ordered that CPS be

placed into liquidation.

MobiKwik

The Company

signed a

subscription agreement

with MobiKwik,

which is

one of

India’s

largest independent

mobile payments

networks and buy now

pay later businesses.

Pursuant to the

subscription agreement, the Company agreed

to make an

equity investment

of up to $

40.0

million in MobiKwik over a

-month period. The Company made an

initial $

15.0

million investment in August 2016

and a

further

10.6

million investment

in June

2017,

under this

subscription

agreement.

During the

year ended

June 30,

2019, the

Company paid $

1.1

million to subscribe

for additional shares in

MobiKwik. As of

each of June 30,

2023 and 2022, respectively,

the

Company owned approximately

% of MobiKwik’s issued share capital.

In October

2021, the

Company converted

(at a

rate of

approximately

for 1)

its

310,781

shares of

compulsorily convertible

cumulative

preferences

6,215,620

equity

anticipation

MobiKwik’s

initial

public

offering.

The

Company’s

investment

percentage

remained

unchanged

following

the

conversion.

The

Company

did

not

identify

any

observable

transactions

during the years ended June 30, 2023 and 2022, respectively, and therefore there was no change in the fair value of MobiKwik during

these years.

During the year

ended June 30,

2021, MobiKwik

entered into a

number of separate

agreements with new

shareholders to

raise

additional capital through the issuance of additional shares. Specifically, the Company used the following transactions as the basis for

its fair value

adjustments to

its investment in

MobiKwik during

the year ended

June 30, 2021:

(i) in early

November 2020,

135.54

6.78

post

conversion)

per

share;

March

2021,

170.33

8.52

post

conversion)

per

share;

and

June

2021,

245.50

12.28

post

conversion) per share. The Company considered

each of these transactions to be an observable price change

in an orderly transaction

for similar

or identical

equity securities

issued by

MobiKwik. The

Company used

the November

2020 valuation

as the

basis for

its

adjustment to

increase the carrying

value in its

investment in

MobiKwik by $

15.1

million from

27.0

million to $

42.1

million as of

December 31, 2020. The

Company used the March 2021

valuation as the basis for

its adjustment to increase the

carrying value in its

investment in

MobiKwik by

10.8

million from

42.1

million to

52.9

million as

of March

31, 2021.

The Company

used the

June

2021 valuation

as the

basis for

its adjustment

to increase

the carrying

value in

its investment

in MobiKwik

by $

24.0

million from

52.9

million to

76.3

million as

of June

30, 2021.

The change

in the

fair value

of MobiKwik

for the

year ended

June 30,

2021, of

49.3

million, is included in the caption “Change in fair value of equity securities” in the consolidated statement of operations for the

year ended June 30, 2021.

Cell C

August

2017,

the

Company,

through

its

subsidiary,

Net1SA,

purchased

75,000,000

class

“A”

Cell

for

aggregate purchase price of ZAR

2.0

billion ($

151.0

million) in cash. The Company funded the transaction through

a combination of

cash and a

borrowing facility.

Net1 SA has

pledged, among other

things, its entire

equity interest in

Cell C as

security for the

South

African

facilities

described

Note

12.

September

30,

2022,

Cell C

completed

its recapitalization

process

which

included

the

issuance of additional equity instruments by Cell C. The Company’s effective percentage holding in Cell C’s equity

has reduced from

% to

% following the recapitalization. The Company’s

investment in Cell C is carried at fair value. Refer

to Note 6 for additional

information regarding changes in the fair value of Cell C.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-37

EQUITY-ACCOUNTED

INVESTMENTS AND OTHER LONG-TERM ASSETS (continued)

Other long-term assets (continued)

CPS

The Company

deconsolidated

its investment

in CPS

in May

2020. As

of June

30, 2023

and 2022,

respectively,

the Company

owned

87.5

% of CPS’ issued share capital.

Revix

In February 2022,

the Company sold its

entire interest in

Revix UK Limited

for cash of

0.7

million because the

Company did

not consider

the investment

core to

its strategy

to operate

primarily

in Southern

Africa. The

Company

had

previously written

this

investment to

(nil) and recognized

a gain on

disposal of $

0.7

million, which is

included in the

caption gain on

disposal of equity

securities in the Company’s

consolidated statements of operations for the year ended June 30, 2022.

Summarized below

are the components

of the Company’s

equity securities

without readily

determinable fair

value and held

maturity investments as of June 30, 2023:

Cost basis

Unrealized

holding

Unrealized

holding

Carrying

gains

losses

value

Equity securities:

Investment in Mobikwik

26,993

49,304

76,297

Investment in CPS

Held to maturity:

Investment in Cedar Cellular notes

Total

26,993

49,304

76,297

Summarized below are the components of the Company’s

equity securities without readily determinable fair value and held to

maturity investments as of June 30, 2022:

Cost basis

Unrealized

holding

Unrealized

holding

Carrying

gains

losses

value

Equity securities:

Investment in MobiKwik

26,993

49,304

76,297

Investment in CPS

Held to maturity:

Investment in Cedar Cellular notes

Total

26,993

49,304

76,297

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-38

10.

GOODWILL AND INTANGIBLE

ASSETS,

net

Goodwill

Summarized below is the movement in the carrying value of goodwill

for the years ended June 30, 2023, 2022 and 2021:

Gross value

Accumulated

impairment

Carrying value

Balance as of July 1, 2020

63,194

(39,025)

24,169

Liquidation of subsidiaries

(2)

(26,629)

26,629

Foreign currency adjustment

(1)

6,384

(1,400)

4,984

Balance as of June 30, 2021

42,949

(13,796)

29,153

Acquisition of Connect (Note 3)

(3)

153,693

Foreign currency adjustment

(1)

(21,166)

977

(20,189)

Balance as of June 30, 2022

175,476

(12,819)

162,657

Impairment loss

(7,039)

Foreign currency adjustment

(1)

(22,857)

982

(21,875)

Balance as of June 30, 2023

152,619

(18,876)

133,743

(1) – The

foreign currency

adjustment represents

the effects

of the

fluctuations between the

South African Rand

and the Euro,

against the U.S. dollar on the carrying value.

(2) – The Company deconsolidated

the goodwill and accumulated impairment

related to entities it

substantially liquidated during

the year ended June 30, 2021.

(3) – Represents

goodwill arising from

the acquisition of

Connect and translated

at the foreign exchange

rate applicable on the

date the transaction became effective. This goodwill has been

allocated to the merchant reportable operating segment

Goodwill

associated

with

the

acquisition

Connect

represents the

excess

cost

over

the

fair

value

acquired

net assets.

Connect goodwill

is not deductible

for tax purposes.

See Note 3

for the allocation

of the purchase

price to the

fair value of

acquired

net assets.

Impairment loss

The Company assesses the carrying

value of goodwill for impairment

annually, or

more frequently,

whenever events occur and

circumstances change indicating

potential impairment. The Company

performs its annual impairment

test as at June 30 of

each year.

Except as discussed below,

goodwill has been impaired during the years ended June 30, 2023, 2022

and 2021, respectively.

Year ended

June 30, 2023 goodwill impairment loss

The Company

recognized an

impairment loss

of $

7.0

million as

a result

of its

annual impairment

analysis related

to goodwill

allocated

its

hardware/

software

support

business

within

its

merchant

operating

segment.

The

impairment

loss

resulted

from

reassessment

the

business’

growth

prospects

given

the

change

customer

demand

result

the

introduction

cheaper

hardware devices which incorporate

software widely adopted by our customers

customer-base, coupled with a challenging

economic

environment

South

Africa.

The

impairment

included

within

the

caption

impairment

loss

the

consolidated

statement

operations for the year ended June 30, 2023.

In order to determine the

amount of the goodwill

impairment, the estimated fair value

of our hardware/ software support business

assets and liabilities were compared to the carrying

value of its assets and liabilities.

The Company used a discounted cash flow model

in order

to determine

the fair

value of

the business.

Based on

this analysis,

the Company

determined that

the carrying

value of

the

business’ assets and liabilities exceeded their fair value at the reporting date.

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

businesses, this

may lead to additional impairments

in future periods.

Furthermore, the difficulties of integrating acquired businesses

may be increased

the

necessity

integrating

personnel

with

disparate

business

backgrounds

and

combining

different

corporate

cultures.

The

Company also may not

be able to retain key

employees or customers of

an acquired business or realize

cost efficiencies or

synergies

or other

benefits that

it anticipated

when selecting

its acquisition

candidates. Acquisition

candidates may

have liabilities

or adverse

operating

issues that

the

Company

fails

discover

through

due

diligence

prior

the

acquisition.

These

factors

may

also

lead

additional impairments in future periods.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-39

10.

GOODWILL AND INTANGIBLE

ASSETS,

net (continued)

Goodwill (continued)

Goodwill has been allocated to the Company’s

reportable segments as follows:

Consumer

Merchant

Carrying value

Balance as of July 1, 2020

24,169

Liquidation of subsidiaries

Foreign currency adjustment

(1)

4,984

Balance as of June 30, 2021

29,153

Acquisition of Connect (Note 3)

153,693

Foreign currency adjustment

(1)

(20,189)

Balance as of June 30, 2022

162,657

Impairment loss

(7,039)

Foreign currency adjustment

(1)

(21,875)

Balance as of June 30, 2023

133,743

(1) –

The foreign

currency adjustment

represents the

effects of

the fluctuations

between the

South African

rand and

the Euro,

against the U.S. dollar on the carrying value.

Intangible assets

Intangible assets acquired

Summarized below

is the

fair value

of intangible

assets acquired,

translated at

the exchange

rate applicable

as of

the relevant

acquisition dates, and the weighted-average amortization period:

Fair value as of

acquisition date

Weighted-average

amortization

period (in years)

Finite-lived intangible asset:

Acquired during the year ended June 30, 2022:

Connect – integrated platform

142,981

Connect – customer relationships

20,516

Connect –brands

15,987

Impairment loss

The Company

assesses the carrying

value of

intangible assets

for impairment

whenever events

occur or

circumstances change

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

intangible assets have been impaired during the

years ended June 30, 2023, 2022 and 2021, respectively.

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

2022:

As of June 30, 2023

As of June 30, 2022

Gross

carrying

value

Accumulated

amortization

Net

carrying

value

Gross

carrying

value

Accumulated

amortization

Net

carrying

value

Finite-lived intangible assets:

Customer relationships

(1)

24,978

(11,565)

13,413

26,937

(9,140)

17,797

Software, integrated

platform and unpatented

technology

(1)

110,906

(13,711)

97,195

127,785

(3,075)

124,710

FTS patent

2,034

(2,034)

2,352

(2,352)

Brands and trademarks

(1)

13,852

(2,863)

10,989

16,018

(1,823)

14,195

Total finite-lived

intangible assets

151,770

(30,173)

121,597

173,092

(16,390)

156,702

(1) 2022 balances include the intangible assets acquired as part of the

Connect acquisition in April 2022.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-40

10.

GOODWILL AND INTANGIBLE

ASSETS,

net (continued)

Intangible assets (continued)

Carrying value and amortization of intangible assets (continued)

Aggregate

amortization

expense on

the finite-lived

intangible assets

for

the

years

ended June

30,

2023,

2022

and

2021,

was

approximately $

15.0

million, $

3.8

million and $

0.4

, respectively.

Future estimated annual amortization expense for the next five

fiscal years and thereafter, using the exchange rates that prevailed

on June

30, 2023, is

presented in the

table below.

Actual amortization

expense in future

periods could differ

from this estimate

as a

result of acquisitions, changes in useful lives, exchange rate fluctuations and other

relevant factors.

Fiscal 2023

14,362

Fiscal 2024

14,364

Fiscal 2025

14,364

Fiscal 2026

14,310

Fiscal 2027

14,278

Thereafter

49,919

Total future

estimated annual amortization expense

121,597

11.

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 years

ended June 30, 2023 and 2022:

Reinsurance

Assets

(1)

Insurance

contracts

(2)

Balance as of July 1, 2021

1,298

(2,011)

Increase in policy holder benefits under insurance contracts

2,087

(9,540)

Claims and policyholders’ benefits under insurance contracts

(1,782)

9,336

Foreign currency adjustment

(3)

(179)

260

Balance as of June 30, 2022

1,424

(1,955)

Increase in policy holder benefits under insurance contracts

785

(5,833)

Claims and policyholders’ benefits under insurance contracts

(986)

5,928

Foreign currency adjustment

(3)

(183)

260

Balance as of June 30, 2023

1,040

(1,600)

(1) Included in other long-term assets (refer to Note 9);

(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 large insurance contracts, however,

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 estimates

assumptions plus

prescribed margins

includes assumptions

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

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-41

11.

ASSETS AND POLICYHOLDER LIABILITIES UNDER INSURANCE AND

INVESTMENT CONTRACTS

(continued)

Assets and policyholder liabilities under investment contracts

Summarized below is the movement in assets

and policyholder liabilities under investment contracts during the years

ended June

30, 2023 and 2022:

Assets

(1)

Investment

contracts

(2)

Balance as of July 1, 2021

381

(381)

Increase in policy holder benefits under investment contracts

(16)

Foreign currency adjustment

(3)

(26)

Balance as of June 30, 2022

371

(349)

Increase in policy holder benefits under investment contracts

(6)

Claims and decrease in policyholders’ benefits under investment contracts

(69)

Foreign currency adjustment

(3)

(51)

Balance as of June 30, 2023

257

(241)

(1) Included in other long-term assets (refer to Note 9);

(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.

12.

BORROWINGS

South Africa

The amounts below have been translated at exchange rates applicable as of

the dates specified.

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

long-term borrowings

On July 21,

2017, Lesaka SA

entered into a

Common Terms

Agreement, Subordination

Agreement, Security

Cession & Pledge

and

certain

ancillary

loan

documents

(collectively,

the

“Original

Loan

Documents”)

with

RMB,

South

African

corporate

and

investment

bank, and

Nedbank Limited

(acting

through its

Corporate

and Investment

Banking division),

an African

corporate

and

investment bank (collectively, the “Lenders”).

Since 2017, these agreements have been amended to add

additional facilities, including

Facilities G and H, which were obtained to finance the acquisition of Connect (refer to Note 3). Facilities A, B, C, D and F have been

repaid and cancelled. As of June

30, 2023, the only remaining facilities are

Facility G and Facility H (as defined

below), and Facility

E, an overdraft facility.

Available short-term facility -

Facility E

September

26,

2018,

Lesaka

revised

its

amended

July

2017

Facilities

agreement

with

RMB

include

Facility

overdraft facility of up to ZAR

1.5

billion ($

79.6

million, translated at exchange rates applicable as of June 30, 2023) to fund the cash

in the Company’s

ATMs.

The Facility E overdraft

facility was subsequently

reduced to ZAR

1.2

billion ($

63.7

million, translated at

exchange rates applicable as

of June 30, 2023) in

September 2019. On August

2, 2021, Lesaka SA and

RMB entered into a Letter

Amendment to increase Facility

E from ZAR

1.2

billion to ZAR

1.4

billion ($

74.3

million, translated at exchange rates

applicable as

of June 30, 2023). Interest on the overdraft facility

is payable on the first day of the month following

utilization of the facility and on

the final maturity date based on the South African

prime rate. The overdraft facility amount utilized must be

repaid in full within one

month of utilization and

at least

% of the

amount utilized must be

repaid within

25 days

. The overdraft facility

is secured by a

pledge

by Lesaka SA of, among other things, cash and certain bank accounts utilized in the Company’s ATM

funding process, the cession of

Lesaka

SA’s

shareholding

Cell

the

cession

insurance

policy

with

Senate

Transit

Underwriters

Managers

Proprietary

Limited, and

any rights

and claims

Lesaka SA

has against

Grindrod Bank

Limited. As

at June

30, 2023,

the Company

had utilized

approximately ZAR

0.4

billion ($

23.0

million) of this

overdraft facility.

This overdraft facility

may only be

used to fund

ATMs

and

therefore the overdraft

utilized and converted

to cash to

fund the Company’s

ATMs

is considered restricted

cash. The prime

rate on

June 30, 2023, was

11.75

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-42

12.

BORROWINGS (continued)

South Africa (continued)

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

long-term borrowings (continued)

Long-term borrowings - Facility G and Facility H

On March

16, 2023,

the Company,

through Lesaka

SA, entered

into a

Fifth Amendment

and

Restatement Agreement,

which

includes, among other agreements, an Amended and

Restated Common Terms Agreement (“CTA”), an Amended and Restated Senior

Facility G Agreement (“Facility

G Agreement”) and an

Amended and Restated Senior

Facility H Agreement (“Facility

H Agreement”)

(collectively,

the “Loan

Documents”) with

RMB. Main

Street 1692

(RF) Proprietary

Limited (“Debt

Guarantor”), a

South African

company incorporated

for the sole

purpose of

holding collateral for

the benefit of

the Lenders and

acting as debt

guarantor is also

party to

the Loan

Documents. Pursuant

to the

Facility G

Agreement,

Lesaka SA

may borrow

up to

an aggregate

of approximately

ZAR

708.6

million. Facility G now

includes a term loan

of ZAR

508.6

million and a

revolving credit facility of

up to ZAR

200

million.

Pursuant to the Facility H Agreement, Lesaka SA may borrow up to an aggregate

of approximately ZAR

357.4

million.

The Loan

Documents contain

customary

covenants that

require Lesaka

SA to

maintain a

specified total

asset cover

ratio and

restrict the ability of Lesaka, Lesaka SA, and certain of its subsidiaries to make

certain distributions with respect to their capital stock,

prepay

other debt,

encumber their

assets, incur

additional indebtedness,

make investment

above specified

levels, engage

in certain

business combinations and engage in other corporate activities. The

March 16, 2023, amendments to the CTA

include an amendment

to the asset cover

ratio to change the

Covenant Equity Value

(as defined in

the CTA)

definition to include

% of the book

value of

the Lesaka Financial Service Proprietary Limited (formerly known as Moneyline Financial Service Proprietary Limited)

receivables,

and to deduct the net debt

(as defined in the CTA) of Cash Connect Management Solutions

Proprietary Limited (“CCMS”) and K2021

Proprietary Limited (“K2021”) from the respective CCMS and

K2021 valuations. When determining the Covenant Equity Value,

the

value of the aggregate of the CCMS Equity Value

(as defined in the CTA) and the K2021 Equity Value

(as defined in the CTA) must

be at least

per cent of the Covenant Equity Value.

To the extent that the value of the

aggregate of the CCMS Equity Value

and the

K2021 Equity Value

is not at least

per cent of the

Covenant Equity Value,

the Covenant Equity Value

will be reduced so

that the

aggregate of the CCMS Equity Value and the K2021 Equity Value

per cent of the Covenant Equity Value. The amendments also

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

Interest on

Facility G

and Facility

H (together,

the “Facilities”)

is based

on the

3-month Johannesburg

Interbank Agreed

Rate

(“JIBAR”) in effect from

time to time plus a

margin, as a result

of the amendment, from

January 1, 2023 of:

(i)

5.50

% for as long as

the aggregate balance

under the Facilities is

greater than ZAR

800

million; (ii)

4.25

% if the aggregate

balance under the Facilities

equal to or less than ZAR

800

million, but greater than ZAR

350

million; or (iii)

2.50

% if the aggregate balance under the Facilities is

less than

ZAR

350

million. Interest

on the

Facilities may

be capitalized

to each

of the

facilities, and

will be

repaid on

the maturity

date, provided that the sum of the outstanding facility (including interest and fees) plus any accrued interest does not exceed

1.2

times

of the

Facilities outstanding

balance. Any

interest that

exceeds this

cap must

be settled

in full

on a

quarterly basis.

