10-Q - LSAK - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-Q

(Mark One)

☒

QUARTERLY

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

EXCHANGE ACT OF 1934

For the quarterly period ended

December 31, 2024

☐

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, 4

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

Not Applicable

(Former Name, Former Address and Former Fiscal Year,

if Changed Since Last Report)

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

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

days.

YES

☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File

required

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 by

check mark

whether the

registrant is

a shell

company (as

defined in

Rule 12b-2

of the

Exchange

Act). YES

☐

☒

As of

February 3,

2025 (the

latest practicable

date),

79,124,599

shares of

the registrant’s

common stock,

par

value $0.001 per share, net of treasury shares, were outstanding.

Form 10-Q

LESAKA TECHNOLOGIES, INC.

Table

of Contents

Page No.

PART

I. FINANCIAL INFORMATION

Item 1.

Financial Statements

Unaudited Condensed Consolidated Balance Sheets as of December 31, 2024 and June

30, 2024

Unaudited Condensed Consolidated Statements of Operations for the three and six

months ended December 31, 2024 and 2023

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the

three and six months ended December 31, 2024 and 2023

Unaudited Condensed Consolidated Statement of Changes in Equity for the three and six

months ended December 31, 2024 and 2023

Unaudited Condensed Consolidated Statements of Cash Flows for the three and six

months ended December 31, 2024 and 2023

Notes to Unaudited Condensed Consolidated Financial Statements

Item 2.

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

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Item 4.

Controls and Procedures

Part II. OTHER INFORMATION

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 5.

Other Information

Item 6.

Exhibits

Signatures

EXHIBIT 2.2

EXHIBIT 40

EXHIBIT 41

EXHIBIT 42

EXHIBIT 43

EXHIBIT 44

EXHIBIT 45

Part I. Financial information

Item 1. Financial Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Balance Sheets

December 31,

June 30,

2024

(A)

(In thousands, except share data)

ASSETS

CURRENT ASSETS

Cash and cash equivalents

60,625

59,065

Restricted cash related to ATM funding

and credit facilities (Note 9)

112

6,853

Accounts receivable, net and other receivables (Note 3)

46,203

36,667

Finance loans receivable, net (Note 3)

49,529

44,058

Inventory (Note 4)

27,346

18,226

Total current assets before settlement assets

183,815

164,869

Settlement assets

27,550

22,827

Total current assets

211,365

187,696

PROPERTY,

PLANT AND EQUIPMENT, net of accumulated depreciation of - December: $

48,124

June:

49,762

42,295

31,936

OPERATING LEASE RIGHT-OF-USE (Note 17)

7,649

7,280

EQUITY-ACCOUNTED INVESTMENTS

(Note 6)

181

206

GOODWILL (Note 7)

200,760

138,551

INTANGIBLE ASSETS, NET (Note 7)

125,964

111,353

DEFERRED INCOME TAXES

6,278

3,446

OTHER LONG-TERM ASSETS, including equity securities (Note 6 and 8)

46,082

77,982

TOTAL ASSETS

640,574

558,450

LIABILITIES

CURRENT LIABILITIES

Short-term credit facilities for ATM funding (Note 9)

6,737

Short-term credit facilities (Note 9)

51,152

9,351

Accounts payable

16,704

16,674

Other payables (Note 10)

59,416

56,051

Operating lease liability - current (Note 17)

3,257

2,343

Current portion of long-term borrowings (Note 9)

68,300

3,878

Income taxes payable

1,385

654

Total current liabilities before settlement obligations

200,214

95,688

Settlement obligations

26,882

22,358

Total current liabilities

227,096

118,046

DEFERRED INCOME TAXES

36,260

38,128

OPERATING LEASE LIABILITY - LONG TERM (Note 17)

4,819

5,087

LONG-TERM BORROWINGS (Note 9)

80,357

139,308

OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 8)

3,048

2,595

TOTAL LIABILITIES

351,580

303,164

REDEEMABLE COMMON STOCK

88,957

79,429

EQUITY

COMMON STOCK (Note 11)

Authorized:

200,000,000

with $

0.001

par value;

Issued and outstanding shares, net of treasury - December:

80,159,292

June:

64,272,243

101

PREFERRED STOCK

Authorized shares:

50,000,000

with $

0.001

par value;

Issued and outstanding shares, net of treasury:

December:

June:

ADDITIONAL PAID-IN-CAPITAL

421,950

343,639

TREASURY SHARES, AT

COST: December:

28,297,365

June:

25,563,808

(302,319)

(289,733)

ACCUMULATED OTHER

COMPREHENSIVE LOSS (Note 12)

(199,969)

(188,355)

RETAINED EARNINGS

273,547

310,223

TOTAL LESAKA EQUITY

193,310

175,857

NON-CONTROLLING INTEREST

6,727

TOTAL EQUITY

200,037

175,857

TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS’ EQUITY

640,574

558,450

(A) – Derived from audited financial statements

See Notes to Unaudited Condensed Consolidated Financial Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Operations

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

(In thousands, except per share

data)

(In thousands, except per share

data)

REVENUE (Note 16)

146,818

143,893

292,364

279,982

EXPENSE

Cost of goods sold, IT processing, servicing and support

101,298

114,266

212,185

221,756

Selling, general and administration

36,520

21,507

63,246

44,022

Depreciation and amortization

8,223

5,813

14,499

11,669

Transaction costs related to Adumo acquisition (Note 2)

1,702

OPERATING INCOME

777

2,273

732

2,501

CHANGE IN FAIR VALUE

OF EQUITY SECURITIES (Note 5 and 6)

(33,731)

LOSS ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT

(Note 6)

161

REVERSAL OF ALLOWANCE FOR

DOUBTFUL EMI DEBT

RECEIVABLE

250

INTEREST INCOME

721

485

1,307

934

INTEREST EXPENSE

6,174

4,822

11,206

9,731

LOSS BEFORE INCOME TAX (BENEFIT) EXPENSE

(38,568)

(2,064)

(43,059)

(6,046)

INCOME TAX (BENEFIT) EXPENSE (Note 19)

(6,412)

686

(6,334)

950

NET LOSS BEFORE EARNINGS (LOSS) FROM EQUITY-

ACCOUNTED INVESTMENTS

(32,156)

(2,750)

(36,725)

(6,996)

EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS

(Note 6)

(1,362)

NET LOSS

(32,106)

(2,707)

(36,648)

(8,358)

LESS NET INCOME ATTRIBUTABLE

TO NON-CONTROLLING

INTEREST

NET LOSS ATTRIBUTABLE

TO LESAKA

(32,134)

(2,707)

(36,676)

(8,358)

Net loss per share, in United States dollars

(Note 14):

Basic loss attributable to Lesaka shareholders

(0.40)

(0.04)

(0.51)

(0.13)

Diluted loss attributable to Lesaka shareholders

(0.40)

(0.04)

(0.51)

(0.13)

See Notes to Unaudited Condensed Consolidated Financial Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

(In thousands)

Net loss

(32,106)

(2,707)

(36,648)

(8,358)

Other comprehensive (loss) income, net of taxes

Movement in foreign currency translation reserve

(22,731)

6,112

(12,206)

5,268

Release of foreign currency translation reserve related to

liquidation of subsidiaries (Note 12)

(952)

Release of foreign currency translation reserve related to

disposal of Finbond equity securities (Note 12)

1,543

Movement in foreign currency translation reserve related

to equity-accounted investments

489

Total other comprehensive

(loss) income, net of

taxes

(22,725)

6,703

(12,200)

6,348

Comprehensive (loss) income

(54,831)

3,996

(48,848)

(2,010)

Less comprehensive loss attributable to non-

controlling interest

558

Comprehensive (loss) income attributable to

Lesaka

(54,273)

3,996

(48,290)

(2,010)

See Notes to Unaudited Condensed Consolidated Financial Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Changes in Equity

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

For the three months ended December 31, 2023 (dollar amounts

in thousands)

Balance – October 1, 2023

88,883,198

(25,244,286)

(288,238)

63,638,912

337,490

322,012

(196,081)

175,266

79,429

Shares repurchased (Note 13)

(50,975)

(198)

(50,975)

(198)

Restricted stock granted (Note 13)

868,996

Exercise of stock options (Note 13)

592

Stock-based compensation charge

(Note 13)

1,812

Reversal of stock-based compensation

charge (Note 13)

(14,002)

(8)

Stock-based compensation charge

related to equity-accounted investment

(Note 6)

(147)

Net loss

(2,707)

Other comprehensive loss (Note 12)

6,703

Balance – December 31, 2023

89,738,784

(25,295,261)

(288,436)

64,443,523

339,149

319,305

(189,378)

180,723

79,429

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Changes in Equity

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

For the six months ended December 31, 2023 (dollar

amounts in thousands)

Balance – July

1, 2023

88,884,532

(25,244,286)

(288,238)

63,640,246

335,696

327,663

(195,726)

179,478

79,429

Shares repurchased (Note 13)

(50,975)

(198)

(50,975)

(198)

Restricted stock granted (Note 13)

868,996

Exercise of stock options (Note 13)

7,385

Stock-based compensation charge

(Note 13)

3,580

Reversal of stock-based compensation

charge (Note 13)

(22,129)

(17)

Stock-based compensation charge

related to equity-accounted investment

(133)

Net loss

(8,358)

Other comprehensive loss (Note 12)

6,348

Balance – December 31, 2023

89,738,784

(25,295,261)

(288,436)

64,443,523

339,149

319,305

(189,378)

180,723

79,429

See Notes to Unaudited Condensed Consolidated Financial

Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Changes in Equity

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

For the three months ended December 31, 2024 (dollar amounts

in thousands)

Balance – October 1, 2024

89,865,751

(25,563,808)

(289,733)

64,301,943

346,016

305,681

(177,830)

184,217

79,429

Shares issued (Note 2 and Note 11)

17,279,803

73,239

73,256

9,528

Shares repurchased (Note 13)

(2,733,557)

(12,586)

(2,733,557)

(12,586)

Restricted stock granted (Note 13)

1,331,310

Exercise of stock options (Note 13)

17,014

Stock-based compensation charge

(Note 13)

2,655

Reversal of stock-based compensation

charge (Note 13)

(37,221)

(11)

Adumo non-controlling interest

acquired (Note 2)

7,586

Net loss

(32,134)

(32,106)

Dividends paid to non-controlling

interest

(301)

Other comprehensive loss (Note 12)

(22,139)

(586)

(22,725)

Balance – December 31, 2024

108,456,657

101

(28,297,365)

(302,319)

80,159,292

421,950

273,547

(199,969)

193,310

6,727

200,037

88,957

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Changes in Equity

Lesaka Technologies, Inc. Shareholders

Number of

Amount

Number of

Treasury

Number of

shares, net

of treasury

Addition

al Paid-

Capital

Retained

Earnings

Accumulated

other

comprehensiv

e loss

Total

Lesaka

Equity

Non-

controllin

g Interest

Total

Redeemda

ble

common

stock

For the six months ended December 31, 2024 (dollar

amounts in thousands)

Balance – July 1,

2024

89,836,051

(25,563,808)

(289,733)

64,272,243

343,639

310,223

(188,355)

175,857

79,429

Shares issued (Note 2 and Note 11)

17,279,803

73,239

73,256

9,528

Shares repurchased (Note 13)

(2,733,557)

(12,586)

(2,733,557)

(12,586)

Restricted stock granted

1,364,110

Exercise of stock options (Note 13)

17,014

Stock-based compensation charge

(Note 13)

5,032

Reversal of stock-based compensation

charge (Note 13)

(40,321)

(11)

Stock-based compensation charge

related to equity-accounted investment

(Note 6)

Adumo non-controlling interest

acquired (Note 2)

7,586

Net loss

(36,676)

(36,648)

Dividends paid to non-controlling

interest

(301)

Other comprehensive loss (Note 12)

(11,614)

(586)

(12,200)

Balance – December 31, 2024

108,456,657

101

(28,297,365)

(302,319)

80,159,292

421,950

273,547

(199,969)

193,310

6,727

200,037

88,957

See Notes to Unaudited Condensed Consolidated Financial

Statements

LESAKA TECHNOLOGIES, INC.

Unaudited Condensed Consolidated Statements of Cash Flows

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

(In thousands)

Cash flows from operating activities

Net loss

(32,106)

(2,707)

(36,648)

(8,358)

Depreciation and amortization

8,223

5,813

14,499

11,669

Movement in allowance for doubtful accounts receivable

2,521

1,164

4,020

2,689

Fair value adjustment related to financial liabilities

(454)

(836)

(264)

(870)

Loss on disposal of equity-accounted investments (Note 6)

161

(Earnings) Loss from equity-accounted investments

(50)

(43)

(77)

1,362

Movement in allowance for doubtful loans to equity-accounted investments

(250)

Change in fair value of equity securities (Note 5 and 6)

33,731

Profit on disposal of property, plant and equipment

(14)

(163)

(41)

(199)

Movement in interest payable

1,864

(1,573)

3,557

191

Facility fee amortized

137

316

Stock-based compensation charge (Note 13)

2,644

1,804

5,021

3,563

Dividends received from equity-accounted investments

Increase in accounts receivable

(11,988)

(13,157)

(4,295)

(15,502)

Increase in finance loans receivable

(8,325)

(2,889)

(9,915)

(3,377)

(Increase) Decrease in inventory

(4,560)

985

(5,449)

506

Increase (Decrease) in accounts payable and other payables

8,135

13,728

(9,042)

14,103

(Decrease) Increase in taxes payable

(153)

(654)

612

(346)

Decrease in deferred taxes

(8,928)

(1,032)

(9,374)

(1,594)

Net cash (used in) provided by operating activities

(9,166)

583

(13,302)

3,957

Cash flows from investing activities

Capital expenditures

(6,318)

(2,198)

(10,283)

(5,007)

Proceeds from disposal of property, plant and equipment

475

436

1,325

720

Acquisition of intangible assets

(428)

(47)

(601)

(182)

Acquisitions, net of cash acquired

(3,957)

Proceeds from disposal of equity-accounted investment (Note 6)

3,508

Repayment of loans by equity-accounted investments

250

Net change in settlement assets

(1,266)

(43)

2,304

(11,280)

Net cash (used in) provided by investing activities

(11,494)

1,906

(11,212)

(11,991)

Cash flows from financing activities

Proceeds from bank overdraft (Note 9)

48,855

69,012

72,748

128,586

Repayment of bank overdraft (Note 9)

(4,512)

(66,048)

(35,540)

(128,841)

Long-term borrowings utilized (Note 9)

12,903

8,557

13,677

11,028

Repayment of long-term borrowings (Note 9)

(8,322)

(3,184)

(13,794)

(5,813)

Acquisition of treasury stock (Note 13)

(12,586)

(198)

(12,586)

(198)

Proceeds from exercise of stock options

Guarantee fee

(431)

Dividends paid to non-controlling interest

(301)

Net change in settlement obligations

1,209

197

(2,439)

10,893

Net cash provided by financing activities

36,866

8,338

21,385

15,678

Effect of exchange rate changes on cash and cash equivalents

(5,278)

2,005

(2,052)

1,562

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

10,928

12,832

(5,181)

9,206

Cash, cash equivalents and restricted cash – beginning of period

49,809

55,006

65,918

58,632

Cash, cash equivalents and restricted cash – end of period (Note 15)

60,737

67,838

60,737

67,838

See Notes to Unaudited Condensed Consolidated Financial Statements

LESAKA TECHNOLOGIES, INC

Notes to the Unaudited Condensed Consolidated Financial Statements

for the three and six months ended December 31, 2024 and 2023

(All amounts in tables stated in thousands or thousands of U.S. dollars, unless otherwise stated)

Basis of Presentation and Summary of Significant Accounting

Policies

Unaudited Interim Financial Information

The accompanying

unaudited condensed

consolidated financial

statements include

all majority-owned

subsidiaries over

which

the Company exercises

control and have been

prepared in accordance with

U.S. generally accepted accounting

principles (“GAAP”)

and

the rules

and

regulations

the United

States Securities

and

Exchange

Commission

for

Quarterly Reports

on Form

10-Q

and

include all of

the information and

disclosures required

for interim financial

reporting. The results

of operations

for the three

and six

months ended December 31, 2024 and

2023, are not necessarily indicative

of the results for the full year.

The Company believes that

the disclosures are adequate to make the information presented not misleading.

These

unaudited

condensed

consolidated

financial

statements

should

read

conjunction

with

the

financial

statements,

accounting policies and financial notes thereto included in the

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

30,

2024.

the

opinion

management,

the

accompanying

unaudited

condensed

consolidated

financial

statements

reflect

all

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

representation of financial results for the

interim periods presented.

References to “Lesaka” are references

solely to Lesaka Technologies,

Inc. References to the “Company” refer

to Lesaka and its

consolidated subsidiaries, collectively,

unless the context otherwise requires.

Recent accounting pronouncements adopted

In November 2023, the

Financial Accounting Standards

Board (“FASB”)

issued guidance regarding

Segment Reporting (Topic

280)

improve

reportable

segment

disclosure

requirements,

primarily

through

enhanced

disclosures

about

significant

segment

expenses. In addition, the

guidance enhances interim disclosure

requirements, clarifies circumstances in

which an entity can disclose

multiple

segment

measures

profit

loss,

provides

new

segment

disclosure

requirements

for

entities

with

single

reportable

segment, and contains

other disclosure requirements.

This guidance is effective

for the Company

beginning July 1,

2024 for its

year

ended June 30, 2025, and for interim periods commencing from July 1, 2025 (i.e. for the

quarter ended September 30, 2025).

Recent accounting pronouncements not yet adopted

as of December 31, 2024

December

2023,

the

FASB

issued

guidance

regarding

Income

Taxes

(Topic

740)

improve

income

tax

disclosure

requirements. The guidance requires

entities, on an

annual basis, to

(1) disclose specific categories

in the income

tax rate reconciliation

and (2) provide additional information for reconciling items that meet a quantitative threshold (if

the effect of those reconciling items

is equal

to or

greater

than

five percent

of the

amount computed

by multiplying

pre-tax

income

or loss

by the

applicable

statutory

income tax rate). This guidance

is effective for the Company

beginning July 1, 2025. The Company

is currently assessing the impact

of this guidance on its financial statements and related disclosures.

November

2024,

the

FASB

issued

guidance

regarding

Income

Statement—Reporting

Comprehensive

Income—Expense

Disaggregation

Disclosures

(Subtopic

220-40)

which

requires

disaggregated

disclosure

income

statement

expenses

for

public

business entities. The guidance does not change the expense captions an

entity presents on the face of the income statement; rather,

requires

disaggregation

certain

expense

captions

into

specified

categories

disclosures

within

the

footnotes

the

financial

statements. This guidance is effective for the

Company beginning July 1, 2027. Early

adoption is permitted. The Company is

currently

assessing the impact of this guidance on its financial statements and related disclosures.

Acquisitions

The Company did not make

any acquisition during the six

months ended December 31, 2023.

The cash paid, net of

cash received

related to the Company’s acquisitions during

the six months ended December 31, 2024, is summarized in the table below:

Total

Total cash paid

13,392

Less: cash acquired

9,435

Total cash paid, net

of cash received

3,957

Acquisitions

(continued)

2025

Acquisitions

October 2024 acquisition of Adumo

On May 7,

2024, the Company

entered into a

Sale and Purchase

Agreement (the “Purchase

Agreement”) with Lesaka

SA, and

Crossfin Apis Transactional

Solutions (Pty) Ltd

and Adumo ESS

(Pty) Ltd (“the

Sellers”). Pursuant to

the Purchase Agreement

and

subject to its terms and

conditions, Lesaka, through its

subsidiary,

Lesaka SA, agreed to

acquire, and the Sellers agreed

to sell, all of

the

outstanding

equity

interests

and

certain

claims

the

Adumo

(RF)

Proprietary

Limited

(“Adumo”).

The

transaction

closed

October 1, 2024.

Adumo

independent

payments

and

commerce

enablement

platform

Southern

Africa,

and

acquisition

served

approximately

23,000

active

merchants

with

operations

across

South

Africa,

Namibia,

Botswana

and

Kenya.

For

than

two

decades,

Adumo

has

facilitated

physical

and

online

commerce

between

retail

merchants

and

end-consumers

offering

unique

combination

payment

processing

and

integrated

software

solutions,

which

currently

include

embedded

payments,

integrated

payments,

reconciliation

services,

merchant

lending,

customer

engagement

tools,

card

issuing

program

management

and

data

analytics.

Adumo operates

across three businesses,

which provide

payment processing

and integrated software

solutions to different

end

markets:

●

The

Adumo

Payments

business

offers

payment

processing,

integrated

payments

and

reconciliation

solutions

small-and-

medium (“SME”) merchants in

South Africa, Namibia and

Botswana, and also provides

card issuing program management

corporate clients such as Anglo American and Coca-Cola;

●

The Adumo ISV business, also known as GAAP,

has operations in South Africa, Botswana and Kenya, and clients in a further

countries,

and

the

leading

provider

integrated

point-of-sales

software

and

hardware

the

hospitality

industry

Southern Africa, serving clients such as KFC, McDonald’s,

Pizza Hut, Nando’s and Krispy

Kreme; and,

●

The Adumo

Ventures

business offers

online commerce

solutions (Adumo

Online), cloud-based,

multi-channel point-of-sales

solutions

(Humble)

and

aggregated

payment

and

credit platform

for

in-store

and

online

commerce

(SwitchPay)

to SME

merchants and corporate clients in South Africa and Namibia.

The acquisition

continues the

Company’s

consolidation in

the Southern

African fintech

sector.

At acquisition,

the Company’s

ecosystem served approximately

1.7

million active consumers,

120,200

merchants, and processes over ZAR

270

billion in throughput

(cash,

card

and

VAS)

per

year.

The

acquisition

Adumo

enhances

the

Company’s

strength

both

the

consumer

and

merchant

markets in which it operates.

The total purchase

consideration was ZAR

1.67

billion ($

96.2

million) and comprised

the issuance of 17,279,803

shares of the

Company’s

common stock

(“Consideration Shares”)

with a

value of

82.8

million (

17,279,803

multiplied by

4.79

per share)

and

cash of $

13.4

million. The purchase consideration was settled through

the combination of the Consideration Shares and a ZAR

232.2

million ($

13.4

million, translated at the prevailing

rate of $1: ZAR

17.3354

as of October 1, 2024)

payment in cash. The Company’s

closing price on

the Johannesburg

Stock Exchange on

October 1, 2024,

was ZAR

83.05

4.79

using the October

1, 2024, $1:

ZAR

exchange rate).

The

closing

the

transaction

was

subject

customary

closing

conditions,

including

(i)

approval

from

the

competition

authorities of South

Africa and

Namibia; (ii) exchange

control approval from

the financial surveillance

department of the

South African

Reserve

Bank;

(iii)

approval

from

all necessary

regulatory

bodies

and

from

shareholders

issue

the

Consideration

the

Sellers; (iv) obtaining

certain third-party

consents; (v) the

Company obtained confirmation

from RMB that

it has sufficient

funds to

settle the

cash portion

of the purchase

consideration; (vi)

approval of

Adumo shareholders

(including preference

shareholders) with

respect to entering into and implementation of the Purchase Agreement, and

all other agreements and transactions contemplated in the

Purchase Agreement;

(vii) obtained

the consent

of Adumo’s

lender regarding

Adumo entering

into and

implementing the

Purchase

Agreement, and

all other

agreements and

transactions contemplated

in the

Purchase Agreement;

(viii) the

release of

certain Seller’s

shares held

as security

by such

bank; (ix)

consent of

the lender

of one

of Adumo’s

shareholders regarding

Adumo entering

into the

transaction;

(x)

the

Company

signing

written

addendum

the

Policy

Agreement

with

International

Finance

Corporation

that

provides for the inclusion

of the Consideration

Shares attributable to certain

Seller shareholders

in the definition of

“Put Shares” under

the

Policy

Agreement,

and

change;

and

(xi)

Seller

(or

their

nominee),

which

ultimately

was

Crossfin,

concluding

purchase agreements to dispose

of an amount of Consideration

Shares (which ultimately was determined

3,587,332

Consideration

Shares).

The Company agreed to file a

resale registration statement with the United States

Securities and Exchange Commission (“SEC”)

covering the resale of the Consideration Shares by the Sellers. The resale registration statement

was declared effective by the SEC on

December 6, 2024.

Acquisitions (continued)

2025

Acquisitions (continued)

October 2024 acquisition of Adumo (continued)

The Company incurred transaction-related expenditures of $

1.7

million during the six months ended December 31,

2024, related

to the acquisition

of Adumo. The

Company’s accruals presented in Note

10 of as

December 31, 2024,

includes an accrual

of transaction

expenditures

0.6

million

and

the

Company

does

not

expect

incur

any

further

significant

transaction

costs over

the

remainder of the 2025 fiscal year.

November 2024 acquisition of Innervation Value

Added Services Namibia Pty Ltd (continued)

Effective

November

2024,

the

Company,

through

its

wholly

owned

subsidiary

Adumo

Technologies

Proprietary

Limited

(“Adumo AT”),

acquired the remaining

shares (representing

% of the issued and

outstanding shares) it did

not own in Innervation

Value

Added Services Namibia Pty Ltd

(“IVAS

Nam”) for $

0.4

million (ZAR

6.0

million, translated at November 1, 2024

exchange

rates). IVAS

Nam was accounted for using the equity method prior to the acquisition of a controlling interest in the company. Adumo

paid ZAR

2.0

million of the purchase price

prior the acquisition of Adumo

by the Company and the

balance of ZAR

4.0

million will

paid

two

equal

tranches,

one

March

2025

and

the

other

September

2025.

The

Company

did

not

incur

any

significant

transaction costs related to this acquisition.

The

preliminary

purchase

price

allocation

acquisitions

during

the

six

months

ended

December

31,

2024,

translated

the

foreign exchange rates applicable on the date of acquisition, in provided

is the table below:

Acquisitions during fiscal 2025 through December

31, 2024

Adumo

IVAS

Nam

Total

Cash and cash equivalents

9,219

216

9,435

Accounts receivable

6,800

630

7,430

Inventory

5,121

5,124

Property, plant and equipment

9,169

9,181

Operating lease right of use asset

1,024

Equity-accounted investment

477

Goodwill

72,299

432

72,731

Intangible assets

28,383

Deferred income taxes assets

1,060

1,115

Other long-term assets

2,809

Current portion of long-term borrowings

(1,178)

Accounts payable

(3,266)

(388)

(3,654)

Other payables

(28,045)

(226)

(28,271)

Operating lease liability - current

(1,019)

Income taxes payable

(150)

(42)

(192)

Deferred income taxes liabilities

(6,994)

Operating lease liability - long-term

(326)

Long-term borrowings

(7,308)

Other long-term liabilities

(141)

Settlement assets

8,610

Settlement liabilities

(8,530)

Fair value of assets and liabilities on acquisition

88,014

692

88,706

The

fair

value

the

non-controlling

interests

recorded

was $

7.6

million.

The

fair

value

the

non-controlling

interest

was

determined as

the non-controlling

interests respective

portion of

the equity value

of the entity

acquired by

the Company,

and which

was adjusted for

% minority discount.

The allocation of the

purchase price is

preliminary and not

yet finalized. The preliminary

allocation of the purchase price

is based upon preliminary estimates which

used information that was available

to management at the

time

the

unaudited

condensed

consolidated

financial

statements

were

prepared

and

these estimates

and

assumptions

are subject

change within the measurement period,

up to one year

from the acquisition date. Accordingly, the allocation may

change. We continue

to refine certain inputs to the calculation of acquired intangible assets and the valuation

of the non-controlling interest.

Acquisitions (continued)

2025 Acquisitions (continued)

Intangible assets acquired

intangible assets were identified related

to the acquisition of IVAS

Nam. Summarized below is the

fair value of the Adumo

intangible assets acquired 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 six months ended December 31, 2024:

Adumo – technology assets

13,949

Adumo – customer relationships

10,813

Adumo – brands

3,621

On acquisition, the

Company recognized a

deferred tax liability

of approximately $

7.7

million related to

the acquisition of

Adumo

intangible assets during the six months ended December 31, 2024.

Pro forma results related

to acquisitions

Pro forma results

of operations have

not been presented

for the acquisition

of IVAS

Nam because

the effect

of the IVAS

Nam

acquisition is not material to the Company. Since the closing of the IVAS

Nam acquisition, it has contributed revenue and net income

of $

0.9

million and $

0.2

million, respectively, for the

six months ended December 31, 2024.

The results

of Adumo’s

operations are

reflected in

the Company’s

financial

statements from

October 1,

following

unaudited pro

forma revenue

and net

income information

has been prepared

as if the

acquisition of

Adumo had

occurred on

July 1,

2023 using the applicable average foreign exchange rates for the periods presented:

Three months

ended

December 31,

2023

Six months ended

December 31,

2024

2023

Revenue

159,397

305,748

307,897

Net loss

(3,040)

(35,024)

(15,088)

The unaudited pro forma financial

information presented above includes the

business combination accounting and

other effects

from the

acquisition including

(1) amortization

expense related

to acquired

intangibles and

the related

deferred tax;

(2) the

loss of

interest income,

net of

taxation, as

a result

of funding

a portion

of the

purchase price

in cash;

and (3)

an adjustment

to exclude

all

applicable transaction-related costs recognized in

the Company’s consolidated statement of

operations for six months

ended December

31, 2024, and

include the applicable transaction

-related costs for the

year ended June 30,

The unaudited pro

forma net income

presented above does not include any cost savings or other synergies

that may result from the acquisition.

The unaudited pro forma

information as presented above

is for information purposes

only and is not indicative

of the results of

operations that would have been achieved if the acquisition had occurred on

these dates.

Since the closing

of the acquisition,

Adumo has contributed

revenue of $

17.0

million and net

income attributable to

the Company,

including intangible assets amortization related to assets acquired, net of deferred

taxes, of $

0.45

million.

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 December 31, 2024, and June 30, 2024, are presented in

the table below:

December 31,

June 30,

2024

Accounts receivable, trade, net

21,407

13,262

Accounts receivable, trade, gross

23,258

14,503

Allowance for doubtful accounts receivable, end of period

1,851

1,241

Beginning of period

1,241

509

Reversed to statement of operations

(200)

(511)

Charged to statement of operations

1,385

1,305

Utilized

(493)

(67)

Foreign currency adjustment

(82)

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

net of

allowance: December 2024: $

750

; June 2024: $

750

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

24,796

23,405

Total accounts receivable,

net and other receivables

46,203

36,667

Trade receivables include amounts

due from customers

which generally have

a very short-term

life from

date of invoice

or service

provided to settlement. The duration

is less than a year in all cases and

generally less than 30 days in many

instances. The short-term

nature

these

exposures

often

results

balances

month-end

that

are

disproportionately

small

compared

the

total

invoiced

amounts.

The

month-end

outstanding

balance

are

volatile

than

the

monthly

invoice

amounts

because

they

are

affected

operational timing issues and

the fact that a balance

is outstanding at month-end is

not necessarily an indication of

increased risk but

rather a matter of operational timing.

Credit risk in respect of trade receivables are generally not

significant and the Company has not developed a sophisticated model

for these basic

credit exposures. The

Company determined to

use a lifetime

loss rate by

expressing write-off experience as

a percentage

of corresponding

invoice amounts

(as opposed

to outstanding

balances). The

allowance for credit

losses related to

these receivables

has

been

calculated

multiplying

the

lifetime

loss

rate

with

recent

invoice/origination

amounts.

Management

actively

monitors

performance of these receivables over

short periods of time. Different

balances have different rules to

identify an account in distress.

Once balances

in distress are

identified, specific

allowances are immediately

created. Subsequent

recovery from distressed

accounts

is not significant.

Current portion

of amount

outstanding related

to sale

of interest

in Carbon

represents an

amount due

related to

the sale

of the

loan in Carbon Tech

Limited (“Carbon”), 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. The Company has

not yet received

the outstanding $

0.75

million related

to the sale of the $

3.0

million loan, and continues to engage with the purchaser to recover the outstanding

balance.

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 December 31,

2024, and

June 30, 2024, respectively was $

(zero).

Other receivables include prepayments, deposits, income taxes receivable and

other receivables.

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Finance loans receivable, net

The Company’s finance

loans receivable, net, as of December 31, 2024, and June 30, 2024, is presented

in the table below:

December 31,

June 30,

2024

Microlending finance loans receivable, net

35,196

28,184

Microlending finance loans receivable, gross

37,642

30,131

Allowance for doubtful finance loans receivable, end of period

2,446

1,947

Beginning of period

1,947

1,432

Reversed to statement of operations

(162)

(210)

Charged to statement of operations

1,927

2,454

Utilized

(1,166)

(1,795)

Foreign currency adjustment

(100)

Merchant finance loans receivable, net

14,333

15,874

Merchant finance loans receivable, gross

17,375

18,571

Allowance for doubtful finance loans receivable, end of period

3,042

2,697

Beginning of period

2,697

2,150

Reversed to statement of operations

(23)

(359)

Charged to statement of operations

1,093

2,479

Utilized

(607)

(1,672)

Foreign currency adjustment

(118)

Total finance

loans receivable, net

49,529

44,058

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 with an aggregate balance

of $

13.6

million as of December 31, 2024 have been pledged as

security for the Company’s

revolving credit facility (refer to Note 9).

Allowance for credit losses

Microlending finance loans receivable

Microlending finance loans receivable is related to the Company’s

microlending operations in South Africa whereby it provides

unsecured short-term loans to qualifying customers. Loans to customers

have a tenor of up to

nine months

, with the majority of loans

originated having

a tenor of

six months

. The Company

analyses this lending

book as a

single portfolio

because the

loans within the

portfolio have similar characteristics and management uses similar processes to monitor and assess the

credit risk of the lending book.

Refer to Note 5 related to the Company risk management process related to

these receivables.

The Company has operated this lending book for more than

five years

and uses historical default experience over the lifetime of

loans in order

to calculate a

lifetime loss rate

for the lending

book. The allowance

for credit losses

related to these

microlending finance

loans receivables

is calculated

by multiplying

the lifetime

loss rate

with the

month end

outstanding lending

book. The

lifetime loss

rate as of each of June

30, 2024 and December 31,

2024, was

6.50

%. The performing component (that

is, outstanding loan payments

not in

arrears) of

the book

exceeds more

than

%, of

the outstanding

lending book

as of each

of June

30, 2024

and December

31,

2024.

Merchant finance loans receivable

Merchant finance loans

receivable is related

to the Company’s

Merchant lending activities

in South Africa

whereby it provides

unsecured

short-term loans

to qualifying

customers. Loans

to customers

have a

tenor of

up to

twelve months

, with

the majority

loans originated having a tenor of approximately

eight months

. The Company analyses this lending book as a single portfolio because

the loans within the portfolio have similar characteristics and management uses similar processes to monitor and assess the credit risk

of the lending book. Refer to Note 5 related to the Company risk management

process related to these receivables.

Accounts receivable, net and other receivables and

finance loans receivable, net (continued)

Finance loans receivable, net (continued)

Allowance for credit losses (continued)

Merchant finance loans receivable (continued)

The Company uses historical default

experience over the lifetime of loans generated

thus far in order to calculate a lifetime

loss

rate for the lending

book. The allowance

for credit losses related

to these merchant

finance loans receivables

is calculated by adding

together actual receivables in default plus

multiplying the lifetime loss rate

with the month-end outstanding lending book.

The lifetime

loss

rate

each

June

30,

2024

and

December

31,

2024,

was

approximately

1.18

The

performing

component

(that

is,

outstanding loan

payments not

in arrears),

under-performing

component (that

is, outstanding

loan payments

that are

in arrears)

and

non-performing

component

(that

is,

outstanding

loans

for

which

payments

appeared

have

ceased)

the

book

represents

approximately

% and

%, respectively,

of the

outstanding

lending book

as of

June 30,

2024.

The performing

component,

under-performing component and

non-performing component of the book represents

approximately

% and

%, respectively,

of the outstanding lending book as of December 31, 2024.

Inventory

The Company’s inventory

comprised the following categories as of December 31, 2024, and June 30, 2024:

December 31,

June 30,

2024

Raw materials

2,333

2,791

Work-in-progress

145

Finished goods

24,868

15,364

27,346

18,226

Finished goods as

of June 30, 2024,

includes $

1.8

million of Cell C

airtime inventory that was

previously classified as

finished

goods subject to

sale restrictions. The

Company sold all

of this

inventory during the

first two

months of the

six months

ended December

31, 2024.

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.

Fair value of financial instruments (continued)

Risk management (continued)

Interest rate risk

As a result of its

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

interest rates, which

manages

primarily

through

regular

financing

activities.

Interest

rates

South

Africa

remained

unchanged

for

the

majority

calendar 2024 however the South African Reserve Bank announced a 25-basis point reduction in the South African repurchase rate in

each of

September 2024

and November

2024, with

further reductions

expected in

the short-term.

Therefore, ignoring

the impact

changes

the

margin

its

borrowings

(refer

Note

and

value

borrowings

outstanding,

the

Company

expects

its

cost

borrowing to decline moderately in the foreseeable future, however,

the Company would expect a higher cost of borrowing if interest

rates were to increase in

the future. The

Company periodically evaluates the

cost and effectiveness

of interest rate hedging

strategies

manage

this risk.

The Company

generally

maintains

surplus

cash

in cash

equivalents and

held

to maturity

investments

and

has

occasionally invested in marketable securities.

Credit risk

Credit

risk

relates

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. Judgment

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.

Fair value of financial instruments (continued)

Financial instruments (continued)

The following

section describes

the valuation

methodologies the

Company uses

to measure

its significant

financial assets

and

liabilities at fair value.

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

active markets for identical assets or liabilities

to determine

fair value.

This pricing

methodology would

apply to

Level 1

investments. If quoted

prices in

active markets

for identical

assets or

liabilities are

not available

to determine

fair value,

then the

Company uses

quoted

prices for

similar assets

and

liabilities or

inputs

other

than

the

quoted

prices

that

are

observable

either

directly

indirectly. These

investments

would

be included

Level

investments. In

circumstances

which

inputs

are

generally

unobservable,

values

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. Investments

valued using

such techniques are included in Level 3 investments.