The JIBAR

rate

was

8.5

% on June 30, 2023.

Lesaka SA will pay a quarterly commitment fee computed at a rate of

% of the Applicable Margin (as defined in the CTA) on

the amount of the revolving credit facility outstanding

and such commitment fee will also be capitalized,

subject to the cap discussed

above.

The Facilities are repayable in full on or before December 31, 2025.

The then

available

amounts available

under

the Facilities

were utilized,

in full,

on April

14,

2022,

primarily

to part

fund the

acquisition

of Connect.

April 2022,

Lesaka SA

paid

non-refundable

deal

origination

fees of

ZAR

11.25

million

and

ZAR

5.25

million to the Lenders related to Facility G and Facility H, respectively.

The Facility H

Agreement provides the Lenders

with a right

to discuss the

capitalization of the Lesaka

group with its

management

and Value

Capital Partners Proprietary

Limited (“VCP”) if Lesaka’s

market capitalization on

the NASDAQ Stock Market

(based on

the closing price

on the NASDAQ Stock

Market) on any day

falls below the USD

equivalent of ZAR

3.250

billion. VCP is required

to maintain an asset cover ratio above

5.00

:1.00, calculated as the total VCP investment fund net

asset value (as defined in the Facility

H agreement) divided by the Facility H borrowings outstanding, measured as of March, June, September and December each year (as

applicable) (each a

“Measurement Date”). The

Lenders require Lesaka

SA to deliver a

compliance certificate procured from

VCP as

of each applicable Measurement Date, which shows the computation

of the asset cover ratio.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-43

12.

BORROWINGS (continued)

South Africa (continued)

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

On March 22, 2023,

the Company, through CCMS, entered

into a First

Amendment and Restatement Agreement, which

includes,

among other

agreements, an

Amended

and Restated

Facilities Agreement

(“CCMS Facilities

Agreement”)

with RMB.

The CCMS

Facilities Agreement was

amended to increase

the Facility B available

under the CCMS Facilities

Agreement by ZAR

200.0

million

to ZAR

550.0

million. The

final maturity

date has

been extended

to December

31, 2027,

and scheduled

principal repayments

have

been amended, with the first scheduled repayment commencing from

March 31, 2026.

As of June 30,

2023, the Connect

Facilities include (i)

an overdraft facility

(general banking facility)

of ZAR

205.0

million (of

which ZAR

170.0

million has been

utilized); (ii)

Facility A of

ZAR

700.0

million; (iii) Facility

B of ZAR

550.0

million (both

fully

utilized); and (iv) an asset-backed facility of ZAR

200.0

million (of which ZAR

149.1

million has been utilized).

In February 2023, the Company,

through CCMS, obtained a ZAR

175.0

million temporary increase in its overdraft facility for a

period of

four months

to specifically

fund the

purchase of

prepaid airtime

vouchers. This

temporary increase

was repayable

four

equal monthly instalments of ZAR

43.8

million and which commenced

in March 2023. In May 2023,

the Company,

through CCMS,

obtained a ZAR

155.0

million temporary increase

in its overdraft facility

for a period of

one month

to specifically fund the

purchase

of prepaid airtime vouchers. This temporary increase was repaid in full in June 2023. Interest at the South Africa prime rate less

0.1

was payable on a monthly basis on both of these temporary facilities.

CCMS paid a non-refundable structuring fee of approximately ZAR

5.5

million during the year ended June 30, 2022. Interest on

Facility A and Facility

B is payable quarterly in

arrears based on JIBAR

in effect from time to

time plus a margin.

Interest on the asset-

backed facility is payable quarterly in arrears based on prime in effect

from time to time plus a margin.

Borrowings under

the CCMS

Facilities Agreement

are secured

by a

pledge by

CCMS of,

among other

things, all

of its

equity

shares, its

entire equity

interests in

equity securities

it owns

and any

claims outstanding.

The CCMS

Facilities Agreement

contains

customary covenants that require CCMS to maintain specified debt service, interest

cover and leverage ratios.

CCC Revolving Credit Facility, comprising

long-term borrowings

November

29,

2022,

the

Company,

through

its

indirect

South

African

subsidiary

Cash

Connect

Capital

(Pty)

Limited

(“CCC”), entered into

a Revolving Credit

Facility Agreement (the

“CCC Loan Document”)

with RMB

and other Company

subsidiaries

within the Connect Group of companies listed therein, as guarantors. The transaction

closed on December 1, 2022.

The CCC Loan Document contains

customary covenants that require CCC and

K2020 to collectively maintain a

specified capital

adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock,

encumber their assets,

incur additional indebtedness, make investments, engage in certain business

combinations and engage in other corporate activities.

Pursuant

the

CCC Loan

Document,

CCC may

borrow

up to

an aggregate

of ZAR

300.0

million

(“CCC Revolving

Credit

Facility”) for the sole purposes of funding CCC’s

consumer lending business, providing a limited recourse loan to

K2020, settling up

to ZAR

35.0

million related to

an intercompany

loan to CCC’s

direct parent,

and paying the

structuring and

execution fee and

legal

costs. The Revolving

Credit Facility replaces

K2020’s existing lending arrangement and

increases the

borrowings available to

facilitate

further growth of the

business. Certain merchant finance

loans receivable have been

pledged as security for

the revolving credit

facility

obtained from

RMB. CCMS

also provided

RMB with

an unsecured

limited guarantee

(“the guarantee”)

in respect

of the

revolving

credit facility entered into between

K2020 and RMB. The guarantee is limited

to a maximum aggregate amount of ZAR

10.0

million

and will become due and payable should there be any default on any of K2020’s

payment obligations to RMB.

Interest on

the Revolving

Credit Facility

is payable

on the last

business day

of each

calendar month and

is based on

the South

African prime rate in effect from time to time plus a margin

0.95

% per annum.

The Company

paid a

non-refundable structuring

and execution

fee of ZAR

1.7

million, or

0.1

million, including

value added

taxation, to the Lenders on closing.

As of June 30, 2023, the amount of the CCC Revolving Credit Facility was ZAR RMB facility, comprising indirect facilities

300.0

million (of which ZAR

222.3

million has

been utilized).

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-44

12.

BORROWINGS (continued)

South Africa (continued

As of

June 30,

2023, the

aggregate amount

of the

Company’s

short-term South

African indirect

credit facility

with RMB

was

ZAR

135.0

million ($

7.2

million), which includes facilities

for guarantees, letters of credit

and forward exchange contracts. As

of June

30, 2023

and June

30, 2022,

the Company

had utilized

approximately ZAR

33.1

million ($

1.8

million) and

ZAR

5.1

million ($

0.3

million), respectively,

of its indirect and derivative

facilities of ZAR

135.0

million (June 30, 2022: ZAR

135.0

million) to enable the

bank to issue guarantees, letters of credit and forward exchange contracts (refer

to Note 22).

Nedbank facility, comprising short-term facilities

As of June 30, 2023, the aggregate amount of

the Company’s short-term South African credit facility with Nedbank Limited was

ZAR

156.6

million ($

8.3

million). The credit facility represents an

indirect and derivative facilities of up

to ZAR

156.6

million ($

8.3

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

contracts.

On November 2, 2020, the Company amended its short-term

South African credit facility with Nedbank Limited to

increase the

indirect

and

derivative

facilities

component

the

facility

from

ZAR

150.0

million

ZAR

159.0

million.

June

2021,

the

Company

further

amended

its short-term

South

African

credit facility

with Nedbank

Limited

to reduce

the indirect

and derivative

facilities component of the facility

from ZAR

159.0

million to ZAR

157.0

million, and to cancel its ZAR

million general banking

facility. During the year ended June 30, 2022,

the Company cancelled its

overdraft facility of up to

ZAR

251.0

million ($

13.0

million),

which was used to fund mobile ATMs

as it no longer operates a mobile ATM

service.

The Company

has entered

into cession

and pledge

agreements with

Nedbank related

to certain

of its

Nedbank credit

facilities

(the general banking

facility and a

portion of the

indirect facility) and

the Company has

ceded and pledged

certain bank accounts

Nedbank and also provided a cession of Lesaka SA’s

shareholding in Cell C. The funds included in these bank accounts are restricted

as they may not be withdrawn without the express permission of Nedbank.

The short-term facility

provided Nedbank with

the right to set off

funds held in certain

identified Company bank

accounts with

Nedbank against any amounts owed to Nedbank under the facility.

As of June 30, 2023, these facilities were no longer available.

As of June 30, 2023 and June 30,

2022, the Company had utilized approximately

ZAR

2.1

million ($

0.1

million) and ZAR

92.1

million ($

5.7

million), respectively,

of its indirect and derivative facilities of

ZAR

156.6

million (June 30, 2022: ZAR

156.6

million)

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

contracts (refer to Note 22).

On June 30,

2022, the Company’s

ZAR

60.0

million bank guarantee

issued by Nedbank

to a third

party expired and

on July 1,

2022, it was replaced with a ZAR

28.0

million bank guarantee issued by RMB to

the same third party. In July 2022, the Company was

able to release

ZAR

60.0

million in cash

held in a

pledged bank

account with Nedbank

which was held

as security against

the bank

guarantee issued by Nedbank, and the ZAR

28.0

million bank guarantee did not require a cash underpin.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-45

12.

BORROWINGS (continued)

Movement in short-term credit facilities

Summarized below are the Company’s short-term facilities as of June 30, 2023, and the movement in the Company’s

short-term

facilities from as of June 30, 2022 to as of June 30, 2023:

RMB

Nedbank

Facility E

Indirect

Connect

Facilities

Total

Short-term facilities available as of June

30, 2023

74,319

7,167

10,882

8,311

100,679

Overdraft

10,882

Overdraft restricted as to use for ATM

funding only

74,319

Indirect and derivative facilities

7,167

8,311

15,478

Movement in utilized overdraft facilities:

Balance as of June 30, 2021

14,245

Facilities acquired in transaction

16,903

Utilized

563,588

5,929

1,345

570,862

Repaid

(517,948)

(6,189)

(1,322)

(525,459)

Foreign currency adjustment

(1)

(8,547)

(1,763)

(23)

(10,333)

Balance as of June 30, 2022

51,338

14,880

66,218

Restricted as to use for ATM

funding only

51,338

No restrictions as to use

14,880

Utilized

501,603

18,462

520,065

Repaid

(524,766)

(22,505)

(547,271)

Foreign currency adjustment

(1)

(5,154)

(1,812)

(6,966)

Balance as of June 30, 2023

23,021

9,025

32,046

Restricted as to use for ATM

funding only

23,021

No restrictions as to use

9,025

Interest rate as of June 30, 2023 (%)

(2)

11.7500

11.6500

Movement in utilized indirect and

derivative facilities:

Balance as of June 30, 2021

5,398

Utilized

4,009

Foreign currency adjustment

(1)

1,540

Balance as of June 30, 2022

313

5,654

10,947

Guarantees cancelled

(3)

(5,017)

Utilized

1,561

Foreign currency adjustment

(1)

(117)

(525)

(642)

Balance as of June 30, 2023

1,757

112

6,849

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

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

0.10

(3) Represents

the cancellation

of the guarantee

with supplier

amounting to

ZAR

million ($

5.0

million) which

is no longer

required due the reduction in the volume and value of transactions processed.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-46

12.

BORROWINGS (continued)

Movement in long-term borrowings

Summarized below is the movement in the Company’s

long-term borrowing from as of June 30, 2022, to as of June 30, 2023:

Facilities

G & H

A&B

CCC/ K2020

Asset backed

Total

Opening balance as of June 30, 2021

Facilities acquired in transaction

72,318

9,772

4,870

86,960

Facilities utilized

77,069

472

1,310

78,851

Facilities repaid

(4,492)

(933)

(156)

(5,581)

Non-refundable fees paid

(1,307)

Non-refundable fees amortized

196

251

Foreign currency adjustment

(1)

(8,112)

(7,864)

(1,002)

(550)

(17,528)

Included in current

4,604

2,200

6,804

Included in long-term

63,354

59,868

8,346

3,274

134,842

Opening balance as of June 30, 2022

63,354

64,472

8,346

5,474

141,646

Facilities utilized

10,947

7,377

6,031

24,355

Facilities repaid

(10,543)

(2,151)

(2,149)

(2,669)

(17,512)

Non-refundable fees paid

(500)

(100)

(600)

Non-refundable fees amortized

762

863

Capitalized interest

5,078

Capitalized interest repaid

(514)

Foreign currency adjustment

(1)

(8,672)

(8,889)

(1,716)

(921)

(20,198)

Closing balance as of June 30, 2023

48,965

64,436

11,802

7,915

133,118

Included in current

3,663

Included in long-term

48,965

64,436

11,802

4,252

129,455

Unamortized fees

(598)

(223)

(65)

(886)

Due within 2 years

3,005

Due within 3 years

49,563

3,317

11,867

1,149

65,896

Due within 4 years

7,300

7,398

Due within 5 years

54,042

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

14.00

12.25

12.70

12.50

Base rate (%)

8.50

11.75

Margin (%)

5.50

3.75

0.95

0.75

Footnote number

(2)(3)(4)

(5)

(6)

(7)

(

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

(2) Prior

to the

amendment in March

2023, interest

on Facility G

was calculated

based on

the 3-month

JIBAR in

effect from

time to

time plus a margin

of (i)

3.00

% per annum until January

13, 2023; and then (ii) from

January 14, 2023, (x)

2.50

% per annum if the Facility

G balance outstanding

is less than

or equal to

ZAR

250.0

million, or (y)

3.00

% per annum

if the Facility

G balance is between

ZAR

250.0

million to

ZAR

450.0

million, or

(z)

3.50

% per

annum if

the Facility

G balance

is greater

than ZAR

450.0

million. The

interest rate

shall

increase by a further

2.00

% per annum in the event of default (as defined in the Loan Documents).

(3) Prior to the amendment in

March 2023, interest on Facility

H is calculated based on JIBAR

in effect from time to

time plus a margin

2.00

% per annum which increases by a further

2.00

% per annum in the event of default (as defined in the Loan Documents).

(4) Interest on Facility

G and Facility H

is calculated based

on the 3-month

JIBAR in effect

from time to time

plus a margin

of, from

January 1, 2023:

(i)

5.50

% for as

long as the

aggregate balance under

the Facilities is

greater than ZAR

800

million; (ii)

4.25

% if the

aggregate

balance under the Facilities is

equal to or less

than ZAR

800

million, but greater than

ZAR

350

million; or (iii)

2.50

% if the aggregate

balance

under the Facilities is less than ZAR

350

million

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

3.75

%, in effect from time to time.

(6) Interest is charged at prime plus

0.95

% per annum on the utilized balance.

(7) Interest is charged at prime plus

0.75

% per annum on the utilized balance.

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

expense

the

consolidated

statement

operations

during

the

years

ended

June

30,

2023

and

2022,

was

13.1

million

and

2.3

million,

respectively. There

was

interest expense incurred during the year ended

June 30, 2021. Prepaid facility fees amortized included

interest expense during the years

ended June 30, 2023 and

2022, was $

0.8

million and $

0.2

million, respectively. There was

prepaid

facility fee

amortization during

the year

ended June

30, 2021.

Interest expense

incurred under

the Company’s

CCC/K2020 facility

relates

borrowings

utilized

fund

portion

the

Company’s

merchant

finance

loans receivable

and

interest

expense

1.4

million

and

0.2

million

included

the

caption

cost

goods

sold,

processing,

servicing

and

support

the

consolidated

statement of operations for the years ended June 30, 2023 and 2022, respectively.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-47

13.

OTHER PAYABLES

Summarized below is the breakdown of other payables as of June 30,

2023 and 2022:

June 30,

2023

2022

Accruals

7,078

9,948

Provisions

7,429

7,365

Payroll-related payables

1,038

1,306

Participating merchants' settlement obligation

114

Value

-added tax payable

1,247

845

Vendor

consideration due to sellers of Connect (Note 3)

1,459

Other

19,466

13,325

36,297

34,362

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

deposits and other payables.

14.

COMMON STOCK

Common stock

Holders of shares of Lesaka’s common stock are entitled to receive dividends and other distributions when declared by Lesaka’s

board of

directors out

of legally

available funds.

Payment of

dividends and

distributions is

subject to

certain restrictions

under the

Florida Business Corporation Act, including

the requirement that after making

any distribution Lesaka must be

able to meet its debts

as they become due in

the usual course of

its business. Upon voluntary or

involuntary liquidation, dissolution or winding up

of Lesaka,

holders of

common stock

share ratably

in the

assets remaining

after payments

to creditors

and provision

for the

preference of

any

preferred

stock

according

its

terms.

There

are

pre-emptive

other

subscription

rights,

conversion

rights

redemption

scheduled installment payment provisions relating to shares

of common stock. All of

the outstanding shares of common stock

are fully

paid and non-assessable.

Each holder of

common stock is

entitled to one

vote per share

for the election

of directors and

for all other

matters to be

voted

on by shareholders. Holders

of common stock may

not cumulate their

votes in the

election of directors, and

are entitled to

share equally

and ratably in the dividends that may be declared by the board of directors, but only after payment of dividends required to be paid on

outstanding shares of preferred stock according to its terms. The shares of

Lesaka common stock are not subject to redemption.

Issue of shares to Connect sellers pursuant to April 2022 transaction

The total purchase consideration pursuant to the Connect

acquisition in April 2022 includes

3,185,079

shares of the Company’s

common stock. These shares of

common stock will be issued

three

equal tranches on each

of the first, second

and third anniversaries

of the April 14, 2022 closing. The Company legally issued

1,061,693

shares of its common stock, representing the first tranche, to the

Connect sellers in April 2023, and this had no impact on the

number of shares, net of treasury, presented in the consolidated statement

of changes during the year ended June 30, 2023 because the

3,185,079

shares are included in the number of shares, net of treasury, as

of June 30, 2022, and 2023, respectively.

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

net of treasury

The Company’s

number of

shares, net

of treasury,

presented in

the consolidated

balance sheets

and consolidated

statement of

changes in

equity includes

participating non-vested

equity shares (specifically

contingently returnable

shares) as described

below in

Note

“—

Amended

and

Restated

Stock

Incentive

Plan—Restricted

Stock—General

Terms

Awards”.

The

following

table

presents a reconciliation

between the number

of shares, net of

treasury,

presented in the

consolidated statement of

changes in equity

and the

number

of shares,

net of

treasury,

excluding non-vested

equity shares

that have

not vested

during the

years ended

June 30,

2023, 2022 and 2021:

2023

2022

2021

Number of shares, net of treasury:

Statement of changes in equity – common stock

63,640,246

62,324,321

56,716,620

Less: Non-vested equity shares that have not vested as of end of year (Note

17)

2,614,419

2,385,267

384,560

Number of shares, net of treasury excluding non-vested equity shares that have Redeemable common stock issued pursuant to transaction with the IFC Investors

not vested

61,025,827

59,939,054

56,332,060

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-48

14.

COMMON STOCK (continued)

Holders of redeemable common

stock have all the rights enjoyed by

holders of common stock, however,

holders of redeemable

common

stock

have

additional

contractual

rights.

April

11,

2016,

the

Company

entered

into

Subscription

Agreement

(the

“Subscription Agreement”)

with International

Finance Corporation

(“IFC”), IFC

African, Latin

American and

Caribbean Fund,

LP,

IFC

Financial

Institutions

Growth

Fund,

LP,

and

Africa

Capitalization

Fund,

Ltd.

(collectively,

the

“IFC

Investors”).

Under

the

Subscription Agreement,

the IFC Investors purchased,

and the Company

sold in the

aggregate, approximately

9.98

million shares of

the

Company’s

common

stock,

par

value

0.001

per

share,

price

10.79

per

share,

for

gross

proceeds

the

Company

approximately $

107.7

million. The Company

accounted for these

9.98

million shares as

redeemable common stock

as a result of

the

put option discussed below.