Asset measured at fair value using significant observable inputs – investment in MobiKwik

The Company’s

owns

6,215,620

equity shares of

One MobiKwik Systems Limited

(“MobiKwik”). MobiKwik

listed on the

National Stock Exchange of India (“NSE”) on December 18, 2024. Up until its listing MobiKwik did not have a readily determinable

fair value and the

Company elected to measure

its 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 a similar investment of the same issuer

(“cost plus

or minus changes

in observable prices equity

securities”). From the date

of MobiKwik’s

listing, the Company has

used MobiKwik’s

closing price reported

on the NSE

on the last

trading day related

to last day

of the Company’s

reporting period to

determine the fair

value of the equity securities

owned by the Company.

The Company has determined

a fair value per MobiKwik

share of $

6.85

(INR

586.15

per share at the USD: INR exchange rates applicable as of December 31, 2024).

Refer to Note 6 for additional information.

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 December 31, 2024 and June 30, 2024, respectively,

and valued Cell C at $

0.0

(zero) and $

0.0

(zero) as

of December 31, 2024, and

June 30, 2024, 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

assumed a marketability discount of

% and a minority discount of

%. The Company utilized the latest business plan provided by

Cell C management for the

period ending December 31, 2027, for

the December 31, 2024, and June

30, 2024, 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 December 31, 2024

and June 30, 2024:

Weighted Average

Cost of Capital ("WACC"):

Between

% and

% over the period of the forecast

Long term growth rate:

4.5

% (

4.5

% as of June 30, 2024)

Marketability discount:

% (

% as of June 30, 2024)

Minority discount:

% (

% as of June 30, 2024)

Net adjusted external debt - December 31, 2024:

(1)

ZAR

7.4

billion ($

0.4

billion), no lease liabilities included

Net adjusted external debt - June 30, 2024:

(2)

ZAR

7.9

billion ($

0.4

billion), no lease liabilities included

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

December 31, 2024.

(2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30,

2024.

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

Cell C investment of a

1.0

% decrease and

1.0

increase in

the WACC

rate and

the EBITDA

margins respectively

used in

the Cell C

valuation on

December 31,

2024, all

amounts

translated at exchange rates applicable as of December 31, 2024:

Sensitivity for fair value of Cell C investment

1.0% increase

1.0% decrease

WACC

rate

426

EBITDA margin

1,059

The aggregate

fair value

of the

MobiKwik and

Cell C’s

shares as

of December

31, 2024,

represented

6.6

% of

the Company’s

total assets,

including

these shares

The Company

expects that

there will

be short-term

equity price

volatility with

respect to

these

shares, and with respect to Cell C specifically,

particularly given that Cell C remains in a turnaround process.

Fair value of financial instruments

The following table

presents the

Company’s assets measured at

fair value on

a recurring

basis as

of December 31,

2024, 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

Investment in MobiKwik

42,566

Related to insurance

business:

Cash, cash equivalents and

restricted cash (included

in other long-term assets)

217

Fixed maturity

investments (included in

cash and cash equivalents)

4,532

Total assets at fair value

47,315

The following table presents the

Company’s assets measured

at fair value on a recurring basis as of

June 30, 2024, 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)

216

Fixed maturity investments

(included in cash and cash

equivalents)

4,635

Total assets at fair value

4,851

There have been

transfers in or out of Level 3 during the six months ended December 31, 2024 and 2023,

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 six months ended December 31, 2024 and 2023.

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 six months ended December 31, 2024:

Carrying value

Assets

Balance as of June 30, 2024

Foreign currency adjustment

(1)

Balance as of December 31, 2024

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

South African rand against the U.S. dollar on

the carrying value.

Fair value of financial instruments

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 six months ended December 31, 2023:

Carrying value

Assets

Balance as of June 30, 2023

Foreign currency adjustment

(1)

Balance as of December 31, 2023

(1) The

foreign currency

adjustment represents the

effects of

the fluctuations

of the South

African rand

against the U.S.

dollar

on the carrying value.

Assets measured at fair value on a nonrecurring basis

The Company

measures equity

investments without

readily determinable

fair values

at fair value

on a

nonrecurring basis.

The

fair values of

these investments

are determined

based on

valuation techniques

using the best

information available

and may include

quoted market prices, market comparables, and discounted cash flow

projections. An impairment charge is recorded when the cost

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.

Equity-accounted investments and other long-term assets

Refer to Note 9 to the Company’s audited consolidated

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

year ended June 30, 2024, for additional information regarding its equity-accounted

investments and other long-term assets.

Equity-accounted investments

The Company’s

ownership percentage in its equity-accounted

investments as of December 31,

2024, and June 30, 2024, was as

follows:

December 31,

June 30,

2024

Sandulela Technology

(Pty) Ltd ("Sandulela")

49.0

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

50.0

Sale and impairment of Finbond shares during

the three and six months ended December 31, 2023

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 ($

3.5

million), or

ZAR

0.2911

per share. The transaction was subject to certain conditions, including regulatory and shareholder approvals, which were

finalized in

December 2023.

The cash

proceeds received

of ZAR

64.2

million ($

3.5

million) were

used to

repay capitalized

interest

under the Company’s borrowing

facilities.

As noted

above, the

Company

entered into

an agreement

to exit

its position

in Finbond

and

the Company

considered this

impairment indicator. The

Company is required to include any foreign currency translation reserve

and other equity account amounts

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

of its

holding in

Finbond, including

the foreign

currency translation

reserve and

other equity

account amounts,

as of September

30,

The Company recorded an impairment loss of $

1.2

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

difference between

the determined fair value

of the Company’s

interest in Finbond and

the Company’s

carrying value, including

the

foreign currency

translation reserve

(before the

impairment). The

Company used

the price of

ZAR

0.2911

referenced in

the August

2023 agreement referred to above to calculate the determined fair value for Finbond.

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

Equity-accounted investments (continued)

Sale and impairment of Finbond shares during

the three and six months ended December 31, 2023

(continued)

The Company sold

7,379,656

shares in Finbond for

cash during the three

and six months ended

December 31, 2023, respectively.

The

Company

did

record

gain

loss

the

disposal

because

the

sale

proceeds

were

equivalent

the

net

carrying

value,

including accumulated reserves,

of the investment

in Finbond as of

the disposal date. The

following table presents

the calculation of

the disposal of Finbond shares during the three and six months ended December

31, 2023:

2023

Loss on disposal of Finbond shares:

Consideration received in cash

3,508

Less: carrying value of Finbond shares sold

(2,112)

Less: release of foreign currency translation reserve from

accumulated other comprehensive loss

(1,543)

Add: release of stock-based compensation charge related

equity-accounted investment

147

Loss on sale of Finbond shares

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

3.0

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 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

was expected to be

paid as follows:

(i) $

0.25

million on September 30,

2023 (the amount

was received in October

2023), and (ii) the

remaining amount, of

0.75

million in March 2024

(the amount has not

been received as

of December 31, 2024 (refer to Note 3)).

Summarized below is the

movement in equity-accounted investments and

loans provided to equity-accounted

investments during

the six months ended December 31, 2024:

Total

(1)

Investment in equity

Balance as of June 30, 2024

206

Comprehensive income:

Other comprehensive income

Equity accounted (loss) earnings

Share of net (loss) earnings

Impairment

Dividends received

(65)

Equity-accounted investment acquired in business combination (Note

477

Disposal of equity accounted investment (Note 2)

(507)

Foreign currency adjustment

(2)

(7)

Balance as of December 31, 2024

181

(1) Includes Sandulela,

and SmartSwitch Namibia;

(2) The foreign currency

adjustment represents the effects

of the fluctuations

of the ZAR and Namibian

dollar, against the

U.S.

dollar on the carrying value.

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 December

31, 2024, and June 30, 2024:

December 31,

June 30,

2024

Total equity investments

42,566

76,297

Investment in

% of Cell C (June 30, 2024:

%) at fair value (Note 5)

Investment in

% of MobiKwik (June 30, 2024:

(1)

42,566

76,297

Investment in

87.5

% of CPS (June 30, 2024:

87.5

%) at fair value

(1)(2)

Policy holder assets under investment contracts (Note 8)

217

216

Reinsurance assets under insurance contracts (Note 8)

1,692

1,469

Other long-term assets

1,607

Total other long-term

assets

46,082

77,982

(1) The

Company determined

that MobiKwik

(up until

December 2024)

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.

Refer to Note 5 for additional information regarding

the determination of the fair value of Company’s

investment in MobiKwik

December

31,

2024.

The

Company

used

this

valuation

the

basis

for

its

adjustment

decrease

the

carrying

value

its

investment in MobiKwik by $

33.7

million from $

76.3

million to $

42.6

million as of December 31, 2024. The change in the fair value

of MobiKwik for the three and

six months ended December 31, 2024,

of $

33.7

million, is included in the

caption “Change in fair value

of equity securities” in the consolidated statement of operations for

the three and six months ended December 31, 2024.

Summarized below

are the components

of the Company’s

equity securities without

readily determinable

fair value and

held to

maturity investments as of December 31, 2024:

Cost basis

Unrealized

holding

Unrealized

holding

Carrying

gains

losses

value

Equity securities:

Investment in CPS

Held to maturity:

Investment in Cedar Cellular notes (Note 3)

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, 2024:

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

Goodwill and intangible assets, net

Goodwill

Summarized below is the movement in the carrying value of goodwill

for the three months ended December 31, 2024:

Gross value

Accumulated

impairment

Carrying

value

Balance as of June 30, 2024

157,899

(19,348)

138,551

Acquisitions (Note 2)

(1)

72,731

Foreign currency adjustment

(2)

(10,989)

467

(10,522)

Balance as of December 31, 2024

219,641

(18,881)

200,760

(1) – Represents goodwill arising from the acquisition of Adumo

and IVAS Namibia and translated at the foreign exchange rates

applicable on the date

the transactions became

effective. This goodwill

has been allocated to

the Merchant and

Consumer reportable

operating segments.

(2) – The foreign currency adjustment represents the effects

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

dollar on the carrying value.

Goodwill associated with the acquisitions

represents the excess of cost over the fair value of acquired net assets. Goodwill

arising from these acquisitions is not deductible for tax purposes. See Note 2 for

the allocation of the purchase price to the fair value

of acquired net assets.

Refer to Note 7 for additional information regarding changes

to the Company’s reportable segments during the six months ended

December 31, 2024. Goodwill has been allocated to the Company’s

reportable segments as follows:

Merchant

Consumer

Enterprise

Carrying

value

Balance as of June 30, 2024

123,396

15,155

138,551

Acquisitions (Note 2)

64,241

8,490

72,731

Foreign currency adjustment

(1)

(9,327)

(674)

(521)

(10,522)

Balance as of December 31, 2024

178,310

7,816

14,634

200,760

(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.

Intangible assets, net

Carrying value and amortization of intangible assets

Summarized below is

the carrying value

and accumulated amortization

of intangible assets as

of December 31,

2024, and June

30, 2024:

As of December 31, 2024

As of June 30, 2024

Gross

carrying

value

Accumulated

amortization

Net

carrying

value

Gross

carrying

value

Accumulated

amortization

Net

carrying

value

Finite-lived intangible assets:

Customer relationships

(1)

34,945

(14,941)

20,004

25,880

(14,030)

11,850

Software, integrated

platform and unpatented

technology

(1)

124,690

(31,056)

93,634

115,213

(25,763)

89,450

FTS patent

2,035

(2,035)

2,107

(2,107)

Brands and trademarks

(1)

17,191

(4,865)

12,326

14,353

(4,300)

10,053

Total finite-lived

intangible

assets

178,861

(52,897)

125,964

157,553

(46,200)

111,353

(1) December 31, 2024 balances include the intangible assets acquired as part of

the Adumo acquisition in October 2024.

Goodwill and intangible assets, net (continued)

Intangible assets, net (continued)

Aggregate amortization

expense on the

finite-lived intangible

assets for the

three months

ended December

31, 2024 and

2023,

was $

4.9

million and $

3.6

million, respectively. Aggregate amortization expense on the

finite-lived intangible assets for

the six months

ended December

31, 2024 and

2023, was $

8.8

million and $

7.2

million, respectively.

Future estimated

annual amortization

expense

for the next

five fiscal years

and thereafter,

assuming exchange

rates that prevailed

on December

31, 2024, 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 2025 (excluding six months ended December 31, 2024)

9,291

Fiscal 2026

18,581

Fiscal 2027

18,286

Fiscal 2028

18,061

Fiscal 2029

17,699

Thereafter

44,046

Total future

estimated annual amortization expense

125,964

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

six

months ended December 31, 2024:

Reinsurance

Assets

(1)

Insurance

contracts

(2)

Balance as of June 30, 2024

1,469

(2,241)

Increase in policy holder benefits under insurance contracts

550

(5,028)

Claims and decrease in policyholders’ benefits under insurance

contracts

(260)

4,582

Foreign currency adjustment

(3)

(67)

102

Balance as of December 31, 2024

1,692

(2,585)

(1) Included in other long-term assets (refer to Note 6);

(2) Included in other long-term liabilities;

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

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

if the reinsurer is unable

to meet its obligations, the

Company retains the liability.

The value of insurance

contract liabilities is based

on the best estimate assumptions of future experience plus prescribed

margins, as required in the markets in which these

products are

offered,

namely South

Africa. The

process of

deriving the

best estimate

assumptions plus

prescribed margins

includes assumptions

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

Assets and policyholder liabilities under investment contracts

Summarized below is the movement

in assets and policyholder

liabilities under investment contracts during

the six months ended

December 31, 2024:

Assets

(1)

Investment

contracts

(2)

Balance as of June 30, 2024

216

(216)

Increase in policy holder benefits under investment contracts

(8)

Foreign currency adjustment

(3)

(7)

Balance as of December 31, 2024

217

(217)

(1) Included in other long-term assets (refer to Note 6);

(2) Included in other long-term liabilities;

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

The Company does not offer any investment products with guarantees

related to capital or returns.

Borrowings

Refer to

Note 12

to the

Company’s

audited consolidated

financial statements

included in

its Annual

Report on

Form 10-K

for

the year ended June 30, 2024, for additional information regarding

its borrowings.

Reference rate reform

After the

transition

away from

certain

interbank

offered

rates in

foreign

jurisdictions

(“IBOR reform

”), the

reforms to

South

Africa’s

reference interest

rate are now

accelerating rapidly.

The Johannesburg

Interbank Average

Rate (“JIBAR”)

will be replaced

by the new South African Overnight Index Average (“ZARONIA”). Certain of the Company’s

borrowings reference JIBAR as a base

interest rate. ZARONIA

reflects the

interest rate at

which rand-denominated

overnight wholesale

funds are

obtained by commercial

banks. There

is uncertainty

surrounding the

timing and

manner in

which the

transition would

occur and

how this

would affect

our

borrowings. The

Company is engag

ing with its

borrowers to

negotiate changes

to its existing

borrowing agreements

or to introduce

language to cater for the transition to ZARONIA in its future borrowing agreements.

South Africa

The Company is currently renegotiating its borrowing facilities and expects the process to be concluded before

March 31, 2025.

The amounts

below have

been translated

at exchange

rates applicable

as of

the dates

specified. The

JIBAR, an

average of

3 month

negotiable

certificates of

deposit (“NCD”)

rates, on

December 31,

2024, was

7.75

%. The

prime rate,

the benchmark

rate at

which

private sector

banks lend to

the public in

South Africa, on

December 31,

2024, was

11.25

%, and reduced

11.00

% on January

31,

2025, following a 0.25% reduction in the South African repo rate, the rate at which private sector banks borrow funds from

the South

African Reserve Bank.

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

borrowings

Long-term borrowings - Facility G and Facility H

As of December 31, 2024, Lesaka SA’s

facilities included (i) Facility G of ZAR

627.0

million ($

33.3

million); (ii) Facility H of

ZAR

390.1

million ($

20.8

million) (both

fully utilized);

and (iii)

the Facility

G revolver

of ZAR

200.0

million ($

10.6

million) (of

which ZAR

199

million ($

10.6

million) has been

utilized). The interest rate

on these facilities as

of December 31,

2024, was JIBAR

plus

4.75

Available short-term facility -

Facility E

The Company

cancelled its

Facility E

facility agreement

in November

overdraft facility

could only

be used

to fund

ATMs

and therefore

the overdraft utilized

and converted

to cash to

fund the Company’s

ATMs

was considered

restricted cash.

The

interest rate on this facility was equal to the prime rate.

RMB Bridge Facilities, comprising a short-term facility obtained

in October 2024 and amended in December 2024

On September

30, 2024,

Lesaka SA

entered into

a Facility

Letter (the

“F2024 Facility

Letter”) with

RMB to

provided Lesaka

SA a

ZAR

665.0

million funding

facility (the

“Facility”). As

of December

31, 2024,

the Company

had utilized

all of

the ZAR

665

million bridge facility. The Facility has

been used by Lesaka

SA to (i) settle

an amount of ZAR

232.2

due under the Adumo

transaction

(refer to Note

2); (ii) pay

Crossfin Holdings (RF)

Proprietary Limited (“Crossfin Holdings”)

ZAR

207.2

million under a

share purchase

agreement concluded between Lesaka SA and Crossfin Holdings (refer

to Note 11); (iii) pay an amount of ZAR

147.5

million, which

includes interest, notified

by Investec Bank Limited

to Adumo and Lesaka

SA as a result

of the transaction

described in Note 2,

and

(iv) pay

an origination

fee of

ZAR

7.6

million to

RMB. The

Facility also

provides Lesaka

with ZAR

70.0

million for

transaction -

related expenses.

December

10,

2024,

Lesaka

and

RMB

entered

into

First

Addendum

the

Facility

Letter

(the

“F2024

Addendum

Letter”).

The F2024

Addendum

Letter provides

Lesaka

SA with

an additional

ZAR

250.0

million

general

banking

facility (“GBF

Facility”) which may be used for general corporate

purposes. As of December 31, 2024, the Company

had utilized ZAR

98.2

million

of the bridge facility.

Interest on

the Facility

and the

GBF Facility

is calculated

at the

prime rate

plus

1.80

%. The

Facility and

the GBF

Facility are

unsecured and are required to be repaid in full on or before February

28, 2025.

Borrowings (borrowings) (continued)

South Africa (continued)

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

As of December 31, 2024, the Connect Facilities include (i) an overdraft facility (general banking facility) of

ZAR

170.0

million

(of which ZAR

170.0

million ($

9.0

million) has been utilized); (ii) Facility A of ZAR

700.0

million ($

37.2

million); (iii) Facility B of

ZAR

550.0

million ($

29.2

million) (both

fully utilized);

and (iv)

an asset-backed

facility of

ZAR

200.0

million ($

10.6

million) (of

which ZAR

151.6

million ($

8.1

million) has been utilized).

On October 29,

2024, the Company, through its

wholly owned subsidiary

Cash Connect Management

Solutions (Pty) Ltd,

entered

into an addendum to a facility letter with RMB, to obtain a ZAR

100.0

million temporary increase in its overdraft facility for a period

of approximately four

months to specifically

fund the purchase

of prepaid airtime

vouchers. This temporary

increase is repayable

equal daily instalments which commenced at the end of October

2024 with the final repayment due on February 15, 2025.

CCC Revolving Credit Facility, comprising

long-term borrowings

As of

December

31,

2024,

the amount

the

CCC Revolving

Credit

Facility

was ZAR

300.0

million

(of

which

ZAR

215.7

million has been utilized).

Interest on the Revolving Credit Facility

is payable on the last business

day of each calendar month

and is

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

a margin of

0.9

0% per annum.

RMB facility, comprising indirect facilities

As of December

31, 2024, the

aggregate amount

of the Company’s

short-term South African

indirect credit facility

with RMB

was ZAR

135.0

million ($

7.1

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

December 31, 2024

and June

30, 2024, the

Company had utilized

ZAR

33.1

million ($

1.8

million) and ZAR

33.1

million ($

1.8

million),

respectively,

of its indirect

and derivative facilities

of ZAR

135.0

million (June 30,

2024: ZAR

135.0

million) to enable

the bank

issue guarantees, letters of credit and forward exchange contracts (refer

to Note 20).

Nedbank facility, comprising short-term facilities

As of December

31, 2024, 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 indirect and derivative facilities

of up to ZAR

156.6

million ($

8.3

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

contracts.

As of

December 31,

2024 and

June 30,

2024, the

Company had

utilized ZAR

2.1

million ($

0.1

million) and

ZAR

2.1

million

0.1

million), respectively, of its indirect and derivative facilities of ZAR

156.6

million (June 30, 2024: ZAR

156.6

million) to enable

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

(refer to Note 20).

Borrowings (borrowings) (continued)

South Africa (continued)

Movement in short-term credit facilities (continued)

Summarized below are the Company’s short-term facilities as

of December 31, 2024, and

the movement in the Company’s short-

term facilities from as of June 30, 2024 to as of December 31, 2024:

RMB

Nedbank

Facility E

Bridge

Indirect

Connect

Facilities

Total

Short-term facilities available as of

December 31, 2024

48,594

7,170

14,339

8,314

78,417

Overdraft

48,594

14,339

62,933

Indirect and derivative facilities

7,170

8,314

15,484

Movement in utilized overdraft

facilities:

Restricted as to use for ATM

funding only

6,737

No restrictions as to use

9,351

Balance as of June 30, 2024

6,737

9,351

16,088

Utilized

23,893

43,200

5,655

72,748

Repaid

(31,028)

(3,374)

(34,402)

Guarantee fee paid

(431)

Foreign currency

adjustment

(1)

398

(2,683)

(566)

(2,851)

Balance as of December 31, 2024

40,086

11,066

51,152

No restrictions as to use

40,086

11,066

51,152

Interest rate as of December 31,

2024 (%)

(2)

N/A

13.05

N/A

11.15

N/A

Movement in utilized indirect and

derivative facilities:

Balance as of June 30, 2024

1,821

116

1,937

Foreign currency adjustment

(1)

(63)

(4)

(67)

Balance as of December 31, 2024

1,758

112

1,870

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

(2) Facility E interest was set at prime, RMB Bridge at prime plus

1.8

% and the Connect facility at prime less

0.10

Interest expense incurred under

the Company’s South African short-term borrowings

and included in

the caption interest

expense

on the condensed consolidated statement of operations during the three months ended December 31, 2024 and 2023, was $

1.8

million

and $

0.6

million, respectively.

Interest expense

incurred under

the Company’s

South African long-term

borrowings and included

the caption interest

expense on the condensed

consolidated statement of

operations during the

six months ended

December 31, 2024

and 2023, was $

2.4

million and $

1.3

million, respectively.

The

Company

cancelled

Adumo’s

overdraft

arrangements

October

2024,

and

settled

Adumo’s

outstanding

overdraft

balance of ZAR

20.0

million ($

1.1

million) on the

same day.

The repayment is

included in the

caption repayment

of bank overdraft

included on the Company’s unaudited condensed consolidated statements of cash flows for the three and six months ended December

31, 2024.

Borrowings (continued)

Movement in long-term borrowings

Summarized below is

the movement in

the Company’s

long-term borrowing from

as of as of

June 30, 2024

to as of December

31, 2024:

Facilities

Lesaka

RMB

G & H

Connect

RMB

A&B

CCC

RMB

Connect

Wesbank

Asset

backed

Total

Included in current

3,878

Included in long-term

56,151

66,815

11,841

4,501

139,308

Opening balance as of June 30, 2024

56,151

66,815

11,841

8,379

143,186

Facilities utilized

11,022

559

2,096

13,677

Facilities repaid

(3,911)

(554)

(2,117)

(6,582)

Non-refundable fees amortized

133

Capitalized interest

3,735

Capitalized interest repaid

(95)

Foreign currency adjustment

(1)

(2,374)

(2,302)

(414)

(307)

(5,397)

Closing balance as of December 31, 2024

64,616

64,537

11,453

8,051

148,657

Included in current

64,616

3,684

68,300

Included in long-term

64,537

11,453

4,367

80,357

Unamortized fees

(149)

Due within 2 years

4,978

2,873

7,851

Due within 3 years

7,634

11,453

1,119

20,206

Due within 4 years

52,074

333

52,407

Due within 5 years

Interest rates as of December 31, 2024 (%):

12.50

11.50

12.15

12.00

Base rate (%)

7.75

11.25

Margin (%)

4.75

3.75

0.90

0.75

Footnote number

(2)

(3)

(4)

(5)

(1) Represents the effects of the fluctuations between the

ZAR and the U.S. dollar.

(2)

Interest

Facility

and

Facility

based

the

JIBAR in

effect

from

time

plus

margin,

which

margin

calculated as:

(i)

5.50

% if

the Look

Through Leverage

(“LTL”)

ratio is

greater than

3.50x; (ii)

4.75

% if

the LTL

ratio is

less than

3.50x but greater than 2.75x; (iii)

3.75

% if the LTL ratio is less than 2.75x but greater than 1.75x; or (iv)

2.50

% if the LTL ratio is less

than 1.75x.

The LTL

ratio is

expressed as

times (“x”),

and was

introduced to

calculate the

margin

used in

the determination

of the

interest

rate.

The

LTL

ratio

calculated

the

Total

Attributable

Net

Debt

the

Total

Attributable

EBITDA,

defined

the

Company’s borrowing arrangements

with RMB, for the measurement period ending on a specified date.

(3) Interest on Facility

A and Facility B is calculated

based on JIBAR plus a

margin, which

margin is calculated

as (i)

4.00

% if

the Leverage Ratio (“LR”) is

greater than 3.50x; (ii)

3.75

% if the LR is less than

3.50x but greater than 2.50x;

(iii)

3.40

% if the LTL

ratio is less than 2.50x.

(4) Interest is charged at prime plus

0.90

% per annum on the utilized balance.

(5) Interest is charged at prime plus

0.75

% per annum on the utilized balance.

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

caption interest expense

on the condensed consolidated statement of operations during the three months ended December 31, 2024 and 2023, was $

4.3

million

and $

4.1

million, respectively.

Prepaid facility fees

amortized included

in interest expense

during the three

months ended December

31, 2024

and 2023,

respectively,

were $

0.1

million and

0.1

million, respectively.

Interest expense

incurred under

the Company’s

K2020 and

CCC facilities

relates to

borrowings utilized

to fund

a portion

of the

Company’s

merchant finance

loans receivable

and

this

interest

expense

0.4

million

and

0.4

million,

respectively,

included

the

caption

cost

goods

sold,

processing,

servicing and support on the

condensed consolidated statement of operations

for the three months

ended December 31, 2024 and

2023.

Borrowings (continued)

Movement in long-term borrowings (continued)

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

caption interest expense

on the condensed

consolidated statement of

operations during the

six months ended

December 31, 2024

and 2023, was

8.5

million

and $

8.1

million, respectively. Prepaid facility fees amortized included in interest expense during the six months ended December

31,

2024 and 2023,

respectively,

were $

0.1

million and $

0.3

million, respectively.

Interest expense incurred

under the Company’s

CCC

facilities relates to borrowings utilized to fund a portion of

the Company’s merchant finance loans receivable and this interest expense

of $

0.8

million and $

0.7

million, respectively,

is included

in the caption

cost of goods

sold, IT processing,

servicing and support

the condensed consolidated statement of operations for the six months

ended December 31, 2024 and 2023.

The Company

cancelled Adumo’s

long-term borrowings

arrangements on

October 1,

2024, and

settled Adumo’s

outstanding

balances

of ZAR

126.7

million

7.2

million) on

the same

day.

The repayment

is included

in the

caption

repayment of

long-term

borrowings included on the Company’s unaudited condensed consolidated

statements of cash flows

for the three and

six months ended

December 31, 2024.

10.

Other payables

Summarized below is the breakdown of other payables as of December

31, 2024, and June 30, 2024:

December 31,

June 30,

2024

Clearing accounts

8,093

17,124

Vendor

wallet balances

18,657

14,635

Accruals

12,522

7,173

Provisions

5,873

7,442

Value

-added tax payable

2,088

1,191

Payroll-related payables

1,942

922

Participating merchants' settlement obligation

Other

10,239

7,563

59,416

56,051

Other includes deferred income, client deposits and other payables.

11.

Capital structure

October 2024 repurchase of common stock

On October

1, 2024,

the Company,

through Lesaka

SA, and

Crossfin Holdings

entered into

a share

purchase agreement

under

which Lesaka SA purchased

2,601,410

of the

3,587,332

Consideration Shares for ZAR

207.2

million ($

12.0

million). The transaction

was settled

in early

October 2024,

and the

shares of

Company’s

common stock

repurchased have

been included

in the

Company’s

treasury shares

included in

its unaudited

condensed consolidated

statement of

changes in

equity for

the three

and six months

ended

December 31, 2024. The repurchase was made outside of the Company’s

100

million share repurchase authorization.

Redeemable common stock issued pursuant to transaction with the IFC Investors

Put Option

Refer to

Note 14

to the

Company’s

audited consolidated

financial statements

included in

its Annual

Report on

Form 10-K

for

the year ended

June 30, 2024, for

additional information regarding

its redeemable common

stock issued pursuant to

transaction with

the IFC Investors.

Certain IFC Investors were

investors in Adumo

and the Company

issued an aggregate

1,989,162

additional shares

of its common

stock at a

price of

4.79

to these

IFC Investors pursuant

to the

Purchase Agreement. The

Company and the

IFC Investors

amended and restated the Policy Agreement (“Amended and Restated Policy Agreement”) to include these additional shares issued to

the IFC

Investors to also

be covered by

the put

right included

in the

Amended and Restated

Policy Agreement. The

Company accounted

for these

1,989,162

shares as redeemable

common stock as

a result of

the put option.

The Company believes

that the put

option has

no value and, accordingly,

has not recognized the put option in its consolidated financial statements.

11.

Capital structure (continued)

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

net of treasury

The following table presents a

reconciliation between the number of

shares, net of treasury, presented in the

unaudited condensed

consolidated statement of changes in

equity during the six months ended

December 31, 2024 and 2023, respectively,

and the number

of shares, net of treasury,

excluding non-vested equity shares that have not vested as of December

31, 2024 and 2023, respectively:

December 31,

2024

2023

Number of shares, net of treasury:

Statement of changes in equity

80,203,148

64,443,523

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

2,902,303

3,205,580

Number of shares, net of treasury,

excluding non-vested equity shares that have not

vested

77,300,845

61,237,943

12.

Accumulated other comprehensive loss

The table

below presents

the change

in accumulated

other comprehensive

loss per

component

during the

three months

ended

December 31, 2024:

Three months ended

December 31, 2024

Accumulated

foreign

currency

translation

reserve

Total

Balance as of October 1, 2024

(177,830)

Release of foreign currency translation reserve related to liquidation of subsidiaries

Movement in foreign currency translation reserve

(22,145)

Balance as of December 31, 2024

(199,969)

The table

below presents

the change

in accumulated

other comprehensive

loss per

component during

the three

months ended

December 31, 2023:

Three months ended

December 31, 2023

Accumulated

foreign

currency

translation

reserve

Total

Balance as of October 1, 2023

(196,081)

Release of foreign currency translation reserve related to disposal of

Finbond equity securities

1,543

Movement in foreign currency translation reserve related to liquidation

of subsidiaries

(952)

Movement in foreign currency translation reserve

6,112

Balance as of December 31, 2023

(189,378)

12.

Accumulated other comprehensive loss (continued)

The

table

below

presents

the

change

accumulated

other

comprehensive

loss

per

component

during

the

six

months

ended

December 31, 2024:

Six months ended

December 31, 2024

Accumulated

foreign

currency

translation

reserve

Total

Balance as of July 1, 2024

(188,355)

Release of foreign currency translation reserve related to liquidation

of subsidiaries

Movement in foreign currency translation reserve

(11,620)

Balance as of December 31, 2024

(199,969)

The

table

below

presents

the

change

accumulated

other

comprehensive

loss

per

component

during

the

six

months

ended

December 31, 2023:

Six months ended

December 31, 2023

Accumulated

foreign

currency

translation

reserve

Total

Balance as of July 1, 2023

(195,726)

Release of foreign currency translation reserve related to disposal of Finbond

equity securities

1,543

Movement in foreign currency translation reserve related to equity-accounted

investment

489

Movement in foreign currency translation reserve related to liquidation

of subsidiaries

(952)

Movement in foreign currency translation reserve

5,268

Balance as of December 31, 2023

(189,378)

The movement in the

foreign currency translation reserve represents

the impact of translation of

consolidated entities which have

a functional currency (which is primarily ZAR) to the Company’s

reporting currency, which is USD.

During

each

the

three

and

six

months

ended

December

31,

2024,

the

Company

reclassified

loss

0.006

million,

respectively, from

accumulated other comprehensive loss (accumulated foreign currency

translation reserve) to net loss related to the

liquidation of subsidiaries During each of the three and

six months ended December 31, 2023, the

Company reclassified losses of $

1.5

million, respectively, from accumulated other

comprehensive loss

(accumulated foreign currency translation

reserve) to net

loss related

to the disposal

of shares in

Finbond (refer

to Note 6).

The Company also

reclassified a gain

of $

1.0

million from accumulated

other

comprehensive loss (accumulated foreign currency translation reserve)

to net loss related to the liquidation of subsidiaries.

13.

Stock-based compensation

The Company’s

Amended and Restated

2022 Stock

Incentive Plan (“20

22 Plan”)

and the vesting

terms of certain

stock-based

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

Form 10-K for the year ended June 30, 2024.

Stock option and restricted stock activity

Options

The following table summarizes stock option activity for the six months

ended December 31, 2024 and 2023:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($'000)

Weighted

average

grant date

fair value

($)

Outstanding - June 30, 2024

4,918,248

8.70

4.51

889

1.77

Granted - December 2024

350,000

6.00

433

1.24

Granted - December 2024

250,000

8.00

177

0.71

Exercised

(17,014)

3.02

Forfeited

(13,333)

11.23

8.83

Outstanding - December 31, 2024

5,487,901

8.48

4.04

1,418

1.76

Outstanding - June 30, 2023

673,274

4.37

5.14

239

1.67

Granted – December 2023

500,000

3.50

5.17

880

1.76

Exercised

(7,385)

3.07

Forfeited

(186,846)

3.71

1.28

Outstanding - December 31, 2023

979,043

4.07

5.50

1.80

The Company awarded

600,000

stock options to an executive officer during the three and six months ended December 31,

2024.

The Company awarded a further

400,000

to the same executive officer in January 2025 with strike prices ranging from $

to $

. The

1,000,000

stock options will vest on

December 31, 2026, and

vesting is subject to the

executive officers continued

employment with

the Company

through to the

vesting date. The

1,000,000

stock options expire

on January 31,

The Company

awarded

500,000

stock options

to Ali

Mazanderani, the

Company’s

Executive Chairman,

during the

three and

six months

ended December

31, 2023.

These options

vested in December

2024, but may

only be exercised

during a period

commencing from

January 31,

2028 to January

31, 2029.

During each

of the

three and

six months

ended December

31, 2024,

the Company

received $

0.05

million from

the exercise of

17,014

stock options, respectively. During the three and six months ended December

31, 2023, the Company received $

0.002

million

and $

0.02

million from

the exercise of

592

and

7,385

stock options, respectively.

Employees forfeited

an aggregate of

13,333

stock

options

during

each

the

three

and

six

months

ended

December

31,

2024.

Employees

and

non-employee

director

forfeited

aggregate of

11,070

and

186,846

stock options during the three and six months ended December 31, 2023.

The

fair

value

each

option

estimated

the

date

grant

using the

Cox

Ross

Rubinstein

binomial

model

that

uses the

assumptions noted in the following table. The estimated expected

volatility is calculated based on the Company’s

730

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.

The table below

presents the range

of assumptions used

to value stock

options granted during

the six months

ended December

31, 2024 and 2023:

Six months ended

December 31,

2024

2023

Expected volatility

Expected dividends

Expected life (in years)

Risk-free rate

4.3

2.1

13.

Stock-based compensation (continued)

The Company’s

Amended and

Restated 2022

Stock Incentive

Plan (“2022

Plan”) and

the vesting

terms of

certain stock-based

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

Form 10-K for the year ended June 30, 2024.

Stock option and restricted stock activity

(continued)

Options (continued)

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

December 31, 2024:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Vested

and expecting to vest - December 31, 2024

5,487,901

8.48

4.04

1,418

These options have an exercise price range of $

3.01

to $

14.00

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

31, 2024:

Number of

Weighted

average

exercise

price

($)

Weighted

average

remaining

contractual

term

(in years)

Aggregate

intrinsic

value

($’000)

Exercisable - December 31, 2024

360,995

4.56

5.03

428

stock options became exercisable during each

of the three and six

months ended December 31, 2024 and

The Company

issues new shares to satisfy stock option exercises.

13.

Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Restricted stock

The following table summarizes restricted stock activity for the six

months ended December 31, 2024 and 2023:

Number of

shares of

restricted stock

Weighted

average grant

date fair value

($’000)

Non-vested – June 30, 2024

2,084,946

8,736

Total granted

1,331,110

4,850

Granted – August 2024

32,800

154

Granted – October 2024

100,000

490

Granted – November 2024, with performance conditions

1,198,310

4,206

Total vested

(473,432)

2,469

Vested

– July 2024

(78,801)

394

Vested

– November 2024

(213,687)

1,134

Vested

– November 2024, with performance conditions

(103,638)

524

Vested

– December 2024

(77,306)

417

Forfeitures

(40,321)

216

Non-vested – December 31, 2024

2,902,303

11,348

Non-vested – June 30, 2023

2,614,419

11,869

Total Granted

868,996

3,394

Granted – October 2023

333,080

1,456

Granted – October 2023, with performance awards

310,916

955

Granted – October 2023

225,000

983

Total vested

(255,706)

965

Vested

– July 2023

(78,800)

302

Vested

– November 2023

(109,833)

429

Vested

– December 2023

(67,073)

234

Forfeitures

(22,129)

Non-vested – December 31, 2023

3,205,580

13,880

Grants

In August 2024 and

October 2024, respectively, the Company granted

32,800

and

100,000

shares of restricted

stock to employees

which have time -based vesting conditions and which are subject to the employees continued employment with the Company through

the applicable vesting dates.