On May

19, 2020,

the Africa

Capitalization Fund,

Ltd sold

its entire

holding of

2,103,169

shares of

the Company’s

common

stock and

therefore the

additional contractual

rights, including

the put

option rights

related to

these

2,103,169

shares, expired.

The

Company reclassified $

22.7

million related to

these

2,103,169

shares sold from

redeemable common stock

to additional paid-in-capital

during the year ended June 30, 2020.

On August 19, 202

2, the IFC Investors

filed an amended Form

13D/A, amendment no. 2,

with the United

States Securities and

Exchange

Commission

reporting

that

October

2017

and

February

2018,

the

IFC

sold

aggregate

514,376

the

Company’s

common

stock

and therefore

the

additional

contractual

rights,

including

the put

option

rights

these

514,376

shares,

expired.

The

Company

reclassified

5.6

million

these

514,376

sold

from

redeemable

common

stock

additional paid-in-capital during the year ended June 30, 2022. Previously reported periods were not amended because the transaction

only impacted equity.

The Company has entered

into a Policy Agreement with

the IFC Investors (the

“Policy Agreement”). The

material terms of the

Policy Agreement are described below.

Board Rights

For so long as the IFC Investors in aggregate beneficially own shares representing at least

% of the Company’s common stock,

the IFC Investors will have the right to nominate one director to the Company’s board of directors. For so long as the IFC Investors in

aggregate beneficially

own shares representing

at least

2.5

% of the

Company’s

common stock, the

IFC Investors will

have the right

to appoint

an observer

to the

Company’s

board of

directors at

any time

when they

have not

designated, or

do not

have the

right to

designate, a director.

Put Option

Each IFC Investor will have

the right, upon the occurrence of specified

triggering events, to require the Company

to repurchase

all of the shares

of its common stock purchased by

the IFC Investors pursuant to

the Subscription Agreement (or upon exercise

of their

preemptive rights

discussed below).

Events triggering

this put

right relate

to (1)

the Company

being the

subject of

a governmental

complaint alleging, a court judgment finding or an indictment alleging that the Company (a) engaged in specified corrupt,

fraudulent,

coercive, collusive or obstructive practices; (b) entered into transactions with targets of economic sanctions; or (c) failed to operate its

business in compliance with anti-money laundering and anti-terrorism laws; or (2) the Company rejecting a bona fide offer to acquire

all of its outstanding Common Stock at a time when it has in place or implements a shareholder rights plan, or adopting a shareholder

rights plan triggered by a beneficial ownership

threshold of less than

twenty

percent. The put price per share will be

the higher of the

price per

share paid

by the

IFC Investors

pursuant to

the Subscription

Agreement (or

paid when

exercising their

preemptive rights)

and the

volume weighted

average price

per share

prevailing for

the

trading days

preceding the

triggering event,

except that

with

respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered

by the offeror.

The Company believes that the

put option has no

value and, accordingly, has not recognized the put

option in its consolidated

financial

statements.

Registration Rights

The Company has agreed

to grant certain registration

rights to the IFC Investors

for the resale of their

shares of the Company’s

common stock, including filing a resale shelf registration statement and

taking certain actions to facilitate resales thereunder.

Preemptive Rights

For so long as the IFC Investors hold in

aggregate

% of the outstanding shares of common stock of

the Company, each Investor

will have the right to purchase its pro-rata share of new issuances of securities by the Company,

subject to certain exceptions.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-49

14.

COMMON STOCK (continued)

Common stock repurchases

Executed under share repurchase authorizations

February 5, 2020,

the

Company’s

Board

of Directors

approved

the replenishment

of its

repurchase

authorization

repurchase

aggregate

100

million

common

stock.

The

authorization

has

expiration

date.

The

repurchase

authorization will be

used at

management’s discretion, subject to

limitations imposed by

SEC Rule

10b-18 and other

legal requirements

and subject to price and other internal limitations established by

the Board. Repurchases will be funded from the Company’s available

cash.

Share repurchases

may be

made

through open

market purchases,

privately

negotiated

transactions,

or both.

There can

be no

assurance

that

the

Company

will

purchase

any

particular

number

shares.

The

authorization

may

suspended,

terminated or

modified at

any time

for any

reason, including

market conditions,

the cost

of repurchasing

shares, liquidity

and other

factors that management deems appropriate.

The Company did

t repurchase any of its shares during

the years ended June 30, 2023

under

the

authorization,

however,

it did

repurchase

352,994

its

common

stock

from

its

employees,

refer

to Note

for

additional information

regarding these

repurchases. The

Company did

t repurchase

any of

its shares

during the

years ended

June

30,,

2022 and 2021, respectively,

either under or outside of the authorization.

15.

ACCUMULATED OTHER

COMPREHENSIVE (LOSS) INCOME

The table below

presents the change

in accumulated other

comprehensive (loss) income

per component during

the years ended

June 30, 2023, 2022 and 2021:

Accumulated

foreign

currency

translation

reserve

Total

Balance as of July 1, 2020

(169,075)

Release of foreign currency translation reserve: the disposal of Bank Frick

(Note 9)

(2,462)

Release of foreign currency translation reserve: liquidation of subsidiaries

605

Movement in foreign currency translation reserve related to equity-accounted

investment

(1,967)

Movement in foreign currency translation reserve

27,178

Balance as of July 1, 2021

(145,721)

Release of foreign currency translation reserve: disposal of Finbond

equity securities

(Note 9)

587

Release of foreign currency translation reserve: liquidation of subsidiaries

468

Movement in foreign currency translation reserve related to equity-accounted

investment

1,239

Movement in foreign currency translation reserve

(25,413)

Balance as of July 1, 2022

(168,840)

Release of foreign currency translation reserve: disposal of Finbond

equity securities

(Note 9)

362

Movement in foreign currency translation reserve related to equity

-accounted

investment

3,935

Movement in foreign currency translation reserve

(31,183)

Balance as of June 30, 2023

(195,726)

During

the

year

ended

June

30,

2023,

the

Company

reclassified

0.4

million

from

accumulated

other

comprehensive

loss

(accumulated foreign currency translation reserve) to net loss related to the disposal of shares in Finbond (refer to Note 9). During the

year ended

June 30, 2022,

the Company

reclassified $

0.6

million from

accumulated other comprehensive

loss (accumulated foreign

currency translation reserve)

to net loss related to the

disposal of shares in Finbond

(refer to Note 9). During

the year ended June 30,

2021, the

Company reclassified

the following

amounts from

accumulated other

comprehensive loss

(accumulated foreign

currency

translation reserve) to

net loss: $

2.5

million related to the disposal of Bank Frick (refer to Note 9) and (ii) $ The Company is a provider of digitized cash management solutions and merchant acquiring services, including an integrated

0.6

million related to the

liquidation of subsidiaries.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-50

16.

REVENUE

platform for

the distribution

of value-added

services; transaction

processing services;

financial inclusion

products and

services, and

secure payment technology. The

Company operates a

payment processor in South

Africa. The Company

offers debit, credit

and prepaid

processing and issuing services for all major payment networks. In South Africa, the Company provides innovative low-cost financial

inclusion products, including banking, lending and insurance.

Disaggregation of revenue

Certain revenue from the Company’s

legacy processing activities which were ceased during the year

ended June 30, 2021, have

not been allocated to the Company’s current reportable operating segments

and are presented as “Unallocated” in

the table for the year

ended June 30, 2021.

The

following

table

represents

our

revenue

disaggregated

major

revenue

streams,

including

reconciliation

operating

segments for the year ended June 30, 2023:

Merchant

Consumer

Unallocated

Total

Processing fees

111,281

26,159

1,469

138,909

South Africa

105,957

26,159

1,469

133,585

Rest of world

5,324

Technology

products

19,017

1,253

20,270

South Africa

18,780

1,253

20,033

Rest of world

237

Telecom products

and services

322,756

322,801

South Africa

306,093

306,138

Rest of world

16,663

Lending revenue

19,504

Interest from customers

5,778

Insurance revenue

9,677

Account holder fees

5,610

Other

4,869

553

5,422

South Africa

4,680

553

5,233

Rest of world

189

Total revenue, derived

from the following geographic

locations

463,701

62,801

1,469

527,971

South Africa

441,288

62,801

1,469

505,558

Rest of world

22,413

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-51

16.

REVENUE (continued)

The

following

table

represents

our

revenue

disaggregated

major

revenue

streams,

including

reconciliation

operating

segments for the year ended June 30, 2022:

Merchant

Consumer

Total

Processing fees

55,752

28,982

84,734

South Africa

48,305

28,982

77,287

Rest of world

7,447

Technology

products

25,891

277

26,168

South Africa

25,826

277

26,103

Rest of world

Telecom products

and services

69,603

Lending revenue

21,573

Interest from customers

1,121

Insurance revenue

8,530

Account holder fees

5,838

Other

4,310

732

5,042

South Africa

4,259

732

4,991

Rest of world

Total revenue, derived

from the following geographic locations

156,677

65,932

222,609

South Africa

149,114

65,932

215,162

Rest of world

7,563

7,447

The

following

table

represents

our

revenue

disaggregated

major

revenue

streams,

including

reconciliation

operating

segments for the year ended June 30, 2021:

Merchant

Consumer

Unallocated

Total

Processing fees

29,585

32,042

1,693

63,320

South Africa

27,960

32,042

60,002

Rest of world

1,625

1,693

3,318

Technology

products

18,683

331

19,014

Telecom products

and services

13,422

Lending revenue

20,672

Insurance revenue

6,605

Account holder fees

5,342

Other

1,254

1,157

2,411

Total revenue, derived

from the following geographic

locations

62,944

66,149

1,693

130,786

South Africa

61,319

66,149

127,468

Rest of world

1,625

1,693

3,318

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-52

17.

STOCK-BASED COMPENSATION

Amended and Restated Stock Incentive Plan

On September 7, 2022,

the Company’s

Board further amended and

restated the Company’s

Amended and Restated 2015

Stock

Incentive

Plan (“2015

Plan”), and

on November

16, 2022,

the Company’s

shareholders approved

the Amended

and Restated

2022

Stock Incentive Plan (“2022

Plan”). Amendments included:

(1) increasing the number

of shares available for

issuance by

2,500,000

;

(2) extending

the term of

the plan to

September 7,

2032; (3) addressed

the treatment

of equity awards

upon a change

in control;

(4)

clarified that

all equity

awards will

generally

have a

vesting period

of at

least one

year; (5)

included an

explicit prohibition

on the

payment

of dividends

and dividend

equivalents on

unvested

full value

awards;

(6)

clarified and

updated

repricing

restrictions;

(7)

included mandatory application of

our clawback policy to equity awards under

the 2022 Plan; and (8) removed deadwood

provisions

related to the “performance based

compensation” exemption under Section 162(m) of

the Internal Revenue Code

of 1986, as

amended.

No evergreen provisions are included in the 2022 Plan. This means that the maximum number of

shares issuable under the 2022

Plan is fixed

and cannot

be increased

without shareholder

approval, the plan

expires by

its terms upon

a specified date,

and no

new

stock

options

are

awarded

automatically

upon

exercise

outstanding

stock

option.

Shareholder

approval

required

for

the

repricing of awards or the implementation of any award exchange program.

The Plan permits Lesaka to grant to its employees, directors and consultants incentive stock options, nonqualified stock options,

stock appreciation rights, restricted stock, performance-based awards

and other awards based on its

common stock. The Remuneration

Committee of the Company’s Board

of Directors (“Remuneration Committee”) administers the Plan.

The total number

of shares of common

stock issuable under the

Plan is

13,552,580

. The maximum

number of shares for

which

stock options, stock appreciation rights

(other than performance-based awards

that are not options) may be granted

during a calendar

year

to any

participant

600,000

shares. Shares

covered

by awards

that expire,

terminate or

lapse without

payment

will again

available for the grant of awards under the 2022 Plan, as well as shares that are delivered to us by the holder to pay withholding taxes

or as payment for

the exercise price of

an award, if permitted

by the Remuneration Committee.

The shares deliverable

in connection

with awards

granted under

the 2022

Plan may

consist, in

whole or

in part,

of authorized

but unissued

shares or

treasury shares.

account

for

stock

splits,

stock

dividends,

reorganizations,

recapitalizations,

mergers,

consolidations,

spin-offs

and

other

corporate

events, the 2022 Plan

requires the Remuneration Committee to

equitably adjust the number

and kind of shares

of common stock issued

or reserved pursuant to the plan or outstanding awards, the maximum number of shares

issuable pursuant to awards, the exercise price

for awards,

and other

affected terms

of awards

to reflect

such event.

No awards

may be

granted under

the Plan

after September

2032, but awards granted on or before such date may extend to later dates.

Options

General Terms of

Awards

Option awards are generally granted with an exercise price equal to the market price of the Company's stock at the date of grant,

with vesting conditioned upon the recipient’s continuous service through the applicable vesting date and expire

years after the date

of grant. The options generally become exercisable in accordance with a

vesting schedule ratably over a period of

three years

from the

date of grant. The Company issues new shares to satisfy stock option award exercises but may

also use treasury shares.

Valuation

Assumptions

The

fair

value

each

option

estimated

the

date

grant

using the

Cox

Ross

Rubinstein

binomial

model

that

uses the

assumptions

noted

the

table

below.

The

estimated

expected

volatility

generally

calculated

based

the

Company’s

750

-day

volatility. The

estimated expected life of the

option was determined based on

the historical behavior of employees

who were granted

options with similar terms.

stock options were granted during the year ended June 30, 2023. The table below presents the range of

assumptions used to value options granted during the years ended June 30, 2022

and 2021:

2022

2021

Expected volatility

Expected dividends

Expected life (in years)

3.0

2.8

Risk-free rate

1.61

0.19

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-53

17.

STOCK-BASED COMPENSATION

(continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock

General Terms of

Awards

Shares of restricted stock are

considered to be participating non-vested equity shares

(specifically contingently returnable shares)

for the

purposes of

calculating earnings per

share (refer

to Note

19) because, as

discussed in

more detail

below, the recipient is

obligated

to transfer any unvested

restricted stock back to

the Company for no

consideration and these shares

of restricted stock are

eligible to

receive non-forfeitable

dividend equivalents

at the

same rate as

common stock.

Restricted stock

generally vests

ratably over

three

year

period, with

vesting conditioned

upon the

recipient’s

continuous service

through the

applicable vesting

date and

under certain

circumstances, the achievement of certain performance targets,

as described below.

Recipients

are

entitled

all

rights

shareholder

the

Company

except

otherwise

provided

the

restricted

stock

agreements. These

rights include the

right to vote

and receive dividends

and/or other

distributions,

however, any

or all dividends

other

distributions

paid

restricted

stock

during

the period

such

restrictions

shall

accumulated

(without

interest)

reinvested in additional shares of common stock, which in either case shall be subject to the same restrictions as the underlying award

or such other restrictions as the Remuneration

Committee may determine.

The restricted stock agreements generally

prohibit transfer

of any

nonvested and

forfeitable restricted

stock. If a

recipient ceases

to be

a member

of the

Board of

Directors or

an employee

for

any reason,

all shares

of restricted

stock that

are not

then vested

and nonforfeitable

will be immediately

forfeited and

transferred to

the

Company

for

consideration.

Forfeited

restricted

stock

are

available

for

future

issuances

the

Remuneration

Committee.

The Company issues new shares to satisfy restricted stock awards.

Valuation

Assumptions

The fair value

of restricted stock

is generally based

on the closing

price of the

Company’s stock

quoted on The

Nasdaq Global

Select Market on the date of grant.

Forfeiture of 150,000 shares

of restricted stock with Market Conditions awarded

in August 2017

In August 2017, the Remuneration Committee approved an award

210,000

shares of restricted stock to executive

officers. The

shares of restricted

stock awarded to

executive officers

in August 2017

were subject to

a time-based vesting

condition and a

market

condition and would vest

in full only on

the date, if any,

that the following conditions

were satisfied: (1) the

price of the Company’s

common stock must equal or exceed certain agreed VWAP

levels (as described below) during a measurement period commencing on

the date that

it filed its Annual

Report on Form

10-K for the

fiscal year ended

June 30, 2020

and ending on

December 31, 2020

and

(2) the recipient

is employed by the

Company on a

full-time basis when

the condition in

(1) is met.

If either of

these conditions was

not satisfied, then

none of the

shares of restricted

stock would vest

and they would

be forfeited. The

23.00

price target represented

an approximate

% increase, compounded annually,

in the price of the Company’s common stock on

Nasdaq over the $

9.38

closing

price on August 23, 2017. The VWAP

levels and vesting percentages related to such levels were as follows:

●

Below $

15.00

(threshold)—

●

At or above $

15.00

and below $

19.00

—

●

At or above $

19.00

and below $

23.00

—

●

At or above $

23.00

—

100

The

210,000

shares of restricted stock were effectively forward starting knock-in barrier options with multi-strike prices of

zero

The fair

value of

these shares

of restricted

stock was calculated

utilizing a

Monte Carlo

simulation model

which was

developed for

the purpose

of the

valuation of

these shares.

For each

simulated share

price path,

the market

share price

condition was

evaluated to

determine whether

or not

the shares would

vest under

that simulation.

A standard

Geometric Brownian

motion process

was used

the forecasting

of the share

price instead of

a “jump diffusion”

model, as the

share price volatility

was more stable

compared to

the

highly volatile regime

of previous

years. Therefore, the

simulated share price

paths capture the

idiosyncrasies of the

observed Company

share price movements.

In scenarios where

the shares do not

vest, the final vested

value at maturity is

zero. In scenarios where

vesting occurs, the

final

vested value on maturity is

the share price on vesting date. The

value of the grant is the

average of the discounted vested

values. The

Company used an expected volatility of

44.0

%, an expected life of

approximately

three years

, a risk-free rate ranging between

1.275

1.657

% and

future dividends

in its

calculation of

the fair

value of

the restricted

stock. The

estimated expected

volatility was

calculated based on the Company’s

30 day

VWAP

share price using the exponentially weighted moving average of returns.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-54

17.

STOCK-BASED COMPENSATION

(continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Forfeiture of 150,000 shares

of restricted stock with Market Conditions awarded

in August 2017(continued)

On August 5, 2020,

the Company and its

then chief executive officer and

member of its board

of directors, Mr. Herman G. Kotzé,

entered into

a Separation

and Release of

Claims Agreement

(the “Separation

Agreement”). The

parties agreed

that Mr.

Kotzé’s

last

day

employment

with

the Company

would

September

30,

2020,

unless

terminated

earlier

the

Company

for

cause.

Upon

separation

from

the

Company,

Mr.

Kotzé

forfeited

150,000

restricted

stock

that

were

subject

the

market

conditions

described above

because he was

no longer

an employee of

the Company as

of the vesting

date. The

VWAP

market conditions were

not achieved and all outstanding shares of restricted stock were forfeited on December

31, 2020.

Market Conditions - Restricted Stock Granted in September 2018 –

all forfeited

In September 2018, the Remuneration Committee approved an award of

148,000

shares of restricted stock to executive officers.

The

148,000

shares of restricted stock awarded to executive

officers in September 2018 are subject

to a time-based vesting condition

and a market

condition and vest

in full only

on the

date, if

any, that the following

conditions are

satisfied: (1) the

price of the

Company’s

common stock must equal or exceed certain agreed VWAP

levels (as described below) during a measurement period commencing on

the date that

it files its

Annual Report on

Form 10-K for

the fiscal year

ended June 30,

2021 and ending

on December 31,

2021 and

(2) the recipient is employed by the Company on a full-time basis when the

condition in (1) is met. If either of these conditions is not

satisfied,

then

none

the

restricted

stock

will

vest

and

they

will

forfeited.