November

2024,

the

Company

awarded

1,198,310

restricted

stock

group

comprising

employees

and

three

executive officers and which

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 off

a base

price of $

5.00

over the measurement period commencing on September 30, 2024 through September 30, 2027, and (2) the recipient is

employed by the Company on a full-time basis through to September 30, 2027. 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 September 30, 2024, was $

5.00

The appreciation levels (times and price) and

annual target percentages to earn the

awards as of each period

ended are as follows:

●

Prior to the first anniversary of the grant date:

●

Fiscal

2026,

the

Company’s

30-day

volume

weighted-average

stock

price

(“VWAP”)

before

September

30,

2025

approximately

1.15

times higher (i.e. $

5.75

or higher) than $

5.00

●

Fiscal 2027, the Company’s

VWAP before

September 30, 2026 is

1.32

times higher (i.e. $

6.61

or higher) than $

5.00

●

Fiscal 2028, the Company’s

VWAP before

November 1, 2027 is

1.52

times higher (i.e. $

7.60

) than $

5.00

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 of

47.7

% for

the closing

price (of

5.50

), a

discounting based

on U.S.

dollar overnight

indexed swap

rates for

the grant

date, and

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.

13.

Stock-based compensation (continued)

Stock option and restricted stock activity (continued)

Restricted stock (continued)

Grants (continued)

In October 2023, the Company

awarded

333,080

shares of restricted stock with time-based

vesting conditions to approximately

150

employees, which

are subject to

the employees

continued employment

with the

Company through

the applicable

vesting dates.

The Company also awarded

225,000

shares of restricted stock

to an executive officer

in October 2023, which

vest on June 30, 2025,

except if the executive officer is terminated for cause, in

which case the award will be forfeited.

In October 2023, the Company

awarded

310,916

shares of restricted stock to three

of its executive officers

which are subject to

time-based

vesting

condition

and

market

condition

and

vest

full

only

the

date,

any,

that

the

following

conditions

are

satisfied: (1)

a compounded

annual

% appreciation

in the

Company’s

stock price

off a

base price

of $

4.00

over the

measurement

period commencing on September 30, 2023 through November 17, 2026, 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 September 30, 2023, was $

3.90

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

2025,

the

Company’s

30-day

volume

weighted-average

stock

price

(“VWAP”)

before

November

17,

2024

approximately

1.10

times higher (i.e. $

4.40

or higher) than $

4.00

●

Fiscal 2026, the Company’s

VWAP before

November 17, 2025 is

1.21

times higher (i.e. $

4.84

or higher) than $

4.00

●

Fiscal 2027, the Company’s

VWAP before

November 1, 2026 is

1.33

times higher (i.e. $

5.32

) than $

4.00

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 of

48.3

% for

the closing

price (of

4.37

), a

discounting based

on U.S.

dollar overnight

indexed swap

rates for

the grant

date, and

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.

The Company has agreed

to grant an advisor

5,500

shares per month in

lieu of cash for services

provided to the Company.

The

Company and

the advisor have

agreed that the

Company will issue

the shares to

the advisor,

in arrears, on

a quarterly basis.

During

the three

and six months

ended December

31, 2024,

the Company

recorded a

stock-based compensation

charge of

0.2

million and

included the issuance of

33,000

shares of common stock in its issued and outstanding share count.

Vesting

In July 2024,

78,801

shares of restricted

stock granted to Mr. Meyer, our former

Group CEO, vested.

In November and December

2024, an

aggregate of

290,993

shares of restricted

stock granted to

employees vested.

Certain employees elected

for

132,147

to be withheld

to satisfy the

withholding tax

liability on the

vesting of

their shares. These

132,147

shares have

been included

in the

Company’s

treasury shares. In

November 2024,

103,638

shares of restricted

stock with performance

conditions (share price

targets)

vested following the achievement of the agreed performance condition.

In July 2023,

78,800

shares of restricted stock granted

to Mr. Meyer

vested. In November and

December 2023, an aggregate

176,906

shares of restricted stock granted

to employees vested. Certain employees

elected for

50,975

shares to be withheld to

satisfy

the withholding tax liability on the vesting of their shares. These

50,975

shares have been included in the Company’s treasury

shares.

Forfeitures

During

the

three

and

six

months

ended

December

31,

2024,

respectively,

employees

forfeited

37,221

and

40,321

restricted stock following their

termination of employment with

the Company or the

failure to achieved agreed

performance conditions

(

29,121

shares were

forfeited following

the failure

to achieved

agreed share

performance targets).

During the

three and

six months

ended December 31, 2023, respectively,

employees forfeited

14,002

and

22,129

shares of restricted stock following their termination

of employment with the Company.

13.

Stock-based compensation (continued)

Stock-based compensation charge and unrecognized compensation

cost

The Company recorded a stock-based compensation charge, net during the three months ended December 31, 2024 and 2023, of

2.6

million and $

1.8

million, respectively,

which comprised:

Total

charge

Allocated to cost

of goods sold, IT

processing,

servicing and

support

Allocated to

selling, general

and

administration

Three months ended December 31, 2024

Stock-based compensation charge

2,655

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(11)

Total - three months

ended December 31, 2024

2,644

Three months ended December 31, 2023

Stock-based compensation charge

1,812

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(8)

Total - three months

ended December 31, 2023

1,804

The Company

recorded a stock-based

compensation charge,

net during

the six months

ended December 31,

2024 and 2023,

5.0

million and $

3.6

million respectively, which

comprised:

Total

charge

Allocated to cost

of goods sold, IT

processing,

servicing and

support

Allocated to

selling, general

and

administration

Six months ended December 31, 2024

Stock-based compensation charge

5,032

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(11)

Total - six months ended

December 31, 2024

5,021

Six months ended December 31, 2023

Stock-based compensation charge

3,580

Reversal of stock compensation charge related to stock

options and restricted stock forfeited

(17)

Total - six months ended

December 31, 2023

3,563

The stock-based compensation charges

have been allocated to selling,

general and administration based

on the allocation of the

cash compensation paid to the relevant employees.

December

31,

2024,

the

total

unrecognized

compensation

cost

stock

options

was

3.5

million,

which

the

Company expects to

recognize over

two years

. As of

December 31, 2024,

the total unrecognized

compensation cost related

to restricted

stock awards was $

6.3

million, which the Company expects to recognize over

two years

During the three months

ended December 31,

2024 and 2023, the

Company recorded a deferred

tax benefit of $

0.5

million and

0.3

million, respectively,

related to the stock-based compensation charge

recognized related to employees of Lesaka.

During the six

months

ended

December

31,

2024

and

2023,

the

Company

recorded

deferred

tax

benefit

0.8

million

and

0.3

million,

respectively,

to the

stock-based

compensation

charge

recognized

to employees

of Lesaka.

During

these periods

the

Company recorded a valuation allowance related to the full deferred tax benefit recognized

because it does not believe that the stock-

based compensation

deduction would

be utilized

as it

does not

anticipate generating

sufficient taxable

income in

the United

States.

The Company deducts

the difference between

the market value on

the date of exercise

by the option

recipient and the

exercise price

from income subject to taxation in the United States.

14.

(Loss) Earnings per share

The Company

has issued redeemable

common stock

which is redeemable

at an amount

other than

fair value.

Redemption of

class of

common stock

at other

than fair

value increases

or decreases

the carrying

amount of

the redeemable

common stock

and is

reflected in basic earnings

per share using the two-class

method. There were

redemptions of common stock, or

adjustments to the

carrying value

of the redeemable

common stock

during the three

and six months

ended December 31,

2024 and 2023.

Accordingly,

the two-class method

presented below does

not include the impact

of any redemption.

The Company’s

redeemable common stock

described in Note 14 to the Company’s

audited consolidated financial statements included in its Annual Report on Form 10-K

for the

year ended June 30, 2024.

Basic (loss) earnings per share

includes shares of restricted stock that

meet the definition of a

participating security because these

shares are eligible

to receive non

-forfeitable dividend

equivalents at the

same rate as

common stock.

Basic (loss) earnings

per share

has been calculated using

the two-class method and

basic (loss) earnings per

share for the three

and six months ended

December 31,

2024 and

2023, reflects

only undistributed

earnings. The

computation below

of basic

(loss) earnings

per share

excludes the

net loss

attributable

unvested

restricted

stock

(participating

non-vested

restricted

stock)

from

the

numerator

and

excludes

the

dilutive impact of these unvested shares of restricted stock from the denominator.

Diluted (loss)

earnings

per share

has been

calculated

to give

effect

to the

number

of shares

of additional

common

stock that

would have

been outstanding

if the

potential dilutive

instruments had

been issued

in each

period. Stock

options are

included in

the

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

stock method and are not considered to be

participating securities,

as the

stock options

do not

contain non-forfeitable

dividend rights.

The Company

has excluded

employee stock

options to

purchase

257,445

and

51,704

shares of common

stock from the calculation

of diluted loss per

share during the

three months ended December

31, 2024 and 2023 because the effect would be antidilutive.

The Company has excluded employee stock options to

purchase

338,725

and

46,756

shares of

common stock

from the

calculation of

diluted loss

per share

during the

six months

ended December

31, 2024

and 2023, because the effect would be antidilutive.

The

calculation

of diluted

(loss) earnings

per

includes the

dilutive

effect

a portion

of the

restricted

stock granted

employees

these

restricted

stock

are

considered

contingently

returnable

for

the

purposes

the

diluted

(loss)

earnings per share calculation and the vesting conditions in respect of

a portion of the restricted stock had been satisfied.

14.

(Loss) Earnings per share (continued)

The vesting conditions for all awards made are discussed in Note 17 to the Company’s audited consolidated financial statements

included in its Annual Report on Form 10-K for the year ended June

30, 2024.

The

following

table

presents

net

loss

attributable

Lesaka

and

the

data

used

the

basic

and

diluted

loss

per

computations using the two-class method:

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

(in thousands except

percent and

per share data)

Numerator:

Net loss attributable to Lesaka

(32,134)

(2,707)

(36,676)

(8,358)

Undistributed loss

(32,134)

(2,707)

(36,676)

(8,358)

Percent allocated to common shareholders

(Calculation 1)

97%

96%

97%

95%

Numerator for loss per share: basic and diluted

(31,034)

(2,588)

(35,430)

(7,961)

Denominator

Denominator for basic (loss) earnings per share:

weighted-average common shares outstanding

77,024

60,990

69,589

60,134

Effect of dilutive securities:

Denominator for diluted (loss) earnings

per share: adjusted weighted average

common shares outstanding and assuming

conversion

77,024

60,990

69,589

60,134

Loss per share:

Basic

(0.40)

(0.04)

(0.51)

(0.13)

Diluted

(0.40)

(0.04)

(0.51)

(0.13)

(Calculation 1)

Basic weighted-average common shares

outstanding (A)

77,024

60,990

69,589

60,134

Basic weighted-average common shares

outstanding and unvested restricted shares

expected to vest (B)

79,753

63,805

72,037

63,134

Percent allocated to common shareholders

(A) / (B)

97%

96%

97%

95%

Options to

purchase

4,743,500

shares of

the Company’s

common stock

at prices

ranging from

6.00

to $

14.00

per share

were

outstanding

during the

three and

six months

ended December

31, 2024,

but were

not included

in the

computation of

diluted (loss)

earnings per

share because

the options’

exercise price

was greater

than the

average market

price of

the Company’s

common stock.

Options to purchase

755,006

shares of the

Company’s common stock at

prices ranging from

4.87

to $

11.23

per share were

outstanding

during the

three and

six months

ended December

31, 2023,

respectively,

but were

not included

in the

computation of

diluted (loss)

earnings per

share because

the options’

exercise price

was greater

than the

average market

price of

the Company’s

common stock.

The options, which expire at various dates through February 3, 2032,

were still outstanding as of December 31, 2024.

15.

Supplemental cash flow information

The following

table presents

supplemental

cash flow

disclosures

for the

three and

six months

ended December

31, 2024

and

2023:

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

Cash received from interest

716

482

1,297

927

Cash paid for interest

4,242

6,308

7,513

9,233

Cash paid for income taxes

3,253

2,806

3,208

3,410

15.

Supplemental cash flow information (continued)

Disaggregation of cash, cash equivalents and restricted

cash

Cash, cash equivalents and restricted

cash included on the Company’s unaudited condensed consolidated statement of

cash flows

includes restricted cash

related to cash

withdrawn from the

Company’s

debt facilities to

fund ATMs.

This cash may

only be used

fund ATMs

and is

considered restricted

as to

use and

therefore is

classified as

restricted cash.

Cash, cash

equivalents and

restricted

cash also includes cash in certain bank accounts that has

been ceded to Nedbank. As this cash has been pledged

and ceded it may not

be drawn

and is

considered

restricted as

to use

and therefore

is classified

as restricted

cash as

well. Refer

to Note

9 for

additional

information regarding the

Company’s facilities. The following

table presents the

disaggregation of cash,

cash equivalents and

restricted

cash as of December 31, 2024 and 2023, and June 30, 2024:

December 31,

2024

December 31,

2023

June 30, 2024

Cash and cash equivalents

60,625

44,316

59,065

Restricted cash

112

23,522

6,853

Cash, cash equivalents and restricted cash

60,737

67,838

65,918

Leases

The following table presents supplemental

cash flow disclosure related to leases

for the three and nine months

ended December

31, 2024 and 2023:

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

Cash paid for amounts included in the measurement of

lease liabilities

Operating cash flows from operating leases

1,212

679

2,216

1,372

Right-of-use assets obtained in exchange for lease

obligations

Operating leases

708

243

1,218

983

16.

Revenue recognition

Disaggregation of revenue

The

following

table

presents

the

Company’s

revenue

disaggregated

major

revenue

streams,

including

reconciliation

reportable segments for the three months ended December 31, 2024:

Merchant

Consumer

Enterprise

Total

Processing fees

37,931

7,862

5,825

51,618

South Africa

36,068

7,862

5,825

49,755

Rest of Africa

1,863

Technology

products

8,121

1,187

9,373

South Africa

8,057

1,187

9,309

Rest of Africa

Prepaid airtime sold

66,653

1,660

68,336

South Africa

59,874

1,660

61,557

Rest of Africa

6,779

Lending revenue

7,376

Interest from customers

1,610

120

1,730

Insurance revenue

4,868

Account holder fees

1,765

Other

902

850

1,752

South Africa

845

850

1,695

Rest of Africa

Total revenue, derived

from the following geographic

locations

115,217

22,929

8,672

146,818

South Africa

106,454

22,929

8,672

138,055

Rest of Africa

8,763

16.

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

following

table

presents

the

Company’s

revenue

disaggregated

major

revenue

streams,

including

reconciliation

reportable segments for the three months ended December 31, 2023:

Merchant

Consumer

Enterprise

Total

Processing fees

22,984

6,175

6,820

35,979

South Africa

21,528

6,175

6,820

34,523

Rest of Africa

1,456

Technology

products

557

2,646

3,215

South Africa

518

2,646

3,176

Rest of Africa

Prepaid airtime sold

90,620

1,339

92,011

South Africa

85,618

1,339

87,009

Rest of Africa

5,002

Lending revenue

5,586

Interest from customers

1,453

Insurance revenue

2,897

Account holder fees

1,502

Other

654

483

113

1,250

South Africa

604

483

113

1,200

Rest of Africa

Total revenue, derived

from the following geographic

locations

116,268

16,707

10,918

143,893

South Africa

109,721

16,707

10,918

137,346

Rest of Africa

6,547

The

following

table

presents

the

Company’s

revenue

disaggregated

major

revenue

streams,

including

reconciliation

reportable segments for the six months ended December 31, 2024:

Merchant

Consumer

Enterprise

Total

Processing fees

63,002

15,392

12,337

90,731

South Africa

59,337

15,392

12,337

87,066

Rest of Africa

3,665

Technology

products

9,966

2,478

12,511

South Africa

9,829

2,478

12,374

Rest of Africa

137

Prepaid airtime sold

151,806

3,238

155,084

South Africa

139,147

3,238

142,425

Rest of Africa

12,659

Lending revenue

14,332

Interest from customers

3,286

120

3,406

Insurance revenue

9,208

Account holder fees

3,464

Other

2,199

1,378

3,628

South Africa

2,085

1,378

3,514

Rest of Africa

114

Total revenue, derived

from the following geographic

locations

230,259

44,001

18,104

292,364

South Africa

213,684

44,001

18,104

275,789

Rest of Africa

16,575

16.

Revenue recognition (continued)

Disaggregation of revenue (continued)

The

following

table

presents

the

Company’s

revenue

disaggregated

major

revenue

streams,

including

reconciliation

reportable segments for the six months ended December 31, 2023:

Merchant

Consumer

Enterprise

Total

Processing fees

45,310

11,908

13,254

70,472

South Africa

42,494

11,908

13,254

67,656

Rest of Africa

2,816

Technology

products

1,068

4,172

5,271

South Africa

978

4,172

5,181

Rest of Africa

Prepaid airtime sold

176,856

2,416

179,365

South Africa

167,100

2,416

169,609

Rest of Africa

9,756

Lending revenue

10,959

Interest from customers

2,973

Insurance revenue

5,508

Account holder fees

2,870

Other

1,424

918

222

2,564

South Africa

1,325

918

222

2,465

Rest of Africa

Total revenue, derived

from the following geographic

locations

227,631

32,287

20,064

279,982

South Africa

214,870

32,287

20,064

267,221

Rest of Africa

12,761

17.

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 and

branch locations through

which the

Company operates

its consumer

business in

South Africa.

The Company’s

operating leases

have remaining

lease terms

of between

one

and

five years

. The Company also operates parts

of its consumer business from

locations which it leases for a period

of less than

one year

. The Company’s operating lease expense during the three months ended

December 31, 2024 and 2023 was $

1.2

million and

0.7

million, respectively.

The Company’s operating lease expense during the

six months ended December 31, 2024 and 2023 was $

2.2

million and $

1.4

million, respectively.

The

Company

has

also

entered

into

short-term

leasing

arrangements,

primarily

for

the

lease

branch

locations

and

other

locations,

to operate its consumer

business in South Africa.

The Company’s

short-term lease expense during

the three months ended

December 31, 2024

and 2023, was $

1.2

million and $

1.0

million, respectively.

The Company’s

short-term lease expense

during the

six months ended December 31, 2024 and 2023, was $

2.3

million and $

1.9

million, respectively.

The following table presents supplemental balance

sheet disclosure related to the

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

lease liabilities as of December 31, 2024 and June 30, 2024:

December 31,

June 30,

2024

Right of use assets obtained in exchange for lease obligations:

Weighted average

remaining lease term (years)

2.7

3.1

Weighted average

discount rate (percent)

10.5

17.

Leases (continued)

The maturities of the Company’s

operating lease liabilities as of December 31, 2024, are presented below:

Maturities of operating lease liabilities

Year

ended June 30,

2025 (excluding six months to December 31, 2024)

2,338

2026

3,200

2027

2,155

2028

1,369

2029

279

Thereafter

Total undiscounted

operating lease liabilities

9,381

Less imputed interest

1,305

Total operating lease liabilities,

included in

8,076

Operating lease liability - current

3,257

Operating lease liability - long-term

4,819

18.

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.

Change to internal reporting structure and re

cast of previously reported information

The Company’s

chief operating

decision maker

is the

Company’s

Executive Chairman.

He changed

the Company’s

operating

and internal reporting

structures to present

a new segment,

Enterprise, separately.

The chief operating

decision maker has

decided to

analyze the Company’s

operating performance primarily based on three operational lines, namely,

(i) Merchant, which focuses on

both formal and informal sector

merchants.

Formal sector merchants are generally

in urban areas,

have higher

revenues and

have access

to multiple

service providers.

Informal sector

merchants, which

are often

sole proprietors

and

usually

have lower

revenues compared

with formal

section merchants,

operate in

rural areas

or in

informal urban

areas and

do not

always have access to a full-suite of traditional banking products;

(ii) Consumer,

which primarily

focuses on

individuals who

have historically

been excluded

from traditional

financial services

and to whom we offer transactional accounts (banking), insurance, lending (short-term

loans), payments solutions (digital wallet) and

various value-added services;

and

(iii) Enterprise, which comprises large-scale corporate and government organizations, including but not limited to banks, mobile

network operators (“MNOs”) and municipalities.

Reallocation of certain activities among operating segments

The

change

our

operating

segments

during

the

second

quarter

fiscal

2025

included

the

separation

Enterprise

out

Merchant.

The

Company

has also

allocated

the

majority

of Adumo’s

operations

Merchant,

with

smaller

part

its operations

focusing on the provision

of physical and digital

prepaid and secure payout

solutions for South African

businesses with large individual

end-users being allocated to Consumer.

Previously reported information has been recast.

The Merchant segment includes revenue generated from the sale of prepaid airtime, and fees earned from the provision

of value-

added services (“VAS”)

and card-acquiring services to informal sector merchants.

It also includes activities related to the provision of

goods

and services

provided

to corporate

and

other

juristic entities.

The

Company

earns fees

from

processing

activities

performed

(including

card acquiring

and the

provision

of a

payment

gateway services)

for

its customers,

and

rental and

license fees

from

the

provision of point

of sales (“POS”) hardware

and software to

the hospitality industry.

The Company also

provides cash management

and payment services to merchant customers through a digital vault which is located at the customer’s premises and through which the

Company is able to provide

the services which generate

processing fee revenue. From

July 1, 2023, the segment

includes fees earned

from transactions performed by customers utilizing its ATM

infrastructure.

18.

Operating segments (continued)

Reallocation of certain activities among operating segments (continued)

The Consumer segment

includes activities related

to the provision

of financial services

to customers,

including a bank

account,

loans and

insurance products.

The Company

charges monthly

administration fees

for all

bank accounts.

Customers that

have a

bank

account managed by the Company are issued cards that can be utilized to withdraw funds at an ATM or to transact at a merchant POS.

The Company

earns processing

fees from

transactions processed

for these

customers. The

Company also

earns fees

on transactions

performed

other

banks’

customers

utilizing

its

ATM

(until

June

30,

2023)

POS. The

Company

provides

short-term

loans

customers in South Africa for which it earns initiation and monthly service fees, and interest revenue from the second quarter of fiscal

2025.

The Company writes life insurance contracts, primarily funeral-benefit policies, and policy holders pay the Company a monthly

insurance premium.

The Company

also earns fees

from the provision

of physical and

digital prepaid

and secure payout

solutions for

South African businesses.

The Enterprise segment provides its business and government-related customers with transaction

processing services that involve

the collection, transmittal and retrieval of all transaction data. This segment also includes sales of hardware

and licenses to customers.

Hardware includes

the sale of

POS devices, SIM

cards and other

consumables which can

occur on an

ad hoc basis.

Licenses include

the right to use certain technology developed by the Company.

The reconciliation of the reportable segment’s revenue to revenue from external customers for the three months ended December

31, 2024 and 2023, is as follows:

Revenue

Reportable

Segment

Inter-

segment

From

external

customers

Merchant

115,811

594

115,217

Consumer

22,929

Enterprise

8,933

261

8,672

Total for the three

months ended December 31, 2024

147,673

855

146,818

Merchant

117,182

914

116,268

Consumer

16,707

Enterprise

11,921

1,003

10,918

Total for the three

months ended December 31, 2023

145,810

1,917

143,893

The reconciliation of

the reportable segment’s

revenue to revenue from

external customers for the

six months ended December

31, 2024 and 2023, is as follows:

Revenue

Reportable

Segment

Inter-

segment

From

external

customers

Merchant

231,441

1,182

230,259

Consumer

44,001

Enterprise

20,815

2,711

18,104

Total for the six months ended

December 31, 2024

296,257

3,893

292,364

Merchant

229,243

1,612

227,631

Consumer

32,287

Enterprise

21,388

1,324

20,064

Total for the six months ended

December 31, 2023

282,918

2,936

279,982

18.

Operating segments (continued)

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’s reportable segments’

measure of profit or

loss. The Company is

working on obtaining a

separate lending facility to

fund a portion of

its Consumer lending

during the

twelve months

ended June

30, 2025.

The Company

expected to

have this

facility in

place on

July 1,

2024, however,

the

Company has

been unable to

finalize terms as

the separate

lending facility

will form part

of a broader

refinancing of

the Company’s

facilities. Therefore, the Company has included an intercompany interest expense in its Consumer Segment Adjusted EBITDA for

the

three and

six months

ended December

31, 2024. The

Company does

not allocate

once-off items,

stock-based compensation

charges,

depreciation and amortization, impairment

of goodwill or other intangible assets, other

items (including gains or losses on disposal

investments, fair

value adjustments

to equity

securities), interest

income, certain

interest expense,

income tax

expense or

loss from

equity-accounted investments to

its reportable segments.

Group costs generally

include: employee related

costs in relation

to employees

specifically hired

for group

roles and

related directly

to managing

the US-listed

entity; expenditures

related to

compliance with

the

Sarbanes-Oxley Act of

2002; non-employee directors’

fees; legal

fees; group and

US-listed related

audit fees; and

directors and officer’s

insurance premiums.

Once-off

items represent

non-recurring

expense items,

including costs

to acquisitions

and transactions

consummated

ultimately

not

pursued.

Unrealized

loss

for

currency

adjustments

represents

foreign

currency

mark-to-market

adjustments

certain

intercompany

accounts.

Interest

adjustment

represents

the

intercompany

interest

expense

included

the

Consumer Segment Adjusted EBITDA. The Stock-based compensation adjustments reflect stock-based compensation expense and are

excluded from the calculation of Segment Adjusted

EBITDA and are therefore reported as reconciling

items to reconcile the reportable

segments’ Segment Adjusted EBITDA to the Company’s loss before income tax expense. Effective from fiscal 2025, all lease charges

are allocated to the Company’s operating

segments, whereas in fiscal 2024 the Company presented certain lease charges on

a separate

line outside of

its operating

segments. Prior period

information has been

re-presented to include

the lease

charges which were

previously

reported on a separate line in the Company’s Consumer and Merchant

(now Merchant, Enterprise and Consumer) operating segments.

The reconciliation of the reportable

segments’ measure of profit or

loss to loss before income taxes

for the three and six months

ended December 31, 2024 and 2023, is as follows:

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

Reportable segments' measure of profit or loss

14,630

10,963

26,942

20,808

Operating loss: Group costs

(2,820)

(2,011)

(5,769)

(3,833)

Once-off costs

(488)

816

(2,293)

738

Interest adjustment

757

1,588

Unrealized Loss FV for currency adjustments

(435)

122

(216)

Stock-based compensation charge adjustments

(2,644)

(1,804)

(5,021)

(3,563)

Depreciation and amortization

(8,223)

(5,813)

(14,499)

(11,669)

Loss on disposal of equity-accounted investments

(161)

Change in fair value of equity securities

(33,731)

Reversal of allowance of EMI doubtful debt

250

Interest income

721

485

1,307

934

Interest expense

(6,174)

(4,822)

(11,206)

(9,731)

Loss before income tax expense

(38,568)

(2,064)

(43,059)

(6,046)

18.

Operating segments (continued)

The following tables summarize

supplemental segment information

for the three and six months

ended December 31, 2024 and

2023:

Three months ended

Six months ended

December 31,

2024

2023

2024

2023

Revenues

Merchant

115,811

117,182

231,441

229,243

Enterprise

8,933

11,921

20,815

21,388

Consumer

22,929

16,707

44,001

32,287

Total reportable segment

revenue

147,673

145,810

296,257

282,918

Segment Adjusted EBITDA

Merchant

(1)(2)

10,319

7,497

17,873

14,407

Enterprise

(2)

(31)

891

331

1,706

Consumer

(1)(2)

4,342

2,575

8,738

4,695

Total Segment Adjusted

EBITDA

14,630

10,963

26,942

20,808

Depreciation and amortization

Merchant

3,027

1,944

5,254

3,904

Enterprise

194

215

Consumer

235

179

437

348

Subtotal: Operating segments

3,356

2,220

5,885

4,467

Group costs

4,867

3,593

8,614

7,202

Total

8,223

5,813

14,499

11,669

Expenditures for long-lived assets

Merchant

5,783

2,052

9,669

4,736

Enterprise

105

Consumer

511

120

568

166

Subtotal: Operating segments

6,318

2,198

10,283

5,007

Group costs

Total

6,318

2,198

10,283

5,007

(1) Segment Adjusted

EBITDA for the

three months ended December

31, 2024, includes

retrenchments costs for

Consumer of

0.01

million (ZAR

0.1

million). Segment

Adjusted EBITDA

for Merchant

includes retrenchment

costs of

0.01

million (ZAR

0.1

million) and Consumer includes retrenchment costs of $

0.1

million (ZAR

1.3

million) for the three months ended December 31,

2023.

(2) Segment

Adjusted EBITDA

for the

six months

ended December

31, 2024,

includes retrenchments

costs for

Consumer of

0.1

million (ZAR

1.2

million) and Enterprise of $

0.0

million (ZAR

0.2

million). Segment Adjusted EBITDA

for Merchant includes

retrenchment costs

of $

0.2

million (ZAR

4.7

million) and

Consumer includes

retrenchment costs

of $

0.2

million (ZAR

2.8

million)

for the six months ended December 31, 2023.

The segment

information as

reviewed by

the chief operating

decision maker

does not include

a measure of

segment assets per

segment as all of

the significant assets are

used in the operations

of all, rather than

any one, of the segments.

The Company does

not

have dedicated assets

assigned to a

particular operating segment.

Accordingly,

it is not meaningful

to attempt an arbitrary

allocation

and segment asset allocation is therefore not presented.

19.

Income tax

Income tax in interim periods

For the purposes of interim

financial reporting, the Company

determines the appropriate income

tax provision by first

applying

the effective

tax rate

expected to

be applicable

for the

full fiscal

year to

ordinary income.

This amount

is then

adjusted for

the tax

effect

significant

unusual

items,

for

instance,

changes

tax

law,

valuation

allowances

and

non-deductible

transaction-related

expenses that

are reported

separately,

and have an

impact on the

tax charge.

The cumulative effect

of any change

in the enacted

tax

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

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

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

For

the

three

and

six

months

ended

December

31,

2024,

the

Company’s

effective

tax

rate

was

impacted

the

tax expense

recorded by the

Company’s profitable South African operations,

non-deductible expenses (including transaction-related expenditures),

the on-going

losses incurred

by certain of

the Company’s

South African

businesses and the

associated valuation

allowances created

related to the deferred tax assets recognized regarding net operating losses incurred

by these entities.

For

the

three

and

six

months

ended

December

31,

2023,

the

Company’s

effective

tax

rate

was

impacted

the

tax expense

recorded by the Company’s

profitable South African operations,

non-deductible expenses, the

on-going losses incurred

by certain of

the Company’s South African businesses and the associated valuation allowances created related to the deferred tax assets recognized

regarding net operating losses incurred by these entities.

Uncertain tax positions

As of three months ended December 31, 2024 and June 30, 2023, the Company had

unrecognized tax benefits. The Company

files income

tax returns

mainly in

South Africa,

Botswana, Namibia

and in

the U.S.

federal jurisdiction.

As of

December 31,

2024,

the Company’s South African subsidiaries are no longer subject to income tax examination by the South African Revenue Service

for

periods before

June 30,

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.

20.

Commitments and contingencies

Guarantees

The South African

Revenue Service and

certain of the

Company’s customers,

suppliers and other

business partners have

asked

the Company

to provide

them with

guarantees, including

standby letters

of credit,

issued by

South African

banks. The

Company is

required to procure these guarantees for these third parties to operate

its business.

RMB has

issued

guarantees

these

third

parties

amounting

ZAR

33.1

million

1.8

million,

translated

exchange

rates

applicable as of December 31, 2024) thereby utilizing part of the Company’s

short-term facilities. The Company pays commission of

between

3.42

% per annum to

3.44

% per annum of the face

value of these guarantees and does

not recover any of the commission

from

third parties.

Nedbank has

issued guarantees

to these

third parties

amounting to

ZAR

2.1

million ($

0.1

million, translated

at exchange

rates

applicable as of December 31, 2024) thereby utilizing part of the Company’s

short-term facilities. The Company pays commission of

between

0.47

% per annum to

1.84

% per annum of the face

value of these guarantees and does

not recover any of the commission

from

third parties.

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

The maximum

potential amount that

the Company could

pay under these

guarantees is ZAR

35.2

million ($

2.1

million, translated

at exchange

rates applicable

as of

December 31,

2024). As

discussed in

Note 9,

the Company

has ceded

and pledged

certain bank

accounts to Nedbank as

security for the guarantees

issued by them

with an aggregate value

of ZAR

2.1

million ($

0.1

million, translated

exchange

rates

applicable

December

31,

2024).

The

guarantees

have

reduced

the

amount

available

under

its indirect

and

derivative facilities in the Company’s

short-term credit facilities described in Note 9.

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.

21.

Subsequent events

Proposed acquisition of Recharger

On November 20, 2024,

the Company announced the

acquisition of Recharger (Pty)

Ltd (“Recharger”).

The acquisition is

subject

the

satisfaction

customary

closing

conditions,

including

certain

regulatory

approvals.

January

29,

2025,

all regulatory

approvals, including approval by

the Competition Commission (South

Africa), were satisfied. The acquisition

is expected to close in

the third quarter of fiscal 2025.

The purchase

consideration of

ZAR

507

million will

be paid

over

two

tranches with

the first tranche

settled at closing

and the

second tranche

a year later.

The purchase consideration

will be settled

through a

combination of

ZAR

332

million in cash

and ZAR

175

million in shares of

the Company’s

common stock. The share

price applied to determine

the number of shares

of common stock

to be

issued for

the equity

consideration will be

based on

the volume-weighted

average price

of the Company’s

common shares

for

the three-month period prior

to the disbursal

of each tranche. The

Company will also

make a ZAR

million contribution to Recharger

at closing which will be used exclusively to repay a loan due by Recharger

to the seller.

The Company expects the acquisition

to act as an

entry point for it

into the South African

private utilities space while

augmenting

the Enterprise division’s alternative

payment offering.

Item 2. Management’s Discussion and Analysis of

Financial Condition and Results of Operations

The following discussion should be read in conjunction with our Annual Report on Form 10-K for the year

ended June 30, 2024,

and the unaudited condensed consolidated financial statements and

the accompanying notes included in this Form 10-Q.

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.

Forward-looking statements

Some of the statements in this Form 10-Q constitute forward-looking

statements. These statements relate to future events or our

future financial performance

and involve known

and unknown

risks, uncertainties and

other factors that

may cause

our or our

industry’s

actual results,

levels of

activity,

performance

or achievements

to be

materially

different

from

any future

results, levels

activity,

performance or achievements expressed,

implied or inferred by these

forward-looking statements. Such factors

include, among other

things, those

listed under Item

1A.—“Risk Factors” in

our Annual

Report on Form

10-K for

the year ended

June 30, 2024.

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.

Although we believe

that the expectations

reflected in the

forward-looking statements are

reasonable, we do

not know whether

we can

achieve positive

future results,

levels of

activity,

performance, or

goals. Actual

events or

results may

differ

materially.

undertake no obligation to update any of the forward-looking statements after the date of this Form 10-Q to conform those statements

to reflect the occurrence of unanticipated events, except as required by applicable

law.

You

should read this Form 10-Q and the documents that we reference herein and the documents we have filed as exhibits hereto

and thereto

and which we

have filed with

the United States

Securities and

Exchange Commission

(“SEC”) completely

and with

the

understanding that our

actual future results,

levels of activity,

performance and achievements

may be materially

different from

what

we expect. We

qualify all of our forward-looking statements by these cautionary

statements.

Recent Developments

Beginning in the

second quarter of fiscal

year 2025, Lesaka has

commenced disclosing its

financial results across

three distinct

operating divisions: Merchant, Consumer

and Enterprise. We are building an

integrated multiproduct platform that

is organized around

addressing a number of customer needs.

The Consumer

Division (“Consumer”)

will remain

substantially the

same. We

offer

consumers a

transactional account,

loans

and insurance. On 1 October the Adumo Payouts business officially

became part of Consumer.

The Merchant Division (“Merchant”) serves merchants

and micro-merchants, combining existing Connect, Kazang and

Kazang

Insights (previously known

as Touchsides) operations, as

well as

the bulk of

Adumo, specifically its

merchant acquiring and

processing

business and its GAAP hospitality platform. Combined the Lesaka

offering will be amongst the most comprehensive

in the market in

meeting the

needs of

micro and

medium size

businesses in

the region.

Our integrated

multi-product range

provides merchants

with

card acquiring, cash management, lending, software and Alternative Digital Payments (“ADP”). ADP includes

our pre-paid solutions

and supplier enabled payments (previously referred to as our value-added services).

Our

Enterprise

Division

(“Enterprise”)

focuses

large

corporates,

mobile

network

operators,

banks,

governments

and

municipalities. Our offering includes our bill and

utility payments platform, a new

payment switch, Prism Switch, as

well as Hardware

Security Modules,

a third

party vending

and security

business. Enterprise serves

third party

corporates and

the technology

needs of

our Consumer and Merchant Divisions.

Merchant Division

This division provides merchant acquiring, software, cash management services, lending and ADP, that empower merchants and

micro-merchants to transact efficiently and fulfill their

potential.

Performance in Merchant has been driven by:

Merchant acquiring

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

Q2 2023

Number of devices in deployment

80,178

48,199

34,216

Total Throughput

for the quarter (ZAR billions)

11.3

4.1

3.1

●

Merchant acquiring includes 80,178 devices deployed under the Adumo, Card Connect and Kazang brands. Q2 2025 is

inclusive of

approximately

27,000 devices

deployed under

the Adumo

brand with

the Adumo

transaction closing

October 1, 2024.

●

Throughput increased

to ZAR

11.3

billion for

the quarter,

driven mainly

by the

inclusion of

Adumo in

Q2 2025

and

supported by 19% year-on-year increase in throughput

attributable to Kazang Pay.

Software

Our software

solutions are

offered through

GAAP,

a subsidiary

of Adumo.

GAAP has

operations in

South Africa,

Botswana,

Kenya

and

clients

further

countries,

and

the

leading

provider

integrated

point-of-sales

software

and

hardware

the

hospitality industry in Southern Africa, serving clients such as KFC, McDonald’s,

Pizza Hut, Nando’s and

Krispy Kreme.

Fiscal quarter ended December 31,

Q2 2025

Number of GAAP sites

9,705

Approximate ARPU per site (ZAR)

3,300

ARPU is calculated on a

revenue per site basis, as

monthly figure based on a

three-month rolling average for the quarter

ending December 31, 2024.