The

23.00

price

target

represented

approximate

% increase,

compounded annually,

in the

price of

the Company’s

common stock

on Nasdaq

over the

6.20

closing

price on September 7, 2018. The VWAP

levels and vesting percentages related to such levels are as follows:

●

Below $

15.00

(threshold)—

●

At or above $

15.00

and below $

19.00

—

●

At or above $

19.00

and below $

23.00

—

●

At or above $

23.00

—

100

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

Carlo simulation of a stochastic volatility process.

The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of

larger than expected moves in the daily time series for the Company’s

VWAP

price, but also the observation of the strike structure of

volatility

(i.e.

skew

and

smile)

for

out-of-the

money

calls

and

out-of-the

money

puts

versus

at-the-money

options

for

both

the

Company’s stock and NASDAQ futures.

In scenarios where

the shares do not

vest, the final vested

value at maturity is

zero. In scenarios where

vesting occurs, the

final

vested value on maturity is the share price on

vesting date. In its calculation of the fair value

of the restricted stock, the Company used

an average volatility of

37.4

% for the VWAP

price, a discounting based on USD overnight indexed swap rates for

the grant date, and

no future dividends. The average volatility was extracted from the time series for VWAP prices as the standard deviation of log prices

for the

three years

preceding the grant date. The mean

reversion of volatility and the volatility of

volatility parameters of the stochastic

volatility process

were extracted

by regressing

log differences

against log

levels of

volatility from

the time

series for

at-the-money

options

30 day

volatility quotes, which were available from January 2, 2018 onwards.

During

the year

ended June

30, 2022,

an executive

officer forfeited

30,000

shares of

restricted

stock that

were subject

to the

market conditions described above because the performance conditions were not met. During the year ended June 30, 2021, executive

officers forfeited

88,000

shares of restricted

stock that were

subject to the

market conditions described above

following their separation

from the Company.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-55

17.

STOCK-BASED COMPENSATION

(continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Performance Conditions - Restricted Stock Granted in February 2020

– all forfeited

The

454,400

restricted

stock

awarded

executive

officers

February

2020

were

subject

time-based

and

performance-based

vesting

conditions

and

vest

full

only

the

date,

any,

that

the

following

conditions

are

satisfied:

(1)

the

achievement of an agreed return on average net equity per year during a measurement period commencing from July 1, 2021, through

June 30, 2023,

and (2) the recipient

is employed by the

Company on a full-time

basis when the

condition in (1) is

met. Net equity

calculated as total equity attributable to the Company’s

shareholders plus redeemable common stock, in conformity with GAAP.

The

net equity as of June 30, 2021, was set as the base year for the measurement period. The average net equity is calculated as the simple

average between

the opening

net equity

and closing

net equity

during each

fiscal year

within the

measurement period.

The targeted

return per year within the measurement period is derived from GAAP net income

attributable to the Company per fiscal year.

The performance-based awards

vest based on the achievement

of the following targeted

return on average net equity

during the

measurement period, of:

●

% per year:

% vest;

●

% per year:

100

% vest.

shares of

restricted stock

vested at

a return

on average

net equity

of less

than

%. Calculation

of the

award based

on the

returns between

% and

% will be interpolated on a linear

basis. The Company’s Remuneration Committee was permitted to use its

discretion to adjust any component of the

calculation of the award on a fact-by-fact basis, for

instance, as the result of an acquisition.

During

the

year

ended

June

30,

2023,

executive

officer

forfeited

80,000

restricted

stock

that

were

subject

the

performance

conditions

because

the

performance

conditions

were

not

achieved.

During

the

year

ended

June

30,

2021,

executive

officers forfeited

374,400

shares of

restricted stock that

were subject

to the

performance conditions described

following their separation

from the Company.

Market Conditions - Restricted Stock Granted in May 2021 and

July 2021

In May

2021 and

July 2021,

respectively,

the Remuneration

Committee

approved

an award

158,734

and

58,652

shares of

restricted stock to executive officers. These shares of restricted stock awarded to executive officers are subject to a

time-based vesting

condition and a market condition and vest in full

only on the date, if any, that the following conditions are satisfied: (1) a

compounded

annual

% appreciation in the Company’s

stock price over the measurement period commencing on June

30, 2021 through June 30,

2024,

and

(2)

the

recipient

employed

the

Company

full-time

basis

when

the

condition

(1)

met.

either

these

conditions is not satisfied, then none of the shares

of restricted stock will vest and they will

be forfeited. The Company’s closing stock

price on Nasdaq on June 30, 2021, was $

4.71

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

period ended related to such levels are as follows:

●

Prior to the first anniversary of the grant date:

●

Fiscal 2022, stock price as of June 30, 2022 is

1.2

times higher (i.e. $

5.65

or higher) than $

4.71

●

Fiscal 2023, stock price as of June 30, 2023 is

1.44

times higher (i.e. $

6.78

or higher) than $

4.71

●

Fiscal 2024, stock price as of June 30, 2024 is

1.728

times higher (i.e. $

8.14

) than $

4.71

100

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

Carlo simulation of a stochastic volatility process.

The choice of a stochastic volatility process as an extension to the standard Black Scholes process was driven by both observations of

larger than expected moves in the daily time series for

the Company’s closing price, but

also the observation of the strike structure of

volatility

(i.e.

skew

and

smile)

for

out-of-the

money

calls

and

out-of-the

money

puts

versus

at-the-money

options

for

both

the

Company’s stock and NASDAQ futures.

In scenarios where the

shares do not vest, the

final vested value at maturity

is zero. In scenarios where

vesting occurs, the final

vested value on maturity is the share price on

vesting date. In its calculation of the fair value

of the restricted stock, the Company used

an average

volatility of

61.6

% for the

closing price

(for each

of the

May 2021

and July 2021

awards), a

discounting based

on USD

overnight indexed swap rates for the grant date, and no future dividends. The average volatility was extracted from the time series for

closing prices as the standard deviation of log prices for the three years preceding the grant date. The mean reversion of volatility and

the volatility of volatility parameters of the stochastic volatility process were extracted by

regressing log differences against log levels

of volatility from the time series for at-the-money options

30 day

volatility quotes, which were available for the three years preceding

May 5, 2021 (for the May 2021 awards) and July 1, 2021 (for the July 2021 award).

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-56

17.

STOCK-BASED COMPENSATION

(continued)

Amended and Restated Stock Incentive Plan (continued)

Restricted Stock (continued)

Performance Conditions - Restricted Stock Granted in July 2021

In July 2021, the Remuneration Committee approved an

award of

58,652

shares of restricted stock to an

executive officer. These

shares of restricted

stock are subject to

a time-based vesting

condition and a performance

condition and vest

in full only on

the date,

if any,

that the following

conditions are satisfied:

(1) achieving the

Company’s

three year

financial services

plan during the

specific

measurement

period from

June 30,

2021, to

June 30,

2024, and

(2) the

recipient is

employed by

the Company

on a

full-time basis

when the condition in (1) is met. If either of these conditions are not satisfied, then none of the shares of restricted stock will vest and

they will be forfeited. The fair value of these shares of restricted stock was calculated

based on the market price on date of award.

Market Conditions - Restricted Stock Granted in December 2022

In December 2022, the Remuneration

Committee approved an award of

257,868

shares of restricted stock to executive

officers.

The

257,868

restricted

stock

awarded

executive

officers

are

subject

time-based

vesting

condition

and

market

condition and vest

in full only

on the date,

if any, that the

following conditions are

satisfied: (1) a

compounded annual

% appreciation

the

Company’s

stock

price

off

base

price

4.94

over

the

measurement

period

commencing

December

2022

through

December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is

met. If either of

these conditions is not satisfied, then none of the shares of

restricted stock will vest and they will be

forfeited. The Company’s closing

price on December 1, 2022, was $

4.08

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

period ended are as follows:

●

Prior to the first anniversary of the grant date:

●

Fiscal 2024, stock price as of December 1, 2023 is

1.1

times higher (i.e. $

5.43

or higher) than $

4.94

●

Fiscal 2025, stock price as of December 1, 2024 is

1.21

times higher (i.e. $

5.97

or higher) than $

4.94

●

Fiscal 2026, stock price as of December 1, 2025 is

1.331

times higher (i.e. $

6.57

) than $4.94:

100

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

simulation.

In scenarios where

the shares do not

vest, the final vested

value at maturity is

zero. In scenarios where

vesting occurs, the

final

vested value on maturity is the share price on

vesting date. In its calculation of the fair value

of the restricted stock, the Company used

an equally

weighted volatility

50.1

% for

the closing

price (of

4.08

), a discounting

based on

U.S. dollar

overnight indexed

swap

rates for the grant date, and no

future dividends. The equally weighted

volatility was extracted from the

time series for closing prices

as the standard deviation of log prices for the three years preceding the grant date.

Restricted Stock Units

The Remuneration Committee

may approve the

grant of other

stock-based awards. In

April 2022, the

Company granted

1,250,486

restricted

stock

employees

Connect

pursuant

the

terms

the

acquisition.

The

award

included

equalization

mechanism to

maintain a

return of

7.50

per share

of restricted

stock upon

vesting through

the issue

of restricted

stock units.

The

conversion of restricted stock units to shares cannot exceed

% under the terms of the award and therefore no more than

625,243

(or

1,250,486

divided by

two) would

be issued

upon vesting.

During the

year ended

June 30,

2023,

412,487

shares of

restricted stock

vested,

and

206,239

restricted

stock units

vested,

the maximum

amount possible,

and

were converted

to shares

of common

stock.

Employees elected

for

72,081

shares to

be withheld

from

164,687

restricted stock

units which

vested, and

which were

converted to

shares, in order

to satisfy the withholding

tax liability on

the vesting of

these shares. These

72,081

shares have been

included in our

treasury shares.

Stock Appreciation Rights

The Remuneration Committee may also grant stock appreciation rights, either

singly or in tandem with underlying stock

options.

Stock appreciation rights entitle the holder upon exercise to receive an amount in any combination of cash or shares of common stock

(as determined by the Remuneration Committee)

equal in value to the

excess of the fair

market value of the shares

covered by the right

over the grant price.

stock appreciation rights have been granted.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-57

17.

STOCK-BASED COMPENSATION

(continued)

Stock option and restricted stock activity

Options

The following table summarizes stock option activity for

the years ended June 30, 2023, 2022 and 2021:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($'000)

Weighted

average

grant date

fair value

($)

Outstanding - July 1, 2020

1,331,651

5.83

7.56

2.01

Granted – August 2020

150,000

3.50

3.00

166

1.11

Granted – November 2020

560,000

3.01

10.00

691

1.23

Exercised

(17,335)

3.07

Forfeited

(729,484)

6.65

2.24

Outstanding - June 30, 2021

1,294,832

3.93

7.68

1,624

1.45

Granted – February 2022

137,620

4.87

10.00

235

1.71

Exercised

(249,521)

3.05

470

Forfeited

(256,706)

4.53

1.69

Outstanding - June 30, 2022

926,225

4.14

6.60

1,249

1.60

Exercised

(158,659)

3.04

200

Forfeited

(94,292)

3.99

1.81

Outstanding - June 30, 2023

673,274

4.37

5.14

239

1.67

These options have an exercise price range of $

3.01

to $

11.23

stock options were awarded during the year ended June 30, 2023. The Company awarded

137,620

and

560,000

stock options

to employees during the

years ended June 30, 2022

and 2021, respectively.

On August 5, 2020, the Company

granted one of its non-

employee directors, Mr. Ali Mazanderani, in his capacity

as a consultant to

the Company,

150,000

stock options with an

exercise price

of $

3.50

. These stock options were subject to the non-employee director’s continuous service through the applicable vesting date, and

half of

the options

vested on

each of

the first

and second

anniversaries of

the grant

date. The

stock options

expired unexercised

August 5, 2023.

During

the

years

ended

June

30,

2023,

2022

and

2021,

327,965

376,348

and

331,833

stock

options

became

exercisable,

respectively. During the year ended June 30, 2023, an employee delivered

23,934

shares of the Company’s common stock to exercise

37,500

stock options with an aggregate

strike price of $

0.1

million. These

23,934

shares of common stock

have been included in

the

Company’s treasury stock.

The employee also elected to deliver

6,105

shares of the Company’s common stock to settle income

taxes

arising upon exercise of the stock options, and

these shares have also been included in

the Company’s treasury stock. During the years

ended

June 30,

2023, 2022

and 2021,

the Company

received approximately

0.5

million, $

0.8

million and

0.05

million from

the

exercise of

158,659

249,521

and

17,335

stock options, respectively.

During

the

years

ended

June

30,

2023,

2022

and

2021,

employees

forfeited

94,292

256,706

and

729,484

stock

options,

respectively.

The number

of forfeitures

during the

year ended

June 30,

2021, increased

significantly compared

to prior

periods as

result of the closure of our IPG operations during the latter half of calendar 2020 and the unrelated (to

the IPG closure) resignation of

various employees

in the

first half

of calendar

2021. The

stock options

forfeited had

strike prices

ranging from

3.01

to $

11.23

. In

addition, the Company’s former chief executive officer forfeited

250,034

stock options with strike

prices ranging from $

6.20

to $

11.23

per share following his separation from the Company during the year

ended June 30, 2021.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-58

17.

STOCK-BASED COMPENSATION

(continued)

Stock option and restricted stock activity

(continued)

Options (continued)

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

June 30, 2023:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Vested

and expecting to vest - June 30, 2023

673,274

4.37

5.14

239

These options have an exercise price range of $

3.01

to $

11.23

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

30, 2023:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Exercisable - June 30, 2023

502,813

4.57

4.25

160

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-59

17.

STOCK-BASED COMPENSATION

(continued)

Stock option and restricted stock activity

(continued)

Restricted stock

The following table summarizes restricted stock activity for the years

ended June 30, 2023, 2022 and 2021:

Number of shares of

restricted stock

Weighted average grant

date fair value

($’000)

Non-vested – July 1, 2020

1,115,500

5,354

Granted – May 2021

254,560

1,035

Total vested

(311,300)

1,037

Vested

– August 2020

(244,500)

812

Vested

– September 2020 - accelerated vesting

(66,800)

225

Total forfeitures

(674,200)

2,690

Forfeitures - employee terminations

(644,200)

2,542

Forfeitures – September 2018 awards with market conditions

(30,000)

148

Non-vested – June 30, 2021

384,560

1,123

Total granted

2,168,110

11,097

Granted – July 2021

234,608

963

Granted – August 2021

44,986

192

Granted – November and December 2021

326,158

1,766

Granted – December 2021

50,300

269

Granted – February 2022

29,920

146

Granted – March 2022

207,859

1,097

Granted – April 2022

1,250,486

6,540

Granted – May 2022

23,793

124

Total granted and vested - November and December 2021

Granted - November and December 2021

71,647

393

Vested

- November and December 2021

(71,647)

393

Total vested

(61,861)

306

Total forfeitures

(105,542)

542

Forfeitures - employee terminations

(75,542)

382

Forfeitures – September 2018 awards with market conditions

(30,000)

160

Non-vested – June 30, 2022

2,385,267

11,879

Total granted

1,085,981

4,411

Granted – July 2022

32,582

172

Granted – August 2022

179,498

995

Granted - November 2022

150,000

605

Granted - December 2022

430,399

1,862

Granted - January 2023

11,806

Granted - June 2023

23,828

124

Granted - December 2022 - performance awards

257,868

596

Total vested

(742,464)

3,171

Vested

– July 2022

(78,801)

410

Vested

– November 2022

(59,833)

250

Vested

– December 2022

(7,060)

Vested

– February 2023

(19,179)

Vested

– March 2023

(69,286)

326

Vested

– April 2023

(418,502)

1,721

Vested

– May 2023

(61,861)

217

Vested

– June 2023

(27,942)

135

Granted - December 2022

300,000

1,365

Vested

- December 2022

(300,000)

1,365

Total forfeitures

(114,365)

554

Forfeitures - employee terminations

(34,365)

138

Forfeitures – February 2020 award with market condition

(80,000)

416

Non-vested – June 30, 2023

2,614,419

11,869

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-60

17.

STOCK-BASED COMPENSATION

(continued)

Stock option and restricted stock activity (continued)

Restricted stock

Awards granted

In July 2022,

December 2022, January

2023 and June

2023, the Company

awarded

32,582

430,399

11,806

and

23,828

of restricted stock, respectively, to employees

and an executive officer which have time-based vesting conditions. In December

2022,

the Company awarded

257,868

shares of restricted

stock to executive officers

which contained time

and performance-based (market

conditions related to

share price performance) vesting

conditions. The Company

also agreed to match,

on a

one

-for-one basis, (1)

employee’s purchase of up to $

1.0

million worth of the Company’s shares of common stock in open market purchases, and in August

2022, the Company granted

179,498

shares of restricted stock to the employee, and (2) another employee’s purchase of up to

150,000

the

Company’s

common

stock,

and

November

2022,

the

Company

granted

150,000

restricted

stock

the

employee.

These

restricted

stock

contain

time-based

vesting

conditions.

The

Company

awarded

300,000

executive officer on December 31, 2022, which vested on the date

of the award.

On June 30, 2021, the Company

entered into employment agreements with

Mr. Chris G.B.

Meyer, under which

Mr. Meyer was

appointed Group Chief Executive Officer of the Company effective July

1, 2021. Mr. Meyer was awarded

117,304

shares of restricted

stock on July

1, 2021, which were

subject to time-based

vesting and vest

in full on June

30, 2024, subject

to Mr.

Meyer’s continued

service to the

Company through June

30, 2024. In

addition, under the

terms of Mr. Meyer’s engagement, the

Company’s Remuneration

Committee also awarded Mr. Meyer

117,304

shares of restricted stock which include performance conditions and which only vest on

June 30,

2024 if

the performance

conditions are

met and

Mr.

Meyer remains

employed with

the Company

through June

30, 2024.

Vesting

half

these

awards,

58,652

restricted

stock,

subject

the Company

achieving

its

three-year

financial

services plan during the specific measurement period from June 30, 2021, to June 30, 2024, and the other half is subject to share price

growth

targets,

and only

vest if

the Company’s

share price

is $

8.14

or higher

on June

30, 2024.

On March

1, 2022,

the Company

awarded

207,859

shares of restricted

stock to executive

officers and

vesting of these

awards is subject

to the executive’s

continuous

service through

the applicable vesting

date, one

third of which

vests on each

of the first,

second and third

anniversaries of

the grant

date.

August

2021,

December

2021,

February

2022,

and

May

2022,

the

Company

awarded

44,986

50,300

29,920

and

23,793

shares of restricted stock, respectively, to employees which

have time and performance-based (market conditions

related to share price

performance) vesting conditions.

April

14,

2022,

the

Company

granted

1,250,486

restricted

stock

employees

Connect

pursuant

the

Sale

Agreement. The

award includes

an equalization

mechanism to

maintain a

return of

7.50

per share

of restricted

stock upon

vesting

through the issue of restricted stock units. The conversion of restricted stock units to shares cannot exceed

% under the terms of the

award.

Upon joining the Company, each of Messrs. Meyer and Lincoln C. Mali, were entitled to receive an award of shares of restricted

stock which were subject to them purchasing an agreed value of

shares (“matching awards”) in the market during a prescribed period

of time. However, these

executives were unable to

purchase shares in

the market during

that period due

to a Company-imposed

insider-

trading

restriction

placed

them.