●

The Adumo transaction closed on October 1, 2024. The number of

GAAP sites was 9,705 as of December 31, 2024.

●

ARPU per site, which combines hardware, software and acquiring revenue,

was approximately ZAR 3,300 per month.

Cash management

Our cash management and digitalization

solutions effectively “puts the bank” in 4,664 merchants’

stores.

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

Q2 2023

2025

vs. 2024

Number of devices in deployment

4,664

4,484

4,325

Cash settlements (throughput)

for the quarter

(ZAR billions)

30.4

29.9

29.5

●

Our cash business remains a vital product in our merchant offering and is a key differentiator for us in the digitalization

of cash. We provide robust cash vaults in the merchant

sector (Cash Connect) and are building a presence in the micro-

merchant

sector

(Kazang

Vaults),

which

enables

our

merchant

customer

base

mitigate

their

operational

risks

pertaining to cash management and security.

Lending

Our lending

solutions are offered to

merchants through Capital Connect

and Adumo Capital, a joint

venture with Retail Capital

(a division of Tyme Bank)

for Merchant Cash Advance (“MCA”), with a 50:50 profit share.

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

Q2 2023

Total credit disbursed

(ZAR millions)

178

170

205

Total net loan book

size at period end (ZAR millions)

343

253

290

Amounts reflected above includes 100% of Adumo

Capital’s

credit disbursed and net loan book.

●

Q2 2025

is inclusive

of credit

disbursed

under

the Adumo

brand

with the

Adumo

transaction closing

on October

2024.

●

Capital Connect’s

lending proposition

is an important

component in

enabling the merchants

we serve

to compete

and

grow.

●

Adumo Capital, a 50:50 joint venture

with Retail Capital, enables merchants to

access working capital in exchange

for

a portion of future turnover at POS.

Merchants can apply online and have access to funds within 24 hours.

Alternative Digital Payments

ADP includes our pre-paid solutions and supplier enabled payments (previously

referred to as our value-added services).

Pre-paid

solutions

comprise

airtime,

electricity

and

gaming

vouchers.

Supplier

enabled

payments

predominantly

includes

supplier payments, with the balance attributable to international money transfers, bill payments, satellite (digital) television

offerings.

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

Q2 2023

2025

vs. 2024

Number of devices in deployment

89,571

79,051

64,428

13%

Total throughput

for the quarter (ZAR billions)

11.1

8.4

6.9

32%

Pre-paid solutions throughput for the quarter

(ZAR billions)

4.9

4.6

3.7

Supplier enabled payments throughput for the

quarter (ZAR

billions)

6.2

3.8

3.2

63%

2025 includes

5,714 devices

attributable to

the acquisition

of Kazang

Insights (formerly

known as

Touchsides),

effective

May 1, 2024, which are not enabled for Alternative

Digital Payments.

●

We had 89,571 devices deployed

as of December

31, 2024, representing a

13% year-on-year growth compared

to 79,051

devices as of December 31, 2023. This includes 5,714 devices in Kazang Insights

(formerly known as Touchsides)

sites

that are not yet enabled for ADP.

●

Core to

our device

placement strategy

is the

decision

to focus

on quality

business and

optimizing

our existing

fleet,

which is reflected in a healthy throughput growth.

●

Total

throughput

increased

32%

ZAR

11.1

billion

year-on-year,

driven

63%

increase

supplier

enabled

payments.

Consumer Division

our

Consumer

Division

offer

transactional

accounts

(banking),

insurance,

lending

and

payments

solutions

designed

improve the lives

of historically underserviced

consumers and continue

to deliver against

our strategic focus

areas underpinning our

growth strategy.

Consumer

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

Q2 2023

2025

vs. 2024

Transactional accounts

(banking) - EasyPay Everywhere ("EPE")

Total active EPE transactional account base at

quarter end

(millions)

1.6

1.4

1.2

11%

Total active EPE transactional account base at

quarter end

Permanent grant recipients (millions)

1.4

1.2

1.0

16%

Approximate

Gross

EPE

account

activations

for

the

quarter -Permanent grant recipients (number)

99,000

137,000

43,000

(27%)

Approximate Net EPE account activations

for the quarter

Permanent grant recipients (number)

65,000

102,000

10,000

(37%)

Lending - EasyPay Loans

Approximate

number

loans

originated

during

the

quarter (number)

336,000

278,000

225,000

21%

Gross advances in the quarter (ZAR millions)

617

447

339

38%

Loan book size,

before allowances, at

quarter end

(ZAR

millions)

709

503

398

41%

Insurance - EasyPay Insurance

Approximate number

of insurance

policies written in

the

quarter (number)

50,000

42,000

29,000

19%

Total

active

insurance

policies

book

quarter

end

(number)

496,488

384,338

294,157

29%

Average

revenue

per

customer

per

month,

December 31, (permanent grant beneficiaries) (ZAR)

11%

Adumo Payouts

Approximate number of active cardholders

200,000

Approximate load value for the quarter (ZAR millions)

170

Source: SASSA statistical reports portal (2024) | Permanent grant customers per SASSA’s

monthly Social Assistance report

(December 31, 2024).

Gross loan book, before

provisions.

●

Driving customer acquisition

Gross EPE account

activations, continue to

grow at the new

levels for the permanent

base, post our marketing

and

distribution network enhancements

in fiscal 2024.

achieved approximately 99,000

gross account activations

the quarter, compared to

approximately 137,000 in the second quarter of fiscal 2024

which was higher than normal

due

to operational

issues at

the

Post Bank

specific

that quarter;

and

approximately

71,000

gross activations

quarter

ago

(Q1

2025).

After

accounting

for

churn,

net

active

account

growth

(

permanent

grant

customers

per

SASSA’s

monthly Social Assistance

report for

December 31, 2024,

on the SASSA

statistical reports

portal)

for the

quarter

was

approximately

65,000

accounts,

compared

approximately

102,000

the

second

quarter

fiscal

2024, and 33 000 in the first quarter of fiscal 2025.

Our total active EPE transactional account base stood at approximately 1.6 million at the end of December 2024, of

which

approximately

1.4

million

(or

approximately

89%)

are

permanent

grant

recipients

(

permanent

grant

customers per SASSA’s

monthly Social

Assistance report

for December

31, 2024,

on the SASSA

statistical reports

portal).

The balance comprises Social Relief of Distress (“SRD”) grant recipients, which was introduced during the

COVID pandemic and extended in calendar year 2024.

Our priority

is to grow

our permanent

grant recipient

customers base,

where we

can build

deeper relationships

offering 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.

●

Progress on cross

selling

EasyPay Loans

originated

approximately 336,000

loans during

the quarter,

with our

consumer

loan book,

before allowances

(“gross book”), increasing 41%

to ZAR 709 million as

of December 31, 2024,

compared to ZAR 503 million

as of

December 31, 2023.

We have not amended our credit scoring or other lending criteria, and the growth is reflective of the demand for our

tailored

loan

product

for

this

market,

growth

EPE

bank

account

customer

base

and

improved

cross-selling

capabilities.

The

loan

conversion

rate continues

to improve

following

the implementation

a number

of targeted

Consumer

lending campaigns and encouraging results from our digital channels.

The

portfolio

loss

ratio

approximately

6%,

calculated

the

loans

written

off

over

the

last

months

percentage of

the total

gross loan

book at

the end

of the

quarter,

has remained

stable at

approximately 6%

on an

annualized basis, compared to quarter two fiscal 2024.

EasyPay Insurance

Our insurance product sales continue to grow and

is a material contributor to the

improvement in our overall ARPU.

have

been

able

improve

customer

penetration

35%

our

active

permanent

grant

account

base

December 31, 2024, compared

to 31% as of December

31, 2023. Approximately

50,000 new policies were

written

in the quarter, compared to

approximately 42,000 in the

comparable period in fiscal

The total number

of active

policies has grown 29% to approximately 496,000 policies as of December 31, 2024,

compared to 384,000 policies

as of December 31, 2023.

ARPU

ARPU for

our permanent

client base

has increased

to approximately

ZAR 94

per month

for the

second quarter

fiscal 2025, from approximately ZAR 85 in the second quarter of fiscal 2024.

Adumo Payouts

On 1 October the Adumo Payouts business officially became part

of the Consumer Division.

The number of active card

holders was approximately 200,000 at

the end of the second quarter of

fiscal 2025, with

a load value of approximately ZAR 170 million for quarter ended December

31, 2024.

Enterprise Division

our

Enterprise

Division

deliver

software

and

payment

technology

enterprise

clients,

who

are

generally

large-scale

corporate

and government

organizations,

including

but not

limited

to banks,

mobile network

operators

and

municipalities, driving

efficiency and innovation.

Fiscal quarter ended December 31,

Q2 2025

Q2 2024

2025

vs. 2024

Bill Payments

Total Throughput

for the quarter (ZAR billions)

8.3

7.3

13%

Utility Payments

Total Throughput

for the quarter (ZAR billions)

1.6

2.0

(16%)

Hardware Security Modules

Units

147

138

Switching

Approximate number of transactions (million)

Our

new

payment

switch,

Prism Switch

has

been

in production

since

June

2024 thus

prior

period

comparatives

are

not

applicable.

Acquisition of Recharger

On November 20,

2024, we announced

the acquisition of

Recharger (Pty) Ltd (“Recharger”),

an acquisition subject

to satisfaction

of customary closing

conditions. As of

January 29, 2025,

all regulatory approvals,

including approval by

the Competition Commission,

have been satisfied. The

transaction is expected to

close in the third quarter

of fiscal 2025, once

the remaining procedural customary

closing conditions are satisfied.

The purchase

consideration of

ZAR 507

million will

be paid

over two

tranches with

the first tranche

settled at closing

and the

second tranche

a year later.

The purchase consideration

will be settled

through a

combination of

ZAR 332 million

in cash and

ZAR

175 million

in shares

of our

common stock.

The share

price applied

to determine

the number

of shares

of our

common stock

to be

issued for the equity consideration will be based on the volume-weighted average price

of our shares for the three-month period prior

the

disbursal

each

tranche.

will

also

make

ZAR

million

contribution

Recharger

closing

which

will

used

exclusively to repay a loan due by Recharger to the seller.

expect

the

acquisition

act

as an

entry

point

for

into

the

South

African

private utilities

space

while

augmenting

the

Enterprise division’s alternative

payment offering.

Improvement in our Broad Based Black Economic

Empowerment (“B-BBEE”) rating to level 3

B-BBEE is

a key

strategic priority

for us. Achievement

of B-BBEE

objectives is

measured by

a scorecard

which establishes

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 2025 we reported that our independently verified B-BBEE rating improved to a level 3 rating from a level

4 rating achieved in fiscal year 2024.

Critical Accounting Policies

Our unaudited condensed 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

estimates

requires

management’s

judgment

based

variety

assumptions

and

other

determinants

such

historical experience, current and expected market conditions and certain scientific evaluation techniques. Critical accounting policies

are those

that reflect

significant judgments

or uncertainties

and may

potentially result

in materially

different

results under

different

assumptions

and

conditions.

have

identified

the

following

critical

accounting

policies that

are

described

detail

our

Annual Report on Form 10-K for the year ended June 30, 2024:

●

Business Combinations and the Recoverability of Goodwill;

●

Intangible Assets Acquired Through Acquisitions;

●

Revenue recognition – principal versus agent considerations;

●

Valuation

of investment in Cell C;

●

Recoverability of equity securities and equity-accounted investments;

●

Deferred Taxation;

●

Stock-based Compensation;

●

Accounts Receivable and Allowance for Doubtful Accounts Receivable;

and

●

Lending.

Recent accounting pronouncements adopted

Refer to Note

1 to

our unaudited condensed

consolidated financial statements

for a full

description of accounting

pronouncements

adopted, including the dates of adoption and the effects on

our unaudited condensed consolidated financial statements.

Recent accounting pronouncements not yet adopted

as of December 31, 2024

Refer

Note

our

unaudited

condensed

consolidated

financial

statements

for

full

description

recent

accounting

pronouncements

not

yet

adopted

December

31,

2024,

including

the

expected

dates

adoption

and

effects

our

financial

condition, results of operations and cash flows.

Currency Exchange Rate Information

Actual exchange rates

The actual exchange rates for and at the end of the periods presented were

as follows:

Table 1

Three months ended

Six months ended

Year

ended

December 31,

June 30,

2024

2023

2024

2023

2024

ZAR : $ average exchange rate

17.9054

18.7313

17.9327

18.6885

18.7070

Highest ZAR : $ rate during period

18.8296

19.4568

18.8296

19.4568

Lowest ZAR : $ rate during period

17.3354

18.2076

17.1144

17.6278

Rate at end of period

18.8296

18.2982

18.8296

18.2982

18.1808

form10qp56i0

Translation exchange

rates for financial reporting purposes

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 three and

six months ended

December 31, 2024

and 2023, vary

slightly from the

averages shown

in the

table above. Except as

described below,

the translation rates we

use in presenting our

results of operations are

the rates shown in

the

following table:

Three months ended

Six months ended

Year

ended

Table 2

December 31,

June 30,

2024

2023

2024

2023

2024

Income and expense items: $1 = ZAR

17.8495

18.7108

17.7967

18.7124

18.6844

Balance sheet items: $1 = ZAR

18.8296

18.2982

18.8296

18.2982

18.1808

have translated

the results

of operations

and operating

segment information

for the

three and

six months

ended December

31, 2024

and 2023,

provided in

the tables

below using

the actual

average exchange

rates per

month (i.e.

for each

of October

2024,

November

2024,

and

December

2024

for

the

second

quarter

fiscal

2025)

between

the

USD

and

ZAR

order

reduce

the

reconciliation

of information

presented to

our chief

operating decision

maker.

The impact

of using

this method

compared with

the

average rate for the

quarter and year to

date is not significant,

however, it does result in

minor differences. We believe that presentation

using

the

average

exchange

rates

per

month

compared

with

the

average

exchange

rate

per

quarter

and

year

date

improves

the

accuracy of the information presented in our external financial

reporting and leads to fewer differences between our external reporting

measures which are supplementally presented in ZAR, and our internal management

information, which is also presented in ZAR.

Results of Operations

The discussion

of our

consolidated overall

results of

operations is

based on

amounts as

reflected

in our

unaudited condensed

consolidated financial

statements which

are prepared

in accordance

with U.S.

GAAP.

analyze our

results of

operations both

U.S. dollars, as presented in the unaudited condensed consolidated

financial statements, and supplementally in ZAR, because ZAR is

the functional

currency of

the entities

which contribute

the majority

of our

results and

is the

currency in

which the

majority of

our

transactions

are

initially

incurred

and

measured.

Presentation

of our

reported

results

in ZAR

is a

non-GAAP

measure.

Due

the

significant impact of currency

fluctuations between the U.S.

dollar and ZAR on

our reported results and because

we use the U.S.

dollar

as our reporting

currency,

we believe that

the supplemental presentation

of our results

of operations in

ZAR is useful

to investors to

understand the changes in the underlying trends of our business.

Our

operating

segment

revenue

presented

“—Results

operations

operating

segment”

represents

total

revenue

per

operating segment before intercompany

eliminations. A reconciliation between

total operating segment revenue and

revenue, as well

the

reconciliation

between

our

segment

performance

measure

and

net

loss

before

tax

(benefits)

expense,

presented

our

unaudited

condensed

consolidated

financial

statements

Note

those

statements.

Our

chief

operating

decision

maker

our

Executive

Chairman

and

evaluates

segment

performance

based

segment

earnings

before

interest,

tax,

depreciation

and

amortization

(“EBITDA”),

adjusted

for

items

mentioned

the

sentence

(“Segment

Adjusted

EBITDA”)

for

each

operating

segment.

do not

allocate once

-off

items (as

defined below),

stock-based

compensation charges,

depreciation

and amortization,

impairment

goodwill

other

intangible

assets,

other

items

(including

gains

losses

disposal

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 represent non-recurring expense items,

including

costs related

acquisitions

and

transactions

consummated

ultimately

not

pursued.

The Stock-based

compensation

adjustments

reflect stock-based compensation expense and are both excluded

from the calculation of Segment Adjusted EBITDA

and are therefore

reported as reconciling items to reconcile the reportable segments’

Segment Adjusted EBITDA to our loss before income

tax expense.

Effective from fiscal 2025, all lease charges are allocated to our operating segments, whereas in

fiscal 2024 we presented certain lease

charges

separate

line

outside

our

operating

segments.

Prior

period

information

has

been

re-presented

include

the

lease

charges

which

were

previously

reported

separate

line

our

Consumer

and

Merchant

(and

now

Merchant,

Consumer

and

Enterprise)

operating segments.

Group

Adjusted

EBITDA

represents

Segment

Adjusted

EBITDA

after

deducting

group

costs.

Refer

also

“Results

Operations—Use of Non-GAAP Measures” below.

Our fiscal 2025 financial

results include Adumo from

October 1, 2024. Adumo

is not included in our

financial results for fiscal

2024.

analyze our

business and

operations

in terms

of three

inter-related

but independent

operating segments:

(1) Merchant

(2)

Enterprise and (3) Consumer.

In addition, corporate activities

that are impracticable to

allocate directly to the

operating segments, as

well as any inter-segment eliminations, are included in Group costs. Inter-segment revenue eliminations are included

in Eliminations.

Second quarter of fiscal 2025 compared to second quarter

of fiscal 2024

The following factors had

a significant impact on

our results of operations

during the second quarter

of fiscal 2025 as compared

with the same period in the prior year:

●

Lower revenue in ZAR:

Our revenues decreased 2% in ZAR, primarily due

to fewer low margin prepaid airtime sales and a

lower contribution from Enterprise, which

was partially offset by

the inclusion of Adumo,

an increase in value-added

services

activity in Merchant, as well as higher transaction, insurance and lending

revenues in Consumer;

●

Operating income

decrease:

Operating income

decreased primarily

due to higher

costs and the

increase in amortization

acquisition-related

intangible assets

the

acquisition

Adumo,

which

was partially

offset

contribution

from

Adumo from October 1, 2024;

●

Non-cash fair value adjustment related to equity securities:

We recorded a non

-cash fair value loss of $33.7 million during

the second quarter of fiscal 2025 related to our investment in MobiKwik;

●

Higher net interest

charge:

Net interest charge

increased to $5.5

million (ZAR 97.7

million) from $4.3

million (ZAR 81.2

million) primarily due to higher

overall borrowings, which was partially

offset by an increase in

interest received as a result

of the inclusion of Adumo; and

●

Foreign exchange

movements:

The U.S.

dollar was

5% weaker

against the

ZAR during

the second

quarter of

fiscal 2025

compared to the prior period, which positively impacted our U.S. dollar

reported results.

Consolidated overall results of operations

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

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

both in U.S. dollars and in ZAR:

Table 3

In United States Dollars

Three months ended December 31,

2024

2023

$ ’000

change

Revenue

146,818

143,893

Cost of goods sold, IT processing, servicing and support

101,298

114,266

(11%)

Selling, general and administration

36,520

21,541

70%

Depreciation and amortization

8,223

5,813

41%

Operating income

777

2,273

(66%)

Change in fair value of equity securities

(33,731)

Loss on disposal of equity-accounted investments

161

Interest income

721

485

49%

Interest expense

6,174

4,822

28%

Loss before income tax (benefit) expense

(38,568)

(2,064)

1,769%

Income tax (benefit) expense

(6,412)

686

Net loss before earnings from equity-accounted investments

(32,156)

(2,750)

1,069%

Earnings from equity-accounted investments

16%

Net loss

(32,106)

(2,707)

1,086%

Less net income attributable to non-controlling interest

Net loss attributable to us

(32,134)

(2,707)

1,087%

Table 4

In South African Rand

Three months ended December 31,

2024

2023

ZAR ’000

change

Revenue

2,629,200

2,694,506

(2%)

Cost of goods sold, IT processing, servicing and support

1,814,111

2,139,730

(15%)

Selling, general and administration

653,756

403,443

62%

Depreciation and amortization

147,086

108,863

35%

Operating income

14,247

42,470

(66%)

Change in fair value of equity securities

(614,710)

Loss on disposal of equity-accounted investments

2,886

Interest income

12,886

9,080

42%

Interest expense

110,580

90,329

22%

Loss before income tax (benefit) expense

(701,043)

(38,779)

1,708%

Income tax (benefit) expense

(116,954)

12,845

Net loss before earnings from equity-accounted investments

(584,089)

(51,624)

1,031%

Earnings from equity-accounted investments

891

805

11%

Net loss

(583,198)

(50,819)

1,048%

Less net income attributable to non-controlling interest

496

Net loss attributable to us

(583,694)

(50,819)

1,049%

Revenue

increased

by $2.9

million (or

2.0%)

but decreased

by ZAR

65.3

million

(or

2.4%), and

in ZAR,

the decreased

was

primarily

due to

fewer

low margin

prepaid

airtime sales,

which was

partially offset

by the

inclusion of

Adumo, an

increase in

the

volume of value-added

services provided (prepaid

airtime and gaming), an

increase in certain issuing

fee base prices and

transaction

activity

our

issuing

business,

and

increase

insurance

premiums

collected

and

lending

revenues

following

higher

loan

originations.

Refer to discussion above

at “—Recent Developments” for

a description of

key trends impacting our

revenue this quarter.

Cost of

goods sold,

IT processing,

servicing and

support decreased

by $13.0

million (ZAR

325.6

million) or

11.3%

(in ZAR

15.2%),

primarily

due

the decrease

in low

margin

prepaid

airtime

sales, which

was partially

offset

by the

inclusion

of Adumo,

higher commissions paid related to VAS

revenue generated, and higher insurance-related claims and third-party

transaction fees.

Selling, general

and administration

expenses increased

by $15.0

million (ZAR

250.3 million),

or 69.5%

(in ZAR

62.0%). The

increase

was

primarily

due

the

inclusion

Adumo;

higher

employee-related

expenses

(including

the

impact

annual

salary

increases);

higher stock-based compensation

charges,

audit and

travel expenses; and

the year-over-year impact

of inflationary increases

on certain expenses.

Depreciation and amortization

expense increased by

$2.4 million (ZAR 38.2

million),

or 41.5% (35.1%). The

increase was due

the

inclusion

acquisition-related

intangible

asset

amortization

intangible

assets

identified

pursuant

the

Adumo

acquisition and an increase in depreciation expense related to

additional POS devices deployed.

Our operating income

margin for the

second quarter of

fiscal 2025 and

2024 was 0.5%

and 1.6%, respectively.

discuss the

components of operating loss margin under “—Results of operations

by operating segment.”

The change in fair value of

equity securities of $33.7 million during

the first half of fiscal 2025 represents

a non-cash fair value

adjustment loss

related to

MobiKwik. We

did not

record any

changes in

the fair

value of

equity interests

in MobiKwik

during the

second quarter of fiscal 2024, or

any fair value adjustments for

Cell C during the second quarter

of fiscal 2025 or 2024, respectively.

continue

to carry

our investment

in Cell

C at

$0 (zero).

Refer to

Note 5

for the

methodology and

inputs used

in the

fair value

calculation for MobiKwik and Cell C.

We recorded a loss of $0.2

million related to the change in

our investment in an equity security

recorded under the equity method

to consolidation during fiscal 2025. Refer

to Note 2 to our consolidated financial statements

for additional information regarding

this

loss.

Interest on surplus cash increased

to $0.7 million (ZAR 12.9 million)

from $0.5 million (ZAR 9.1 million),

primarily due to the

inclusion of Adumo.

Interest expense increased

to $6.2 million (ZAR 110.6

million) from $4.8 million

(ZAR 90.3 million. In

ZAR, the increase was

primarily

by higher

overall borrowings

during the

second quarter

of fiscal

2025 compared

with the

comparable period

in the

prior

quarter.

Fiscal 2025 tax expense

was $(6.4) million (ZAR (117.0)

million) compared to $0.7

million (ZAR 12.8 million)

in fiscal 2024.

Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equity securities,

the tax

expense recorded

by our

profitable South

African operations,

a deferred

tax benefit

related to

acquisition-related intangible

asset amortization,

non-deductible expenses

(in transaction

-related expenses)

the on-going

losses incurred

by certain

of our

South

African businesses and

the associated valuation

allowances created related

to the deferred

tax assets

recognized regarding net operating

losses incurred by these entities.

Our effective

tax rate

for fiscal

2024 was

impacted by

the tax

expense recorded

by our

profitable South

African operations,

deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred

by certain of our

South African businesses and

the associated valuation allowances

created related to the

deferred tax assets recognized

regarding net operating losses incurred by these entities.

The table below presents the relative earnings (loss) from our equity-accounted

investments:

Table 5

Three months ended December 31,

2024

2023

$ %

$ ’000

change

Other

16%

Total

income (loss) from equity-accounted investments

16%

Results of operations by operating segment

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

loss are illustrated below:

Table 6

In United States Dollars

Three months ended December 31,

2024

% of

2023

% of

% change

Operating Segment

$ ’000

total

$ ’000

total

Consolidated revenue:

Merchant

115,811

79%

117,182

81%

(1%)

Consumer

22,929

16%

16,707

12%

37%

Enterprise

8,933

11,921

(25%)

Subtotal: Operating segments

147,673

101%

145,810

101%

Eliminations

(855)

(1%)

(1,917)

(1%)

(55%)

Total

consolidated revenue

146,818

100%

143,893

100%

Group Adjusted EBITDA:

Merchant

(1)(2)

10,319

87%

7,497

84%

38%

Consumer

(1)(2)

4,342

37%

2,575

29%

69%

Enterprise

(2)

(31)

891

10%

Group costs

(2,820)

(24%)

(2,011)

(23%)

40%

Group Adjusted EBITDA (non-GAAP)

(3)

11,810

100%

8,952

100%

32%

(1) Segment Adjusted

EBITDA for the

three months ended December

31, 2024, includes

retrenchments costs for

Consumer of

$0.01

million.

Segment

Adjusted

EBITDA

for

Merchant

includes

retrenchment

costs

$0.01

million

and

Consumer

includes

retrenchment costs of $0.1 million for the three months ended December 31, 2023.

(2) Lease expenses which were previously presented on

a separately line in fiscal

2024 are now included in Merchant,

Consumer

and Enterprise Segment

Adjusted EBITDA. The prior

period has been

re-presented to conform

with current period presentation.

See

also “—Results

of Operations

—

Presentation of

Merchant, Consumer

and Enterprise

by segment

for fiscal

2025 to

date and

fiscal

2024”.

(3) 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

Three months ended December 31,

2024

% of

2023

% of

% change

Operating Segment

ZAR ’000

total

ZAR ’000

total

Consolidated revenue:

Merchant

2,074,003

79%

2,194,260

81%

(5%)

Consumer

410,687

16%

312,767

12%

31%

Enterprise

159,846

223,193

(28%)

Subtotal: Operating segments

2,644,536

16%

2,730,220

12%

(3%)

Eliminations

(15,336)

84%

(35,714)

88%

(57%)

Total

consolidated revenue

2,629,200

100%

2,694,506

100%

(2%)

Group Adjusted EBITDA:

Merchant

(1)(2)

185,108

87%

140,429

84%

32%

Consumer

(1)(2)

77,488

37%

48,233

29%

61%

Enterprise

(2)

(537)

16,779

10%

Group costs

(50,265)

(24%)

(37,663)

(23%)

33%

Group Adjusted EBITDA (non-GAAP)

(3)

211,794

100%

167,778

100%

26%

(1) Segment

Adjusted EBITDA

Merchant and

Segment Adjusted

EBITDA Consumer

include retrenchment

costs of

ZAR 0.1

million, respectively,

for the second quarter

of fiscal 2025. Segment

Adjusted EBITDA for

Merchant includes retrenchment

costs of

ZAR 0.1 million and Consumer includes retrenchment costs of ZAR 1.3 million

for the three months ended December 31, 2023.

(2) Lease expenses which were previously presented

on a separately line in

fiscal 2024 are now included in Merchant,

Consumer

and Enterprise Segment Adjusted EBITDA. The prior period has been

re-presented to conform with current period presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Merchant

Segment revenue primarily decreased due fewer low margin

prepaid airtime sales (“Pinned airtime”), which was partially offset

by the inclusion of Adumo,

a higher volume of value-added

services provided (prepaid airtime

and gaming). In ZAR,

the increase in

Segment

Adjusted

EBITDA

is primarily

due

the

inclusion

Adumo,

which

was partially

offset

higher

operating

expenses

incurred,

especially

employment-related

expenditures,

to expand

our

offering.

recorded

a significant

proportion

of our

airtime

sales in

revenue (see

further below)

and cost

of sales, while

only earning

a relatively

small margin.

This significantly

depresses the

Segment Adjusted EBITDA margins

shown by the business.

From the first quarter

of fiscal 2025, we

have experienced a shift

in the

mix between

the sale of

Pinned Airtime and

distribution of pinless

prepaid airtime

(“Pinless Airtime”), and

this trend has

continued

through to the second quarter of fiscal

2025, with the volume of Pinned Airtime sales

decreasing, which results in a lower revenue and

related cost of sales, and an overall improved margin.

Our Segment Adjusted EBITDA margin for the

second quarter of fiscal 2025 and 2024 was 8.9% and 6.4%, respectively.

Consumer

Segment

revenue

increased

primarily

due

to higher

transaction

fees

generated

from

the higher

EPE

account holders

base,

increase

certain

issuing

fee

base

prices

and

transaction

activity

our

issuing

business,

insurance

premiums

collected,

lending

revenues following an increase in loan originations and the inclusion of

Adumo. This increase in revenue has translated into

improved

profitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations in December

2024, higher insurance-related claims, interest

expense (of approximately ZAR 13.6

million) incurred to fund

our lending book,

higher

computer software license costs, and the year-over-year impact of inflationary increases on certain expenses. As noted during the first

quarter of fiscal 2025, we intend to obtain a separate lending facility to fund a portion of our lending during fiscal 2025. We

expected

to have this facility in place on July 1, 2024, however, we have been unable to finalize terms as the separate lending facility will form

part

broader

refinancing

the

Company’s

facilities.

Therefore,

have

included

intercompany

interest

expense

our

Consumer Segment Adjusted EBITDA for the second quarter

of fiscal 2025 compared with the second quarter of fiscal 2024.

Our Segment Adjusted EBITDA margin for the

second quarter of fiscal 2025 and 2024 was 18.9%

and 15.4%, respectively.

Enterprise

Segment revenue

decreased primarily

due to

fewer ad

hoc hardware

sales as well

as lower

revenue generated

from the

sale of

prepaid airtime vouchers.

In ZAR, the

significant decrease in Segment Adjusted

EBITDA is primarily due

to the impact of

fewer sales.

Our Segment Adjusted

(loss) EBITDA margin

for the second

quarter of fiscal

2025 and 2024

was (0.35)% and

7.5%, respectively.

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

2025 increased compared with the prior

period due to higher employee

costs resulting from an increase

in the number of individuals allocated to group costs and base salary adjustments,

travel, audit, consulting and legal fees.

First half of fiscal 2025 compared to first half of fiscal 2024

The following

factors had a

significant impact on

our results of

operations during

the first half

of fiscal 2025

as compared with

the same period in the prior year:

●

Flat revenue:

Our revenues

were flat and

increased 0.2% in

ZAR, primarily

due to the

inclusion of Adumo,

an increase in

value-added services activity in Merchant, as well as higher transaction, insurance and lending revenues in Consumer, which

was partially offset by fewer Pinned Airtime sales and

a lower contribution from Enterprise;

●

Operating income decrease, before transaction costs:

Operating income, before Adumo-related transaction costs, decreased

primarily

due

increased

costs

and

the

increase

amortization

acquisition-related

intangible

assets

the

acquisition of Adumo, which was partially offset by contribution

from Adumo from October 1, 2024;

●

Non-cash fair value adjustment related to equity securities:

We recorded a non

-cash fair value loss of $33.7 million during

the first half of fiscal 2025 related to our investment in MobiKwik;

●

Higher net interest charge:

Net interest charge increased to $9.9 million (ZAR 177.5

million) from $8.8 million (ZAR 164.3

million) primarily due to higher

overall borrowings, which was partially

offset by an increase in

interest received as a result

of the inclusion of Adumo; and

●

Foreign exchange movements:

The U.S. dollar was

5% weaker against the

ZAR during the first

half of fiscal 2025

compared

to the prior period, which adversely impacted our U.S. dollar reported

results.

Consolidated overall results of operations

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

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

both in U.S. dollars and in ZAR:

Table 8

In United States Dollars

Six months ended December 31,

2024

2023

$ ’000

change

Revenue

292,364

279,982

Cost of goods sold, IT processing, servicing and support

212,185

221,756

(4%)

Selling, general and administration

63,246

44,056

44%

Depreciation and amortization

14,499

11,669

24%

Transaction costs related to Adumo acquisition

1,702

Operating income

732

2,501

(71%)

Change in fair value of equity securities

(33,731)

Loss on disposal of equity-accounted investments

161

Reversal of allowance for EMI doubtful debt receivable

250

Interest income

1,307

934

40%

Interest expense

11,206

9,731

15%

Loss before income tax (benefit) expense

(43,059)

(6,046)

612%

Income tax (benefit) expense

(6,334)

950

Net loss before income (loss) from equity-accounted investments

(36,725)

(6,996)

425%

Income (Loss) from equity-accounted investments

(1,362)

Net loss

(36,648)

(8,358)

338%

Less net income attributable to non-controlling interest

Net loss attributable to us

(36,676)

(8,358)

339%

Table 9

In South African Rand

Six months ended December 31,

2024

2023

ZAR ’000

change

Revenue

5,244,890

5,232,165

Cost of goods sold, IT processing, servicing and support

3,807,752

4,144,195

(8%)

Selling, general and administration

1,133,433

823,304

38%

Depreciation and amortization

259,746

218,029

19%

Transaction costs related to Adumo acquisition

29,997

Operating income

13,962

46,637

(70%)

Change in fair value of equity securities

(614,710)

Loss on disposal of equity-accounted investments

2,886

Reversal of allowance for EMI doubtful debt receivable

4,741

Interest income

23,403

17,448

34%

Interest expense

200,908

181,758

11%

Loss before income tax (benefit) expense

(781,139)

(112,932)

592%

Income tax (benefit) expense

(115,552)

17,670

Net loss before income (loss) from equity-accounted investments

(665,587)

(130,602)

410%

Income (Loss) from equity-accounted investments

1,366

(25,852)

Net loss

(664,221)

(156,454)

325%

Less net income attributable to non-controlling interest

496

Net loss attributable to us

(664,717)

(156,454)

325%

Revenue increased by

$12.4 million (ZAR 12.7

million), or 4.4% (in

ZAR, 0.2%), primarily due

to the inclusion of

Adumo, an

increase in the

volume of value-added

services provided (Pinless

Airtime and gaming),

an increase in certain

issuing fee base

prices

and transaction activity

in our issuing

business, and an

increase in insurance

premiums collected and

lending revenues following higher

loan originations, which was partially offset by fewer

Pinned Airtime sales.

Cost of goods

sold, IT processing,

servicing and

support decreased

by $9.6

million (or 4.3%)

and, in

ZAR, decreased

by ZAR

336.4 million (or 8.1%), primarily due to the decrease in

Pinned Airtime sales, which was partially offset by the inclusion of

Adumo,

higher commissions paid related to VAS

revenue generated, and higher insurance-related claims and third-party

transaction fees.

Selling, general

and administration

expenses increased

by $19.2

million (ZAR

310.1 million),

or 43.6%

(in ZAR

37.7%). The

increase was primarily due to the inclusion of Adumo; higher employee-related expenses (including annual bonuses and

annual salary

increases); higher stock-based

compensation charges,

consulting fees, audit

fees, and travel expenses;

and the year-over-year

impact

of inflationary increases on certain expenses.

Depreciation and amortization

expense increased by $2.8

million (ZAR 41.7 million),

or 24.3% (19.1%). The

increase was due

the

inclusion

acquisition-related

intangible

asset

amortization

intangible

assets

identified

pursuant

the

Adumo

acquisition and an increase in depreciation expense related to additional

POS devices deployed.

Transaction costs related to Adumo acquisition

includes fees paid to

external service providers associated

with legal and advisory

services procured to close the transaction on October 1, 2024.

Our operating (loss)

income margin

for the first half

of fiscal 2025

and 2024 was

0.3% and 0.9%,

respectively.

discuss the

components of operating loss margin under “—Results of operations

by operating segment.”

The change in fair value of

equity securities of $33.7 million during

the first half of fiscal 2025 represents

a non-cash fair value

adjustment loss related to MobiKwik. We did not record any changes in the fair value of equity interests in MobiKwik during the first

half of fiscal

2024, or any fair

value adjustments for

Cell C during

the first half of

fiscal 2025 or

2024, respectively.

continue to

carry our investment in Cell C at $0 (zero).

We recorded a loss of $0.2

million related to the change in

our investment in an equity security

recorded under the equity method

to consolidation during fiscal 2025. Refer

to Note 2 to our consolidated financial statements

for additional information regarding

this

loss.

Interest on surplus cash increased to $1.3 million (ZAR 23.4 million) from $0.9 million (ZAR 17.4 million), primarily due to the

inclusion of Adumo and higher overall average cash balances on deposit during

the first half of fiscal 2025 compared with 2024.

Interest expense

increased to

$11.2

million from

$9.7 million

and, in

ZAR, decreased

to ZAR

200.9 million

from ZAR

181.8

million. In ZAR, the increase was primarily as a result of higher overall borrowings during the first half of fiscal 2025 compared with

the comparable period

in the prior quarter,

which was partially offset

by lower interest expense

incurred on certain of

our borrowing

for which we were able to negotiate lower rates of interest towards the end of

calendar 2024.

Fiscal 2025 tax expense

was $(6.3) million (ZAR (115.6)

million) compared to $1.0

million (ZAR 17.7 million)

in fiscal 2024.

Our effective tax rate for fiscal 2025 was impacted by deferred tax impact related to the fair value adjustment to our equity securities,

the tax

expense recorded

by our

profitable South

African operations,

a deferred

tax benefit

related to

acquisition-related

intangible

asset amortization,

non-deductible expenses

(in transaction

-related expenses),

the on-going

losses incurred

by certain

of our

South

African businesses and

the associated valuation

allowances created related

to the deferred

tax assets

recognized regarding net operating

losses incurred by these entities.