November

15,

2021,

the

Company

amended

the

terms

these

awards

order

put

the

executives into an economically equivalent position, as follows:

(i) assume

that the

executives would

have purchased

their agreed

allocation within

their first

days post

commencement of

employment had they not been embargoed;

(ii) require the

executives to fulfill

their agreed allocations

within a short

period following release

of the Company’s

Quarterly

Report on Form 10-Q for the three months ended September 30, 2021;

(iii) to the

extent that the

price per share

actually paid is

greater than the

-day volume-weighted

average price (“VWAP”)

their respective first

months of employment, award

the executives a

top-up (“top up awards”)

which amounts to

the after-tax difference

between (a) number of shares purchased at

the

-day VWAP in their respective first months of employment and (b) number of

purchased at the actual share price paid. The top-up will be settled as follows: (a)

% in shares of the Company’s common stock and

(b)

%, at the election of

the executive, as either shares

of the Company’s common stock or cash. The top

up awards were not subject

to any vesting conditions and vested immediately; and

(iv)

adjust the initial matching awards to the aggregate number of shares acquired in terms of (ii) and (iii). The matching awards

vest ratably over a period of three years commencing on the first anniversary

of the grant of the matching awards.

The

executives

acquired

during

November

and

December

2021,

and

the

Company

granted

the

executives

326,158

matching

awards and

71,647

top up

awards. In

May 2022,

the Company

amended the

terms of

these awards

to change

the vesting

dates from when the

shares were acquired in

November and December 2021

to the anniversary of

the executive’s

date of joining the

Company. The shares

continue to vest ratably over three years on the applicable vesting date.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-61

17.

STOCK-BASED COMPENSATION

(continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Awards granted

(continued)

Effective January 1,

2022, the Company agreed

to grant an advisor

shares in lieu of

cash for services provided

to the Company

during a contract term that will

expire on December 31, 2022.

The contract could have been terminated

early if certain agreed events

occur,

and the contract was mutually terminated in

November 2022 as no further services

were required. The advisor agreed to

receive

6,481

shares of

the Company’s

common stock

per month

as payment

for services

rendered and

is not

entitled to

receive additional

shares if the contract is

terminated early due to the

occurrence of the agreed events.

The

6,481

shares granted per month

was calculated

using an

agreed monthly

fee of

35,000

divided by

the Company’s

closing market

price on

January 3,

2022, on

the Nasdaq

Global

Select

Market.

The

Company

and

the

advisor

have

agreed

that

the

Company

will

issue

the

advisor,

in arrears,

quarterly basis and that the shares

may not be transferred until the

earlier of December 31, 2022, or

the occurrence of the agreed event.

During each

of the years

ended June 30,

2023

and 2022, respectively,

the Company recorded

a stock-based compensation

charge of

0.2

million and included the issuance of

32,405

and

38,886

shares of common stock in its issued and outstanding share count.

The

May

2021

grants

comprise

158,734

restricted

stock

awarded

executive

officers

that

are

subject

market

condition (related

to share

price performance)

and time-based

vesting, and

95,826

shares of

restricted stock

awarded to

employees,

including

77,040

shares of restricted stock

awarded to Mr. Mali, our Chief

Executive Officer: Southern Africa, that

are subject to time-

based vesting.

The February

2020 grants

comprise

113,600

shares of

restricted stock

awarded to

executive officers

that are

subject to

time-

based vesting

and

454,400

shares of

restricted

stock awarded

to executive

officers

that are

subject to

performance

and time-based

vesting.

Awards vested

During the years ended June

30, 2023, 2022 and 2021,

respectively,

742,464

133,508

and

244,500

shares of restricted stock

with

time-based vesting conditions vested.

The fair value of restricted stock

which vested during the years ended June

30, 2023, 2022 and

2021, was $

3.2

million, $

0.4

million and $

1.0

million, respectively.

In July

2022,

78,801

shares of restricted

stock granted

to Mr.

Meyer vested

and he elected

for

35,460

shares to

be withheld

satisfy the withholding tax liability on the vesting of

these shares. In May 2023,

55,599

shares of restricted stock granted to Mr.

Mali

vested and he elected for

25,020

shares to be withheld to

satisfy the withholding tax liability

on the vesting of these

shares. In addition,

in November and December 2022 and February, April, May and June 2023, an aggregate of

434,279

shares of restricted stock granted

to employees vested and

they elected for

190,394

shares to be withheld to satisfy

the withholding tax liability on

the vesting of these

shares. These

250,974

(

35,460

plus

20,020

plus

190,394

) shares have been included in our treasury shares.

The

133,508

shares of restricted

stock that vested

during the year

ended June 30,

2022, includes the

71,647

top up awards

referred

to above

and

29,919

shares of restricted

stock that

vested following

the change

in vesting date

to the

anniversary of

the executive’s

date of joining the Company.

In connection with the

Company’s former

chief executive officer’s

separation, the Company agreed

to accelerate the vesting of

66,800

shares of restricted stock which were granted in February 2020, and which were subject to time-based

vesting. These shares of

restricted stock vested on September 30, 2020.

Awards forfeited

During the year ended June 30, 2023,

80,000

shares of restricted stock were forfeited by an executive officer as the performance

condition (related to net asset

value targets) was not achieved.

During the year ended

June 30, 2023, employees

forfeited

34,365

of restricted stock following their termination of employment with the Company.

During

the

year

ended

June

30,

2022,

30,000

restricted

stock

were

forfeited

executive

officer

the market

condition (related to share price performance) was not achieved and the

75,542

shares of restricted stock were forfeited by employees

following termination of their employment.

The

644,200

shares of restricted stock that

were forfeited during the year

ended June 30,

2021, includes

475,200

shares of restricted stock forfeited by the Company’s

former chief executive officer upon his separation

from

the Company.

The

30,000

shares were forfeited

by an executive

officer as

the market condition

(related to share

price performance)

was not achieved.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-62

17.

STOCK-BASED COMPENSATION

(continued)

Stock-based compensation charge and unrecognized compensation

cost

The Company has

recorded a net stock

compensation charge

of $

7.3

million, $

3.0

million and $

0.3

million for the

years ended

June 30, 2023, 2022 and 2021, respectively,

which comprised:

Total

charge

Allocated to IT

processing,

servicing and

support

Allocated to

selling, general

and

administration

Year

ended June 30, 2023

Stock-based compensation charge

7,673

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(364)

Total - year ended June

30, 2023

7,309

Year

ended June 30, 2022

Stock-based compensation charge

3,082

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(120)

Total - year ended June

30, 2022

2,962

Year

ended June 30, 2021

Stock-based compensation charge

1,430

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(1,086)

Total - year ended June

30, 2021

344

The

stock-based

compensation

charges

and

reversal

have

been

allocated

selling,

general

and

administration

based

the

allocation of the cash compensation paid to the relevant employees.

As of June

30, 2023, the

total unrecognized

compensation cost related

to stock options

was approximately

0.1

million, which

the

Company

expects

recognize

over

approximately

two years

As of

June

30,

2023,

the

total

unrecognized

compensation

cost

related to restricted stock awards was approximately $

6.9

million, which the Company expects to recognize over approximately

three

years

Tax consequences

The Company

recorded a

deferred tax

asset of

approximately $

0.6

million and

0.3

million, respectively,

for the

years ended

June 30, 2023 and June 30, 2022. As of June 30, 2023 and 2022,

the Company recorded a valuation allowance of approximately $

0.6

million and $

0.3

million respectively,

related to the

deferred tax asset

because it does

not believe that

the stock-based compensation

deduction would be utilized as it does not anticipate generating

sufficient taxable income in the United States. The Company

deducts

the difference

between

the market

value

on date

of exercise

by the

option recipient

and the

exercise

price

from income

subject to

taxation in the United States.

18.

INCOME TAX

Income tax provision

The table below presents

the components of (loss)

income before income taxes

for the years

ended June 30, 2023,

2022 and 2021:

2023

2022

2021

South Africa

(21,308)

(31,266)

(30,825)

United States

(10,755)

(8,509)

(6,686)

Liechtenstein

(509)

(810)

Other

(203)

384

32,702

Loss before income taxes

(32,266)

(39,900)

(5,619)

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-63

18.

INCOME TAX (continued)

Income tax provision (continued)

Presented below is the provision

for income taxes by location of

the taxing jurisdiction

for the years ended June 30, 2023,

2022

and 2021:

2023

2022

2021

Current income tax expense (benefit)

6,317

2,309

859

South Africa

6,317

2,309

866

United States

(75)

Other

Deferred taxation (benefit) charge

(7,442)

(2,044)

6,691

South Africa

(7,490)

(2,154)

(2,039)

United States

9,136

Other

110

(406)

Foreign tax credits generated – United States

115

Income tax (benefit) provision

(2,309)

327

7,560

The South African

corporate income tax

rate reduced from

% to

%, effective from

July 1, 2022,

for all of

the Company’s

South African

subsidiaries with

income tax

years commencing

on July

1, 2022.

The change

in the

income tax

rate was

enacted on

January 5, 2023,

and accordingly all deferred

taxes assets and

liabilities have been

remeasured to the

new tax rate.

This has resulted

the

inclusion

income

tax

benefit

1.3

million

the

Company’s

income

tax

(benefit)

expense

line

its

consolidated

statements of operations for each of the year ended June 30, 2023,

as a result of the reversal of a portion of the deferred tax assets and

liabilities recognized as

of December 31, 2022.

There were

changes to the enacted

tax rates in the years

ended June 30, 2022

and

2021.

The

Company’s

current income

tax

expense for

the year

ended June

30,

2023,

was higher

than

the previous

year

due

the

acquisition of Connect, which is profitable and generates taxable income.

The Company’s

deferred taxation

(benefit) charge

for the year

ended June

30, 2023,

was higher

than the previous

year due

the inclusion of

the deferred tax

benefit recorded related

to the amortization

of intangible assets recognized

due to the

acquisition of

Connect. The

amount for

the year

ended June

30, 2023,

also includes

a deferred

tax benefit

related to

an expense

paid by

Connect

before the

Company acquired

the business

and which

subsequently

determined to

be deductible

for tax

purposes of

approximately

2.0

million. During the years ended June

30, 2023, 2022 and 2021, the Company

incurred net operating losses through certain

of its

South African wholly-owned subsidiaries and recorded a deferred taxation benefit related to these losses. However,

the Company has

created a valuation allowance for certain of these net operating

losses which reduced the deferred taxation benefit recorded.

A reconciliation

of income

taxes, calculated

at the

fully-distributed South

African income

tax rate

to the

Company’s

effective

tax rate, for the years ended June 30, 2023, 2022 and 2021, is as follows:

2023

2022

2021

Income taxes at fully-distributed South African tax rates

27.00

28.00

Movement in valuation allowance

(17.66)

(22.05)

(250.16)

Prior year adjustments

7.60

0.01

1.77

Foreign tax rate differential

(0.02)

0.02

51.21

Change in tax laws – South Africa

4.03

Non-deductible items

(13.28)

(6.59)

(58.40)

Capital gains differential

(0.51)

0.11

93.03

Release from FCTR

(0.33)

Income tax provision

7.16

(0.83)

(134.55)

Percentages included in

the 2022

and 2021 columns

in the

reconciliation of income

taxes presented above

are specifically impacted

by the loss incurred

by the Company

during the year

ended June 30, 202

and 2021. For

instance, for the year

ended June 30, 2022,

the income tax provision of $

0.3

million represents (

0.83

%) multiplied by the net loss before tax of $(

39,900

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-64

18.

INCOME TAX (continued)

Income tax provision (continued)

Movement in the

valuation allowance for

the year

ended June

30, 2023, includes

allowances created related

to certain net

operating

losses

incurred

during

the

year.

Non-deductible

items

for

the

year

ended

June

30,

2023,

includes

the

goodwill

impairment

loss

recognized and interest expense incurred which the Company cannot deduct

for income tax purposes.

Movement in the valuation allowance

for the year ended

June 30, 2022, includes

allowances created related to

net operating losses

incurred during the

year. Non-deductible items for

the year ended

June 30,

2022, includes the

transaction costs related

to the acquisition

of Connect.

Movement in the valuation allowance

for the year ended

June 30, 2021, includes

allowances created related to

net operating losses

incurred during

the year.

Non-deductible items

for the

year ended

June 30,

2021, includes

the impact

of the

allowance for

doubtful

loans to equity

-accounted investments created

The foreign tax

rate differential

relates primarily to

the difference between

the fully-

distributed

South

African

income

tax

rate

and

the

rate

used

(

measure

the

deferred

tax

liability

created

the

fair

adjustment to

the Company’s

investment in

MobiKwik (refer

to Note

9). The

capital gains

differential

for the

year ended

June 30,

2021, represents the impact of the reversal of the

deferred tax liability related to one of the Company’s

equity-accounted investments

following its impairment (refer to Note 9).

Deferred tax assets and liabilities

Deferred

income taxes

reflect the

temporary

differences

between

the

financial

reporting and

tax bases

of assets

and

liabilities

using enacted tax rates

in effect for the

year in which

the differences are expected

to reverse. The

primary components of the

temporary

differences that gave rise to the Company’s

deferred tax assets and liabilities as of June 30, and their classification, were as follows:

June 30,

2023

2022

Total

deferred tax assets

Capital losses related to investments

36,267

42,587

Net operating loss carryforwards

39,486

40,384

Foreign tax credits

32,599

32,671

Provisions and accruals

3,165

3,163

FTS patent

Other

4,217

2,063

Total

deferred tax assets before valuation allowance

115,774

120,963

Valuation

allowances

(109,120)

(117,101)

Total

deferred tax assets, net of valuation allowance

6,654

3,862

Total

deferred tax liabilities:

Intangible assets

32,731

43,876

Investments

10,354

Other

Total

deferred tax liabilities

43,179

54,297

Reported as

Long-term deferred tax assets

10,315

3,776

Long-term deferred tax liabilities

46,840

54,211

Net deferred income tax liabilities

36,525

50,435

Increase in total net deferred income tax liabilities

Capital losses related to investments

Capital losses as of June 30,

2023 and 2022, comprises the

capital loss arising from the difference

between the amount paid for

Cell C in August 2017 and the its fair value as of the respective year end, of $

0.0

million, and difference between the amount paid for

CPS in 2004

and the its

fair value

as of the

respective year

end, of

0.0

million. The

change in capital

losses related

to investments

relates primarily to the impact of currency changes between the South African

Rand against the United States dollar.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-65

18.

INCOME TAX (continued)

Deferred tax assets and liabilities (continued)

Increase in total net deferred income tax liabilities (continued)

Net operating loss carryforwards

Net operating loss carryforwards have increased due

to losses incurred by certain of the Company’s

subsidiaries and the impact

of currency

changes between

the South

African

Rand against

the United

States dollar,

which

was partially

offset

by net

operating

losses carryforwards forfeited following the substantial liquidation

of certain of the Company’s subsidiaries.

Intangibles assets

Intangible assets include intangible assets recognized related to the acquisition of Connect during the year ended June 30,

2022 (refer to Note 3).

Investments

Investment

includes

our

investment

MobiKwik

(refer

Note

9),

and

there

were

adjustments

the

carrying

value

investment in MobiKwik during the year ended June 30, 2023.

Decrease in valuation allowance

At June

30, 20223,

the Company

had deferred

tax assets

of $

6.7

million (2022:

3.9

million), net

of the

valuation allowance.

Management believes,

based on

the weight

of available

positive and

negative evidence

it is

more likely

than not

that the

Company

will realize the benefits of these deductible differences, net of the valuation allowance.

However, the amount of the deferred tax asset

considered realizable could be adjusted in the future if estimates of taxable

income are revised.

At June

30, 2023,

the Company

had a

valuation allowance

of $

109.1

million (2022:

117.1

million) to

reduce its

deferred tax

assets to estimated

realizable value. The movement

in the valuation

allowance for the years

ended June 30, 2023

and 2022, is

presented

below:

Total

Capital losses

related to

investments

Net operating

loss carry-

forwards

Foreign tax

credits

Other

July 1, 2021

118,777

47,518

36,270

32,737

2,252

Charged to statement of operations

8,119

195

7,647

277

Reversed to statement of operations

(301)

(167)

(66)

(68)

Utilized

(1)

Foreign currency adjustment

(9,493)

(5,126)

(4,097)

(270)

June 30, 2022

117,101

42,587

39,652

32,671

2,191

Charged to statement of operations

5,916

5,492

419

Reversed to statement of operations

(1,701)

(579)

(510)

(612)

Change in tax rate - South Africa

(2,351)

(1,190)

(1,161)

Foreign currency adjustment

(9,845)

(5,135)

(5,023)

438

(125)

June 30, 2023

109,120

36,267

38,381

32,599

1,873

Net operating loss carryforwards and foreign tax credits

South Africa

Net operating loss generated are carried forward indefinitely,

however, South Africa has recently enacted

legislation similar to

the United States which limits the loss carryforward that may be used against future

taxable income to 80% of taxable income before

the net operating loss deduction.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-66

18.

INCOME TAX (continued)

Deferred tax assets and liabilities (continued)

Decrease in valuation allowance (continued)

United States

Net operating loss

generated are carried

forward indefinitely,

but the loss

carryforward that may

be used against

future taxable

income is limited to 80% of taxable income before the net operating loss deduction.

As of June 30, 2023, Lesaka had net operating loss carryforwards that will expire,

if unused, as follows:

Year

of expiration

U.S. net

operating loss

carry

forwards

2024

775

Lesaka had

net unused foreign

tax credits

that are more

likely than

not to

be realized as

of June

30, 2023 and

2022, respectively.

Uncertain tax positions

As of June 30, 2023 and 2022, the Company had

unrecognized tax benefits which would impact the Company’s effective

tax

rate. The

Company files

income tax

returns mainly

in South

Africa,

Botswana, Namibia

and in

the U.S.

federal jurisdiction.

As of

June

30,

2023,

the

Company’s

South

African

subsidiaries

are

longer

subject

income

tax

examination

the

South

African

Revenue Service for periods before June 30,

2019. The Company is subject to income tax in other

jurisdictions outside South Africa,

none of which are individually material

to its financial position, statement of

cash flows, or results of operations.

The Company does

not expect the

change related to

unrecognized tax benefits

will have a

significant impact on

its results of

operations or financial

position

in the next 12 months.

19.

(LOSS) EARNINGS PER SHARE

The Company has

issued redeemable common

stock (refer to Note

14) 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

reflected

basic

earnings

per

using

the

two-class

method.

There

were

redemptions

common

stock,

adjustments to the

carrying value of the

redeemable common stock during

the years ended

June 30, 2023,

2022 and 2021.

Accordingly,

the two-class method presented below does not include the impact of

any redemption.

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 years ended June 30,

2023, 2022 and 2021,

reflects only

undistributed

earnings. The

computation below

of basic

(loss) earnings

per share

excludes the

net loss

attributable

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 have

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 calculation

of diluted

(loss) earnings

per share

includes the

dilutive effect

of a portion of

the restricted stock

granted to employees

during the current

and previous fiscal

periods as these

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 are

discussed in

Note 17. The Company has excluded employee stock options to purchase 19.

112,783

and

191,448

shares of

common

stock from

the

calculation

diluted

loss

per

during

the

year

ended

June

30,

2023

and

2022,

respectively,

because

the

effect

would

antidilutive.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-67

(LOSS) EARNINGS PER SHARE (continued)

The following

table presents net

loss attributable

to Lesaka

and the share

data used in

the basic and

diluted (loss)

earnings per

share computations using the two-class method for the years ended

June 30, 2023, 2022 and 2021:

2023

2022

2021

(in thousands except percent and per share data)

Numerator:

Net loss attributable to Lesaka

(35,074)

(43,876)

(38,057)

Undistributed loss

(35,074)

(43,876)

(38,057)

Percent allocated to common shareholders

(Calculation 1)

95%

98%

99%

Numerator for loss per share: basic and diluted

(33,407)

(43,006)

(37,825)

Denominator

Denominator for basic loss per share:

weighted-average common shares outstanding

60,134

57,207

56,332

Effect of dilutive securities:

Stock options

259

Denominator for diluted loss per share: adjusted weighted average

common shares outstanding and assumed conversion

60,134

57,207

56,591

Loss per share:

Basic

(0.56)

(0.75)

(0.67)

Diluted

(0.56)

(0.75)

(0.67)

(Calculation 1)

Basic weighted-average common shares outstanding (A)

60,134

57,207

56,332

Basic weighted-average common shares outstanding and unvested

restricted shares expected to vest (B)

63,134

58,364

56,678

Percent allocated to common shareholders

(A) / (B)

95%

98%

99%

Options

purchase

276,616

186,999

and

282,832

shares of

the

Company’s

common

stock

prices

ranging

from

4.87

11.23

(2023), $

6.20

to $

11.23

(2022) and

6.20

to $

11.23

(2021) per share

were outstanding

during the year

ended June 30,

2023,

2022 and 2021,

respectively, but were not included

in the computation

of diluted (loss)

earnings per share

because the options’

exercise

prices were greater

than the average

market price of

the Company’s common shares.

The options, which

expire at various

dates through

February 3, 2032, were still outstanding as of June 30, 2023.

20.

SUPPLEMENTAL CASH

FLOW INFORMATION

Change in presentation of movement in finance loans receivable

on consolidated statement of cashflows

The movement in

accounts receivable and

finance loans receivable

were previously combined,

however, it was

determined during

the year ended June

30, 2023, to present the

movement in finance loans

receivable as a separate

caption. Previous periods have

been

restated.

The following table presents supplemental cash flow disclosures for

the years ended June 30, 2023, 2022 and 2021:

2023

2022

2021

Cash received from interest

1,841

2,065

2,222

Cash paid for interest

13,278

5,817

3,056

Cash paid for income taxes

7,200

1,138

16,608

As discussed in Note

17, during the year

ended June 30, 2023,

an employee exercised stock

options through the delivery

23,934

shares of

the Company’s

common stock

at the

closing price

on March

7, 2023

of $

4.76

under the

terms of

their option

agreements.

These shares are included in

the Company’s total share count and the

amount is reflected as

treasury shares on the consolidated balance

sheet as of June 30, 2023 and consolidated statement of changes in equity for

the year ended June 30, 2023.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-68

20.

SUPPLEMENTAL CASH

FLOW INFORMATION

(continued)

Disaggregation of cash, cash equivalents and restricted cash

Cash, cash equivalents

and restricted cash

included on

the Company’s

consolidated statement

of cash flows

includes restricted

cash related to

cash withdrawn from

the Company’s

debt facilities to fund

ATMs.

This cash may

only be used

to fund ATMs

and is

considered restricted

as to

use and

therefore is

classified as

restricted cash.

Cash, cash

equivalents and

restricted cash

also includes

cash in certain bank

accounts that have been

ceded to Nedbank. As

this cash has been pledged

and ceded it may

not be drawn

and is

considered restricted as

to use

and therefore is

classified as

restricted cash as

well. Refer to

Note 12 for

additional information regarding

the Company’s

facilities. The following

table presents the disaggregation

of cash, cash equivalents

and restricted cash as

of June 30,

2023, 2022 and 2021:

2023

2022

2021

Cash and cash equivalents

35,499

43,940

198,572

Restricted cash

23,133

60,860

25,193

Cash, cash equivalents and restricted cash

58,632

104,800

223,765

Leases

The following

table presents

supplemental

cash flow

disclosure related

to leases

for the

years ended

June 30,

2023, 2022

and

2021:

2023

2022

2021

Cash paid related to lease liabilities

Operating cash flows from operating leases

2,866

3,971

4,050

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

Operating leases

983

6,054

3,000

21.

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.

The

Company

currently

has

two

reportable

segments:

Merchant

and

Consumer.

The

Company

operates

mainly

within

South

Africa.

The

Company’s

reportable

segments

offer

different

products

and

services

and

require

different

resources

and

marketing

strategies but share the Company’s

assets.

The Merchant segment

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

for its customers

and revenue generated

from the distribution

of prepaid airtime. The Company provides cash management and payment services to

merchant customers through a digital vault (safe

asset) 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

Company

provides

its

customers

with

transaction

processing

services

that

involve

the

collection,

transmittal

and

retrieval

of all

transaction

data. This

segment

also

includes

sales of

hardware

and

licenses

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.

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 point

of sale device (“POS”). The Company earns processing fees from transactions processed

for these customers. The Company also earns

fees

transactions

performed

other

banks’

customers

utilizing

its

ATM

POS.

The

Company

provides

short-term

loans

customers in South Africa

for which it

earns initiation and

monthly service fees.

The Company writes

life insurance contracts,

primarily

funeral-benefit policies, and policy holders pay the Company a monthly

insurance premium.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-69

21.

OPERATING SEGMENTS

(continued)

Reallocation of certain activities in Other to Merchant

During

the second

quarter

of fiscal

2023,

certain

processing

activities

performed

outside

South

Africa

which

were within

the

Company’s

Other

operating

segment

commenced

reporting

management

within

its

Merchant

operating

segment

part

the

integration

of Connect.

The Company

has allocated

these operations

from the

Other reporting

segment to

Merchant in its

reportable

segments during the second quarter of

fiscal 2023. The Company no

longer reports an Other

reporting segment and previously reported

information has been restated.

The reconciliation

of the

reportable segment’s

revenue to

revenue from

external customers

for the

years ended

June 30,

2023,

2022 and 2021, respectively,

is as follows:

Revenue

Reportable

Segment

Inter-segment

Unallocated

From external

customers

Merchant

463,701

Consumer

62,801

Unallocated

1,469

Total for the year

ended June 30, 2023

526,502

1,469

527,971

Merchant

156,689

156,677

Consumer

65,932

Total for the year

ended June 30, 2022

222,621

222,609

Merchant

62,944

Consumer

66,149

Unallocated

1,693

Total for the year

ended June 30, 2021

129,093

1,693

130,786

The

Company

evaluates

segment

performance

based

segment

earnings

before

interest,

tax,

depreciation

and

amortization

(“EBITDA”), adjusted for items mentioned

in the next sentence

(“Segment Adjusted EBITDA”). The Company

does not allocate once-

off items, stock-based compensation

charges, certain lease

charges (“Lease adjustments”), depreciation

and amortization, impairment

of goodwill or other intangible

assets, other items (including gains

or losses on disposal

of investments, fair value adjustments

to equity

securities,

fair

value

adjustments

currency

options),

interest

income,

interest

expense,

income

tax

expense

loss

from

equity-

accounted

investments

its

reportable

segments.

Group

costs

generally

include:

employee

costs

relation

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

represents non-recurring

expense items,

including costs

related to

acquisitions and

transactions

consummated

ultimately

not

pursued.

Unrealized

loss

for

currency

adjustments

represents

foreign

currency

mark-to-market

adjustments

certain

intercompany

accounts.

The

Lease

adjustments

reflect

lease

charges

and

the

Stock-based

compensation

adjustments reflect stock-based compensation expense

and are both excluded from the calculation of Segment

Adjusted EBITDA and

are therefore reported as reconciling items to reconcile the reportable segments’ Segment Adjusted EBITDA to the Company’s loss The reconciliation of the reportable segments’ measures of profit or loss to loss before income taxes for the years ended June 30,

before income tax expense.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-70

21.

OPERATING SEGMENTS

(continued)

2023, 2022 and 2021, respectively,

is as follows:

2023

2022

2021

Reportable segments measure of profit or loss

36,845

(9,028)

(20,551)

Operating loss: Unallocated

(10,899)

Operating loss: Group costs

(9,109)

(8,587)

(6,965)

Once-off costs

(1,922)

(8,088)

(6,618)

Unrealized Loss FV for currency adjustments

(222)

Lease adjustments

(2,906)

(3,955)

(4,148)

Stock-based compensation charge adjustments

(7,309)

(2,962)

(344)

Depreciation and amortization

(23,685)

(7,575)

(4,347)

Impairment loss

(7,039)

Gain related to fair value adjustment to currency options

3,691

Gain on disposal of equity securities

720

Loss on disposal of equity-accounted investment (Note 9)

(205)

(376)

(13)

Change in fair value of equity securities (Note 3)

49,304

Loss on disposal of equity-accounted investment - Bank Frick (Note

(472)

Interest income

1,853

2,089

2,416

Interest expense

(18,567)

(5,829)

(2,982)

Loss before income taxes

(32,266)

(39,900)

(5,619)

The following tables summarize segment information for the years ended

June 30, 2023, 2022 and 2021:

2023

2022

2021

Reportable segment revenue

Merchant

463,701

156,689

62,944

Consumer

62,801

65,932

66,149

Total reportable segment

revenue

526,502

222,621

129,093

Segment Adjusted EBITDA

Merchant

33,531

12,646

5,411

Consumer

(1)

3,314

(21,674)

(25,962)

Total Segment Adjusted

EBITDA

36,845

(9,028)

(20,551)

Depreciation and amortization

Merchant

7,422

2,186

866

Consumer

1,114

1,660

3,071

Subtotal: Operating segments

8,536

3,846

3,937

Group costs

15,149

3,729

359

Unallocated

Total

23,685

7,575

4,347

Expenditures for long-lived assets

Merchant

12,986

2,846

852

Consumer

3,170

1,712

3,433

Subtotal: Operating segments

16,156

4,558

4,285

Group costs

Total

16,156

4,558

4,285

(1) Consumer Segment Adjusted EBITDA for the year ended June 30, 2022, includes reorganization costs of $

5.9

million (refer also Note 1).

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-71

21.

OPERATING SEGMENTS

(continued)

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.

Long-lived assets based on their geographic location as of June 30, 2023,

2022 and 2021, are presented in the table below:

Long-lived assets

2023

2022

2021

South Africa

300,104

359,725

50,754

India - investment in MobiKwik (Note 9)

76,297

Rest of world

2,197

2,811

6,962

Total

378,598

438,833

134,013

22.

COMMITMENTS AND CONTINGENCIES

Capital commitments

June

30,

2023

and

2022,

the

Company

had

outstanding

capital

commitments

approximately

0.1

million

and

0.3

million, respectively.

Purchase obligations

As of June 30, 2023 and 2022, the Company had purchase obligations totaling $

3.0

million and $

11.0

million, respectively. The

purchase

obligations

June

30,

2023,

primarily

relate

POS

devices,

components

for

safe

assets

and

inventory

that

will

delivered to the Company and sold to customers in fiscal 2024.

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.

Nedbank has

issued guarantees

to these

third parties

amounting to

ZAR

2.1

million ($

0.1

million, translated

at exchange

rates

applicable

June

30,

2023)

thereby

utilizing

part

the

Company’s

short-term

facilities.

The

Company

pays

commission

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.

RMB has

issued

guarantees

these

third

parties

amounting

ZAR

33.1

million

1.8

million,

translated

exchange

rates

applicable as of June 30, 2023) thereby utilizing part of the Company’s

short-term facilities.

The Company has not recognized any obligation related to

these guarantees in its consolidated balance sheet as of

June 30, 2023.

The maximum potential

amount that the Company

could pay under

these guarantees is ZAR

35.2

million ($

1.9

million, translated at

exchange rates applicable

as of June 30, 2023).

As discussed in Note

12, the Company

has ceded and pledged

certain bank accounts

to Nedbank

as security

for these

guarantees

with an

aggregate value

of ZAR

3.0

million ($

0.2

million translated

at exchange

rates

applicable as

of June

30, 2023).

The guarantees

have reduced

the amount

available under

its indirect

and derivative

facilities in

the

Company’s short-term credit facility described

in Note 12.

Contingencies

The

Company

subject

variety

insignificant

claims

and

suits

that

arise

from

time

the

ordinary

course

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.

LESAKA TECHNOLOGIES, INC.

Notes to the consolidated financial statements

for the years ended June 30, 2023 and 2022 and 2021

(All amounts stated in thousands of United States Dollars, unless otherwise stated)

F-72

23.

RELATED PARTY

TRANSACTIONS

VCP Agreement

On March

22, 2022, Lesaka

and Lesaka SA

entered into

a Securities Purchase

Agreement (the

“VCP Agreement”)

with Value

Capital Partners Proprietary Limited (“VCP”) , a

significant shareholder,

whereby VCP will procure that one or more funds under

its

management (the “Purchasing Funds”)

will subscribe for, and

Lesaka will have

the obligation to

issue and sell

to the Purchasing

Funds,

ZAR

350.0

million of common stock of Lesaka

if (i) an event of default occurs under

Facility G or Facility H, (ii) Lesaka SA

fails to

pay all outstanding

amounts in respect

of Facility H

on the maturity

date of such

facility, or

(iii) the market

capitalization

of Lesaka

on the

Nasdaq Capital

Market (based

on the

closing price

on such

exchange) falls

and remains

below the

U.S. dollar

equivalent of

ZAR

2.6

billion on more than one day. The VCP Agreement contains

customary representations and warranties from Lesaka and VCP

and covenants from Lesaka and Lesaka SA. In connection

with the VCP Agreement, Lesaka SA agreed to

pay VCP a commitment fee

in an amount equal to ZAR

5.25

million.

On March 16, 2023, VCP,

Lesaka and Lesaka SA, entered into an agreement (the “VCP Amendment Agreement”) to amend the

maturity date under

the agreement with

VCP to December

31, 2025, in

order to align

such date with the

maturity date of

Facility H.

In connection with the VCP Amendment Agreement, Lesaka

SA agreed to pay VCP

an additional commitment fee in an

amount equal

to ZAR

8.9

million, which is

calculated as

% per annum

of the support

provided over the period

of the extension,

as a result of

the

amendment to the maturity date.

Additionally,

Lesaka, Lesaka SA

and VCP entered

into a Step-In

Rights Letter on

March 22, 2022

with RMB, which

provides

RMB with step

in rights to

perform the obligations

or enforce the

rights of Lesaka

and Lesaka SA

under the VCP

Agreement to the

extent that Lesaka and Lesaka SA fail to do so and do not remedy such failure within

two business days of notice of such failure.

Disgorgement proceeds from VCP in fiscal 2021

In late September 2020, VCP notified

the Company that it would make payment

to the Company related to the disgorgement

short-swing profits from the purchase of common stock by VCP pursuant to Section 16(b) of the Securities Exchange Act of 1934, as

amended

and

the

Company’s

insider

trading

policy.

The

Company

recognized

these

proceeds

capital

contribution

from

shareholders and

recorded an

increase of

0.1

million, net

of taxes

of $

0.02

million, to

additional paid-in

capital in

its consolidated

statement of changes in

equity for the year

ended June 30, 2021. The

gross proceeds of $

0.12

million are recorded within

cash flows

from financing activities in the Company’s

consolidated statement of cash flow for the year ended June 30, 2021.

*****************************

EX-4.2 2 ex42.htm EX-4.2 ex42

Exhibit 4.2

DESCRIPTION OF THE REGISTRANT’S SECURITIES

REGISTERED PURSUANT TO SECTION 12 OF THE

SECURITIES EXCHANGE ACT OF 1934

September

12,

2023,

Lesaka

Technologies,

Inc.

(“Lesaka”

the

“Company”)

had

one

class

securities

(“common

stock”)

registered under Section 12 of the Securities Exchange Act of 1934, as amended.

DESCRIPTION OF COMMON STOCK

The following

description of

the Company’s

common stock

is a

summary and

does not

purport to

be complete.

It is

subject to

and

qualified

its

entirety

reference

the

Company’s

Amended

and

Restated

Articles

Incorporation

(“Articles

Incorporation”)

and its

Amended

and Restated By-laws

(“Bylaws”)

, each of

which are

incorporated by

reference as

an exhibit

the Company’s

most recent

Annual Report

on Form 10-K. Lesaka

encourages you

to read

its Articles

of Incorporation,

Bylaws and

the applicable provisions of the Florida Business Corporation Act

(“FBCA”)

for additional information.

General

Lesaka’s Articles

of Incorporation currently

authorizes the issuance of two

hundred million shares of

its common stock, with

$0.001

par value.

Lesaka’s

common stock

is listed

and principally

traded on

the Nasdaq

Stock Exchange,

Global Select

Market, under

the

symbol “LSAK.” Lesaka’s common

stock is also listed on the Johannesburg Stock Exchange, under

the symbol “LSK”.

All outstanding shares of common stock are fully paid and nonassessable

Dividend rights

Holders

Lesaka’s

common

stock

are

entitled

receive

dividends

and

other

distributions

when

declared

Lesaka’s

board of

directors out

of legally

available funds.

Payment of

dividends and

distributions is

subject to

certain restrictions

under the

FBCA, including the requirement

that after making any

distribution Lesaka must be

able to meet its

debts as they become

due in the

usual course of its business.

Voting

rights

Each holder of common

stock is entitled to one vote

per share for the election

of directors and for all other

matters to be voted on

shareholders. Holders of common stock may not cumulate their votes in the election

of directors.

Liquidation and other rights

Upon voluntary or

involuntary liquidation, dissolution

or winding up

of Lesaka, holders of

common stock share

ratably in the assets

remaining

after payments

to creditors

and

provision

for the

preference

of any

preferred stock

according

to its

terms.

There

are no

pre-emptive

other

subscription

rights,

conversion

rights

redemption

scheduled

installment

payment

provisions

relating

shares of common stock. The shares of Lesaka common stock are

not subject to redemption.

Transfer Agent

The Company’s

transfer agent in the

United States is Computershare

Shareowner Services LLC,

480 Washington

Blvd, Jersey City,

New Jersey, 07310, and

the Company’s transfer agent in

South Africa is JSE Investor Services South Africa (Pty) Ltd.

EX-14 3 ex14.htm EX-14 ex14

Exhibit 14

LESAKA TECHNOLOGIES,

INC.

CODE OF ETHICS.

CONTENTS

.............................................................................................................................................

EXECUTIVE SUMMARY ..............................................................................................................

1.1.

INTRODUCTION ...........................................................................................................

COMPLIANCE, WAIVERS OR AMENDMENTS

...........................................................................

2.1.

COMPLIANCE WITH THIS CODE ................................................................................

COMPLIANCE WITH LAWS, RULES

AND REGULATIONS .......................................................

CONFLICT OF INTEREST ...........................................................................................................

4.1.

OUTSIDE ACTIVITIES, EMPLOYMENT AND DIRECTORSHIP ..................................

EMPLOYMENT EQUITY,

ENVIRONMENTAL

RESPONSIBILITY AND POLITICAL SUPPORT10

LESAKA’S FUNDS,

PROPERTY AND RECORDS ....................................................................

EMPLOYMENT MATTERS .........................................................................................................

DEALING WITH OUTSIDE PERSONS AND ORGANISATIONS ...............................................

PRIVACY AND CONFIDENTIALITY ...........................................................................................

10.

EMPLOYEE OBLIGATIONS .......................................................................................................

11.

POLICY REVIEW

........................................................................................................................

EXECUTIVE SUMMARY

1.1.

INTRODUCTION

Lesaka Technologies,

Inc. and

its subsidiaries

(hereinafter referred

to as “Lesaka”)

are committed to

a policy

fairness and integrity in the conducting of their businesses. This commitment, endorsed by the Board of Directors

of Lesaka

(hereinafter

referred

to as

the

“Board”),

based on

the

fundamental

belief that

business

should

conducted to the highest ethical standards of honesty,

fairness and legality.