Our effective

tax rate

for fiscal

2024 was

impacted by

the tax

expense recorded

by our

profitable South

African operations,

deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred

by certain of our

South African businesses and

the associated valuation allowances

created related to the

deferred tax assets recognized

regarding net operating losses incurred by these entities.

Finbond is listed on the Johannesburg Stock

Exchange and reports its six-month results during

our first half and its

annual results

during our fourth quarter. We sold our entire

remaining interest in Finbond

during the first

half of fiscal 2024.

The table below

presents

the relative (loss) earnings from our equity-accounted investments:

Table 10

Six months ended December 31,

2024

2023

$ %

$ ’000

change

Finbond

(1,445)

Share of net loss

(278)

Impairment

(1,167)

Other

(7%)

(1,362)

Results of operations by operating segment

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

loss are illustrated below:

Table 11

In United States Dollars

Six months ended December 31,

2024

% of

2023

% of

% change

Operating Segment

$ ’000

total

$ ’000

total

Consolidated revenue:

Merchant

231,441

80%

229,243

82%

Consumer

44,001

15%

32,287

12%

36%

Enterprise

20,815

21,388

(3%)

Subtotal: Operating segments

296,257

102%

282,918

102%

Eliminations

(3,893)

(2%)

(2,936)

(2%)

33%

Total

consolidated revenue

292,364

100%

279,982

100%

Group Adjusted EBITDA:

Merchant

(1)(2)

17,873

84%

14,407

85%

24%

Consumer

(1)(2)

8,738

41%

4,695

28%

86%

Enterprise

(1)(2)

331

1,706

10%

(81%)

Group costs

(5,769)

(27%)

(3,833)

(23%)

51%

Group Adjusted EBITDA (non-GAAP)

(3)

21,173

100%

16,975

100%

25%

(1)

Segment

Adjusted

EBITDA

Consumer

and

Segment

Adjusted

EBITDA

Enterprise

include

retrenchment

costs

$0.01

million

and

$0.00

million,

respectively,

for

the

first

half

fiscal

2025.

Segment

Adjusted

EBITDA

for

Merchant

includes

retrenchment costs of $0.2 million and Consumer includes retrenchment

costs of $0.2 million for the first half of fiscal 2024.

(2) Lease expenses which were previously presented

on a separately line in

fiscal 2024 are now included in Merchant,

Consumer

and Enterprise Segment Adjusted EBITDA. The prior period has been

re-presented to conform with current period presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Table 12

In South African Rand

Six months ended December 31,

2024

% of

2023

% of

% change

Operating Segment

ZAR ’000

total

ZAR ’000

total

Consolidated revenue:

Merchant

4,152,856

80%

4,283,655

82%

(3%)

Enterprise

373,825

399,914

(7%)

Consumer

788,750

15%

603,396

12%

31%

Subtotal: Operating segments

5,315,431

101%

5,286,965

101%

Eliminations

(70,541)

(1%)

(54,800)

(1%)

29%

Total

consolidated revenue

5,244,890

100%

5,232,165

100%

Group Adjusted EBITDA:

Merchant

(1)(2)

320,618

84%

269,145

85%

19%

Enterprise

(1)(2)

6,031

31,973

10%

(81%)

Consumer

(1)(2)

156,169

41%

87,845

28%

78%

Group costs

(102,919)

(27%)

(71,643)

(23%)

44%

Group Adjusted EBITDA (non-GAAP)

(3)

379,899

100%

317,320

100%

20%

(1) Segment

Adjusted EBITDA

Consumer and

Segment Adjusted

EBITDA Enterprise

include retrenchment

costs of ZAR

0.1

million

and

ZAR

0.0

million,

respectively,

for

the

first

half

fiscal

2025.

Segment

Adjusted

EBITDA

for

Merchant

includes

retrenchment costs of ZAR 4.7 million and Consumer includes retrenchment costs of ZAR 2.8 million for the first half of fiscal 2024.

(2)

Lease

expenses

which

were

previously

presented

separately

line

fiscal

2024

are

now

included

Merchant

and

Consumer Segment Adjusted EBITDA. The prior period has been re-presented

to conform with current period presentation.

(3) Group Adjusted EBITDA

is a non-GAAP measure, refer

to reconciliation below at

“—Results of Operations—Use of

Non-

GAAP Measures”.

Merchant

Segment revenue

primarily increased

due the

inclusion of

Adumo, a

higher volume

of value-added

services provided

(Pinless

Airtime and gaming), which

was partially offset by

fewer Pinned Airtime sales.

In ZAR, the increase

in Segment Adjusted EBITDA

is primarily due to the inclusion of Adumo, which was partially offset by higher operating expenses incurred, especially employment-

related expenditures, to expand our offering. From the first quarter of fiscal 2025,

we have experienced a shift in the mix between the

sale of Pinned

Airtime and distribution

of Pinless Airtime, and

this trend has continued

through to the second

quarter of fiscal 2025,

with the volume of

Pinned Airtime sales decreasing,

which results in

a lower revenue and

related cost of sales,

and an overall

improved

margin.

Our Segment

Adjusted EBITDA

margin

(calculated as

Segment Adjusted

EBITDA divided

by revenue)

for the

first half

fiscal 2025 and 2024 was 7.7% and 6.3%, respectively.

Consumer

Segment

revenue

increased

primarily

due

to higher

transaction

fees

generated

from

the higher

EPE

account holders

base,

increase

certain

issuing

fee

base

prices

and

transaction

activity

our

issuing

business,

insurance

premiums

collected,

lending

revenues following an increase in loan originations and the inclusion of

Adumo. This increase in revenue has translated into improved

profitability, which was partially offset by a higher allowance for credit losses following an increase in loan originations in December

2024, higher insurance-related claims, interest

expense (of approximately ZAR 28.5

million) incurred to fund

our lending book, higher

computer

software

license

costs,

and

the

year-over-year

impact

inflationary

increases

certain

expenses.

As discussed

our

commentary

for

the

second

quarter

of fiscal

2025,

have included

an intercompany

interest expense

in our

Consumer

Segment

Adjusted EBITDA for first half of fiscal 2025 compared with the first half

of fiscal 2024.

Our Segment Adjusted EBITDA margin for the

first half of fiscal 2025 and 2024 was 19.9% and 14.5%, respectively.

Enterprise

Segment revenue

decreased primarily

due to

fewer ad

hoc hardware

sales as well

as lower

revenue generated

from the

sale of

prepaid airtime vouchers.

In ZAR, the significant decrease in Segment Adjusted EBITDA is primarily due

to the impact of few sales.

Our Segment Adjusted EBITDA margin for the first half

of fiscal 2025 and 2024 was 1.6% and 8.0%, respectively.

Group costs

Our group costs for fiscal

2025 increased compared with the prior

period due to higher employee

costs resulting from an increase

in the number of individuals allocated to group costs and base salary adjustments,

higher bonus expense, travel, audit, consulting

and

legal fees.

Presentation of Merchant, Consumer and Enterprise by segment for fiscal 2025 to date and fiscal 2024

The tables below present Merchant, Consumer and Enterprise revenue

and EBITDA for fiscal 2025

to date and fiscal 2024,

including lease charges, as well as the U.S. dollar/ ZAR exchange

rates applicable per fiscal quarter and year:

Table 13

Fiscal 2025

In United States dollars

Quarter 1

Quarter 2

F2025

$ ’000

Revenue

Merchant

115,630

115,811

231,441

Consumer

21,072

22,929

44,001

Enterprise

11,882

8,933

20,815

Subtotal: Operating segments

148,584

147,673

296,257

Eliminations

(3,038)

(855)

(3,893)

Total

consolidated revenue

145,546

146,818

292,364

Group Adjusted EBITDA:

Merchant

7,554

10,319

17,873

Consumer

4,396

4,342

8,738

Enterprise

362

(31)

331

Group costs

(2,949)

(2,820)

(5,769)

Group Adjusted EBITDA (non-GAAP)

9,363

11,810

21,173

Income and expense items: $1 = ZAR

17.72

17.85

17.80

Table 14

Fiscal 2024

In United States dollars

Quarter 1

Quarter 2

Quarter 3

Quarter 4

F2024

$ ’000

Revenue

Merchant

112,061

117,182

111,801

118,746

459,790

Consumer

15,580

16,707

17,904

19,020

69,211

Enterprise

9,467

11,921

11,322

14,187

46,897

Subtotal: Operating segments

137,108

145,810

141,027

151,953

575,898

Eliminations

(1,019)

(1,917)

(2,833)

(5,907)

(11,676)

Total

consolidated revenue

136,089

143,893

138,194

146,046

564,222

Group Adjusted EBITDA:

Merchant

6,910

7,497

7,420

7,343

29,170

Consumer

2,120

2,575

3,757

4,227

12,679

Enterprise

815

891

725

500

2,931

Group costs

(1,822)

(2,011)

(2,199)

(1,812)

(7,844)

Group Adjusted EBITDA (non-GAAP)

8,023

8,952

9,703

10,258

36,936

Income and expense items: $1 = ZAR

18.71

18.88

18.47

18.68

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

and

trends.

believe

that

this

measure

helpful

users

our

financial

information

understand

key

operating

performance and

trends in our

business because

it excludes certain

non-cash expenses

(including depreciation

and amortization

and

stock-based compensation charges) and income

and expenses that we consider once-off in nature.

Non-GAAP Measures

Group

Adjusted

EBITDA

earnings

before

interest,

tax,

depreciation

and

amortization

(“EBITDA”),

adjusted

for

non-

operational

transactions

(including

loss

disposal

equity-accounted

investments,

change

fair

value

equity

securities),

(earnings) loss from equity-accounted

investments, stock-based compensation

charges and once-off

items. Once-off items represents

non-recurring

income

and

expense

items,

including

costs

acquisitions

and

transactions

consummated

ultimately

not

pursued.

The table below presents the reconciliation between GAAP net loss attributable

to Lesaka to Group Adjusted EBITDA:

Table 15

Three months ended

December 31,

Six months ended

December 31,

2024

2023

2024

2023

$ ’000

Loss attributable to Lesaka - GAAP

(32,134)

(2,707)

(36,676)

(8,358)

Less net income attributable to non-controlling interest

(28)

Net loss

(32,106)

(2,707)

(36,648)

(8,358)

(Earnings) loss from equity accounted investments

(50)

(43)

(77)

1,362

Net loss before (earnings) loss from equity-accounted investments

(32,156)

(2,750)

(36,725)

(6,996)

Income tax (benefit) expense

(6,412)

686

(6,334)

950

Loss before income tax expense

(38,568)

(2,064)

(43,059)

(6,046)

Interest expense

6,174

4,822

11,206

9,731

Interest income

(721)

(485)

(1,307)

(934)

Reversal of allowance for doubtful EMI loan receivable

(250)

Net loss on disposal of equity-accounted investment

161

Change in fair value of equity securities

33,731

Operating income

777

2,273

732

2,501

PPA amortization

(amortization of acquired intangible assets)

4,867

3,592

8,614

7,200

Depreciation and amortization

3,356

2,221

5,885

4,469

Stock-based compensation charges

2,644

1,804

5,021

3,563

Interest adjustment

(757)

(1,588)

Once-off items

(1)

488

(816)

2,293

(738)

Unrealized loss (gain) FV for currency adjustments

435

(122)

216

(20)

Group Adjusted EBITDA - Non-GAAP

11,810

8,952

21,173

16,975

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

items for the periods presented:

Table 16

Three months ended

December 31,

Six months ended

December 31,

2024

2023

2024

2023

$ ’000

Transaction costs

684

102

787

180

Transaction costs related to Adumo acquisition

1,702

Indirect taxes provision release

(196)

Income recognized related to closure of legacy businesses

(952)

Total once-off

items

488

(816)

2,293

(738)

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

fiscal

2025

incurred

significant

transaction

costs

the

acquisition

Adumo

over

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

Indirect tax

provision release

relates to

the reversal

of a

non-recurring indirect

tax provision

created in

fiscal 2023

which was

resolved

fiscal

2025

following

settlement

the

matter

with

the

tax

authority.

Income

recognized

closure

legacy

businesses represents

(i) gains

recognized

related to

the release

of the

foreign currency

translation reserve

on deconsolidation

of a

subsidiaries and

(ii) costs

incurred related

to subsidiaries

which we

are in

the process

of deregistering/

liquidation and

therefore we

consider these costs non-operational and ad hoc in nature.

Liquidity and Capital Resources

As of December 31, 2024, our cash and cash

equivalents were $60.6 million and comprised of U.S. dollar-denominated balances

of $3.1 million,

ZAR-denominated balances of

ZAR 961.0 million

($55.9 million), and

other currency deposits,

primarily Botswana

pula, of $1.6

million, all amounts

translated at exchange

rates applicable as

of December 31,

decrease in our

unrestricted

cash balances from June 30, 2024, was

primarily due to the utilization of cash

reserves to fund certain scheduled and

other repayments

of our

borrowings,

purchase ATMs

and vaults,

pay annual

bonuses, pay

for expenses

included

in our

group costs,

and to

make an

investment in working capital, which was partially offset by

positive contribution from our Merchant and 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 of

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

vaults.

Refer to Note

12 to our

consolidated financial

statements for

the year ended

June 30, 2024,

as well as

Note 9 to

these condensed consolidated financial statements for additional

information related to our borrowings.

Available short-term

borrowings

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

December 31, 2024:

Table 17

RMB GBF

RMB Indirect

RMB Connect

Nedbank

$ ’000

ZAR ’000

$ ’000

ZAR ’000

$ ’000

ZAR ’000

$ ’000

ZAR ’000

Total

short-term facilities

available, comprising:

Total overdraft

48,594

915,000

14,339

270,000

Indirect and derivative

facilities

(1)

7,170

135,000

8,314

156,556

Total

short-term facilities

available

48,594

915,000

7,170

135,000

14,339

270,000

8,314

156,556

Utilized short-term

facilities:

Overdraft

40,086

762,382

11,066

208,364

Indirect and derivative

facilities

(1)

1,758

33,095

112

2,106

Total

short-term facilities

available

40,086

762,382

1,758

33,095

11,066

208,364

112

2,106

Interest

rate, based

on South

African prime rate

13.05%

N/A

11.15%

N/A

(1) 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

have

aggregate

long-term

borrowing

outstanding

ZAR

3.6

billion

($188.7

million

translated

exchange

rates

December 31, 2024)

as described in Note

These borrowings

include outstanding

long-term borrowings obtained

by Lesaka SA of

ZAR 1.0 billion,

including accrued

interest, which

was used to

partially fund

the acquisition of

Connect. The Lesaka

SA borrowing

arrangements

were

amended

March

2023

include

ZAR 200

million

revolving

credit

facility.

have

utilized

ZAR

199.0

million of this facility as of December 31, 2024. In contemplation

of the Connect transaction, Connect obtained total facilities of ZAR

1.3 billion, which were

utilized to repay its existing

borrowings, to fund a

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 December 31, 2024, of ZAR 1.2 billion. We 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.

On September 30, 2024,

we obtained a

ZAR 665.0 million funding

facility from RMB which

has been used

to (i) settle an

amount

of ZAR 232

.2 million due

to the Adumo

sellers; (ii) pay

ZAR 207.2 million

to acquire 2,601,410

shares of our

common stock from

one of the Adumo sellers’ indirect shareholders;

(iii) pay ZAR 147.5 million notified by Investec Bank Limited to Adumo and us as a

result of the

acquisition, (iv) pay an

origination fee of

ZAR 7.6 million to

RMB and (v) pay

ZAR 70.0 million of

transaction-related

expenses.

On December 10, 2024, we obtained a ZAR 250.0 million general banking facility from RMB which is repayable in full by

the end of February 2025. We have included

additional information regarding this general banking facility under available short-term

borrowings.

Restricted cash

We have

also entered into cession and pledge

agreements with Nedbank related to

our Nedbank indirect credit facilities

and we

have ceded and pledged

certain bank accounts to

Nedbank. The funds included

in these bank accounts

are restricted as they

may not

be withdrawn without the express

permission of Nedbank. Our cash,

cash equivalents and restricted

cash presented in our consolidated

statement of cash flows as of December 31, 2024, includes restricted cash of

$0.1 million that has been ceded and pledged.

Arrangement with African Bank to fund our ATMs

September

2024,

entered into

arrangement

with African

Bank Limited

(“African

Bank”)

and

certain

cash-in-transit

service providers

to fund

our ATMs.

Under this

arrangement, African

Bank will

use its

cash resources

to fund

our ATMs

and it

specifically recorded that the cash in our ATMs are African Bank’s property.

Therefore,

as we have not utilized a facility to obtain the

cash, and do not own or control the cash for an extended period

of time, we do not record cash or cash equivalents and borrowings

our

consolidated statement

of financial

position.

Cash withdrawn

from our

ATMs

by our

EPE customers

and other

consumers are

settled through the interbank settlement

system from the ATM

users bank account to African

Bank’s bank

accounts. We

pay African

Bank a

monthly fee

for the

service provided

which is calculated

based on

the cumulative

daily outstanding

balance of

cash utilized

multiplied by the South African prime interest rate

less 1%. We are

exposed to the risk of cash lost while it is in our

ATMs

(i.e. from

theft) and are required to repay African Bank for any shortages.

Cash flows from operating activities

Second quarter

Net cash

used operating

activities during

the second

quarter of

fiscal 2025

was $9.2 million

(ZAR 163.6

million) compared

net cash provided

by operating activities

of $0.6 million

(ZAR 10.9 million)

during the second

quarter of fiscal

Excluding the

impact of

income taxes,

our cash

used in

operating activities

during the

second quarter

of fiscal

2025 includes

cash utilized

for the

significant net

growth in our

Consumer finance

loans receivable book,

which was partially

offset by

was positively impacted

by the

contribution from our Merchant and Consumer businesses.

During the second

quarter of fiscal

2025, we paid

first provisional South

African tax payments

of $3.1 million

(ZAR 56.3 million)

related to our 2025. We also paid taxes

totaling $0.1 million in other tax

jurisdictions, primarily in Botswana during the

second quarter

of fiscal 2025.

During the second

quarter of fiscal

2024, we paid

first provisional South

African tax payments

of $2.7 million

(ZAR

49.5 million) related

to our 2024 tax

year and South

African tax payments

related to prior years

of $0.07 million

(ZAR 1.3 million).

We also paid taxes totaling

0.1 million in other tax jurisdictions, primarily in Botswana.

Taxes paid (refunded)

during the second quarter of fiscal 2025 and 2024 were as follows:

Table 18

Three months ended December 31,

2024

2023

2024

2023

ZAR

‘000

First provisional payments

3,088

2,662

56,264

49,516

Taxation paid related

to prior years

1,660

1,328

Total South African

taxes paid

3,181

2,731

57,924

50,844

Foreign taxes paid

1,332

1,409

Total

tax (refund) paid

3,253

2,806

59,256

52,253

First half

Net cash

used operating

activities during

the first

half of

fiscal 2025

was $13.3

million (ZAR

236.7 million)

compared to

net

cash provided by operating

activities of $4.0 million

(ZAR 74.0 million) during

the first half of

fiscal 2024. Excluding

the impact of

income

taxes,

our

cash

used

operating

activities

during

the

first

half

fiscal

2025

includes

cash

utilized

for

the

settlement

working capital movements within our Merchant and Enterprise

businesses related to quarter-end transaction processing activities and

which

were

settled

the

following

week

(our

fourth

quarter

fiscal

2024

closed

Sunday),

and

the

net

growth

our

the

significant net

growth in our

Consumer finance

loans receivable book,

which was partially

offset by

was positively impacted

by the

contribution from Merchant and Consumer businesses.

During the

first half

of fiscal

2025, we

paid first

provisional South

African tax

payments of

$3.1 million

(ZAR 56.3

million)

related to our

also paid taxes

totaling $0.1 million

in other tax

jurisdictions, primarily

in Botswana during

the first half

fiscal

2025.

During

the

first

half

fiscal

2024,

paid

first

provisional

South

African

tax

payments

$2.7

million

(ZAR

49.5

million) related

to our 2024

tax year and

South African tax

payments related

to prior years

of $0.6

million (ZAR

12.2 million).

also paid taxes totaling $0.1 million in other tax jurisdictions, primarily in Botswana.

Taxes (refunded)

paid during the first half of fiscal 2025 and 2024 were as follows:

Table 19

Six months ended December 31,

2024

2023

2024

2023

ZAR

‘000

First provisional payments

3,088

2,662

56,264

49,516

Taxation paid related

to prior years

641

1,660

12,187

Tax refund received

(113)

(31)

(2,053)

(640)

Total South African

taxes paid

3,068

3,272

55,871

61,063

Foreign taxes paid

140

138

2,545

2,605

Total

tax paid

3,208

3,410

58,416

63,668

Cash flows from investing activities

Second quarter

Cash used in investing activities

for the second quarter of

fiscal 2025 included capital expenditures

of $6.3 million (ZAR 112.8

million), primarily

due to the

acquisition of

vaults and

POS devices.

During the

second quarter of

fiscal 2025,

we paid $4.0

million

related to acquisition of certain businesses, including Adumo.

Cash used in

investing activities

for the

second quarter

of fiscal 2024

included

capital expenditures

of $2.2

million (ZAR 41.1

million), primarily due

to the acquisition of

vaults and POS devices

During the second

quarter of fiscal

2024, we received proceeds

of $3.5 million related to the sale of remaining interest in Finbond and $0.25 million related to the second (and final) tranche from the

disposal of our entire equity interest in Carbon.

First half

Cash used in

investing activities for

the first half

of fiscal 2025

included capital expenditures

of $6.3 million

(ZAR 112.8 million),

primarily

due

the

acquisition

vaults

and

POS

devices.

During

the

first

half

fiscal

2025,

paid

$4.0

million

acquisition of certain businesses, including Adumo.

Cash used in investing activities for the

first half of fiscal 2024

included capital expenditures of $2.2 million

(ZAR 41.1 million),

primarily due to the acquisition of

vaults. During the first half of fiscal

2024, we received proceeds of $3.5

million related to the sale

of remaining

interest in

Finbond and

$0.25 million

to the

second (and

final) tranche

from the

disposal of

our entire

equity

interest in Carbon.

Cash flows from financing activities

Second quarter

During the second quarter of fiscal 2025, we utilized $48.9 million from our South

African overdraft facilities to fund our ATMs

and our cash management business through Connect, and repaid

$4.5 million of those facilities. We utilized $12.9 million of our long-

term borrowings to

settle a

portion of the

Adumo purchase consideration,

pay certain transaction

expenses, repay Adumo’s borrowings,

repurchase shares of our common stock, fund the acquisition of certain capital expenditures and for working capital requirements. We

repaid

$8.3

million

long-term

borrowings

accordance

with

our

repayment

schedule

and

paid

$7.2

million

settle Adumo’s

borrowings.

also paid

an origination

fee of

$0.4 million

to secure

additional borrowings

as well

as paid

dividends

to the

non-

controlling interest of $0.3 million.

During the second quarter of fiscal 2024,

we utilized $69.0 million from our South African overdraft facilities to

fund our ATMs

and our cash management business through Connect, and repaid

$66.0 million of those facilities. We utilized $8.6 million of our long-

term borrowings to fund

the acquisition of certain

capital expenditures and for

working capital requirements. We

repaid $3.2 million

long-term

borrowings

accordance

with

our

repayment

schedule

well

settle

portion

our

revolving

credit

facility

utilized. We

also paid $0.2

million to repurchase

shares from employees

in order for

the employees to

settle taxes due

related to the

vesting of shares of restricted stock.

First half

During the first half

of fiscal 2025, we

utilized $48.9 million from

our South African overdraft

facilities to fund our

ATMs

and

our

cash

management

business

through

Connect,

and

repaid

$4.5

million

those

facilities.

utilized

$12.9

million

our

borrowings to

settle a

portion of

the Adumo

purchase consideration,

pay certain

transaction expenses,

repay Adumo’s

borrowings,

repurchase shares of our common stock, fund the acquisition of certain capital expenditures and for working capital requirements. We

repaid

$8.3

million

long-term

borrowings

accordance

with

our

repayment

schedule,

paid

$7.2

million

settle

Adumo’s

borrowings,

and settled

a portion

of our

revolving credit

facility utilized.

also paid

an origination

fee of

$0.4 million

to secure

additional borrowings as well as paid dividends to the non-controlling

interest of $0.3 million.

During the first half

of fiscal 2024, we

utilized $69.0 million from

our South African overdraft

facilities to fund our

ATMs

and

our cash

management business

through Connect,

and repaid

$66.0 million

of those

facilities. We

utilized $8.6

million of

our long-

term borrowings to fund

the acquisition of certain

capital expenditures and for

working capital requirements. We

repaid $3.2 million

long-term

borrowings

accordance

with

our

repayment

schedule

well

settle

portion

our

revolving

credit

facility

utilized. We

also paid $0.2

million to repurchase

shares from employees

in order for

the employees to

settle taxes due

related to the

vesting of shares of restricted stock.

Off-Balance Sheet Arrangements

We have no off

-balance sheet arrangements.

Capital Expenditures

expect

capital spending

for the

third quarter

of fiscal

2025 to

primarily

include spending

for acquisition

of POS

devices,

vaults,

computer software, computer and office equipment, as well as for

our ATM infrastructure and branch network in South Africa.

Our capital

expenditures for

the second

quarter of

fiscal 2025

and 2024

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,

or,

following

the

Connect

acquisition,

our

asset-backed

borrowing

arrangement.

had

outstanding

capital

commitments as of December 31, 2024, of $0.5 million. We expect

to fund these expenditures through internally generated funds and

available facilities.

Item 3. Quantitative and Qualitative Disclosures About

Market Risk

In addition to the tables below, see

Note 5 to the unaudited condensed consolidated financial statements for

a discussion of

market risk.

have

short and

long-term borrowings

in South

Africa 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 December 31, 2024,

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 December

31, 2024. 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

December 31, 2024,

are shown.

The selected 1% hypothetical change does not reflect what could be considered

the best- or worst-case scenarios.

Table 20

As of December 31, 2024

Annual expected

interest charge

($ ’000)

Hypothetical

change in

interest rates

Estimated annual

expected interest

charge after

hypothetical change

in interest rates

($ ’000)

Interest on South African borrowings

17,874

25,855

(1%)

23,390

The following table summarizes our

exchange-traded equity security with equity and

liquidity price risk as

of December 31, 2024.

The effects of a hypothetical 10% increase and a 10% decrease in market prices as of December 31, 2024, is also shown. The selected

10% hypothetical change does not reflect what could be

considered the best or worst case scenarios. Indeed, results

could be far worse

due both to the nature of equity markets and the liquidity risk associated with the

equity security.

Table 21

As of December 31, 2024

Fair value

($ ’000)

Hypothetical

price change

Estimated fair value

after hypothetical

change in price

($ ’000)

Percentage Increase

(Decrease) in

Shareholders’ Equity

Exchange-traded equity securities

42,566

10%

46,823

10%

38,309

(2%)

Item 4. Controls and Procedures

Under

the

supervision

and

with

the

participation

our

management,

including

our

executive

chairman

and

our

group

chief

financial officer, we conducted

an evaluation of our disclosure controls and procedures, as such term is defined

under Rule 13a-15(e)

promulgated under the Securities Exchange Act of 1934, as amended, as of

December 31, 2024.

We previously identified and disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the

year ended June 30, 2024,

material weaknesses in our internal control over financial reporting

related to: (1) information technology general controls (“ITGCs”),

specifically

insufficient

risk

assessment,

design

and

implementation,

monitoring

activities

and

training

individuals

operate

controls

in the

areas of

user access

and

program-change

management

for

certain

information

technology

systems

that support

our

financial reporting processes and (2) insufficient design and implementation of controls and associated policies

and procedures in our

annual goodwill impairment assessment. A material weakness is a deficiency,

or combination of deficiencies, in internal control

over

financial

reporting such that

there is

a reasonable possibility

that a

material misstatement of

our annual or

interim consolidated financial

statements will not be prevented or detected on a timely basis.

As a result

of insufficient time to

design and implement procedures

to remediate the

material weaknesses discussed in

our Annual

Report on Form

10-K for

our fiscal

year ended June

30, 2024 (as

described above), the

executive chairman and

the group chief

financial

officer concluded that our disclosure controls and procedures were

not effective as of December 31, 2024.

Notwithstanding

the

previously

identified

material

weaknesses,

management

believes

the

condensed

consolidated

financial

statements included

in this Quarterly

Report on

Form 10-Q fairly

present, in

all material respects,

our financial

condition, results

operations and cash flows as of and for the periods presented in accordance with

GAAP.

Remediation Plan

Management

is actively

working

to remediate

the identified

material

weakness and

is committed

to remediating

the material

weakness in a timely manner. Our

remediation process is ongoing and includes, but is not limited to, the following steps:

the

review

ITGCs

and

implementation

changes

certain

controls

address

the

issues

the

material

weaknesses identified above; and

the review and implementation of changes to the design of the controls related

to the goodwill impairment assessment.

The remediation plan

may be adjusted

as is appropriate,

as we continue

to evaluate and

enhance our internal

control over financial

reporting. Other than the

design and implementation of

the remediation plan, there

have not been any changes

in our internal control

over financial reporting

during the fiscal quarter

ended December 31, 2024,

that have materially affected,

or are reasonably likely

materially affect, our internal control over financial reporting.

Part II. Other Information

Item 1A. Risk Factors

See “Item

1A RISK

FACTORS”

in Part

I of

our Annual

Report on

Form 10-K

for the

fiscal year

ended June

30, 2024,

for a

discussion

risk

factors

relating

(i)

our

business,

(ii)

operating

South

Africa

and

other

foreign

markets,

(iii) government

regulation, and (iv) our common stock. Except

as set forth below, there have been no material

changes from the risk factors previously

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

2024.

We may not be able

to successfully integrate Adumo’s

operations with our business.

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

Adumo. Integrating Adumo

into our company

may require significant

attention from our

senior management which

may divert their

attention

from

our

day-to-day

business.

The

difficulties

integration

may

increased

cultural

differences

between

our

two

organizations and the necessity of retaining and integrating personnel, including Adumo’s key employees and management team. The

services of these individuals will be important to the continued

growth and success of Adumo’s business and to our ability to integrate

Adumo with

us. If

we were

to lose

the services

of these

key employees

or fail

to sufficiently

integrate them,

our ability

to operate

Adumo successfully would likely be materially and adversely impacted.

As such, if we are unable to successfully integrate Adumo’s operations into our business we could be required to record material

impairments, and as a result, our financial condition, results of operations,

cash flows and stock price could suffer.

depend upon

third-party suppliers,

making us

vulnerable to

supply shortages

and price

fluctuations, which

could harm

our business.

obtain our

smart cards, ATMs,

electronic payment

and POS devices,

components for our

safe assets, components

to repair

the ISV (independent software vendor)

division’s POS hardware, and the other

hardware we use in

our business from a

limited number

of suppliers, and

do not manufacture

this equipment ourselves.

We generally do not have

long-term agreements with

our manufacturers

or component suppliers.

If our suppliers

become unwilling or

unable to provide

us with adequate

supplies of parts

or products when

we need them,

or if they

increase their prices,

we may not

be able to

find alternative

sources in a

timely manner

and could be

faced

with a critical shortage. This

could harm our ability to meet customer

demand and cause our revenues

to decline. Even if we are

able

to secure alternative sources in a timely manner,

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

may lead

increase

the

prices

goods

and

services

from

third

parties.

supply

interruption,

such

the

recent

global

shortage

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.

We do

not have a South African banking

license and, therefore, we provide

our EPE solution through an

arrangement with

a third-party bank, which

limits our control over this

business and the economic benefit we

derive from it. If

this arrangement were

to terminate,

we would

not be

able to

operate our

EPE business

without alternate

means of

access to

a banking

license. We

are

also required

to comply

with the

requirements of

payment schemes,

including

VISA and

Mastercard.

Furthermore,

we provide

certain of

our services under

partnerships with South

African banks. We will

be unable to

provide our payments

and card-acquiring

businesses if we

fail to comply

with payment scheme

rules, and/or fails

to maintain certain

regulatory licenses and

registrations,

and/ or if we were unable to continue to partner with South African banks to provide

our payments and card acquiring services.

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

South African Financial

Intelligence Centre Act,

2001 and money

laundering and terrorist

financing

control

regulations,

when

open

new

bank

accounts

for

our

customers

and

when

they

transact.

Failure

effectively

implement and

monitor responses

to the

legislation and

regulations may

result in

significant fines

or prosecution

of Grindrod

Bank

and ourselves.

are required

to comply

with the

requirements of

payment schemes,

including VISA

and Mastercard.

have deployed

significant number of devices, and any

mandatory compliance upgrades to our deployed POS

devices would require significant capital

expenditures and/or be

disruptive to our

customer base. Failure

to comply with

the payment schemes’

rules may result

in significant

fines and/or a loss of license to participate in the scheme(s).

We provide card acquiring services

to our customers

by partnering with

Nedbank Limited and

ABSA Bank Limited,

and payment

processing services

in partnership

with the

largest banks

in South

Africa. If

these agreements

were to

be terminated,

Adumo would

not be able to operate

its payment services unless it

were able to obtain

alternative card acquiring or

payment processing agreements

with other partners

or obtain a direct

designation license with

the scheme's and

regulatory bodies. In

addition, if we

were to lose our

PASA registrations

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

Compliance with the requirements under these various regulatory regimes may

cause us to incur significant additional costs and

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.

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.

EasyPay

Insurance was

granted a Financial

Service Provider,

or FSP,

license on

June 9, 2015,

and EasyPay Financial

Services (Pty) Ltd

was

granted

a FSP

license on

July 11,

our FSP

licenses are

withdrawn or

suspended, we

may be

stopped from

continuing our

financial services businesses in South Africa unless we are able to enter into a representative

arrangement with a third party FSP.

Furthermore, the

proposed Conduct

of Financial

Institutions Bill

will make

significant changes

to the

current licensing

regime

however, the current proposal is that existing licences will be converted. The second draft of the Conduct of

Financial Institutions Bill

was published for public comment on September 29, 2020.

Item 2. Unregistered Sales of Equity Securities and

Use of Proceeds

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

second quarter

of fiscal

2025:

Table 22

(a)

(b)

(c)

(d)

Period

Total

number

of shares

purchased

Average price

paid per share

(US dollars)

Total

number of shares

purchased as part of publicly

announced plans or

programs

Maximum dollar value of

shares that may yet be

purchased under the plans

or programs

Oct 1, 2024 - Oct 31, 2024

(1)

2,601,410

4.59

100,000,000

Nov 1, 2024 - Nov 30, 2024

(2)

61,821

4.96

100,000,000

Dec 1, 2024 - Dec 31, 2024

(2)

70,326

4.99

100,000,000

Total

2,733,557

(1)

Relates to

the repurchase

2,601,410

shares of

our

common

stock from

Crossfin

Holdings

(RF)

Proprietary

Limited

connection with our acquisition of Adumo. These shares do not reduce the

repurchase authority under the share repurchase program.

(2) Relates to the delivery of 61,821 and 70,326 shares of our common stock in November and December, respectively,

to us by

certain

of our

employees to

settle their

income

tax liabilities.

These shares

do not

reduce the

repurchase

authority under

the

repurchase program.

Other than as

reported in a

Current Report on

Form 8-K, we

did not

sell any

securities that

were not registered

under the Securities

Act during the second quarter of fiscal 2025.

Item 5. Other Information

Our Section 16 officers and directors, as defined in Rule 16a-1(f) of the Securities

Exchange Act of 1934 (the “Exchange Act”),

may from time to time

enter into plans for the

purchase or sale of our

common stock that are

intended to satisfy the affirmative defense

conditions of Rule 10b5-1(c)

of the Exchange

Act. During the quarter

ended December 31, 2024,

no officers or

directors, as defined

in Rule 16a-1(f),

adopted

, modified, or

terminated

a “Rule 10b5-1 trading arrangement” or a “

non-Rule

10b5-1

trading arrangement,”

as defined in Item 408 of Regulation S-K.

Item 6. Exhibits

The following exhibits are filed as part of this Form 10-Q:

Incorporated by Reference Herein

Exhibit

No.

Description of Exhibit

Included

Herewith

Form

Exhibit

Filing Date

2.2

First Addendum to Sale and Purchase Agreement, dated

October 1, 2024, between Lesaka Technologies Proprietary

Limited; Lesaka Technologies, Inc. and the parties listed in

Annexure A

8-K

2.2

October 1, 2024

10.40

Sale of Shares Agreement dated October 1, 2024, between

Lesaka Technologies Proprietary Limited and Crossfin

Holdings Proprietary Limited

8-K

10.2

October 1, 2024

10.41

Third Addendum to Facility Letter no.: LM/CCMS/01/2021

between FirstRand Bank Ltd, Cash Connect Management

Solutions (Pty) Ltd, Main Street 1723 (Pty) Ltd, Cash

Connect Rentals (Pty) Ltd; and K2020 Connect (Pty) Ltd

dated October 29, 2024

10-Q

10.41

November 6,

2024

10.42

First Addendum to the Facility Letter dated December 10,

2024 between Lesaka Technologies (Proprietary) Limited

and FirstRand Bank Limited (acting through its Rand

Merchant Bank division)

8-K

10.1

December 10,

2024

10.43

Amended & Restated Policy Agreement, dated October 28,

2024, among Lesaka Technologies, Inc. and the IFC

Investors

10.44

Trust Deed of the Lesaka Employee Share Trust entered

into between Lesaka Technologies, Inc. and Nomaxabiso

Norma Teyise and Zwelethu Masinga

14A

October 2, 2024

10.45

Relationship Agreement between Lesaka Technologies,

Inc. and the Trustees for the time being of the Lesaka

Employee Share Trust

14A

October 2, 2024

31.1

Certification of Principal Executive Officer pursuant to

Rule 13a-14(a) under the Exchange Act

31.2

Certification of Principal Financial Officer pursuant to Rule

13a-14(a) under the Exchange Act

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

formatted

Inline

XBRL

and

contained

Exhibit 101

SIGNATURES

Pursuant to

the requirements

of the

Securities Exchange

Act of

1934, the

registrant has

caused this

report to

be signed

on its

behalf by the undersigned, thereunto duly authorized, on February

5, 2025.

LESAKA TECHNOLOGIES, INC.

By: /s/ Ali Mazanderani

Ali Mazanderani

Executive Chairman

By: /s/ Dan L. Smith

Dan L. Smith

Group Chief Financial Officer,

Treasurer and Secretary

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, Ali Mazanderani,

certify that:

I have reviewed this quarterly report on Form 10-Q of Lesaka Technologies,

Inc. (“Lesaka”) for the quarter ended December 31,

2024;

Based

knowledge,

this

report

does

not

contain

any

untrue

statement

material

fact

omit

state

material

fact

necessary to

make the

statements made,

in light

of 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;

I am

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, or

caused such

disclosure controls

and procedures

to be

designed

under our supervision,

to ensure that material

information relating to

Lesaka, including

its consolidated subsidiaries,

is 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 to

designed under our supervision, to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally accepted

accounting principles;

(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 in this report

any change in Lesaka’s

internal control over financial reporting

that occurred during Lesaka’s

most

recent

fiscal

quarter

that

has

materially

affected,

reasonably

likely

materially

affect,

Lesaka’s

internal

control

over

financial reporting; and

I have

disclosed, based

on our

most recent

evaluation of

internal control

over financial

reporting, to

Lesaka’s

auditors and

the

Audit Committee of Lesaka’s Board

of 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

not

material,

that

involves

management

other

employees

who

have

significant

role

Lesaka’s internal control over financial

reporting.

Date: February 5, 2025

/s/ Ali Mazanderani

Ali Mazanderani

Executive Chairman

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, Dan L. Smith, certify that:

I have reviewed this quarterly report on Form 10-Q of Lesaka Technologies,

Inc. (“Lesaka”) for the quarter ended December 31,

2024;

Based

knowledge,

this

report

does

not

contain

any

untrue

statement

material

fact

omit

state

material

fact

necessary to

make the

statements made,

in light

of 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;

I am

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, or

caused such

disclosure controls

and procedures

to be

designed

under our supervision,

to ensure that material

information relating to

Lesaka, including

its consolidated subsidiaries,

is 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 to

designed under our supervision, to provide reasonable assurance regarding

the reliability of financial reporting and the preparation of

financial statements for external purposes in accordance with generally accepted

accounting principles;

(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 in this report

any change in Lesaka’s

internal control over financial reporting

that occurred during Lesaka’s

most

recent

fiscal

quarter

that

has

materially

affected,

reasonably

likely

materially

affect,

Lesaka’s

internal

control

over

financial reporting; and

I have

disclosed, based

on our

most recent

evaluation of

internal control

over financial

reporting, to

Lesaka’s

auditors and

the

Audit Committee of Lesaka’s Board

of 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

not

material,

that

involves

management

other

employees

who

have

significant

role

Lesaka’s internal control over financial

reporting.

Date: February 5, 2025

/s/ Dan L. Smith

Dan L. Smith

Group Chief Financial Officer

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

connection

with

the

quarterly

report

Lesaka

Technologies,

Inc.

(“Lesaka”)

Form 10-Q

for

the

quarter

ended

December 31,

2024, as filed

with the Securities

and Exchange

Commission on

the date hereof

(the “Report”),

Ali Mazanderani

and

Dan

Smith,

Executive

Chairman

and

Group

Chief

Financial

Officer,

respectively,

Lesaka,

certify,

pursuant

U.S.C. § 1350, that to 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: February 5, 2025

/s/: Ali Mazanderani

Name: Ali Mazanderani

Executive Chairman

Date: February 5, 2025

/s/: Dan L. Smith

Name: Dan L. Smith

Group Chief Financial Officer

ex1043

EXECUTION VERSION

IFC INVESTMENT NUMBER 37402

Amended & Restated

Policy Agreement

By and Among

LESAKA TECHNOLOGIES, INC.

and

EACH OF THE INVESTORS SIGNATORY

HERETO

Dated October 28, 2024

Exhibit 10.43

TABLE OF CONTENTS

Article/

Section

Item

Page No.

ARTICLE I

................................................................

............................ 1

Definitions and Interpretation

................................................................

..............................................................

Section 1.01

Definitions

................................................................

... 1

Section 1.02.

Interpretation

................................................................

..............................................................

Section 1.03.

No Third Party Rights

................................................................

................................................... 9

Section 1.04.

Exceptions to

No Third Party Rights

................................................................

............................. 9

ARTICLE II

................................................................

......................... 10

Corporate Governance

................................................................

........ 10

Section 2.01.

Investors’ Board Rights

................................................................

............................................. 10

Section 2.02.

Removal/Resignation of Investors’ Nominee Director

..............................................................

Section 2.03.

Procedures of the Board

................................................................

............................................ 11

Section 2.04.

Advisory Committee

................................................................

................................................... 11

ARTICLE III

................................................................

....................... 12

Covenants

................................................................

............................. 12

Section 3.01.

General Reporting Covenants

................................................................

.................................... 12

Section 3.02.

Policy Reporting Covenants

................................................................

...................................... 13

Section 3.03.

Policy Covenants

................................................................

.......................................................

Section 3.04.

Other Affirmative Covenants

................................................................

..................................... 17

Section 3.05.

Use of Proceeds

................................................................

.........................................................

Section 3.06.

Preemptive Rights

................................................................

......................................................

Section 3.07.

Registration Rights

................................................................

.................................................... 19

Section 3.08.

Further Assurances

................................................................

.................................................... 27

ARTICLE IV

................................................................

....................... 28

The Put Option

................................................................

.................... 28

Section 4.01.

The Put Option

................................................................

...........................................................

Section 4.02.

Failure to Perform by the Company

................................................................

.......................... 29

Section 4.03.

Obligations Irrevocable

................................................................

............................................. 29

ARTICLE V

................................................................

......................... 30

Term

of Agreement

................................................................

............. 30

Section 5.01.

Term of Agreement

................................................................

.................................................... 30

ARTICLE VI

................................................................

....................... 30

Representations and Warranties

................................................................

........................................................

Section 6.01.

Representations and Warranties

................................................................

............................... 30

Section 6.02.

Investors Reliance

................................................................

.....................................................

ARTICLE VII

................................................................

...................... 31

Miscellaneous

................................................................

....................... 31

Section 7.01.

Notices

................................................................

....... 31

Section 7.02.

Saving of Rights

................................................................

........................................................

Section 7.03.

English Language

................................................................

......................................................

Section 7.04.

Applicable Law and Jurisdiction

................................................................

............................... 32

Section 7.05.

Immunity

................................................................

.... 34

Section 7.06.

nnouncements / Confidentiality

................................................................

............................... 34

Section 7.07.

Successors and Assigns

................................................................

.............................................. 35

Section 7.08.

Amendments, Waivers

and Consents

................................................................

......................... 35

Section 7.09.

Counterparts

................................................................

..............................................................

Section 7.10.

Costs, Expenses and Third Party Claims

................................................................

................... 35

Section 7.11.

Entire Agreement

................................................................

.......................................................

Section 7.12.

Invalid Provisions

................................................................

......................................................

ANNEX A

................................................................

............................. 38

ANTI-CORRUPTION GUIDELINES FOR IFC TRANSACTIONS

................................................................

... 38

ANNEX B ................................................................................................

.............................................................

ANNUAL MONITORING REPORT ................................................................

................................................ 41

ANNEX C

................................................................

............................. 50

MINIMUM INSURANCE REQUIREMENTS................................

................................................................

ANNEX D

................................................................

............................. 51

LIST

DEVELOPING

EMERGING

MARKET

COUNTRIES

IN WHICH THE PROCEEDS MUST BE USED

................................................................

............................. 51

SCHEDULE 1

................................................................

...................... 53

FORM OF LETTER TO COMPANY’S

AUDITORS ................................................................

..................... 53

SCHEDULE 2

................................................................

...................... 55

ACTION PLAN ................................................................

................................................................

................... 55

SCHEDULE 3

................................................................

...................... 56

FORM OF PUT NOTICE

................................................................

... 56

POLICY AGREEMENT

AMENDED & RESTATED

POLICY AGREEMENT (this “

Agreement

”), dated October 28, 2024, between:

(1)

LESAKA TECHNOLOGIES, INC., a corporation organized and existing under the laws of the State of Florida (the

“

Company

”);

(2)

INTERNATIONAL

FINANCE

CORPORATION,

international

organization

established

Articles

Agreement among its member countries including the United States of America

and South Africa (“

IFC

”); and

(3)

IFC African,

Latin American

and Caribbean

Fund, LP,

a limited

partnership formed

under the

laws of

the United

Kingdom (“

ALAC

”); and

(4)

IFC Financial

Institutions Growth

Fund, LP,

a limited partnership

formed under

the laws of

the United

Kingdom

(“

FIG

” and together with IFC and ALAC, the “

Investors

”).

RECITALS

(A)

Pursuant to

a Subscription

Agreement, dated

April 11,

2016 (the

“

Subscription Agreement

”) by

and among

the

Investors

and

the

Company,

each

Investor

purchased

from

the

Company

the

number

fully

paid

and

non-assessable

Common

Stock

the

Company

set

forth

opposite

its

name

the

Subscription

Agreement

the

terms

and

conditions

the

Subscription Agreement;

(B)

The

Investors

and

the Company

entered into

that certain

Policy

Agreement

dated

April 11,

2016

(the “

Original

Policy Agreement

”) as a condition of the Investors’

subscription pursuant to the Subscription Agreement;

and

(C)

On May 7,

2024, the Company

entered into a

Sale and Purchase

Agreement (the

“

Sale Agreement

”) with Lesaka

Technologies Proprietary Limited, and the Sellers party thereto. Pursuant to

the Sale Agreement,

the Company agreed to sign

a written

addendum to the Original Policy Agreement with the Investors that provides for the inclusion of the shares to be issued in connection

with

the

Sale

Agreement

attributable to the

Investors in

the

definition of “Put

Shares”

under the

Original

Policy

Agreement, and related changes.

(D)

Accordingly,

the Company and the

Investors desire and

agree to amend and

restate the Original Policy

Agreement

in its entirety to incorporate the changes contemplated by the Sale Agreement.

ARTICLE I

Definitions and Interpretation

Section 1.01.

Definitions

Wherever used in this Agreement, the following terms have the following meanings:

“

Accounting Standards

” means accounting principles generally accepted in the

United States, applied on a consistent basis;

“

Action Plan

” means the plan

attached as Schedule 2

(

Action Plan

) setting out the

specific social and environmental

measures to be

undertaken by the Company;

“

Advisory Committee

” has the meaning set forth in Section 2.04 (

Advisory Committee

);

“

Affiliate

” means, with respect to any Person, any Person directly

or indirectly Controlling, Controlled by or under

common Control

with, that Person;

“

ALAC

” has the meaning set forth in the preamble;

“

AML/CFT

” means anti-money laundering and combating the financing

of terrorism;

“

AML/CFT Officer

” means

a senior

officer of

the Company

whose duties

include oversight

or supervision

of the

implementation

and operation of, and compliance with, the Company’s

AML/CFT policies, procedures and controls;

“

Annual Monitoring

Report

” means

the annual

monitoring report,

in form

and substance

satisfactory to

each Investor,

setting out

the specific social, environmental and developmental impact information to be provided by the Company,

substantially in the form of

Annex B hereto, as the same may be amended or supplemented from time to time

with the Investor’s consent;

“

Applicable Law

” means

all applicable

statutes, laws,

ordinances, rules

and regulations,

including but

not limited

to, any

license,

permit or other governmental Authorization, in each case as in effect

from time to time;

“

Applicable S&E Law

” means all applicable statutes, laws, ordinances, rules and regulations of each country in which the Company

or any Subsidiary does business, including,

without limitation, all Authorizations setting

standards concerning environmental, social,

labor, health

and safety or

security risks of

the type contemplated

by the Performance

Standards or imposing

liability for the

breach

thereof;

“

Auditors

” means the independent registered public accounting firm of

the Company;

“

Authority

” means any

national, supranational, regional

or local government

or governmental, statutory,

regulatory,

administrative,

fiscal, judicial,

or government

-owned

body,

department,

commission, authority,

tribunal, agency

or entity,

or central

bank (or

any

Person whether or not government owned and howsoever constituted

or called, that exercises the functions of a central bank);

“

Authorization

” means

any consent,

registration, filing,

agreement, notarization,

certificate, license,

approval, permit,

authority or

exemption from,

by or

with any

Authority,

whether given

by express

action or

deemed given

by failure

to act

within any

specified

time period and all corporate, creditors’ and stockholders’ approvals or consents;

“

Authorized Representative

” means any individual who is duly authorized by the Company to

act on its behalf and whose name and

a specimen

of whose

signature appear

on the

Certificate of

Incumbency and

Authority most

recently delivered

by the

Company to

each Investor;

“

Board of Directors

” or “

Board

” means the

board of directors

of the Company

nominated and elected

from time to

time in accordance

with Section 2.01 (

Investors’ Board Rights

);

“

Bona Fide Offer

” means a bona fide offer to acquire all the outstanding Common

Stock of the Company;

“

Business Day

” means a day when banks are open for business in New York,

New York

and Johannesburg, South Africa;

“

CAO

” means

the Compliance

Advisor

Ombudsman,

the independent

accountability

mechanism for

the Investors

that impartially

responds to environmental and social concerns of affected

communities and aims to enhance outcomes;

“

CAO’s

Role

” means the role of the CAO which is:

(a)

to respond

to complaints

by Persons

who have

been or

are likely

to be

directly affected

by the

social or

environmental impacts of IFC projects; and

(b)

oversee

audits

IFC’s

social

and

environmental

performance,

particularly

relation

sensitive

projects, and to ensure compliance with IFC’s

social and environmental policies, guidelines, procedures and

systems;

“

Certificate of Incumbency and Authority

” means a certificate provided to each Investor by the Company substantially in the form

set forth in Schedule 5 (

Form of Certificate of Incumbency and Authority

) to the Subscription Agreement;

“

Chairman

” means the chairman of the Board of Directors elected or appointed from time to time, or such individual in substantially

the same role;

“

Charter

” means the

Amended and

Restated Articles of

Incorporation and

Amended and Restated

By-Laws of

the Company

or, as

applicable, the organizational documents of any Subsidiary;

“

Coercive Practice

” has the meaning set forth in Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“

Collusive Practice

” has the meaning set forth in Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“

Common Stock

” means the common stock, par value $0.001 per share, of the Company;

“

Company

” has the meaning set forth in the preamble;

“

Company Operations

” means all of the existing and future financing operations of the Company and its Subsidiaries;

“

Company’s

Knowledge

” means

the knowledge

of the

Company’s

executive officers

after making

due

inquiry of

the individuals

within the Company’s and

its Subsidiaries’ having responsibility for the matter in question;

“

Confidential Information

” means any

written information, which

is clearly marked

“confidential”, concerning

the businesses and

affairs of

the Company

or any

of its

Subsidiaries that

the Company

has provided

or shall

in the

future provide

to the

Investors, but

excluding information

that: (i)

is or

becomes available

to the

public from

a source

other than

any Investor;

(ii) was

available to

Investor prior to its disclosure to the Investors by the Company; (iii) was

or is developed by an Investor independently of, and without

reference to any

other information within

the scope of this

definition; (iv) is

required to be disclosed

by action of

any court, tribunal

or regulatory authority or

by any requirement of law,

legal process, regulation, or

governmental order,

decree or rule, or is necessary

or desirable for the Investors to disclose in connection with any proceeding in any court or tribunal or before any regulatory

authority

in order

to preserve

its rights;

(v) the

Company agrees

may be

disclosed; (vi)

is or

becomes available

to any

Investor from

sources

which to such

Investor’s knowledge

are under no

obligation of confidentiality

to the Company;

or (vii) is

or becomes stale

and out-

of-date or no longer material

to the Company and its Subsidiaries,

provided that in the

case of Intellectual Property,

such Intellectual

Property shall not cease to be Confidential Information pursuant to

this sub-clause (vii) without the prior consent of the

Company (not

to be unreasonably withheld);

“

Control

” means the power to direct the management or policies of a Person, directly or indirectly, whether through the ownership of

shares or

other securities,

by contract

or otherwise;

provided that,

in any

event, the

direct or

indirect ownership

of twenty

percent

(20%)

the

voting

capital

Person

deemed

constitute

Control

that

Person,

and

“

Controlling

”

and

“

Controlled

” have corresponding meanings;

“

Controlling Person

” has the meaning set forth in Section 3.07(b)(xvii) (

Registration Rights

);

“

Corrupt Practice

” has the meaning set forth in Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“

Director

” means an individual who is a member of the Board of the Company;

“

Dollars

” or “

” means the lawful currency of the United States of America;

“

Equity Securities

” means

the Company’s

Common Stock,

preferred stock,

bonds, loans,

warrants, rights,

options or

other similar

instruments

securities

which

are

convertible

into or

exercisable

exchangeable

for,

which

carry

right

for

purchase shares of Common Stock or any instrument or certificate representing a beneficial ownership interest in the Common Stock,

including

global

depositary

receipts and

American

depository

receipts

and

any

other

security

issued

the

Company,

even

not

convertible into Common Stock,

that derives its

value and/or return based

on the financial

performance of the

Company or its

Common

Stock;

“

Exchange Act

” means the U.S. Securities Exchange Act of 1934, as amended;

“

Financial Year

” means the accounting year of the Company commencing each year on July 1 and ending on the

following June 30,

or such other period

as the Company,

upon thirty (30) days’

prior written notice

to each Investor,

from time to time

designates as its

accounting year;

“

Fraudulent Practice

” has the meaning set forth in Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“

General

Meeting

”

means

either

special

meeting

the

Company’s

shareholders

the

annual

meeting

the

Company’s

shareholders;

“

IFC

” has the meaning set forth in the preamble;

“

Indemnitee

” shall mean each Investor and its officers, directors, employees,

agents, representatives and Affiliates;

“

Intellectual Property

” means any

or all of

the following and

all rights in,

arising out of,

or associated with

any or all

of the following:

(a)

all U.S.,

foreign and

international patents

and patent

rights (including

all patents,

patent applications,

provisional

patent applications, and any

and all divisions, continuations,

continuations-in-part, reissues, re-examinations

and extensions

thereof, and all invention registrations and invention disclosures);

(b)

all

trademarks

and

trademark

rights,

service

marks

and

service

mark

rights,

trade

names

and

trade

name

rights,

service names

and service name

rights (including

all goodwill,

common law

rights and governmental

or other

registrations

or applications

for registration

pertaining thereto),

designs, trade

dress, brand

names, business

and product

names, internet

domain names, logos and slogans;

(c)

all copyrights

and

rights (including

all common

law rights,

and governmental

other registrations

applications for registration pertaining thereto, and renewal rights therefor);

(d)

all sui generis

database rights,

ideas, inventions

(whether patentable

or not),

invention disclosures,

improvements,

technology

know-how,

show-how,

trade

secrets, formulas,

systems, processes,

designs,

methodologies,

industrial

models,

works

authorship,

databases,

content,

graphics,

technical

drawings,

statistical

models,

algorithms,

modules,

computer

programs, technical documentation, business methods, work

product, intellectual and industrial property licenses,

proprietary

information and documentation relating to any of the foregoing;

(e)

all mask works, mask work registrations and applications therefor;

(f)

all industrial designs and any registrations and applications therefor throughout

the world;

(g)

all computer software

including all source

code, object code,

firmware, development

tools, files, records

and data,

and all media on which any of the foregoing is recorded; and

(h)

all similar, corresponding or equivalent

rights to any of the foregoing;

“

Investor Shares

” means the

Equity Securities of

the Company purchased

by the Investors pursuant

to the Subscription

Agreement

and/or otherwise held by the Investors from time to

time, including without limitation Equity Securities purchased pursuant to Section

3.06 (

Preemptive Rights

), and any Equity Securities issued by way of stock split or stock dividend on such Investor

Shares;

“

Investors

” has the meaning set forth in the preamble;

“

Investors Subscription

” means the subscription

for Equity Securities of the

Company by the Investors as provided

for in Article II

of the Subscription Agreement;

“

Investors’ Nominee Director

” has the meaning set forth in Section 2.01(a) (

Investors’ Board Rights

);

“

Investors’ Observer

” has the meaning set forth in Section 2.01(c) (

Investors’ Board Rights

);

“

Material Adverse Effect

” means a material adverse effect on:

(a)

the Company’s and its Subsidiaries’

assets or properties, taken as a whole;

(b)

the Company’s and its Subsidiaries’

business prospects or financial condition, taken as a whole;

(c)

the ability of the Company’s and its Subsidiaries’ businesses or operations,

taken as a whole, to continue as a going

concern; or

(d)

the ability of the Company

to (i) comply with its obligations

under this Agreement,

the Subscription Agreement or

its

Charter

and

(ii)

ensure

that

each

its

Subsidiaries

complies

with

its

obligations

under

this

Agreement

its

organizational

documents;

“

Nasdaq

” means The Nasdaq Global Select Market;

“

New Securities

” has the meaning set forth in Section 3.06(f) (

Preemptive Rights

);

“

Obstructive Practice

” has the meaning set forth in Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“Performance

Standards”

means

IFC’s

Performance

Standards

Social

Environmental

Sustainability,

dated

January

2012,

copies

which

are

available

publicly

the

IFC

website

http://www.ifc.org/wps/wcm/connect/Topics_Ext_Content/IFC_External_Corporate_Site/IFC+Sustainability/Sustainability+Framew

ork/Sustainability+Framework+-+2012/#PerformanceStandards;

“

Person

” means

any individual,

corporation, company,

partnership, firm,

voluntary association,

joint venture,

trust, unincorporated

organization, Authority or any other entity whether acting

in an individual, fiduciary or other capacity;

“

Plan Put

Trigger

Event

” means

the rejection

by the

Board of

Directors of

the Company

of a

Bona Fide

Offer at

a time when

the

Company has in place, or in response to such Bona Fide Offer the Company implements, a shareholder rights plan or similar plan that

has the

effect

of precluding

a hostile

offer

for

the Company

as a

result of

the triggering

of rights

to purchase

additional shares

Common

Stock or

stock of

the potential

acquirer

at a

discount if

an acquiring

person has

beneficial

ownership

of Common

Stock

representing more than a specified percentage of the Common Stock (such

plan a “

Shareholder Rights Plan

”);

“

Prospectus

” means

the prospectus or

prospectuses included in

any Registration Statement

(including, without limitation,

a prospectus

that includes any information

previously omitted from

a prospectus filed as part of

an effective Registration Statement

in reliance on

Rule

430A

under

the

Securities

Act

any

successor

rule

thereto),

amended

supplemented

any

prospectus

supplement,

including any Shelf Supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered

by such

Registration Statement and by all

other amendments and supplements to

the prospectus, including post-effective

amendments and all

material incorporated by reference in such prospectus or prospectuses;

“

Put Notice

” means a

notice delivered by

an Investor to

the Company pursuant

to Section 4.01(b)

(

The Put Option

) substantially in

the form of Schedule 3;

“

Put Option

” has the meaning set forth in Section 4.01(a) (

The Put Option

);

“

Put Price

” means the amount

obtained by multiplying the

relevant Put Price Per

Share by the relevant

number of Put Shares

specified

in the relevant Put Notice (with any Equity

Securities other than Common Stock treated as if

converted into or exercised or exchanged

for Common Stock of the Company at the date of the Put Notice);

“

Put Price Per Share

” means:

(a) in the case

of a Put Trigger

Event and a Threshold

Put Trigger Event,

as applicable, (I) the

higher of (i) (x)

in respect of

Put Shares purchased pursuant to the Subscription Agreement

the price per Investor Share paid

by the Investors pursuant

to the Subscription Agreement

and (y) in respect

of Put Shares purchased

pursuant to Section 3.06

(

Preemptive Rights

)

the price

per Investor

Share paid

by the

Investors in

such transaction

and (ii)

the volume

weighted

average price

per

share, as reported

by Bloomberg,

prevailing for

the sixty (60)

Nasdaq trading

days preceding

the Put Trigger

Event or

Threshold Put Trigge

Event, as applicable

and (II) in

respect of Additional

Put Shares,

the price per

share attributable

to each such share under

the Sale Agreement (as

adjusted for stock splits, stock

dividends, recapitalizations and

similar

transactions);

and

(b) in the case of a Plan Put Trigger Event, the highest price offered

in any Bona Fide Offer;

“

Put Shares

” means

the (i)

Investor Shares

owned by

any Investor

exercising its

Put Option

that were

purchased by

such Investor

pursuant

to (x)

the Subscription

Agreement

or (y)

Section 3.06

(

Preemptive

Rights

) of

this Agreement,

and

any

Equity Securities

issued by way

of stock split

or stock dividend

on such Investor

Shares and (ii)

the shares acquired

by the Investors

as a result of

the

transaction contemplated

by the Sale

Agreement (the

“

Additional Put

”) , and

any Equity

Securities issued

by way of

stock

split or stock dividend on such Additional Put Shares;

“

Put Trigger Event

” means (1) the formal filing by a governmental Authority of a complaint or instituting an action that specifically

alleges, or a court of competent jurisdiction enters a judgment

(whether or not the action giving rise to such judgment

is brought by a

governmental Authority)

finding that, the

Company or any

of its Subsidiaries

(i) engaged in

or authorized or

permitted any Affiliate

or any

other Person

acting on

its or

their behalf

to engage

in any

Sanctionable

Practice with

respect to

the Company

or any

its

Subsidiaries; (ii)

entered into

any transaction

or engaged

in activity

prohibited under

Section 3.03(d)

or (iii)

failed to

comply with

Section 3.03(f); or (2) an indictment of the Company or any of its Subsidiaries issued under the laws of the United States charging the

Company or any of its Subsidiaries with the conduct described in clauses (1)(i), (ii) or (iii) above, regardless of whether such conduct

occurred prior to or after the date hereof;

“

Registrable Securities

” means

(a) the Investor

Shares and (b)

any shares of

Common Stock

issued or issuable

with respect to

any

shares described in subsection (a) above by

way of a stock dividend

or stock split or in

exchange for or upon conversion of

such shares

or otherwise in connection

with a combination of shares,

distribution, recapitalization, merger,

consolidation, other reorganization

other similar

event with

respect to

the Common

Stock (it

being understood

that, for

purposes of

this Agreement,

a Person

shall be

deemed to be a

holder of Registrable Securities

whenever such Person

has the right to

then acquire or obtain

from the Company any

Registrable Securities,

whether or not

such acquisition has

actually been effected).

As to any particular

Registrable Securities,

such

securities shall

cease to

be Registrable

Securities when

(i) the

SEC has

declared a

Registration

Statement covering

such securities

effective and such securities

have been disposed of

pursuant to such

effective Registration Statement, (ii) such

securities are sold under

circumstances in which

all of the applicable

conditions of Rule 144

are met, (iii) such

securities become eligible

for sale pursuant

Rule 144

without volume

or manner-of-sale

restrictions and

without the

requirement for

the Company

to be in

compliance with

the

current public information requirement under Rule

144(c)(1), as set forth

in a written opinion letter

to such effect, addressed, delivered

and

reasonably

acceptable

the

applicable

transfer

agent

and

the

holders

such

securities,

(iv)

such

securities

are

otherwise

transferred, or (v) such securities have ceased to be outstanding;

“

Registration Statement

”

means any registration statement of the Company, including the Prospectus, amendments and

supplements

(including

Shelf

Supplements)

such

registration

statement,

including

post-effective

amendments,

all

exhibits

and

all

material

incorporated by reference in such registration statement;

“

Related Party

” means any Person: (a) that holds a material interest in the Company or any Subsidiary; (b) in which the Company or

any Subsidiary holds a

material interest; (c) that

is otherwise an

Affiliate of the Company;

(d) who serves

(or has within the

past twelve

(12) months served) as

a director, officer or employee

of the Company;

or (e) who

is a member

of the family

of any individual included

in any

of the

foregoing.

For the

purpose

of this

definition,

“material

interest” shall

mean

a direct

or indirect

ownership

of shares

representing at least twenty percent (20%) of the outstanding voting power

or equity of the Company or any Subsidiary;

“

Rule 144

” means Rule 144 under the Securities Act or any successor rule thereto;

“

Sale Agreement

” has the meaning set forth in the preamble;

“

S&E Management System

” means the Company’s social and environmental management system, as implemented or in effect from

time to time,

enabling it to

identify,

assess and manage

the social and

environmental risks in

respect of the

Company Operations

an ongoing basis in accordance with the S&E Requirements;

“

S&E Officer

” means

a senior

officer of

the Company

to be

responsible for

administration and

oversight of

the S&E

Management

System, initially appointed in accordance with the Action Plan;

“

S&E Requirements

” means the

social and environmental obligations

to be undertaken

by the Company

and its Subsidiaries

to ensure

compliance with: (a) Applicable S&E Laws and (b) the Performance

Standards;

“

Sanctionable

Practice

”

means

any

Corrupt

Practice,

Fraudulent

Practice,

Coercive

Practice,

Collusive

Practice,

Obstructive

Practice,

those

terms

are

defined

herein

and

interpreted

accordance

with

the

Anti-Corruption

Guidelines

attached

this

Agreement as Annex A (

Anti-Corruption Guidelines for IFC Transactions

);

“

SEC

” means

the U.S.

Securities and

Exchange Commission

or any

other federal

agency administering

the Securities

Act and

the

Exchange Act at the time;

“

Securities Act

” means the U.S. Securities Act of 1933, as amended;

“

Selling Expenses

”

means all underwriting

discounts, selling commissions

and stock transfer

taxes applicable to

the sale

of Registrable

Securities,

and

fees

and

disbursements

counsel

for

any

holder

Registrable

Securities,

except

for

the

reasonable

fees

and

disbursements

of counsel for the holders of Registrable Securities required to be paid by the Company

pursuant to Section 3.09(c);

“

Settlement Completion

” has the meaning set forth in Section 4.01(c)(ii) (

The Put Option

);

“

Settlement Date

” means the date for settlement of the purchase of the relevant Put Shares by the Company, as such date is specified

by an

Investor in

the Put

Notice, which

shall be

not less

than ten

(10) days

nor more

than sixty

(60) days

after the

date of

the Put

Notice and shall be a Business Day;

“

Shelf Registration

” has the meaning set forth in Section 3.07(a)(i) (

Registration Rights

);

“

Shareholder Rights Plan

” has the meaning set forth in the definition of Plan Put Trigger

Event;

“

Shelf Registration Statement

” has the meaning set forth in Section 3.07(a)(i) (

Registration Rights

);

“

Shelf Supplement

” has the meaning set forth in Section 3.07(a)(ii) (

Registration Rights

);

“

Shelf Takedown

” has the meaning set forth in Section 3.07(a)(ii) (

Registration Rights

);

“

Shell Bank

”

means

a bank

incorporated

a jurisdiction

in which

it has

no physical

presence

and

which

is not

Affiliate

of a

regulated bank or a regulated financial group;

“

Subscription Agreement

” has the meaning set forth in the Recitals;

“

Subsidiary

”

means

with

respect

the

Company,

Affiliate

over

fifty

per

cent

(50%)

whose

capital

owned,

directly

indirectly, by the Company;

“

Threshold Put Trigger Event

” means the

adoption of a

Shareholder Rights Plan at

a time when

there is no

Bona Fide Offer currently

pending and where

the beneficial ownership

threshold that would

“trigger” the separation

of the rights from

the Common Stock (the

“

Threshold

Trigger

”)

less

than

twenty

percent

(20%)

such

lower

amount

that

expressly

stated

the

Florida

Business

Corporation Act;

“

Threshold Trigger

” has the meaning set forth in the definition of Threshold Put Trigger

Event; and

“

Transaction Documents

” means this Agreement and the Subscription Agreement.

Section 1.02.

Interpretation

In this Agreement, unless the context otherwise requires:

(a)

headings are for convenience only and do not affect the

interpretation of this Agreement;

(b)

words importing the singular include the plural and vice versa;

(c)

a reference to

an Annex, Article, party,

Schedule or Section

is a reference

to that Article or

Section of, or

that Annex, party or Schedule to, this Agreement;

(d)

a reference to a document in the “agreed form” is a reference to a document approved and for the purposes

of identification initialed by or on behalf of the parties thereto;

(e)

a reference

to a

document includes

an amendment

or supplement

to, or

replacement or

novation of,

that

document but disregarding any amendment, supplement, replacement

or novation made in breach of this Agreement;

(f)

general words in this Agreement shall not be given a restrictive meaning by reason of their being preceded

or followed by words indicating a particular class of acts, matters or things or by

examples falling within the general words;

(g)

a reference to a party to any document includes that party’s

successors and permitted assigns; and

(h)

unless stated

otherwise herein,

a reference

to “shares

of the

Company” means

shares of

the Company

any class.

Section 1.03.

No Third Party Rights

Subject to Section 1.04 (

Exceptions to No Third Party Rights

), a Person who

is not a

party to this

Agreement has

no right to

enforce or enjoy

the benefit

of any term of

this Agreement.

Section 1.04.

Exceptions to No Third Party Rights

(a)

Any Person

entitled to indemnity

under Section

7.10 (

Costs, Expenses and

Third Party

Claims

) may enforce

such

Person’s rights thereunder

subject to and in accordance with the terms of this Agreement.

(b)

This Agreement may

be rescinded or

terminated and a

term may be

amended or waived

without the permission

any Indemnitee or its

permitted assignees even if that

removes a right which

the Indemnitee or its

permitted assignees would otherwise

have.

(c)

No Indemnitee or its permitted assignees may enforce a term of this Agreement without the prior written consent of

each Investor, which may be provided in

its sole discretion.

Such consent by each Investor

may be subject to any

terms and conditions

that it may determine in its sole discretion.

(d)

No Indemnitee

may,

without the

prior written

consent of

each Investor

and the

Company (such

consent not

to be

unreasonably withheld,

conditioned or delayed),

assign, charge or

otherwise dispose of

any rights it may

have under this Agreement

or grant or create any third party interest therein.

ARTICLE II

Corporate Governance

Section 2.01.

Investors’ Board Rights

(a)

For so long as the Investors in aggregate beneficially own Investor Shares representing at least five percent (5%) of

the issued and outstanding voting shares of the Company:

(i)

the Investors shall

have the right

to nominate one

(1) Director (the

“

Investors’ Nominee Director

”) to the Board,

and the

Company shall

take all

commercially

reasonably

action to

cause the

election of

such nominee,

including

nominating and recommending to the stockholders of the Company

such person for election, and

(ii)

the Board shall at

all times maintain the

following committees:

an Audit Committee, a

Nominating and Corporate

Governance Committee

and a Remuneration

Committee.

As long as the

Investors’ Nominee

Director satisfies the

independence requirements of Nasdaq listing standards and other Applicable Law,

the Investors’ Nominee Director

shall be appointed

as a

member of the

Audit Committee and

shall have the

right to attend

meetings of the

Nominating

and

Corporate

Governance

Committee and

Remuneration

Committee

as an

observer.

Any financial

audit of

the

Company

must

compliance

with

the

Accounting

Standards

and

approved

the

Audit

Committee.

The

Investors’ Nominee

Director shall

be appointed

as a

member of

any committee

formed by

the Board

to consider

and/or implement a Shareholder Rights Plan.

The Investors

agree that

the Investors’

Nominee Director

shall be

an individual

that is

not an

executive officer

or employee

of the

Company or any of its

Subsidiaries and does not otherwise

fall within paragraphs (A)-(F) of

NASDAQ Marketplace Rule 4200(a)(15).

(b)

For so

long as

the Investors

in aggregate

beneficially own

Investor Shares

representing at

least two

and one

-half

percent (2.5%) of

the issued and outstanding

voting shares of the

Company,

the Investors shall have

the right to appoint

an observer

(the “

Investors’ Observer

”) to the Board

at any time when

they have not designated,

or do not have

the right to designate,

a person

serve

as a

Director

the

Board,

provided

such

observer

enters

into

customary

observer

agreement

containing,

among

other

provisions, confidentiality and non-use obligations with respect to information acquired from the Company.

The Investors’ Observer

shall have

the right

to attend

all meetings

of the

Audit Committee,

the Nominating

and Corporate

Governance Committee

and the

Remuneration

Committee

observer.

The

Investors’

Observer

shall

have

the

same

information

rights

and

receive

the

same

information at the same time as each of the members of the Board and committees

(but will have no voting rights).

Section 2.02.

Removal/Resignation of Investors’ Nominee Director

The Investors may require the removal of

the Investors’

Nominee

Director

Investors’ Observer

any

time

and

shall

entitled

nominate

another

Person

as the

Investors’

Nominee

Director or Investors’ Observer in place of any Investors’ Nominee

Director or Investors’ Observer,

respectively, so removed.

In the

event of the resignation, retirement or vacation of office of

the Investors’ Nominee Director or Investors’ Observer, the Investors shall

entitled,

subject

Section

2.01

(

Investors’

Board

Rights

nominate

another

Person

the

Investors’

Nominee

Director

Investors’ Observer, as applicable, in place

of such Investors’ Nominee Director

or Investors’ Observer and the

Company shall ensure,

to the fullest extent of all its rights and powers, that such nominee is promptly

appointed as a Director or observer.

Section 2.03.

Procedures of the Board

(a)

The

Board

shall

meet

least

once

every

quarter

each

Financial

Year

subject

annual

schedule

and

confirmation of the date of the next Board meeting at the previous Board

meeting.

(b)

Written notice

of each

meeting of the

Board, and an

agenda setting out

in detail the

items of business

proposed to

transacted

such

meeting

together

with

necessary

information

and

supporting

documents,

shall

given

all

the

Directors.

Written notice

of each meeting of

a committee of the

Board, and an agenda

setting out in detail

the items of business

proposed to be

transacted

such

meeting

together

with

necessary

information

and

supporting

documents,

shall

given

all

Directors

that

committee.

Written notice of a meeting and the

materials to be provided under

this Section 2.03(b) shall be

sent to the address

notified

from time to time by the Directors at least five (5) Business Days in advance of such meeting; provided that where, exceptionally,

the

Board or a committee of the Board is required to make a decision in circumstances in which the foregoing notice requirements cannot

be observed, such notice and information requirements may be waived with the unanimous approval

of all Directors or, in the case of

a meeting of a committee of the Board, all Directors on that committee.