Lesaka’s Value

Statement

insurgent

entrepreneurial

spirit

our

core.

drives

our

innovative

thinking

and

relentless

for

disruptive solutions. It is a spirit that is carried with a bone-deep

integrity,

a non-negotiable commitment to doing

the right thing and always doing what we say we will do.

This is the

bedrock of

our environment where

we relish open

and safe debate,

embracing all ideas,

recognising

that our

collective wisdom

will find the answers and allow the best

ideas to succeed. Our environment is

driven

by a belief

in shared

ownership,

based on

a commitment

to performance

and accountability,

and an energised

bias to action.

These

are

our

values

that

underpin

our

mission

enable

Merchants

compete

and

grow

and

Grant

Beneficiaries

improve

their

lives,

providing

innovative

financial

technology

and

value-creating

solutions

This Code

of Ethics

(hereinafter referred

to as

this “Code”)

is Lesaka’s

promise that

our Values

Statement and

ethical standards will form the basis for all endeavours of Lesaka. Lesaka has established this Code as part of its

overall policies and

procedures. To

the extent that

other Lesaka policies

and procedures conflict

with this Code,

this Code will prevail.

This Code

will apply

equally

to all

employees

and other

representatives

of Lesaka.

The term

“Employees”

has

been used in the broadest sense and includes:

●

All staff with whom a service contract exists;

●

Management and non-management;

●

Directors including non-executive Directors;

and

●

Contractors, consultants and temporary staff.

This Code is designed

to inform Employees of policies

in various areas. Therefore, Lesaka

expects all Employees

and other representatives to share its commitment to high moral,

ethical and legal standards.

The most

current version

of this

Code will

be distributed

to all

Employees, posted

and maintained

on Lesaka’s

website, and filed as an exhibit to

Lesaka’s Annual Report on Form

10-K. Lesaka’s Annual Report

on Form 10-K

shall disclose

that this

Code is

maintained

on its

website

and shall

disclose that

substantive amendments

and

waivers will also be posted on Lesaka’s website.

Please study this Code carefully so that you understand Lesaka’s expectations and your Compliance with this Code by all Employees is mandatory.

obligations.

COMPLIANCE, WAIVERS OR AMENDMENTS

2.1.

COMPLIANCE WITH THIS CODE

If any Employee becomes aware of, or suspects, a

contravention of this Code, such

Employee must promptly and confidentially advise

their line manager,

the Head

of Human Resources or a member of the Compliance Department

(provided such person was not involved in the

alleged violation).

Lesaka’s efforts to ensure observance of, and adherence to, the goals and policies outlined in this Code mandate

that you must

promptly bring to

the attention of

your line manager,

the Head of

Human Resources

or a member

the

Compliance

Department

(provided

such

person

was

not

involved

the

alleged

violation)

any

material

transaction, relationship,

act, failure

to act,

occurrence or

practice that

you believe,

in good

faith, is

inconsistent

with, in violation of,

or reasonably could

be expected to

give rise to a

violation of, this Code.

In the event that

Employee feels unable to

report such matters via

the aforementioned channels,

then the Lesaka

Whistleblowing

Hotline is available for safe and anonymous reporting of

any potential breaches of this policy.

The matter will

be investigated

and dealt

with according

to the Lesaka’s

Whistleblowing Policy.

Failure to

report

violations of this Code will itself be considered a serious

violation of this Code.

It is Lesaka’s

policy that no

retaliation or other

adverse action will

be taken against

any Employee for

good-faith

reports

Code

violations.

Persons

who

discriminate,

retaliate

harass

may

subject

civil,

criminal

and

administrative penalties, as well as disciplinary action, up to

and including termination of employment for cause.

Managers set an example for other Employees

and are often responsible for directing the

actions of others. Every

manager and

supervisor is

expected to

take necessary

actions to

ensure compliance

with this

Code, to

provide

guidance and assist Employees in resolving questions concerning this Code and to permit Employees to express

any concerns regarding compliance with this Code.

No one has the authority to order another Employee to

act in a manner that is contrary to this Code.

2.2.

WAIVERS OF OR AMENDMENTS

TO THIS CODE

Any waivers of or amendments to this Code must be

in writing and must be approved in advance by the Board.

Waivers

and

amendments,

and

the

reason

therefore,

shall

disclosed

as required

under

applicable

law

and

regulations. If Employees are in

doubt about the application of

this Code, they should discuss the

matter with their

line manager, the Head of

Human Resources, or the Compliance Department.

COMPLIANCE WITH LAWS, RULES AND REGULATIONS

Employees must

comply with

all applicable

laws, rules

and regulations

which relate

to their activities

for and

behalf of Lesaka. Lesaka will not tolerate any violation of the law or unethical business dealing by any Employee,

including any payment for,

or other participation in, an illegal act, such as bribery.

Lesaka is committed

to full

compliance with

the laws,

rules and

regulations of

the cities,

states and

countries in

which it

operates. You

must comply

with all

applicable laws,

rules and

regulations in

performing your

duties for

Lesaka.

Numerous federal, state and local laws, rules and regulations define and establish obligations with which Lesaka,

its

Employees

and

agents

must

comply.

Under

certain

circumstances,

local

country

law

may

establish

requirements that differ from this Code.

You are expected

to comply with all local country laws in conducting Lesaka’s

business. If you violate these laws

regulations

performing

your

duties

for

Lesaka,

you

not

only

risk

individual

indictment,

prosecution

and

penalties, as well as civil actions and penalties, but also

subject Lesaka to the same risks and penalties.

If you violate

these laws in

performing duties for

Lesaka, you

will be subjected

to immediate disciplinary

action,

including possible termination of your employment or affiliation

with Lesaka.

Employees must ensure that their conduct cannot

be interpreted as being in any way in contravention

applicable laws, rules and regulations governing the operations

Lesaka

3.1.

FOREIGN CORRUPT PRACTICES ACT

Lesaka

Employees

are

expressly

prohibited

from,

directly

indirectly,

offering

payment,

promising

pay,

authorizing the

payment of

any money,

or offering

any gift

or non-monetary

offer or

benefit, promising

to give

gift or

non-monetary offer or benefit,

or authorizing the

giving of anything

of value to

any foreign and/or

local official

or any foreign political

party,

official of any foreign

political party,

or candidate for governmental

or political office

for purposes of:

●

Influencing any act

or decision of

that foreign

and/or local official,

political party or

candidate in his/

her/

its official capacity;

●

Inducing that foreign and/or local

official, candidate or political party to do

or omit to do any act

in violation

of the lawful duty of that official, candidate or

party, or

●

Securing any improper advantage; or

●

Inducing that foreign and/or local

official, candidate or political party to use

his/ her/ its influence with local

and/or foreign government or instrumentality to affect or

influence any act or decision of that government

or instrumentality,

in order to assist Lesaka or

its employee in obtaining or retaining

business for or with,

or directing business to, Lesaka.

Various countries also have laws that

prohibit commercial bribery. Accordingly, these laws are not limited

in scope

to bribery of foreign and/or

local officials

and typically prohibit bribes

or inducements to an individual

or business

to improperly influence decision-making.

As such, it is Lesaka’s policy that nothing of value

should be provided to any person for the purpose of improperly

obtaining or retaining business or otherwise gaining an improper business advantage. Violations of this policy are

taken very seriously,

as they can subject both

Lesaka and the individual to

criminal and civil penalties,

up to and

including imprisonment. Therefore,

any contravention of such laws and

regulations will result in disciplinary action

as detailed in the Code of Conduct.

3.2.

COPYRIGHTED OR LICENSED MATERIAL

It is both illegal and unethical to engage in practices that violate

Lesaka requires

that all

employees respect

the rights

conferred by

such laws

and agreements

and refrain

from

making unauthorized copies of protected materials, including but

not limited to printed matter, musical recordings,

and computer software.

Any Employee who is found to have violated copyright

laws will be subject to a disciplinary action.

3.3.

COMPETITIVE RELATIONSHIPS

It is

unethical and

unlawful to

collaborate with

competitors or

their agents

or representatives

for the

purpose of

establishing or

maintaining rates

or prices

at any

particular level,

or to

collaborate in

any way

in the

restraint of

trade.

It is

prohibited

and

unlawful

to collaborate

or collude

with competitors

that

are in

a horizontal

relationship

with

Lesaka for the

purposes of substantially preventing

or lessening competition in

a market.

Any Employee of

Lesaka

who is found to have violated the Competition laws in any of the jurisdictions in which Lesaka operates, will be interests of Lesaka to optimize business objectives.

subject to disciplinary action.

CONFLICT OF INTEREST

Employees

are

expected

perform

their

duties

conscientiously,

honestly

and

accordance

with

the

best

Employees must not use

their positions, or

knowledge gained through

their employment with

Lesaka, for private

or personal advantage

or in such

a manner that

a conflict or

an appearance of

conflict arises between

Lesaka’s

interest and their personal interests.

A conflict could

arise where an

Employee’s family,

or a business

with which

an Employee

or his or

her family is

associated obtains a gain, advantage or profit, or there is the appearance of a gain, advantage

or profit, by virtue

of the Employee’s position with Lesaka or knowledge

gained through that position.

Every

Employee

must

promptly

inform

Lesaka

any

business

opportunities

that

come

his

her

attention

through the use of Lesaka assets, property

or information or that relate to

the existing or prospective business

Lesaka.

If Employees feel

that a course

of action which

they have pursued,

are pursuing

or are contemplating

pursuing,

may

involve

them

conflict

interest

situation

perceived

conflict

interest

situation,

they

should

immediately make all

the facts known

to the person

to whom they

report and the

Head of Human

Resources, or

Compliance Department.

4.1.

OUTSIDE ACTIVITIES, EMPLOYMENT AND

DIRECTORSHIP

We all share a very real responsibility to contribute to our local communities, and Lesaka encourages Employees

to participate in religious, charitable, educational and civic

activities.

Employees should, however,

avoid acquiring any business interest or

participating in any activity outside

Lesaka

which would create, or appear to create:

●

excessive

demand

upon

their

time,

attention

and

energy which

would

deprive

Lesaka

of their

best

efforts on the job; or

●

conflict

interest

that

is,

obligation,

interest

distraction

which

would

interfere

appear

interfere with their independent exercise of judgment in Lesaka’s

best interest.

Employees other than outside directors may not take up outside employment without the prior written approval of

the Head of Human Resources.

Employees

who

hold, or

have been

invited to

hold,

outside directorships

should

take particular

care

ensure

compliance

with

all

provisions

this

Code.

When

outside

business

directorships

are

being

considered

Employees other than outside directors,

prior written approval must be obtained

from the Chief Executive Officer

of Lesaka or Executive Director responsible for the division.

4.1. RELATIONSHIPS

WITH CLIENTS, CUSTOMERS AND SUPPLIERS

Lesaka recognizes

that relationships

with clients, customers

and suppliers

give rise to

many potential situations

where conflicts of interest, real or perceived, may arise.

Employees

should

ensure

that

they

are

independent,

and

are

seen

independent,

from

any

business

organization

having

contractual

relationship

with

Lesaka

or providing

goods

or services

to Lesaka,

if such

relationship

might

influence

create

the

impression

influencing

their

decisions

the

performance

their

duties on behalf of Lesaka.

In such circumstances, Employees should not invest in, or acquire a financial interest, directly or indirectly, in such Conflicts of interest can arise where Employees are offered gifts, hospitality or other favours which might, or could

an organization.

4.2.

GIFTS, HOSPITALITY

AND FAVOURS

be perceived

to, influence

their judgment

in relation

to business

transactions such

as the

placing of

orders and

contracts.

An Employee should

not accept gifts,

hospitality or other

favours from suppliers

of goods or

services to Lesaka.

However, the acceptance of

the following would not be considered contrary to such

policy:

●

Promotional matter of limited commercial value;

●

Occasional business entertaining such as lunches, cocktail

parties or dinners; and

●

Occasional personal hospitality such as tickets to sporting

events or theatres.

Any

bribe

attempted

bribe

must

reported

the

Employee’s

line

manager

soon

possible.

the

intention that dealings with any supplier that offers

bribes will be terminated.

Certain functions

or operating

areas may

have more

detailed rules

governing

the receipt

of gifts,

hospitality

other favours.

In addition, no bribes of

any kind should be made

by any Lesaka Employee to any customer

or potential customer

to secure business.

Providing the occasional gifts to customers, as set out

below, would not be considered

contrary to such a policy:

●

Advertising matter of limited commercial value;

●

Occasional business entertaining such as lunches, cocktail

parties or dinners; and

●

Occasional personal hospitality such as tickets to sporting

events or theatres.

4.3.

Employees of the Lesaka Group may accept gifts from Third Parties (other than Government Officials) that are of

modest

value

($50

USD

less),

provided

the

gift

and

entertainment

guidelines

stated

the

Gifts

and

Entertainment policy,

are satisfied.

4.4.

PERSONAL INVESTMENTS

Lesaka respects the

right of all

Employees to make

personal investment decisions as

they see fit,

as long as

these

decisions do not contravene any provisions of this Code, any applicable legislation, or any policies or procedures

established by the various operating areas of Lesaka, and provided these decisions are not made on the basis of

material non-public information acquired by reason of an Employee’s

connection with Lesaka.

Employees should not permit their personal investment

transactions to have priority over transactions for

Lesaka

and its clients.

When considering the application of this section, Employees should ensure that no investment decision made for

their

own

account

could

reasonably

expected

adversely

influence

their

judgment

decisions

the

performance of their duties on behalf of Lesaka.

Employees involved in performing

investment activities on behalf

of Lesaka and those who

by the nature of their

duties

or positions

are

exposed

to price

-sensitive

information

relating

Lesaka

are subject

to additional

rules

governing

personal

investments.

These

may

imposed

the

Companies

Act,

the

Stock

Exchange

Johannesburg,

Banks Act,

Financial Sector

Conduct

Authority,

Securities

Regulation Panel,

the Securities

and

Exchange Commission, NASDAQ and other regulatory bodies,

industry associations and management.

The rules include requirements for all Employees to:

●

Obtain prior

written approval

from their

line manager

and the

Compliance

Officer

for,

and to

report on,

their personal

investment

activity and

the

investment

activity of

those

persons

with whom

they have

close relationship; and

●

Refrain

from

dealing

the

entities

that

Lesaka

deals

with

during

certain

restricted/closed

periods, as well as Lesaka subsidiaries and associates.

4.5.

INSIDER INFORMATION

AND INSIDER TRADING

Employees

may

receive

information

concerning

Lesaka

one

its

affiliates,

business

partners,

clients,

customers

that

confidential

and

not

generally

known

the

public.

that

information

“material”

(i.e.,

publication of that information is likely

to affect the market price

of the stock of the entity to which

the information

relates), then the Employee has an ethical and legal obligation

not to:

●

Act on that information (i.e., buy or sell stock based on

that information);

●

Disclose that information to others; or

●

Advise others to buy or sell the stock of the entity to which that information relates,

until such information

becomes public.

An Employee’s direct

or indirect

use of

or sharing

of such

confidential, privileged, or

otherwise proprietary business

information of Lesaka

or its partners,

clients, or customers

for financial gain,

including investment by

the Employee

the

transmission

this

information

others

that

they

can

use

this

information

for

their

financial

gain,

constitutes insider

trading, which

is a

criminal offense.

Please refer

to Lesaka’s

Insider Trading

Policy for

information.

4.6.

REMUNERATION

No Employee

may receive

commissions

or other

remuneration

to the

sale of

any product

or service

Lesaka except

as specifically

provided under

an individual’s

terms of

employment or

as specifically

agreed with

the Group CEO/ Group CFO.

No employee,

director or any committee member of Lesaka

shall receive any compensation not permitted

by the

rules of

the

Securities

and

Exchange

Commission

(hereinafter

referred

as the

“SEC”),

The

NASDAQ

Stock

Market, and other applicable law.

Employees may

not receive any

money or anything

of value (other

than Lesaka’s

regular remuneration

or other

incentives), either directly

or indirectly, for negotiating, procuring,

recommending or aiding

in any

transaction made

on behalf of Lesaka, nor have any direct or indirect financial

interest in such a transaction.

EMPLOYMENT EQUITY, ENVIRONMENTAL

RESPONSIBILITY AND POLITICAL SUPPORT

5.1.

EMPLOYMENT EQUITY

Lesaka supports employment

equity in the

workplace and seeks

to identify,

develop and reward

each employee

who

demonstrates

the

qualities

individual

initiative,

enterprise,

hard

work

and

loyalty

their

job.

Lesaka

supports and complies with the Basic Conditions of Employment

Act and the Employment Equity Act.

All employees have

the right to

work in an

environment which

is free from

any form of

discrimination, directly

indirectly,

on any

arbitrary ground,

including, but

not limited

to race,

gender,

sex, ethnic

or social

origin, colour,

sexual orientation, age, disability, religion, conscience, belief, political opinion, culture, language, marital status or

family responsibility.

Employees should

report any

cases of

actual or

suspected discrimination

to their

line managers

or the

Head of

Human Resources.

Employees with illnesses

or disabilities may continue

to work, provided that

they are able to

continue to perform

satisfactorily the essential

duties of their

jobs and do

not present a

safety or health

hazard to themselves

or others.

5.2.

HEALTH AND SAFETY

Lesaka is committed to taking every reasonable precaution to ensure a safe work environment for all employees.

Employees who become aware of circumstances relating to Lesaka’s operations or activities which pose

a real or

potential health or safety

risk should report

the matter to their

line manager and

the Head of Human

Resources.

It is Lesaka’s

policy that no

retaliation or other

adverse action will

be taken against

any employee for

good-faith

reports.

5.3.

ENVIRONMENTAL MANAGEMENT

Lesaka is

committed to developing

operating policies to

address the environmental

impact of

its business activities

integrating

pollution

control,

waste

management

and

rehabilitation

activities

into

operating

procedures.

Employees should give appropriate and timely attention to

environmental issues.

5.4.

POLITICAL SUPPORT

Lesaka

accepts

the

personal

participation

its

Employees

the

political

process

and

respects

their

right

absolute privacy

with regard

to personal

political activity.

Lesaka will

not attempt

to influence

any such

activity

provided there is no disruption to workplace activities and it does

not contribute to industrial unrest.

Lesaka funds, goods

or services, however, may

not be

used as

contributions to political

parties or

their candidates.

However,

the

event

legitimate

need

make

donation

political

party,

this

must

receive

specific

approval from the Social and Ethics committee of the Board.

LESAKA’S FUNDS, PROPERTY AND RECORDS

6.1.

FUNDS AND PROPERTY

Lesaka

has

developed

number

internal

controls

safeguard

its

assets

and

imposes

strict

standards

prevent

fraud

and

dishonesty.

every

Employee’s

responsibility

implement,

maintain

and

enhance

the

effectiveness of the control environment in which

they operate.

All Employees who have access to

Lesaka’s funds in any form must at

all times follow prescribed procedures

for

recording, handling and protecting such funds.

Operating areas may

implement policies and

procedures relating to

the safeguarding of

Lesaka property, including

computer software and intellectual property.

Employees must at

all times ensure

that Lesaka’s funds and

property are used

only for legitimate

Lesaka business

purposes. Where an Employee requires Lesaka funds to be spent, it is the Employee’s responsibility to use good

judgment

Lesaka’s

behalf

and

ensure

that

appropriate

value

and

authorization

received

for

such

expenditure.

All

payments

made

behalf

Lesaka

for

any

purpose

must

fully

and

accurately

described

the

documents and

records supporting

the payment.

No false,

improper,

or misleading

entries shall

be made

in the

books and records of Lesaka.

Complete and accurate information is to be given in response to inquiries from Lesaka’s Compliance Department

and independent auditors.