(c)

The Company shall

not amend Section

4.11 or

Article VI of the

Company’s

bylaws as in effect

on the date

hereof

without the prior consent of the Investors.

The Company shall enter into an indemnification agreement with each Director.

(d)

The Board shall

maintain a director

remuneration and expense

reimbursement policy providing

for the payment of

directors’ fees

and reimbursement

of expenses

to any

Director who

is not

an employee

of the

Company.

Such policy

shall include

reimbursement

of the

reasonable

expenses incurred

by such

Directors:

(i) in

attending

a board

or committee

meeting or

a General

Meeting or

any other meeting

which the

Director is

requested to

attend in

his capacity

as a

Director of

the Company

(including the

reasonable costs of travel and attendance of an Investors’ Nominee Director or Investors’ Observer); and (ii) in obtaining independent

legal or professional advice in furtherance of his or her duties as a Director.

(e)

If any action

is to

be taken by

written consent of

the Board (or

a committee thereof)

in lieu

of a

meeting, the Company

shall

circulate,

together

with

the

proposed

written

consent,

the

information

determines

good

faith

necessary

enable

the

Directors to make a fully-informed, good faith decision with respect to such the matter(s) that are the subject of such consent, and the

Company shall provide

each Director such

additional information

as any Director

may reasonably request

with respect to

the matter

being considered.

Section 2.04.

Advisory Committee

As soon as

practicable, but in any

event no later

than thirty (30)

days after the

date hereof,

the Company shall create, and thereafter maintain in existence, an advisory committee

(the “

Advisory Committee

”) which will act as

an advisor

to the

Company’s

chief executive

officer

or such

other person

in a

substantially similar

role.

The Advisory

Committee

will,

among

other

things,

advise

guidelines

govern

future

acquisitions,

strategic

partnerships

and

similar

activities

the

Company and its Subsidiaries.

Members of the Advisory Committee shall be comprised of the Company’s

chief executive officer (or

such other person in a substantially similar role), the Company’s chief financial officer, certain individuals with experience in the area

of financial technology designated by the Investors in

their sole discretion and, if approved by the Company’s

chief executive officer

(or such other person

in a substantially similar

role), certain external

individuals with experience

in the area of

financial technology.

For the avoidance of

doubt, the Advisory Committee

shall not have any

decision-making authority or authority to

create any obligation

behalf

the

Company,

and

the

Board

shall

have

obligation

its

advice.

The

Company

shall

indemnify

and

hold

harmless the

non-employee

members of

the Advisory

Committee to

the maximum

extent permitted

under Applicable

Law for

any

reasonable and documented costs, expenses

or liabilities incurred by each such

member in connection with his or her

activities or his

or her position as a

member of the Advisory

Committee, other than those

arising directly from such

member’s gross negligence,

bad

faith or willful misconduct.

The Company’s obligation to have an

Advisory Committee will terminate when

the Investors in aggregate

beneficially own Investor Shares representing less than five percent (5%) of the

issued and outstanding voting shares of the Company.

ARTICLE III

Covenants

Section 3.01.

General Reporting Covenants

(a)

The Company shall furnish to each Investor the following information:

(i)

within ninety (90) days after the end

of each Financial Year, (A) annual consolidated financial statements (a balance

sheet as of the end of such Financial Year and the related statements of operations, comprehensive income, changes

equity

and

cash

flows

for

the

Financial

Year

then

ended)

for

the

Company,

audited

accordance

with

the

Accounting

Standards

and certified

by the

Auditors, together

with an

opinion of

the Auditors

on the

Company’s

internal control

over financial

reporting, and

(B) the

consolidating worksheet

used by

the Company

to prepare

its

consolidated

financial

statements,

certified

the

Company’s

chief

financial

officer

(x)

being

prepared

accordance with

the Company’s

books and

records and

accounting policies

in all material

respects, (y)

containing

all adjustments necessary for purposes of

presenting the Company’s consolidated financial statements in accordance

with the Accounting Standards and (z) fairly presenting in all material respects the

financial condition and results of

operations of the Company and each of the consolidating groups shown thereon;

and

(ii)

within forty-five (45) days after the end of the first three quarters of

each Financial Year,

(A) quarterly consolidated

financial

statements

balance

sheet

the

end

such

quarter

and

the

statements

operations,

comprehensive income, changes in equity and cash flows for the quarter

and Financial Year

to date then ended) for

the Company,

prepared in accordance with

the Accounting Standards and

(B) the consolidating worksheet

used by

the

Company

prepare

its consolidated

financial

statements

for

such

quarter,

certified

the

Company’s

chief

financial officer as (x) being prepared in accordance with the

Company’s books and records and accounting policies

all

material

respects,

(y)

containing

all

adjustments

necessary

for

purposes

presenting

the

Company’s

consolidated

financial

statements

accordance

with

the

Accounting

Standards

and

(z)

fairly

presenting

all

material

respects the

financial

condition

and results

of operations

of the

Company

and

each of

the consolidating

groups

shown thereon; and

(iii) within

fifteen

(15)

days

after

receipt

thereof

the

Company,

any

management

letter

similar

letter

from

the

Auditors; and

(iv)

later

than

fifteen

(15)

days

before

commencement

each

Financial

Year,

the

proposed

annual

budget,

and

promptly following

approval by

the Board

of any

amended budget

for such

Financial Year,

the amended

budget;

and

(v)

no later than thirty (30)

days before the General Meeting,

the notice, agenda and relevant meeting

materials for the

General Meeting; and

(vi)

no later than fifteen

(15) days after each

General Meeting, the minutes

thereof reflecting decisions adopted

at such

meeting; and

(vii)

promptly after becoming aware thereof the name of any person or “group” (within the

meaning of Rule 13d-5 under

the Exchange Act) that beneficially owns more than five percent of any class of

the Company’s securities.

Notwithstanding the foregoing,

the Company shall not

be required to furnish

to the Investors any of

the foregoing information to

the

extent such information is available on the SEC’s EDGAR website and the Company has notified each Investor of the posting of such

information with a link to such information.

(b)

Pursuant to the

Subscription Agreement, the

Company has

irrevocably authorized and

instructed the Auditors

(whose

fees and

expenses shall

be for

the account

of the

Company) to

communicate

directly with

each Investor

at any

time regarding

the

Company’s

financial statements,

accounts and

operations.

The Company

shall take

such actions,

issue such

additional instructions

and

deliver

such

additional

documents

necessary

procure

the

Auditors’

compliance

with

such

instruction,

including

without

limitation having the Company provide any customary indemnity

and/or engagement letter required by the Auditors as a condition to

their

providing

the

Investors

any

information

they

may

request,

being

understood

that

any

such

information

request

will

evaluated by the

Auditors with reference

to the relevant

auditing standards, laws

and its formal

policy and may

be declined on

these

grounds.

No later than

thirty (30)

days after any

change in Auditors,

the Company

shall so authorize

and instruct

the new Auditors

pursuant to a letter in the

form set forth in Schedule 1

(

Form of Letter to Company’s

Auditors

) and provide a copy of

the Company’s

instructions and any other related documentation to each Investor.

(c)

The Company shall promptly provide

to the Investors such

information as any Investor from

time to time reasonably

requests with regard

to the Company

and any of its

Subsidiaries.

The Company shall

provide to the

Investors’ Nominee Director

Investors’ Observer, as applicable, all information as and when provided to any other Director in his or her capacity as a Director and,

at any Investor’s

request and to

the extent consistent

with Applicable Law, shall also

provide such information

to such Investor.

Unless

prohibited by Applicable Law, the Investors’ Nominee Director

and Investors’ Observer may

provide to each Investor

any information

that the

Investors’ Nominee

Director and

Investors’ Observer

receives in his

or her

capacity as

a Director

or observer,

respectively,

including,

without

limitation,

any

information

Company

Operations,

and

may

provide

periodic

reports

each

Investor

related to the discharge of his or her duties as a Director.

(d)

Each Investor

may at any

time, by notice

to the Company,

elect not to

receive any of

the information described

this Section 3.01.

In this case, the

Company shall provide

such Investor with

copies of all information

publicly disclosed that

is not

otherwise available on the SEC’s EDGAR

website.

Section 3.02.

Policy Reporting Covenants.

(a)

The Company shall promptly notify each Investor upon becoming aware of: (i) any

material litigation, investigation

proceeding

commenced

the

Company’s

Knowledge

threatened

against

the

Company

any

Subsidiary,

(ii)

any

criminal

investigations or proceedings commenced or to the Company’s Knowledge threatened against the Company or any Related Party, (iii)

the occurrence of a Put Trigger Event, and any such notification shall specify the nature of the action or proceeding and any steps that

the Company proposes to take

in response to the same

unless, and then only to

the extent, the Company’s

counsel concludes in good

faith such specification

would jeopardize

attorney-client or work

product privilege and

advises each Investor

of such determination,

(iv) the occurrence

of a Plan Put Trigger

Event, and any such

notification shall specify

the terms of the

Bona Fide Offer and

include

any

correspondence

received by

the Company

setting forth

the Bona

Fide Offer,

or (v)

the occurrence

of a

Threshold Put

Trigger

Event, and

any such

notification shall

specify why

the Board

determined to

have the

Threshold Trigger

of less than

twenty percent

(20%).

Separate notification

to each Investor

pursuant to this

Section 3.02(a)

shall not be

required to

the extent such

information is

filed with

the SEC

and available

on the

SEC’s

EDGAR website

and the

Company has

notified each

Investor of

the posting

of such

information with a link to such information.

(b)

Upon each Investor’s request,

and with no less than three (3)

days prior notice to the Company,

the Company shall

permit representatives of each Investor and the CAO, during normal

office hours, to:

(i)

visit any of the sites and premises where the business of the Company or its Subsidiaries

is conducted;

(ii)

inspect any of the sites, facilities, plants and equipment, offices,

branches and other facilities of the Company or its

Subsidiaries;

(iii) have access to the books of account

and all records of the Company and its Subsidiaries; and

(iv)

have access

to those

employees, agents,

contractors and

subcontractors of

the Company

and its

Subsidiaries who

have or may have knowledge of matters with respect to which such Investor

or the CAO seeks information;

provided that in the case of the CAO, such access shall be solely for the purpose of

carrying out the CAO’s Role.

(c)

The Company shall, and shall ensure that each of its Subsidiaries shall:

(i)

within

ninety

(90)

days after

the

end

of each

Financial

Year,

deliver

each Investor

the corresponding

Annual

Monitoring Report confirming compliance with the Action Plan, the social and

environmental covenants set forth in

this Agreement and Applica

ble S&E Law,

or, as the

case may be, identifying

any non-compliance or failure

(other

than

any

immaterial

non-compliance

failure),

and

the

actions

being

taken

remedy

it,

and

including

such

information as

any Investor

shall reasonably

require in

order to

measure the

ongoing development

results of

such

Investor’s investment in the Investor

Shares, which information the Investors

may hold and use in accordance

with

IFC’s

Access

Information

Policy,

dated

January

2012,

which

available

http://www.ifc.org/wps/wcm/connect/98d8ae004997936f9b7bffb2b4b33c15/IFCPolicyDisclosureInformation.pdf?

MOD=AJPERES; and

(ii)

within three

(3) days after

becoming aware of

the occurrence, notify

each Investor of

any social, labor,

health and

safety, security or environmental incident,

accident or circumstance having, or which could reasonably be expected

have,

any

material

adverse

social

and/or

environmental

impact

any

material

adverse

impact

the

implementation or

operation of

the Company’s

Operations in

compliance with

the S&E

Requirements, specifying

in each case

the nature

of the incident,

accident, or

circumstance and

the impact or

effect arising

or likely

to arise

therefrom, and the measures the Company and/or the relevant Subsidiary,

as applicable, is taking or plans to take to

address

them

and

prevent

any

future

similar

event;

and

keep

each

Investor

informed

the

on-going

implementation of those measures.

(d)

The Company

shall furnish

to each

Investor, within

ninety (90)

days after

the end of

each Financial

Year,

at least

one of the following:

(i)

report

the

AML/CFT

Officer

the

implementation

of,

and

compliance

with,

the

Company’s

AML/CFT

policies, procedures and controls;

(ii)

an internal or external auditor’s

assessment on the adequacy of the

Company’s AML/CFT policies,

procedures and

controls; or

(iii) a report

by the AML/CFT

regulator of the

Company concerning the

Company’s compliance

with local AML/CFT

laws and regulations.

(e)

The Company shall

furnish to each

Investor, within

thirty (30) days

after the renewal

or replacement of

any of the

insurance policies referred to in Section 3.03(g) (

Policy Covenants

) and Annex C, a copy of that policy.

(f)

Each Investor

may at any

time, by notice

to the Company,

elect not to

receive any of

the information described

this Section 3.02.

In this case, the

Company shall provide

such Investor with

copies of all information

publicly disclosed that

is not

otherwise available on the SEC’s EDGAR

website.

Section 3.03.

Policy Covenants

(a)

Sanctionable Practices.

(i)

The Company

hereby agrees

that it

shall not

engage in

(nor authorize

or permit

any Affiliate

or any

other Person

acting on its behalf to engage in) any Sanctionable Practice with respect to the

Company;

(ii)

The Company shall not, and shall not permit any of its Subsidiaries and any stockholder that Controls the Company

and or

any counterparty

of the

Company or

any Subsidiary

in respect

of a

material transaction,

to (x)

enter into

business relationship with any Person that

is currently a target of any

economic sanctions administered by the Office

Foreign

Assets

Control

the

U.S.

Treasury

Department

(y)

provide

any

financing

services

connection with any activity in any sector under embargo by the

United Nations;

(iii) The Company further covenants that should it become aware of any violation of Section 3.03(a)(i), it

shall promptly

notify each Investor; and

(iv)

If any Investor

notifies the Company of

its concern that

there has been

a violation of Section

3.03(a)(i), the Company

shall cooperate in good faith with

the Investors and their representatives in

determining whether such a violation has

occurred, and shall respond promptly and in

reasonable detail to any reasonable request from any

Investor, and shall

furnish

documentary support for such response upon such Investor’s request.

(b)

Affirmative Environmental Covenants.

The Company shall and shall ensure that each of its Subsidiaries shall:

(i)

implement the Action Plan and undertake Company Operations in compliance in all material respects with the S&E

Requirements and all Applicable S&E Law; and

(ii)

periodically review

the form of

the report setting

out the specific

social, environmental

and developmental

impact

information

to be

provided

by the

Company

respect of

Company

Operations

(the “

S&E Annual

Monitoring

Report

”) and advise each Investor as to whether revision of the form is necessary or appropriate in light of changes

to Company

Operations

and revise

the form

of the

S&E Annual

Monitoring Report,

if applicable,

with the

prior

written consent of each Investor.

(c)

Negative Environmental Covenants.

The Company shall not and shall ensure that each

of its Subsidiaries shall not

amend, waive the

application of, or

otherwise materially

restrict the scope

or effect of,

the S&E Management

System (including

the

Action Plan and the S&E Requirements) without the prior written consent

of each of the Investors.

(d)

UN Security Council Resolutions.

The Company shall not and shall ensure that each of its

subsidiaries shall not: (i)

enter into any transaction

with, or for

the benefit of,

any of the

individuals or entities named

on lists promulgated by

the United Nations

Security Council under Chapter VII of the United Nations Charter or currently a

target of any economic sanctions administered by the

Office of Foreign Assets

Control of the U.S. Treasury

Department (“

Sanctions Target

”); or (ii) engage in any

activity prohibited by

any resolution of

the United Nations

Security Council under

Chapter VII of

the United Nations

Charter or any

business relationship

with any Sanctions Target.

(e)

Shell Banks. The

Company shall and

shall ensure that

each of its Subsidiaries

shall institute, maintain

and comply

with commercially reasonable internal procedures and controls to ensure that:

(i)

any financial institution with

which the Company or

its Subsidiaries conducts business

or enters into

any transaction,

through

which

the

Company

its

Subsidiaries

transmits

any

funds,

does

not

have

correspondent

banking

relationships with any Shell Bank; and

(ii)

the Company

shall not

and shall

ensure

that each

of its

Subsidiaries

shall not

conduct

business or

enter

into any

transaction with, or transmit any funds through a Shell Bank.

(f)

AML/CFT.

The Company shall,

and shall ensure

that each of its

Subsidiaries shall, take

commercially reasonable

steps to institute, maintain

and comply with internal

policies, procedures and controls

for AML/CFT consistent with

its business and

customer

profile,

compliance

with

national

laws

and

regulations,

and

furtherance

applicable

AML/CFT

best

practices

recommendations

the

Organization

for

Economic

Co-operation

and

Development’s

Financial

Action

Task

Force

Money

Laundering.

(g)

Insurance.

The Company shall, and

shall ensure that each of

its Subsidiaries shall: (i)

insure and keep insured

with

reputable

insurers that

cover such

risks and

contain such

policy limits,

types of

coverage as

are adequate

to insure

against risks

which

the

Company,

its

Subsidiaries

and

their

respective

employees,

business,

properties

and

other

assets

would

reasonably

expected to be exposed to in the operation of the

business as currently conducted and as proposed to be conducted,

including without

limitation the

insurances specified

in Annex C,

on terms and

conditions reasonably

acceptable to each

Investor; (ii) promptly

notify

the

relevant

insurer

any

claim

under

any

policy

written

that

insurer

and

diligently

pursue

that

claim;

(iii)

comply

with

all

warranties and

conditions under

each insurance

policy; (iv)

not do

or omit

to do,

or permit

to be

done or

not done,

anything which

might prejudice the Company’s (and/or any of its Subsidiaries’ right to claim or recover under any insurance policy; and (v) within

days of any renewal or replacement of an insurance policy required in Annex C, provide

to each Investor a copy of that policy.

(h)

Shareholder Rights Plan.

The Company shall not

adopt a Shareholder Rights

Plan having a term

of more than one

(1)

year,

provided

that

the

foregoing

shall

not

prevent

the Company

from

adopting

new

Shareholder

Rights

Plan

replace

the

expired Shareholder Rights Plan.

The Threshold Trigger in any Shareholder Rights Plan adopted by the Board shall be established at

twenty percent

(20%) or

such lower

amount that

is expressly

stated in

the Florida

Business Corporation

Act (the

“

20% Threshold

Trigger

”

)

unless the Board, or committee thereof implementing the Shareholder Rights Plan, determines, upon the advice of counsel,

that

using

a 20%

Threshold

Trigger

would reasonably

be expected

to be

inconsistent

with

its fiduciary

duties,

which

event

the

Threshold Trigger shall be

set at

the highest percentage

determined by the

Board or such

committee to be

consistent with such

fiduciary

duties.

Section 3.04.

Other Affirmative Covenants

The Company shall and shall ensure that each of its Subsidiaries shall:

(a)

undertake

its business,

activities and

investments

in compliance

in all

material

respects with

Applicable

Law; and

(b)

adopt

and

maintain

policy

designed

maximize

its

ownership

Intellectual

Property

developed

acquired in the course of its operations, which policy shall require the Company and its Subsidiaries to: (i) cause all material

technological developments,

patentable or unpatentable,

inventions, discoveries or

improvements by the

Company’s

or any

of its

Subsidiaries’ officers

or employees

to be

documented in

accordance with

appropriate professional

standards; and

(ii)

cause all officers and key employees, and to the extent practicable,

consultants of the Company and its Subsidiaries, to enter

into non-disclosure and proprietary rights agreements in customary form,

approved by the Board of Directors.

Section 3.05.

Use of

Proceeds

The Company

shall use

the

proceeds

from the

sale of

the Investor

Shares for

(i) capital

expenditures;

(ii)

acquisitions

the financial

technology

sector pursuant

to guidelines

to be

adopted

by the

Company

taking

into

account the recommendations of the Advisory Committee; and (iii) general corporate purposes.

A majority of all such proceeds must

be used for the forgoing purposes in developing countries or emerging

markets specified on Annex D.

The Company shall not use of

any such proceeds

in the territories of

any country that is

not a member of

the World

Bank or for reimbursements

of expenditures in

those territories or

for goods produced

in or services

supplied from any

such territory.

Notwithstanding anything herein to

the contrary,

each

Investor

acknowledges

that

nothing

this

Section

3.05

shall

prohibit

the

Company

from

using

its

existing

cash

reserves

countries or markets not specified in Annex D, provided such use

complies with Applicable Law and does not violate Section 3.03(d).

Section 3.06.

Preemptive Rights

For so long

as the Investors

hold in aggregate

5% of the

outstanding shares

of Common

Stock of the Company, each Investor shall have the right to purchase its pro-rata share of New Securities in the manner set out below:

(a)

If the Company proposes to issue New Securities, it shall give each Investor written notice of its intention,

describing the New Securities,

their price, and their general

terms of issuance, and specifying

each Investor’s pro-rata share

such

issuance

(the

“

Issue

Notice

”).

Each

Investor

shall

have

thirty

(30)

days

after

any

such

notice

delivered

(the

“

Notification Date

”) to give the Company written notice that it agrees to purchase part or all

of its pro-rata share of the New

Securities for the price

and on the terms specified

in the Issue Notice (the

“

Subscription Notice

”).

Each Investor may also

notify the Company in the

Subscription Notice that it

is willing to buy

a specified number of

the New Securities (“

Additional

Securities

”) not taken up

by the other Investors (“

Unpurchased Securities

”) for the price and

on the terms specified

in the

Issue Notice.

(b)

For the

avoidance of

doubt, the

Company

shall not

issue any

New Securities

until after

the Notification

Date.

(c)

If an Investor has

indicated that it is

willing to buy Additional

Securities (an “

Overallotment Investor

”),

the Company shall give such Overallotment Investor

written notice of the total

number of Unpurchased Securities within five

(5) days of the expiry of the thirty (30) day period

referred to in Section 3.06(a).

Such notice shall specify the particulars of

the payment

process for

the New

Securities to

be purchased

by such

Overallotment

Investor pursuant

to the

Subscription

Notice.

(d)

On the tenth (10

) Business Day after expiry of the thirty (30) day period referred to in Section 3.06(a):

(i)

each Investor shall subscribe for the number of its pro-rata shares specified in

the Subscription Notice;

(ii)

if an Investor has indicated that

it is willing to buy

Additional Securities, such Overallotment Investor shall also

for

the

lower

the

number

Additional

Securities

and

its

pro

rata

the

number

Unpurchased Securities;

(iii) each Investor shall pay the relevant

consideration to the Company; and

(iv)

the Company shall register in the name of each Investor the number

of New Securities for which such Investor

has subscribed.

(e)

If the Company has not consummated the proposed issuance of New Securities within one hundred twenty

days (120)

days following

the date of

the Issuance

Notice, the

Company may

not issue

such New

Securities without

again

complying with this Section 3.06.

(f)

“

New

Securities

”

shall

mean

any

Equity

Securities

the

Company;

provided,

that

the

term

“

New

Securities

” does not include:

(i)

Common Stock (or options to purchase Common Stock) issued or issuable to officers, directors and employees

of, or consultants to, the Company pursuant to an equity incentive plan that has been

approved by the Board of

Directors, not to exceed five percent (5%) of the then issued and outstanding

shares of Common Stock;

(ii)

Common Stock

issuable upon the

exercise, exchange

or conversion of

Equity Securities outstanding

as of the

date

this

Agreement

issued

after

the

date

hereof

pursuant

exercisable,

exchangeable

convertible

Equity Securities issued in a transaction to which this Section 3.06 was applicable;

(iii)

Common Stock issued or issuable in connection with any stock split or

stock dividend of the Company;

(iv)

Common

Stock (or

options

or warrants

to purchase

Common

Stock)

issued or

issuable

to banks,

equipment

lessors or other

financial institutions

pursuant to

a debt financing

or commercial

leasing transaction

approved

by the

Board of

Directors, not

to exceed

two and

one-half percent

(2.5%) of

the then

issued and

outstanding

shares of Common Stock; and

(v)

Common Stock issued

or issuable pursuant

to the bona

fide acquisition of

another Person by

the Company by

merger, purchase of substantially

all of the assets of such Person, or exchange of shares or other transaction, in

each case, approved

by the

Board of

Directors, not to

exceed five

percent (5%)

of the

then issued

and outstanding

shares of Common Stock.

(g)

If any

Investor is

unable to

exercise, in

whole or

in part, its

right to

purchase New

Securities pursuant

this Section 3.06, such

Investor shall have the

right to transfer its

rights to purchase New

Securities to any other

Investor or

to any Affiliate of any Investor.

Section 3.07.

Registration Rights

(a)

Short Form Registration.

(i)

On June 10,

2016, the

Company filed

with the SEC

a Registration

Statement on

Form S-3

or the then

appropriate

form

(or

post-effective

amendment

currently

effective

Registration

Statement)

for

offering

made

delayed

continuous basis pursuant to Rule 415 under the Securities

Act or any successor rule thereto (each such

registration statement a “

Shelf

Registration Statement

” and

the Shelf

Registration

Statement filed

on June

10, 2016,

the “

Initial Registration

Statement

”) that

covers all

Registrable Securities

then outstanding

for an

offering to

be made

on a

delayed or

continuous basis

pursuant to

Rule 415

under the

Securities Act

or any successor

rule thereto (a

“

Shelf Registration

”), which

was declared

effective on

June 24, 2016.

If,

after the filing

of a Shelf

Registration Statement,

an Investor

requests registration

under the Securities

Act of additional

Registrable

Securities (including Registrable

Securities acquired pursuant

to Section 3.06

(

Preemptive Rights

)) pursuant to

such Shelf Registration,

the Company

shall, as soon

as practicable,

but in any

event no later

than thirty

(30) days after

the date of

such request,

amend such

Shelf Registration Statement to cover such additional Registrable Securities.

(ii)

any

time

that

Shelf

Registration

Statement

effective

but

than

once

each

calendar

quarter,

Investor delivers a

notice to the

Company (a “

Shelf Takedown

Notice

”) stating that

such Investor

(and each other

Investor electing

join

such

Shelf

Takedown)

intends

effect

offering

all

part

its

Registrable

Securities

included

such

Shelf

Registration Statement

(a “

Shelf Takedown

”) and

the Company

is eligible

to use

such Shelf

Registration Statement

for such

Shelf

Takedown,

then

the

Company

shall

take

all

actions

reasonably

required,

including

amending

supplementing

“

Shelf

Supplement

”) such Shelf Registration

Statement, to enable such Registrable

Securities to be offered and

sold as contemplated by

such

Shelf

Takedown

Notice;

provided,

however,

that

before

Investor

delivers

Shelf

Takedown

Notice,

shall

contact

the

other

Investors

determine

whether

they

wish

participate

the

Shelf

Takedown,

and

include

such

Shelf

Takedown

Notice

any

Registrable Securities requested to be

included by such other Investor(s);

and provided further that in no

event shall the Company be

obligated to comply with more than one (1) Shelf Takedown Notice in the aggregate in any calendar quarter from any or all Investors.

Each Shelf Takedown

Notice shall specify the number of Registrable Securities to be offered and sold under the Shelf Takedown

and

the Investors

participating.

The Company

shall prepare

and file

with the

SEC a

Shelf Supplement

as soon

as practicable

(but in no

event later than five (5) Business Days) after the date on

which it received the Shelf Takedown

Notice and, if such Shelf Supplement

is an amendment

to such Shelf Registration

Statement, shall use

its commercially reasonable

efforts to cause

such Shelf Supplement

to be declared effective by the SEC as soon as practicable thereafter.

(iii)

If, pursuant to

Rule 415(a)(5) under

the Securities

Act or

any successor

rule thereto, the

Initial Registration

Statement

may no

longer be

used for

offers and

sales of

any of

the securities

registered for

resale on

such registration

statement (the

“

Initial

Registrable Securities

”), and (C) any of the Initial Registrable Securities are Registrable Securities at the time that (B) above occurs,

the Company shall prepare and file with

the SEC within the time

limits required by Rule 415 under

the Securities Act or any successor

rule thereto a new Registration Statement covering

any Initial Registrable Securities that have not ceased to

be Registrable Securities

for an offering to be

made on a delayed

on continuous basis pursuant to

Rule 415 under the

Securities Act or any successor

rule thereto

(a “

New Registration Statement

”) and shall use its commercially reasonable efforts to cause such New Registration

Statement to be

declared effective by the SEC as soon as practicable thereafter.

(iv)

The Company may postpone for up to forty-five (45) days the filing of a Shelf Supplement for a Shelf Takedown

the Board determines in its reasonable

good faith judgment that such Shelf

Takedown would (A) materially interfere with a significant

acquisition,

corporate

organization,

financing,

securities

offering

other

similar

transaction

involving

the

Company;

(B)

require

premature disclosure of material information that the Company has a bona fide business purpose for preserving as confidential; or (C)

render the Company unable

to comply with requirements under

the Securities Act or Exchange

Act.

The Company shall, within one

(1) day following the decision

of the Board to

delay such filing, provide each

Investor with a certificate

signed by the Chairman stating

that the Board has determined

to postpone the filing,

the reason for the postponement

and the expected date

of filing.

The Company

may delay a Shelf Takedown

hereunder only once in any period of 12 consecutive months.

(v)

If the Investors request a Shelf Takedown

and elect to distribute the Registrable Securities covered by its request in

an underwritten offering, they shall so advise the Company as a part of its request made pursuant to Section 3.07(a)(ii).

The Investors

participating in the

Shelf Takedown shall select

the investment banking

firm or

firms to act

as the

managing underwriter or

underwriters

in connection with such offering; provided, that such selection shall be

subject to the consent of the Company, which consent shall not

be unreasonably withheld, conditioned or delayed.

(vi)

The Company shall not

include in any Shelf Takedown

any securities which are not

Registrable Securities without

the prior written consent of the Investors participating in the Shelf Takedown.

If a Shelf Takedown involves an underwritten offering

and

the

managing

underwriter

the

requested

Shelf

Takedown

advises the

Company

and

the

Investors

participating

the

Shelf

Takedown

in writing that in its reasonable and good faith opinion the number of shares of Common

Stock proposed to be included in

the

Shelf

Takedown,

including

all

Registrable

Securities

and

all

other

Common

Stock

proposed

included

such

underwritten offering,

exceeds the

number of

shares of

Common Stock

which can

be sold

in such

underwritten offering

and/or the

number of shares of Common Stock proposed to be included

in such Shelf Takedown would adversely affect the price per share of the

Common Stock

proposed to

be sold

in such

underwritten offering,

the Company

shall include

in such

Shelf Takedown

(i) first,

the

Common

Stock

that

the

Investors

propose

sell, and

(ii)

second,

the

Common

Stock,

any,

proposed

included therein

by any

other Persons

(including shares

of Common

Stock to

be sold

for the

account of

the Company

and/or other

holders of Common Stock) allocated among such Persons in such manner as they may agree.

If the managing underwriter determines

that less than all of the Registrable Securities proposed to be sold can be included in such

offering, then the Registrable Securities that

are included in such

offering shall be allocated

pro rata among the

Investors on the basis

of the number of

Registrable Securities owned

by each such Investor.

(b)

Registration Procedures.

In connection with the Company’s obligations under Section

3.07(a) and if and whenever

the Investors request that any Registrable Securities be distributed in

a Shelf Takedown pursuant to the provisions

of Section 3.07(a),

the Company shall use its commercially reasonable efforts to effect the registration of the offer and sale of such Registrable Securities

under the

Securities Act

in accordance

with the

intended method

of disposition

thereof, and

pursuant thereto

the Company

shall as

soon as practicable and as applicable:

(i)

subject

Section

3.07(a)(iv),

prepare

and

file

with

the

SEC

Registration

Statement

covering

such

Registrable

Securities and use its commercially reasonable efforts to cause such

Registration Statement to be declared effective;

(ii)

prepare

and

file

with

the

SEC

such

amendments,

post-effective

amendments

and

supplements,

including

Shelf

Supplements, to

such Registration

Statement and

the Prospectus

used in

connection therewith

as may

be necessary

keep such

Registration Statement

effective and

to comply

with the

provisions of

the Securities Act

with respect

to the

disposition

all

Registrable

Securities

subject

thereto

for

period

ending

the

date

which

all

the

Registrable

Securities subject thereto have been sold pursuant to such Registration Statement;

(iii) at

least five

(5)

Business

Days

before

filing

such

Registration

Statement,

Prospectus

amendments

supplements

thereto with

the SEC,

furnish to

one counsel

selected by

the Investors

copies of

such documents

proposed to

be filed,

which documents shall be

subject to the review, comment and

approval of such counsel;

provided that the Company

shall

not have

any obligation

to modify

any information

(other than

any information

related to

any seller)

if the

Company

reasonably expects that so doing would cause (A) the

Registration Statement to contain an untrue statement of a

material

fact

omit

state

any

material

fact

required

stated

therein

necessary

make

the

statements

therein

not

misleading

(B)

the

Prospectus

contain

an untrue

statement

material

fact

omit

state

material

fact

necessary

order

make

the

statements

made,

light

the

circumstances

under

which

they

were

made,

not

misleading;

(iv)

notify

each selling

Investor,

promptly

after the

Company

receives notice

thereof,

of the

time when

such Registration

Statement has been declared

effective or a supplement,

including a Shelf Supplement,

to any Prospectus forming

a part

of such Registration Statement has been filed with the SEC;

(v)

furnish

each

selling

Investor

such

number

copies

the

Prospectus

included

such

Registration

Statement

(including

each

preliminary

Prospectus)

and

any

supplement

thereto,

including

Shelf

Supplement

(in

each

case

including all

exhibits and

documents incorporated

by reference

therein), and

such other

documents as

such seller

may

reasonably request in order to facilitate the disposition of the Registrable Securities owned

by such seller;

(vi)

use its

commercially reasonable

efforts to

qualify such

Registrable Securities

under such

other securities

“blue sky” laws of such jurisdictions as any selling Investor reasonably requests and do any and all other acts and things

which

may

reasonably

necessary

advisable

enable

such

Investor

consummate

the

disposition

such

jurisdictions of the Registrable Securities

owned by Investor; provided, that the

Company shall not be required to

qualify

generally

to do

business, subject

itself to

general taxation

or consent

to general

service of

process in

any jurisdiction

where it would not otherwise be required to do so but for this Section 3.07(b)(vi)

;

(vii)

notify each selling Investor, at

any time when

a Prospectus relating

thereto is required

to be delivered

under the Securities

Act, of the

happening of any

event that would

cause the Prospectus

included in such

Registration Statement to

contain

an untrue statement

of a material

fact or omit

any fact necessary

in order to

make the statements

made therein, in

light

of the circumstances under which they

were made, not misleading, and, at

the request of any such

Investor, the Company

shall prepare

a supplement

or amendment

to such

Prospectus so

that, as

thereafter delivered

to the

purchasers of

such

Registrable Securities, such

Prospectus shall not

contain an untrue

statement of a

material fact or omit

to state any fact

necessary to make the statements therein, in light of the circumstances under

which they were made, not misleading;

(viii)

make available,

upon reasonable

notice and

during normal

business hours,

for inspection

by any

selling Investor,

any underwriter participating

in any disposition

pursuant to such Registration

Statement and any

attorney,

independent

registered public accounting firm or other agent retained by any such Investor or underwriter (each, an “

Inspector

”), all

financial

and

other

records,

pertinent

corporate

documents

and

properties

the

Company

shall

reasonably

necessary to enable them to

exercise their due diligence responsibility,

and cause the Company’s

officers, directors and

employees to

supply all

information reasonably

requested by

any such

Inspector in

connection with

such Registration

Statement;

(ix)

provide a transfer agent and registrar (which may be the

same entity) for all such Registrable Securities

not later than the

effective date of such registration;

(x)

use its commercially

reasonable efforts to

cause such Registrable Securities

to be listed on

each securities exchange

which the common stock is then listed;

(xi)

in connection with an underwritten offering, enter

into such customary agreements (including underwriting

and lock-up

agreements in customary form) and take all such other

customary actions as the participating Investors

or the managing

underwriter

such

offering

reasonably

request

order

expedite

facilitate

the

disposition

such

Registrable

Securities (including,

without limitation,

making appropriate

officers of

the Company

available to

participate in

“road

show”

and

other

customary

marketing

activities

(including

one-on-one

meetings

with

prospective

purchasers

the

Registrable

Securities),

provided

that

the

Company

shall

not

obligated

participate

any

non-telephonic

“road

show” more than once in any eighteen (18) month period);

(xii)

otherwise comply with all applicable rules and regulations of

the SEC and make available to its

stockholders an earnings

statement (in a form that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 under the Securities

Act or any successor rule

thereto) no later than thirty

(30) days after the end

of the 12-month period beginning

with the

first day of the Company’s first full fiscal quarter after the effective date of such Registration Statement, which earnings

statement shall cover said 12-month period, and

which requirement will be deemed to

be satisfied if the Company

timely

files complete and accurate information on Forms 10-K, 10-Q and

8-K under the Exchange Act and otherwise complies

with Rule 158 under the Securities Act or any successor rule thereto;

(xiii)

furnish

each

selling

Investor

and

each

underwriter,

any,

with

(i)

written

legal

opinion

the

Company’s

outside counsel, dated

the closing date of

the offering, in

form and substance

as is customarily given

in opinions of the

Company’s counsel to underwriters in underwritten registered

offerings; and (ii) on

the date of the

applicable Prospectus,

on the effective date

of any post-effective amendment

to the applicable Registration Statement

and at the closing of

the

offering,

dated

the

respective

dates

delivery

thereof,

“comfort”

letter

signed

the

Company’s

independent

registered public accounting firm in form and substance as is customarily given in accountants’ letters to underwriters in

underwritten registered offerings;

(xiv)

without limiting Section

3.07(b)(v), use its commercially

reasonable efforts to

cause such Registrable Securities

be registered with or

approved by such other governmental

agencies or authorities as may

be necessary by virtue

of the

business

and

operations

the

Company

enable

the

Investors

consummate

the

disposition

such

Registrable

Securities in accordance with their intended method of distribution

thereof;

(xv)

notify

the

Investors

promptly

any

request

the

SEC

for

the

amending

supplementing

such

Registration

Statement or Prospectus or for additional information;

(xvi)

advise the Investors,

promptly after it shall

receive notice or obtain

knowledge thereof, of

the issuance of

any stop

order

by the

SEC suspending

the

effectiveness

such

Registration

Statement

the

initiation

threatening

of any

proceeding for

such purpose

and promptly

use its

commercially reasonable

efforts to

prevent the

issuance of

any stop

order or to obtain its withdrawal at the earliest possible moment if such stop order should

be issued;

(xvii)

any

Registration

Statement

refers

any

Investor

name

otherwise

the

holder

any

securities

the

Company

and

its

sole

and

exclusive

judgment

such

Investor

might

deemed

underwriter

“controlling person” (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act) of the

Company

(each

such Person

a “

Controlling

Person

”), such

Investor

shall have

the right

to require

(A) the

insertion

therein of language, in form and substance satisfactory to such Investor

and presented to the Company in writing, to the

effect that

the holding by

such Investor of

such securities is

not to be

construed as a

recommendation by such

Investor

of the

investment quality

of the

Company’s

securities covered

thereby and

that such

holding does

not imply

that such

Investor shall assist in meeting any future financial requirements of the Company, or (B) in the event that such reference

to such Investor

by name or

otherwise is not

required by the

Securities Act or

any similar federal

statute then in

force,

the deletion of the reference to such Investor;

(xviii)

cooperate

with

the

Investors

facilitate

the

timely

preparation

and

delivery

certificates

representing

the

Registrable Securities to be sold pursuant to such Registration Statement or

Rule 144 free of any restrictive legends and

representing

such number

of shares

of Common

Stock and

registered in

such names

as the

Investors may

reasonably

request a

reasonable period

of time

prior to

sales of

Registrable Securities

pursuant to

such Registration

Statement or

Rule 144; provided,

that the Company

may satisfy its

obligations hereunder

without issuing

physical stock certificates

through the use of The Depository Trust Company’s

Direct Registration System;

(xix)

upon the Registration Statement covering the Registrable Securities being

declared effective by the SEC, removing

any restrictive

notation placed on

the Registrable Securities

as contemplated

by Section 3.02(f)(iv)

of the Subscription

Agreement;

(xx)

take no

direct or

indirect action

prohibited by

Regulation M

under the

Exchange Act;

provided, that,

to the extent

that

any prohibition is applicable to the Company,

the Company will take all reasonable action to make any such prohibition

inapplicable; and

(xxi)

otherwise use its commercially

reasonable efforts

to take all other

steps necessary to

effect the registration

of such

Registrable Securities contemplated hereby.