If Employees

become aware

of any

evidence that

Lesaka funds

or property

may have

been or

are likely

to be

used in a fraudulent

or improper manner

they should immediately

and confidentially advise

Lesaka as set

out in

the compliance with this Code section of this document.

It is Lesaka’s

policy that no

retaliation or other

adverse action will

be taken against

any employee for

good-faith

reports.

6.2.

RECORDS

Accurate and reliable

records of many

kinds are necessary

to meet Lesaka’s

legal and financial

obligations and

manage

the

affairs

Lesaka.

Lesaka’s

books

and

records

should

reflect

all

business

transactions

accurate and timely manner.

Undisclosed

unrecorded

revenues,

expenses,

assets

liabilities

are

not

permissible,

and

the

Employees

responsible for accounting and record-keeping functions are expected to be

diligent in enforcing proper practices.

EMPLOYMENT MATTERS

7.1.

SUPERVISION OF RELATIVES

AND OTHERS

Close relatives

and domestic

partners shall

not work

directly or

indirectly under

the supervision

of one

another

without prior

written approval

from the

Head of

Human Resources.

The aforementioned

may be

allowed on

exceptional basis.

●

“Close relative” means, but is not limited to, a spouse, sister,

brother, sister-in-law,

brother-in-law, father,

mother, father-in-law, mother-in-law,

step-parent, aunt, uncle, first cousin, child,

step-child, foster child, or

grandparent.

●

“Domestic partner” means, but

is not limited to,

husband, wife, or a

person the employee currently

resides

with in an intimate, romantic or sexual relationship.

If such

a situation

should arise,

it should

be immediately

brought to

the attention

of a direct

manager of

Human

Resources.

Lesaka

also

requires

that

employees

disclose

Human

Resources

the

existence

intimate,

romantic

sexual

relationship

between

employees

where

there

exists

direct

chain

command

and/

supervisor/

subordinate relationship. Decisions concerning such employees will be made on a case-by-case basis by Human

Resources.

7.2.

RESTRICTIONS ON FORMER GOVERNMENT EMPLOYEES

Former U.S.

Government employees

or U.S.

military officers

are generally

prohibited from

representing Lesaka

in matters in which the government has substantial

interest and where the employee had prior responsibility.

Retired senior

U.S. Government

officials

and regular

military officers

are further

restricted from

selling to,

or in

some instances, contacting their former agency or military

service.

The duration of

these prohibitions and the

matters to which they

apply depend on the

type of previous government

employment. Lesaka’s legal department should be

contacted to help identify which restrictions apply.

DEALING WITH OUTSIDE PERSONS AND ORGANISATIONS

8.1.

PROMPT COMMUNICATIONS

Lesaka strives to

achieve complete, accurate, fair, understandable and

timely communications with all

parties with

whom it conducts business,

as well as government

authorities and the

public. All Employees

must take all steps

necessary to assist Lesaka

in fulfilling these

disclosure responsibilities. In

addition, prompt and

effective internal

communication is encouraged.

A prompt, courteous and accurate response should be made to all reasonable requests

for information and other

client communications.

Any complaints

should be

dealt with

in accordance

with internal

procedures established

by various operating areas of Lesaka and applicable laws.

8.2.

MEDIA RELATIONS

addition

everyday

communications

with

outside

persons

and

organizations,

Lesaka

will,

occasion,

asked to express its views to the media on certain issues.

Unless

specifically

designated

so,

employee

may

provide

advice

comment

on/respond

customer/media/public

queries

any

business/product

queries

representative

the

organisation/operate in any official capacity via social

or other public platforms/media spaces.

Employees

approached

the

media

should

immediately

contact

the

department

individual

responsible

for

corporate communications.

Employee,

when

dealing

with

anyone

outside

Lesaka,

including

public

officials,

must

take

care

not

compromise the

integrity or

damage the

reputation of

any outside

individual, business,

or government

body,

that of Lesaka.

As a general

rule, Lesaka’s

position on public

policy or industry

issues will be

dealt with by

the Board of

Lesaka

and existing

policies in

this regard

must be

adhered to.

The text

of the

articles for

publication, public

speeches

and addresses about

Lesaka and its business

should be reviewed

in advance with

the individual responsible

for

public relations.

Employees

should

separate

their

personal

roles

from

Lesaka’s

position

when

communicating

matters

not

involving Lesaka

business. They

should be

especially careful

to ensure

that they

are not

identified with

Lesaka

when pursuing personal or political

activities, unless this identification has

been specifically authorized in advance

by Lesaka.

If your

personal social

media activity

is/can be

linked in

any way

or could

be deemed

related to

Lesaka (or

our

related business

entities and

brands), we

have a

legitimate interest

in the

content being

published by

you. This

includes but is not limited to posting any confidential or sensitive information (either as

text, video, audio or image

content), discriminatory

or offensive

comments, critical

comments about

Lesaka, our employees,

our customers

or competitors or any other information that may put Lesak

and its associated brands and entities at risk.

PRIVACY AND CONFIDENTIALITY

the

regular

course

business,

Lesaka

accumulates

considerable

amount

information.

The

following

principles are to be observed:

9.1.

OBTAINING AND

SAFEGUARDING INFORMATION

Information necessary for Lesaka’s business should

be reliable, accurate and its

confidentiality maintained. When

personal information is needed,

wherever possible, it

should be obtained directly

from the person

concerned. Only

reputable and reliable sources should be used to supplement

this information.

Information

should

only

retained

long

needed

required

law,

and

every

employee’s

responsibility to ensure that such information is physically secured

and protected.

9.2.

ACCESS TO INFORMATION

Any

information

with

respect

any

product,

plan

business

transaction

Lesaka,

personal

information

regarding

employees,

including

their

salaries,

must

kept

strictly

confidential

(hereinafter

referred

“Confidential Information”) and must not be disclosed or used

for improper purposes by any employee unless and

until proper authorization for such disclosure has been

obtained.

Once

authorization

has

been

obtained,

all

information

required

stakeholders

either

request

due

statutory requirements must be accurately disclosed.

addition,

operating

areas

may

implement

policies

and

procedures

prevent

improper

transmission

within

Lesaka of material non-public information.

9.3.

TERMINATION OF

EMPLOYMENT

The obligation

to preserve

the confidentiality

of Confidential

Information

acquired

in the

course

of employment

with

Lesaka

does

not

end

upon

termination

employment.

The

obligation

continues

indefinitely

until

Lesaka

authorizes disclosure, or until the Confidential Information

legally enters the public domain.

Immediately

upon

the

termination

employment

for

any

reason,

when

otherwise

requested

Lesaka,

Employees are required

to return to

Lesaka all above-mentioned

Confidential Information,

including documents,

information and other property.

9.4.

FORMER EMPLOYMENT

New Employees

will not

be assigned

to work

where they

might be

required to

use or

disclose trade

secrets

confidential

information

belonging

their

former

employers.

New

Employees

should

not

take

away

from

their

former place of employment any information that might

be considered proprietary or confidential.

10.

EMPLOYEE OBLIGATIONS

It is

of paramount

importance

to Lesaka

that

all disclosure

in reports

and documents

that

Lesaka files

with, or

submits

to,

the

SEC,

and

other

public

communications

made

Lesaka

full,

fair,

accurate,

timely

and

understandable.

You must take all steps available to assist Lesaka in fulfilling these responsibilities consistent with your

role within

Lesaka. In

particular,

you are

required

to provide

prompt and

accurate

answers

to all

inquiries made

to you

connection with Lesaka’s preparation of its public

reports and disclosure.

All Employees must perform their duties diligently,

effectively and efficiently,

and in particular:

●

Support and assist Lesaka to

fulfil its commercial and ethical

obligations and objectives as

set out in

this Code;

●

Avoid any waste of resources, including time;

●

committed

improving

productivity,

achieving

the

maximum

quality

standards,

reducing

ineffectiveness, and avoiding unreasonable disruption

of activities at work;

●

Commit to honouring their agreed terms and conditions

of employment;

●

Not act in any way that

may jeopardize the shareholders’ rights to a reasonable return

on investment;

●

Act

honestly

and

good

faith

all

times

and

report

any

harmful

activity

they

observe

the

workplace;

●

Recognize fellow Employees’ rights to freedom of association

and not intimidate fellow employees;

●

Pay due

regard to

environmental, public

health and

safety conditions

in and

around the

workplace;

and

●

Act within their powers and not carry on the business of

Lesaka recklessly.

Each Employee

who contributes

in any

way to

the preparation

or verification

of the

Company's financial statements

and other financial information must:

●

Ensure that the Company's books, records and accounts

are accurately maintained;

●

Be familiar

with and

comply with the

Company's disclosure controls

and procedures and

its internal

control

over financial reporting; and

●

Take all necessary steps to ensure that all filings with the SEC and

all other public communications about

the financial and

business condition of

the Company provide

full, fair, accurate, timely

and understandable

disclosure.

Each Employee

must cooperate

fully with

the Company's

accounting and internal

audit departments,

as well

the Company's independent auditors and counsel.

Each employee acknowledges

that Lesaka shall

be the owner of

the copyright in

any work which

is eligible for

and which is

created or executed

by such employee,

whether alone or

with others, in

the course and

scope of employment.

All work

created or

executed by

the employee

and for

which copyright

exists shall

unless the

employee established

the

contrary, be deemed

to have been created or executed in the course

and scope of employment with Lesaka.

Non-compliance with the guidelines set herein, may result in the institution of disciplinary action and potential dismissal The Audit Committee of the Company will periodically (preferably annually) review the policy and may recommend

11.

POLICY REVIEW

changes from time to time for the consideration of the

Board.

Any proposed changes to this Policy where indicated, shall be referred

to the Board for appropriate action.

EX-21 4 ex21.htm EX-21 ex21

Exhibit 21

SUBSIDIARIES OF REGISTRANT

The

following

list

subsidiaries

the

Company

June

30,

2023,

omitting

subsidiaries

which,

considered

the

aggregate, would not constitute a significant subsidiary.

NAME

WHERE ORGANIZED

Cash Connect Capital Proprietary Limited

Republic of South Africa

Cash Connect Management Solutions (Pty) Ltd

Republic of South Africa

Cash Connect Rentals Proprietary Limited

Republic of South Africa

Deposit Manager Proprietary Limited

Republic of South Africa

EasyPay (Pty) Ltd

Republic of South Africa

EasyPay Cash (Pty) Ltd (formerly named RMT Systems (Pty)

Ltd)

Republic of South Africa

EasyPay Financial Services (Pty) Ltd (formerly Moneyline

Financial Services (Pty) Ltd)

Republic of South Africa

K2021477132 (South Africa) Proprietary Limited

Republic of South Africa

K2020263969 (South Africa) Proprietary Limited

Republic of South Africa

Kazang Prepaid Proprietary Limited

Republic of Botswana

Kazang Prepaid Namibia (Pty)

Republic of Namibia

Kwande Group (Pty) Ltd

Republic of South Africa

Main Street 1723 Proprietary Limited

Republic of South Africa

Manje Mobile Electronic Payment Services (Pty) Ltd

Republic of South Africa

Lesaka Technologies

(Pty) Ltd (formerly named Net1 Applied

Technologies South

Africa (Pty) Ltd)

Republic of South Africa

Net1 Finance Holdings (Pty) Ltd

Republic of South Africa

Net1 Mobile Solutions (Pty) Ltd

Republic of South Africa

Net1 Universal Electronic Technological

Solutions (Pty) Ltd

Republic of South Africa

Prism Holdings (Pty) Ltd

Republic of South Africa

Prism Payment Technologies

(Pty) Ltd

Republic of South Africa

The Smart Life Insurance Company Limited

Republic of South Africa

Masterpayment GmbH

Federal Republic of Germany

Transact24 Limited

Hong Kong Special Administrative Region of the People's CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Republic of China

SmartSwitch Netherlands Holdings BV

Netherlands

Net1 Applied Technologies

Netherlands BV

Netherlands

NUEP Holdings S.a.r.l.

Luxembourg

EX-23 5 ex23.htm EX-23 ex23

Exhibit 23

consent

the

incorporation

reference

Registration

Statement

Nos.

333-208324,

333-126958,

333-140042

and

333-

170395

Form

S-8

and

Registration

Statement

No.

333-211968

Form

S-3

our

reports

dated

September

12,

2023,

relating

the

financial

statements

Lesaka

Technologies,

Inc.

and

the

effectiveness

Lesaka

Technologies,

Inc.’s

internal

control over financial reporting appearing in this Annual Report on Form 10-K

for the year ended June 30, 2023.

/s/ Deloitte & Touche

Deloitte & Touche

Registered Auditor

Johannesburg, South Africa

September 12, 2023

EX-31.1 6 ex311.htm EX-31.1 ex311

Exhibit 31.1

CERTIFICATION

OF PRINCIPAL

EXECUTIVE OFFICER

PURSUANT TO RULES 13A-14(A) AND 15D-14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Chris G.B Meyer,

certify that:

I have reviewed this annual report on Form 10-K of Lesaka Technologies,

Inc. (“Lesaka”) for the year ended June 30, 2023;

Based on

my knowledge,

this report

does not

contain any

untrue statement

of a

material fact

or omit

to state

a material

fact

necessary

make

the

statements

made,

light

the

circumstances

under

which

such

statements

were

made,

not

misleading

with respect to the period covered by this report;

Based on my

knowledge, the financial

statements, and other

financial information

included in this

report, fairly present

in all

material respects the financial condition, results of

operations and cash flows of Lesaka as of,

and for, the periods

presented in this

report;

Lesaka’s other

certifying officer and

I are responsible

for establishing and

maintaining disclosure controls

and procedures (as

defined in Exchange Act Rules

13a-15(e) and 15d-15(e)) and internal

control over financial reporting (as defined

in Exchange Act

Rules 13a-15(f) and 15d-15(f)) for Lesaka and have:

(a)

Designed

such

disclosure

controls

and

procedures,

caused

such

disclosure

controls

and

procedures

designed under

our supervision,

to ensure

that material

information relating

to Lesaka,

including its

consolidated subsidiaries,

made known to us by others within those entities, particularly during the period

in which this report is being prepared;

(b) Designed

such internal

control over

financial reporting,

or caused

such internal

control over

financial reporting

designed

under

our

supervision,

provide

reasonable

assurance

regarding

the

reliability

financial

reporting

and

the

preparation of financial statements for external purposes in accordance

with generally accepted accounting principles;

(c)

Evaluated

the

effectiveness

Lesaka’s

disclosure

controls

and

procedures

and

presented

this

report

our

conclusions

about the

effectiveness

of the

disclosure

controls and

procedures,

as of

the end

of the

period covered

by this

report

based on such evaluation; and

(d)

Disclosed

this

report

any

change

Lesaka’s

internal

control

over

financial

reporting

that

occurred

during

Lesaka’s most recent fiscal quarter

(Lesaka’s fourth fiscal quarter

in the case of an annual report) that has materially affected,

or is

reasonably likely to materially affect, Lesaka’s

internal control over financial reporting; and

Lesaka’s

other certifying

officer and

I have

disclosed, based

on our

most recent

evaluation of

internal control

over financial

reporting,

Lesaka’s

auditors

and

the

Audit

Committee

Lesaka’s

Board

Directors

(or

persons

performing

the

equivalent

functions):

(a)

All

significant

deficiencies

and

material

weaknesses

the

design

operation

internal

control

over

financial

reporting

which

are

reasonably

likely

adversely

affect

Lesaka’s

ability

record,

process,

summarize

and

report

financial

information; and

(b)

Any fraud,

whether or

not material,

that involves

management

or other

employees who

have a

significant role

Lesaka’s internal control over financial

reporting.

Date: September 12, 2023

/s/ Chris G.B. Meyer

Chris G.B. Meyer

Chief Executive Officer

EX-31.2 7 ex312.htm EX-31.2 ex312

Exhibit 31.2

CERTIFICATION

OF PRINCIPAL

FINANCIAL OFFICER

PURSUANT TO RULES 13A-14(A) AND 15D-14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Naeem E. Kola, certify that:

I have reviewed this annual report on Form 10-K of Lesaka Technologies,

Inc. (“Lesaka”) for the year ended June 30, 2023;

Based on

my knowledge,

this report

does not

contain any

untrue statement

of a

material fact

or omit

to state

a material

fact

necessary

make

the

statements

made,

light

the

circumstances

under

which

such

statements

were

made,

not

misleading

with respect to the period covered by this report;

Based on my

knowledge, the financial

statements, and other

financial information

included in this

report, fairly present

in all

material respects the financial condition, results of

operations and cash flows of Lesaka as of,

and for, the periods

presented in this

report;

Lesaka’s other

certifying officer and

I are responsible

for establishing and

maintaining disclosure controls

and procedures (as

defined in Exchange Act Rules

13a-15(e) and 15d-15(e)) and internal

control over financial reporting (as defined

in Exchange Act

Rules 13a-15(f) and 15d-15(f)) for Lesaka and have:

(a)

Designed

such

disclosure

controls

and

procedures,

caused

such

disclosure

controls

and

procedures

designed under

our supervision,

to ensure

that material

information relating

to Lesaka,

including its

consolidated subsidiaries,

made known to us by others within those entities, particularly during the period

in which this report is being prepared;

(b) Designed

such internal

control over

financial reporting,

or caused

such internal

control over

financial reporting

designed

under

our

supervision,

provide

reasonable

assurance

regarding

the

reliability

financial

reporting

and

the

preparation of financial statements for external purposes in accordance

with generally accepted accounting principles;

(c)

Evaluated

the

effectiveness

Lesaka’s

disclosure

controls

and

procedures

and

presented

this

report

our

conclusions

about the

effectiveness

of the

disclosure

controls and

procedures,

as of

the end

of the

period covered

by this

report

based on such evaluation; and

(d)

Disclosed

this

report

any

change

Lesaka’s

internal

control

over

financial

reporting

that

occurred

during

Lesaka’s most recent fiscal quarter

(Lesaka’s fourth fiscal quarter

in the case of an annual report) that has materially

affected, or is

reasonably likely to materially affect, Lesaka’s

internal control over financial reporting; and

Lesaka’s

other certifying

officer and

I have

disclosed, based

on our

most recent

evaluation of

internal control

over financial

reporting,

Lesaka’s

auditors

and

the

Audit

Committee

Lesaka’s

Board

Directors

(or

persons

performing

the

equivalent

functions):

(a)

All

significant

deficiencies

and

material

weaknesses

the

design

operation

internal

control

over

financial

reporting

which

are

reasonably

likely

adversely

affect

Lesaka’s

ability

record,

process,

summarize

and

report

financial

information; and

(b)

Any fraud,

whether or

not material,

that involves

management

or other

employees who

have a

significant role

Lesaka’s internal control over financial

reporting.

Date: September 12, 2023

/s/ Naeem E. Kola

Naeem E. Kola

Chief Financial Officer

EX-32 8 ex32.htm EX-32 ex32

Exhibit 32

CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Lesaka Technologies,

Inc. (“Lesaka”) on Form 10-K for the year

ended June 30,

2023,

as filed

with

the

Securities and

Exchange

Commission

the date

hereof (the

“Report”),

Chris

G.B.

Meyer

and

Naeem

Kola,

Chief

Executive

Officer

and

Chief

Financial

Officer,

respectively,

Lesaka,

certify,

pursuant

U.S.C. § 1350,

that

their knowledge:

The

Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange

Act of

1934, as amended;

and

The information contained in the Report fairly presents, in all material respects, the financial

condition and results

of operations of Lesaka.

Date: September 12, 2023

/ s/: Chris G.B. Meyer

Name: Chris G.B. Meyer

Chief Executive Officer

Date: September 12, 2023

/s/: Naeem E. Kola

Name: Naeem E. Kola

Chief Financial Officer