(c)

Expenses.

All expenses (other

than Selling Expenses)

incurred by the

Company in complying

with its obligations

pursuant

this

Agreement

and

connection

with

the

registration

and

disposition

Registrable

Securities

shall

paid

the

Company,

including, without

limitation, all

(i) registration

and filing

fees (including,

without limitation,

any fees

relating to

filings

required to be

made with, or

the listing of

any Registrable Securities

on, any securities

exchange or over-the-counter

trading market

on which

the Registrable

Securities are

listed or

quoted); (ii)

underwriting expenses

(other than

underwriting fees,

commissions or

discounts);

(iii)

expenses

of any

audits incident

to or

required

by any

such registration;

(iv)

fees

and

expenses

of complyin

with

securities and “blue sky”

laws (including, without limitation,

fees and disbursements of

counsel for the Company

in connection with

“blue sky” qualifications

or exemptions of

the Registrable Securities);

(v) printing expenses;

(vi) messenger,

telephone and delivery

expenses;

(vii)

fees

and

expenses

the

Company’s

counsel

and

independent

registered

public

accounting

firm;

(viii)

Financial

Industry Regulatory Authority,

Inc. filing fees (if any); and (ix)

reasonable and documented fees and

expenses of one counsel for the

Investors

participating

such

registration

group

(selected

the

Investors

holding

Registrable

Securities

included

the

registration).

addition,

the

Company

shall

responsible

for

all

its

internal

expenses

incurred

connection

with

the

consummation

the

transactions

contemplated

this

Agreement

(including,

without

limitation,

all

salaries

and

expenses

its

officers and employees performing legal or accounting duties) and the expense of any annual audits.

All Selling Expenses relating to

the offer and sale

of Registrable Securities registered

under the Securities Act

pursuant to this Agreement

shall be borne and

paid by

the holders of such Registrable Securities, in proportion to the number of Registrable

Securities included in such registration for each

such holder.

(d)

Indemnification.

(i)

The Company shall indemnify and

hold harmless, to the fullest extent

permitted by law,

each holder of Registrable

Securities, such holder’s officers, directors, managers, members, partners, stockholders and Affiliates, each

underwriter, broker or any

other Person acting on

behalf of such holder of

Registrable Securities and each

other Controlling Person, if

any, who

controls any of

the

foregoing

Persons,

against

all

losses,

claims,

actions,

damages,

liabilities

and

expenses,

joint

several,

which

any

the

foregoing

Persons

may

become

subject

under

the

Securities

Act

otherwise,

insofar

such

losses,

claims,

actions,

damages,

liabilities or

expenses arise

out of

or are

based upon

(A) any

untrue or

alleged untrue

statement of

a material

fact contained

in any

Registration Statement, Prospectus,

preliminary Prospectus, free

writing prospectus (as

defined in Rule

405 under the Securities

Act

or any successor rule thereto) or any amendment thereof or supplement

thereto or any omission or alleged omission of a material fact

required to be

stated therein or

necessary to make

the statements therein

(in the case

of a Prospectus,

preliminary Prospectus

or free

writing prospectus, in light of the circumstances under which

they were made) not misleading or (B) any violation

or alleged violation

the

Company

the

Securities

Act

any

other

similar

federal

state

securities

laws

any

rule

regulation

promulgated

thereunder

applicable

the

Company

and

relating

action

inaction

required

the

Company

connection

with

any

such

registration, qualification or compliance; and shall reimburse such Persons

for any reasonable and documented legal or

other expenses

incurred by any of them in connection with investigating or defending any such loss, claim, action, damage or liability, except insofar

as the same are

caused by or contained

in any information furnished

in writing to

the Company by

such holder expressly for

use therein

or by such holder’s failure to deliver a

copy of the Registration Statement, Prospectus, preliminary Prospectus, free writing

prospectus

(as defined in Rule 405 under the Securities Act or any successor rule thereto) or

any amendments or supplements thereto (if the same

was required by applicable law to be so delivered) after the Company has furnished

such holder with a sufficient number of copies of

the same prior to any written confirmation of the sale of Registrable Securities.

This indemnity shall be in addition to any liability the

Company may otherwise have.

(ii)

In connection

with any

registration in

which

a holder

of Registrable

Securities is

participating,

each such

holder

shall furnish

to the

Company in

writing such

information as

the Company

reasonably requests

for use

in connection

with any

such

Registration

Statement

Prospectus

and,

the

extent

permitted

law,

shall

indemnify

and

hold

harmless,

the

Company,

each

director of the Company,

each officer of the

Company who shall sign such

Registration Statement, each

underwriter, broker

or other

Person acting on behalf of

the holders of Registrable

Securities and each Controlling Person

who controls any of

the foregoing Persons

against any losses, claims,

actions, damages, liabilities

or expenses resulting

from any untrue or

alleged untrue statement of

material

fact contained in the

Registration Statement, Prospectus, preliminary Prospectus, free

writing prospectus (as defined

in Rule 405 under

the Securities Act or any successor rule thereto) or any amendment thereof or supplement thereto or any omission or alleged omission

of a

material fact

required to

be stated

therein or

necessary to

make the

statements therein

(in the

case of

a Prospectus,

preliminary

Prospectus or free writing prospectus,

in light of the

circumstances under which they were

made) not misleading, but only

to the extent

that

such

untrue

statement

omission

contained

any

information

furnished

in writing

such

holder;

provided,

that

the

obligation to indemnify shall be

several, not joint and several,

for each holder and shall

not exceed an amount equal

to the net proceeds

(after underwriting fees, commissions

or discounts) actually received

by such holder from the sale

of Registrable Securities pursuant

to such Registration Statement.

This indemnity shall be in addition to any liability the selling holder may otherwise have.

(iii)

Promptly

after

receipt

an indemnified

party

notice

the

commencement

any

action

involving

claim

referred to

in this Section

3.07(d), such

indemnified party

shall, if a

claim in respect

thereof is made

against an indemnifying

party,

give written notice to the latter

of the commencement of such action.

The failure of any indemnified party

to notify an indemnifying

party

any

such

action

shall

not

(unless

such

failure

shall

have

material

adverse

effect

the

indemnifying

party)

relieve

the

indemnifying party from any liability in respect of such action that it may have to such indemnified party hereunder.

In case any such

action is brought against

an indemnified party,

the indemnifying party shall

be entitled to participate

in and to assume the

defense of

the claims in any such action that are subject or potentially

subject to indemnification hereunder,

jointly with any other indemnifying

party similarly notified to the extent that it may

wish, with counsel reasonably satisfactory to such indemnified party, and after written

notice from the indemnifying party

to such indemnified party of its election

so to assume the defense thereof,

the indemnifying party

shall not be responsible for any legal or other expenses subsequently incurred by the indemnified party in connection with the defense

thereof; provided that, if (A) any

indemnified party shall have reasonably

concluded that there may be one or more

legal or equitable

defenses available to such indemnified party which are additional to or conflict with those available to the indemnifying party,

or that

such claim or

litigation involves or

could have an

effect upon matters

beyond the scope

of the indemnity

provided hereunder,

or (B)

such action

seeks an

injunction or

equitable relief

against any

indemnified party

or involves

actual or

alleged criminal

activity,

the

indemnifying party

shall not

have the

right to

assume the

defense of

such action

on behalf

of such

indemnified party

without

such

indemnified

party’s

prior

written consent

(but,

without

such consent,

shall

have

the right

participate

therein

with

counsel

of its

choice) and such indemnifying party shall reimburse such indemnified party and

any Controlling Person of such indemnified party for

that

portion

the

fees

and

expenses

any

counsel

retained

the

indemnified

party

which

reasonably

the

matters

covered by

the indemnity

provided hereunder.

If the

indemnifying party

is not

entitled to,

or elects

not to,

assume the

defense of

claim, it shall not be obligated to pay the fees

and expenses of more than one counsel for all parties indemnified by such

indemnifying

party with respect to such

claim, unless in the

reasonable judgment of

any indemnified party a conflict

of interest may exist

between

such

indemnified

party

and

any

other

such

indemnified

parties

with

respect

such

claim.

such

instance,

the

conflicting

indemnified parties shall have a

right to retain one separate counsel,

chosen by the holders of a majority

of the Registrable Securities

included in the registration, at the expense of the indemnifying

party.

An indemnifying party shall not be liable for any settlement

any action or

claim referred

to in

this Section 3.07(d)

effected without its

written consent, such

consent not to

be unreasonably

withheld,

conditioned or delayed.

(iv)

If the

indemnification provided

for hereunder

is held

by a

court of

competent jurisdiction

to be

unavailable to

indemnified party with respect to any loss, claim, damage, liability or action referred to herein, then the indemnifying party,

in lieu of

indemnifying such indemnified party hereunder,

shall contribute to the amounts paid or payable by such indemnified party as a result

of such loss, claim, damage,

liability or action in such

proportion as is appropriate to reflect

the relative fault of the

indemnifying party

on the one hand and of the indemnified party on the other in connection

with the statements or omissions which resulted in such loss,

claim, damage, liability or

action as well as

any other relevant equitable

considerations; provided that the maximum

amount of liability

in respect

of such

contribution

shall be

limited,

in the

case of

each holder

of Registrable

Securities, to

an amount

equal to

the net

proceeds (after underwriting

fees, commissions or

discounts) actually received

by such seller

from the sale

of Registrable Securities

effected pursuant

to such registration.

The relative fault

of the indemnifying

party and of

the indemnified party

shall be determined

reference

to,

among

other

things,

whether

the

untrue

alleged

untrue

statement

of a

material

fact

the

omission

alleged

omission to

state a

material fact

relates to

information supplied

by the

indemnifying party

or by

the indemnified

party,

whether the

violation

the

Securities

Act

any

other

similar

federal

state

securities

laws

rule

regulation

promulgated

thereunder

applicable to the Company and

relating to action or inaction required

of the Company in connection with

any applicable registration,

qualification

compliance

was

perpetrated

the

indemnifying

party

the

indemnified

party

and

the

parties’

relative

intent,

knowledge, access

to information

and opportunity

to correct or

prevent such

statement or omission.

The parties agree

that it would

not be just

and equitable if contribution

pursuant hereto were

determined by pro

rata allocation or by

any other method or

allocation

which

does

not

take

account

the

equitable

considerations

referred

herein.

Person

guilty

liable

fraudulent

misrepresentation within the meaning of Section 11(f) of the Securities Act shall be entitled to contribution from any Person who was

not guilty of such fraudulent misrepresentation.

(e)

Participation

Underwritten

Registrations.

Person

may

participate

any

registration

hereunder

which

underwritten

unless such

Person (i)

agrees to

sell such

Person’s

securities on

the basis

provided

in any

underwriting

arrangements

approved by the Person or

Persons entitled hereunder to

approve such arrangements and (ii)

completes and executes all questionnaires,

powers

attorney,

indemnities,

underwriting

agreements

and

other

documents

required

under

the

terms

such

underwriting

arrangements; provided

that no

holder of

Registrable Securities

included in

any underwritten

registration shall

be required

to make

any representations or warranties

to the Company or

the underwriters (other than

representations and warranties regarding

such holder,

such

holder’s

ownership

its

Registrable

Securities

sold

the

offering

and

such

holder’s

intended

method

distribution)

undertake

any

indemnification

obligations

the

Company

the

underwriters

with

respect

thereto,

except

otherwise provided in Section 3.07(d).

(f)

Rule 144 Compliance.

With a view to making available to the Investors the benefits of Rule 144 and any other rule

or regulation of the SEC

that may at any time permit

a holder to sell securities of

the Company to the public

without registration, the

Company shall:

(i)

make and keep public information available, as those terms are understood and defined in Rule 144, at

all times after the

date hereof;

(ii)

use commercially reasonable efforts to file with the SEC in a timely manner all reports and other documents required of

the Company under the Exchange Act; and

(iii) furnish

any

Investor

long

owns

Registrable

Securities,

promptly

upon

request,

written

statement

the

Company as

to its

compliance with

the reporting

requirements of

Rule 144

and the

Exchange Act,

a copy

of the

most

recent

annual or

quarterly

report of

the Company,

and such

other reports

and documents

so filed

or furnished

by the

Company

such

Investor

may

reasonably

request

connection

with

the

sale

Registrable

Securities

without

registration.

(g)

Lock-up Agreement.

Each Investor

agrees that

in connection

with any

registered offering

of Equity

Securities of

the Company,

and upon

the request

of the

managing underwriter

in such

offering, such

Investor shall

not, without

the prior

written

consent of such managing underwriter, during the period commencing on the effective date

of such registration and ending on the

date

specified by such managing underwriter (such period not to exceed

ninety (90) days), (i) offer,

pledge, sell, contract to sell, grant any

option

or contract

to purchase,

purchase

any option

or contract

to sell,

hedge

the beneficial

ownership

of or

otherwise dispose

of,

directly or

indirectly,

any shares

of Common

Stock or

any securities

convertible into,

exercisable for

or exchangeable

for shares

Common

Stock held immediately before

the effectiveness of the

Registration Statement for such

offering, or (ii) enter

into any swap

or other arrangement that transfers to another,

in whole or in part, any of the economic consequences of ownership of such securities,

whether any such transaction described in

clause (i) or (ii) above

is to be settled

by delivery of Common Stock or

such other securities,

in cash or otherwise, provided, however, that the foregoing shall not prevent any Investor from exercising the Put Option with respect

to its Investor Shares.

The foregoing provisions of this Section 3.07(g) shall

not apply to sales of Registrable Securities

to be included

in such offering pursuant

to Section 3.07(a), and shall

be applicable to the Investors

only if all officers and

directors of the Company

and

all

stockholders

owning

than

five

percent

(5%)

the

Company’s

outstanding

Common

Stock

are

subject

the

same

restrictions.

Each Investor agrees

to execute and

deliver such other

agreements as may

be reasonably requested

by the Company

the

managing

underwriter

which

are

consistent

with

the

foregoing

which

are

necessary

give

further

effect

thereto.

Notwithstanding anything to the contrary contained in this Section 3.07(g),

each Investor shall be released, pro rata, from any lock-up

agreement entered into

pursuant to this Section

3.07(g) in the event

and to the extent

that the managing underwriter

or the Company

permit any discretionary waiver or termination of

the restrictions of any lock-up

agreement pertaining to any officer, director or holder

of greater than five percent (5%) of the outstanding Common Stock.

(h)

Preservation of Rights.

The Company shall not (i) grant any demand or “piggyback” registration rights to any third

party without also granting the

same rights to each Investor

or (ii) enter into any

agreement, take any action, or

permit any change to

occur, with respect to its securities that violates or

subordinates the rights expressly granted to the Investors in this Agreement.

Section 3.08.

Further Assurances

The Company shall

exercise all such

rights and powers

as are available

to it to

take, or

cause to be taken, such actions, and do, perform, execute and deliver, or cause to be done, performed, executed and delivered, all acts,

deeds and documents necessary,

proper or advisable to ensure compliance with

and to fully and effectually

implement the provisions

this

Agreement,

including

making,

causing

made,

all

governmental,

regulatory

and

administrative

filings

with

any

appropriate Authority,

as promptly as reasonably possible.

ARTICLE

The Put Option

Section 4.01.

The Put Option

(a)

The Company hereby grants to each Investor an option (the “

Put Option

”) to sell to the Company on one occasion,

and the Company

is obligated to purchase

from each Investor

upon exercise of each

such option, all of

such Investor’s Put

Shares in

accordance with the terms of this Article IV.

(b)

The Put Option may be exercised by each Investor by delivery to the Company of

a Put Notice at any time within

(i) in the

case of a

Put Trigger

Event, ninety (90)

days following the

earlier of (x)

receipt by the

Investors of written

notice

from the

Company that

a Put

Trigger

Event has

occurred or

(y) written

notice given

to the

Company by

the Investors

that a Put Trigger Event has occurred;

(ii) in the case of a Plan Put Trigger Event, thirty

(30) days following the Company’s

receipt of a Bona Fide Offer, provided

that any

increase in

such the

price offered

in such

Bona Fide

Offer,

or any

Bona Fide

Offer

by another

Person, shall

trigger a new thirty (30) day period; and

(iii) in

the case

of a

Threshold Put

Trigger

Event, ninety

(90) days

following

the earlier

of (x)

receipt by

the Investors

written

notice

from

the

Company

that

Threshold

Put

Trigger

Event

has

occurred

(y) written

notice

given

the

Company by the Investors that a Threshold Put Trigger

Event has occurred.

The Put Notice

shall specify the

Put Price for

the Put Shares

(and the basis

for its determination

of the Put

Price), the bank

account into which the Put

Price shall be paid, the

nature of the relevant Put

Trigger Event, if applicable, and the applicable

Settlement

Date.

The failure of any Investor to exercise the Put Option following (i) the occurrence of a Put Trigger Event shall not preclude

the

subsequent exercise of

the Put Option if

a subsequent Put Trigger

Event occurs, (ii) the

occurrence of a Plan

Put Trigger Event

shall

not

preclude

the

subsequent

exercise

the

Put

Option

subsequent

Bona

Fide

Offer

received

and

(iii)

the

occurrence

Threshold Put Trigger Event shall not preclude the subsequent exercise of the Put Option if a new Shareholder Rights Plan is adopted

that constitutes a Threshold Put Trigger Event.

(c)

On the Settlement Date:

(i)

the Company

shall pay

to each Investor,

into the

bank account

specified by

such Investor,

the Put

Price set

out in

the

Put

Notice

Dollars

immediately

available

funds,

without

deduction

whatsoever

for

any

fees,

Taxes

(excluding for

the avoidance

of doubt

Taxes

on any

gains realized

by any

Investor), duties,

costs or

other charges

howsoever called (all of which shall be borne by the Company); and

(ii)

such Investor shall, simultaneously with receipt of the Put Price, transfer to the Company free of all Liens and other

encumbrances

and

rights

third

parties

the

certificates,

any,

book-entry

evidencing

title

the

Put

together

with

such

instruments

transfer,

any,

required

Applicable

Law

(“

Settlement

Completion

”).

In the event

the Company is

prohibited by Applicable

Law from repurchasing,

or otherwise does

not have sufficient cash

to repurchase,

all the Put Shares, as reasonably

determined by the Board in good

faith and certified to such Investor

by the Chairman, the Company

shall repurchase as many Put Shares as it can for cash (pro rata among the Investors exercising the Put Option based on the number of

Put Shares

specified in

their Put

Notices).

With

respect to

the Put

Shares that

the Company

is unable

to purchase

pursuant

to the

preceding sentence, each

Investor shall have the

option to either retain

the unrepurchased Put Shares

or receive a promissory

note in

the principal

amount equal

to the

Put Price

for the

unrepurchased Put

Shares, bearing

interest at

the rate

of ten

percent (10%)

per

annum (with

quarterly interest

payments), payable

in eight

(8) equal

quarterly installments

with a

final maturity

date two

(2) years

from the date of issuance, and otherwise in form and substance reasonably

acceptable to such Investor.

(d)

For the avoidance of doubt, each

Investor shall be entitled to

any dividends, distributions or return of capital

relating

to the Put Shares which are the subject of the relevant Put Notice which were declared or otherwise had a record date on or before the

Settlement Completion, even if the payment

date is after the

Settlement Completion.

Until Settlement Completion, each Investor shall

entitled to

all of

its rights

as a

stockholder

(or

attached to

such Put

Shares) whether

under

this Agreement,

Applicable

Law or

otherwise.

(e)

After delivery of a Put Notice to

the Company but prior to Settlement Completion, each

Investor shall have the right

(but not the obligation) in its sole discretion to withdraw the Put Notice and its

exercise of the Put Option thereunder by written notice

to the Company at any time or times.

(f)

The calculation by each Investor

of the Put Price

or Put Price Per

Share as set forth

in the Put Notice

shall be binding

and conclusive for all purposes, absent manifest error.

(g)

The Company shall notify the Investors promptly, and in any case no later than one (1) Business Day, following the

occurrence

Plan

Put

Trigger

Event,

Put

Trigger

Event

Threshold

Put

Trigger

Event,

setting

forth

reasonable

detail

the

circumstances giving rise to such Plan Put Trigger

Event, Put Trigger Event or Threshold Put Trigger

Event.

Section 4.02.

Failure to Perform by

the Company

Without prejudice

to the remedies available to

each Investor under this

Agreement or otherwise,

if the Company

fails to make

payment of the

Put Price by

the Settlement Date

as specified pursuant

to this

Article

IV,

then

the

Company

shall

pay

each

Investor having

delivered

Put

Notice, in

Dollars

demand,

a bank

account

designated by such Investor, a late payment charge which will accrue at a rate per annum of ten percent

(10%) on the amount required

to be paid to

such Investor pursuant to Section

4.01(c)(i), such late payment charge to accrue

daily from (and including) the

Settlement

Date until (but

excluding) the date

the Put Price

is paid in

full prorated on

the basis of

a 360-day year

for the actual

number of days

elapsed.

In the

case of

a failure

to perform by

the Company, Settlement Completion

shall be

deemed to occur

for all

purposes hereunder

(including, but

not limited

to, Section

4.01(d) above)

on the

date such

Investor effectively

transfers the

Put Shares

to the

Company

after receipt of

the Put Price and

any additional amounts

payable by the Company

pursuant to this

Section 4.02 and

otherwise under

this Agreement.

Section

4.03.

Obligations

Irrevocable

The

obligations

the

Company

hereunder

are

irrevocable

and

shall

not

terminated, suspended or affected

in any manner by the deterioration

of the financial situation or the interruption

of the operations of

the Company (whether by

condemnation, expropriation, nationalization

or otherwise) or the insolvency

of the Company or the

filing

of any bankruptcy proceeding or any similar proceeding by or against the

Company or any other circumstances whatsoever.

ARTICLE V

Term

of Agreement

Section 5.01.

Term

of Agreement

Except as otherwise expressly set forth

herein, this Agreement shall become

effective as

of the date on which the Investors first subscribe for the Investor Shares and shall continue in force until such time as the Investors no

longer hold

any Investor Shares

(or any promissory

note issued to

pay all or

a portion of

the Put Price);

provided,

however, that

the

termination of this

Agreement or cessation of

effectiveness with respect

to a party shall

be without prejudice to

such party’s

accrued

rights and obligations

at the date

of its termination

and any legal

or equitable remedies

of any kind

which may accrue

in connection

therewith.

ARTICLE VI

Representations and Warranties

Section 6.01.

Representations

and

Warranties

The Company

hereby

represents and

warrants that

each of

the following

statements is true, accurate and not misleading as of the date of this Agreement:

(a)

Organization

and Authority.

The Company

is a corporation duly organized and validly existing under the

laws of its place of

incorporation and has the corporate power and authority to enter into, deliver and

perform its obligations

under this

Agreement;

(b)

Validity.

This Agreement has been duly authorized and executed by the Company and constitutes its valid

and legally binding

obligation, enforceable in

accordance with its

terms, except as

the same may

be limited by

bankruptcy,

insolvency,

reorganization,

moratorium

or other

similar

laws affecting

the

rights

and

remedies

creditors

generally

and

general principles of equity;

(c)

No Conflict

The execution, delivery and performance

of this Agreement will not contravene: (i) any law,

regulation, order,

decree or

Authorization applicable

to the

Company or

any of

its Subsidiaries;

(ii) any

provision of

the Company’s

or any

Subsidiary’s Charter;

or (iii)

any contractual

restriction binding

on or

affecting the

Company or

any of

the Company’s

assets (including its Subsidiaries); and

(d)

Status of Authorizations.

All Authorizations required for the execution and

delivery of this Agreement and

the performance of its

obligations hereunder have been obtained

and are in full

force and effect, other than

the filings required

to be made pursuant to Section 3.07.

Section 6.02.

Investors Reliance

The Company acknowledges that it has

made the representations and warranties in

Section

6.01 (

Representations and Warranties

), with the intention of inducing each Investor to enter into this Agreement and the Subscription

Agreement

and

make

its

Investors

Subscription

and

that

each

Investor

has

entered

into

this

Agreement

and

the

Subscription

Agreement and made its Investors Subscription on the basis of and in full reliance

on such representations and warranties.

ARTICLE VII

Miscellaneous

Section 7.01.

Notices

(a)

Any notice, request or other communication to be given

or made under this Agreement shall be in writing.

Subject

to Section 7.04

(

Applicable Law and Jurisdiction

), any such communication to the Company shall be delivered by email and any

such

communication by any

other party shall be

delivered by hand,

established courier service

or email (and facsimile

in the case of

IFC)

to the party to which it is required or permitted to be given or made at such party’s address specified below or at such other address as

such party has from time

to time designated by written

notice to the other parties

hereto, and shall be effective

upon the earlier of (a)

actual receipt and (b) deemed receipt under Section 7.01(b) below.

For the Company:

Lesaka Technologies,

Inc.

President Place, 4

Floor,

Cnr. Jan Smuts Avenue

and Bolton Road

Rosebank, Johannesburg 2196, South Africa

Attention:

Mr. Ali Mazanderani,

Executive Chair

Telephone:

Email:

XXX

For IFC:

International Finance Corporation

2121 Pennsylvania Avenue,

N.W.

Washington,

D.C.

20433

United States of America

Attention:

Director, TMT,

Venture

Capital & Funds

Facsimile:

XXX

Email:

XXX

With a copy

(in the

case of

communications relating to

payments) sent

to the

attention of

the Director, Department of

Financial

Operations at:

Facsimile:

+XXX

For ALAC:

IFC African, Latin American and Caribbean Fund, LP

2121 Pennsylvania Avenue,

N.W.

Washington,

D.C. 20433

United States of America

Attention:

Head, IFC African, Latin American and Caribbean Fund, LP

Email:

XXX

For FIG:

IFC Financial Institutions Growth Fund, LP

2121 Pennsylvania Avenue,

N.W.

Washington,

D.C. 20433

United States of America

Attention:

Head, IFC Financial Institutions Growth Fund, LP

Email:

XXX

(b)

Unless there

is reasonable

evidence that

it was received

at a

different time,

notice pursuant

to this

Section 7.01

deemed given if: (i) delivered by hand, when left

at the address referred to in Section 7.01(a); (ii) sent

by established courier services

within

country,

three

(3)

Business

Days

after

posting

it;

(iii)

sent

established

courier

service

between

two

countries,

six

(6)

Business Days

after posting

it; and

(iv) sent

by email,

when receipt

has been

confirmed by

telephone and

a copy

has been

sent by

established courier service; provided that

in the case

of IFC, any

notice sent by email

shall also be sent

by facsimile and will

be deemed

given when confirmation of its transmission has been recorded by the sender’s

facsimile machine.

Section 7.02.

Saving of Rights

(a)

The rights and remedies of the Investors in relation to

any misrepresentation or breach of warranty on the part of

the

Company shall not be

prejudiced by any investigation

by or on

behalf of the Investors

into the affairs of

the Company, by the execution

or the performance of

this Agreement or by any

other act or thing by

or on behalf of the

Investors which might prejudice

such rights

or remedies.

(b)

No course of dealing and no failure or delay by the Investors in exercising any power, remedy,

discretion, authority

or other right under this Agreement or any other

agreement shall impair, or be construed

to be a waiver of or an acquiescence in, that

or any

other power,

remedy,

discretion, authority

or right

under this

Agreement, or

in any

manner preclude

its additional

or future

exercise.

Section 7.03.

English Language

All documents to

be provided or

communications to be

given or made

under this Agreement

shall be in

English and, where

the original version

of any such

document or communication

is not in

English, shall be

accompanied

by an English

translation certified by

an Authorized Representative

to be a true

and correct translation

of the original.

Any Investor

may, if it so requires, obtain

an English translation of any document or communication received in any other

language at the cost and

expense of the Company (except

for documents or communications provided

by any Investor).

The Investors and the Company may

deem any such translation to be the governing version.

Section 7.04.

Applicable Law and Jurisdiction

(a)

This Agreement shall be

governed by and construed

in accordance with the laws

of the State of

New York,

United

States of America,

without giving effect

to principles or

rules of conflict

of laws to the

extent such principles

or rules would

require

or permit the application of the laws of another jurisdiction.

(b)

Each of the Company and each

Investor irrevocably agrees to venue being

laid in the courts of the United

States of

America located in the Southern District of New York or in the courts of the State of New York

located in the Borough of Manhattan,

in any legal

action, suit or

proceeding arising out

of or relating

to this Agreement,

and waives any

objections to venue

based on grounds

of forum non conveniens or inconvenient forum.

Nothing contained herein shall be construed as a waiver of the

right of the Company

or any Investor to seek removal to federal court in any action brought hereunder.

(c)

Final judgment against the Company in any such action, suit

or proceeding shall be conclusive and may be enforced

in any other

jurisdiction by suit

on the judgment,

a certified or

exemplified copy of which

shall be conclusive

evidence of the

judgment,

or in any other

manner provided by law,

and the Company

irrevocably also submits

to personal jurisdiction

of any such court

in any

such action, suit or proceeding to enforce any judgment.

(d)

The

parties

acknowledge

and

agree

that

provision

this

Agreement,

nor

the

consent

venue

IFC

subsection (b), in any

way constitutes or implies

a waiver, termination or modification

by IFC of

any privilege, immunity or

exemption

of IFC granted in the Articles of Agreement establishing IFC, international conventions,

or Applicable Law.

(e)

The Company

hereby irrevocably

designates, appoints

and empowers

Corporation Service

Company with

offices

currently located at

1180 Avenue

of the Americas,

Suite 210, New

York,

New York

10036, as its

authorized agent solely

to receive

for and

on its

behalf service

of any

summons, complaint

or other

legal process

in any

action, suit

or proceeding

the Investors

may

bring in the State of New York

in respect of this Agreement.

(f)

As long as this

Agreement remains in

force, the Company

shall maintain a

duly appointed and

authorized agent to

receive for and on its

behalf service of any

summons, complaint or other

legal process in any action,

suit or proceeding the Investors

may bring in New York, New York,

United States of America, with respect to this

Agreement.

The Company shall keep the Investors

advised of the identity and location of such agent.

(g)

The Company

also irrevocably

consents to

the service of

such papers

being made

by mailing

copies of the

papers

by to the

Company at its address

and in the

manner specified in

Section 7.01 (

Notices

In such a case,

the Investors shall

also send

by email, or have sent by email, a copy of the papers to the Company.

(h)

Service

in the

manner

provided in

Sections 7.04(e)

(f) and

(g)

in any

action,

suit or

proceeding

will be

deemed

personal service,

will be accepted

by the Company

as such and

will be valid

and binding upon

the Company for

all purposes of

any

such action, suit or proceeding.

(i)

THE

COMPANY

IRREVOCABLY

WAIVES

THE

FULLEST

EXTENT

PERMITTED

APPLICABLE

LAW

ANY

AND

ALL

RIGHTS

DEMAND

TRIAL

JURY

ANY

SUCH

ACTION,

SUIT

PROCEEDING

BROUGHT AGAINST THE COMPANY

BY ANY INVESTOR.

(j)

The Company

hereby acknowledges

that IFC

shall be

entitled under

Applicable Law,

including the

provisions of

the International

Organizations Immunities

Act, to

immunity from

a trial

by jury

in any

action, suit

or proceeding

arising out

of or

relating to this Agreement or

the transactions contemplated hereby brought

against IFC in any court of the

United States of America.

The Company hereby waives any

and all rights to demand a trial by

jury in any action, suit or proceeding

arising out of or relating to

this Agreement or the transactions contemplated

by this Agreement, brought against IFC

in any forum in which IFC is not

entitled to

immunity from a trial by jury.

(k)

the extent

that the

Company may,

in any

action, suit

or proceeding

brought in

any of

the courts

referred to

Section 7.04(b) or in any other court or elsewhere arising out of or in connection with this

Agreement, be entitled to the benefit of any

provision of

law requiring

any Investor

in such action,

suit or proceeding

to post security

for the costs

of the Company,

or to

post a

bond or

to take similar

action, the

Company hereby

irrevocably waives

such benefit,

in each case

to the fullest

extent now

or in

the

future permitted under Applicable Law or,

as the case may be, the jurisdiction in which such court is located.

(l)

Nothing in this Agreement shall affect the right of any Investor to (i) commence legal proceedings or otherwise sue

the Company

in South

Africa, the

U.S. federal

courts sitting

in the

State of

Florida or

the state courts

of the

State of

Florida, or

(ii)

commence legal proceedings

to enforce any judgment

against the Company

in any appropriate jurisdiction

or (iii), and in

either case

to serve process, pleadings and other legal papers upon the Company

in any manner authorized by the laws of any such jurisdiction.

Section

7.05.

Immunity

the

extent

the

Company

may

entitled

any

jurisdiction

claim

for

itself

its

assets

immunity

respect

its

obligations

under

this

Agreement

the

Subscription

Agreement

from

any

suit,

execution,

attachment

(whether provisional

or final,

in aid

of execution,

before judgment

or otherwise)

or other

legal process

or to

the extent

that in

any

jurisdiction that immunity (whether

or not claimed) may be attributed

to it or its assets, the Company

irrevocably agrees not to

claim

and irrevocably waives such immunity to the fullest extent permitted now

or in the future by the laws of such jurisdiction.

Section 7.06.

Announcements / Confidentiality

(a)

The Company

may not

represent any

Investor’s

views on

any matter,

or,

except to

the extent

required by

law or

regulation (including, but

not limited

to, SEC,

Nasdaq and JSE

Limited rules), use

any Investor’s name

in any written

material provided

to third parties, without such Investor’s prior written consent.

(b)

The Company shall not:

(i)

disclose any information either in writing or orally to any Person which is not

a party to this Agreement; or

(ii)

make or issue a public announcement, communication or circular,

about

the

Investors

Subscription

the

subject

matter

of,

the

transactions

referred

in,

this

Agreement

the

Subscription

Agreement, including

by way

of press

release, promotional

and publicity

materials, posting

of information

on websites,

granting of

interviews or

other communications

with the

press, or

otherwise, other

than: (A)

to such

of its

officers,

employees and

advisers as

reasonably require such

information in connection

with the Investors

Subscription or to

comply with the

terms of this Agreement

the Subscription

Agreement; (B) to

the extent required

by law or

regulation (including

SEC, Nasdaq and

JSE Limited

rules); (C)

the extent required

for it to

enforce its rights

under this Agreement;

and (D) with

the prior written

consent of each

Investor.

Before

any

information

disclosed

any

public

announcement,

communication

circulation

made

issued

pursuant

this

Section

7.06(b),

the

Company

must

consult

with

each

Investor

advance

about

the

timing,

manner

and

content

the

disclosure,

announcement, communication or circulation (as the case may be).

(c)

Each Investor shall hold any Confidential Information it receives from the Company in confidence, and (for so long

as it

remains

Confidential

Information)

shall

not

without

the consent

the

Company

reveal

any

Confidential

Information

any

Person

other

than

such

Investor’s

directors,

officers,

employees,

attorneys,

independent

registered

public

accounting

firm,

rating

agencies,

contractors

and

consultants

(including,

without

limitation,

technical

and

financial

advisors)

who

need

know

such

information in connection with the performance of their duties for such Investor.

The Investors agree that money damages would not

be a sufficient

remedy for any breach

of the confidentiality

obligation contained herein

and that the Company

shall have the right

seek equitable relief,

including injunction and specific

performance, as a remedy

for any such breach or

threat thereof, subject to

the

privileges and immunities contained

in IFC’s Articles

of Agreement, international

treaties and Applicable Law.

Such remedies shall

not be deemed to

be the exclusive remedies

for a breach of

such confidentiality provisions and shall

be in addition to

all other remedies

available at law or in equity to the Company.

Section 7.07.

Successors and

Assigns

This Agreement

binds and

benefits the

respective successors

and assignees

of the

parties.

However, (i) the

Company may not assign, transfer or

delegate any of its rights or obligations

under this Agreement without

the prior

written consent

of each

Investor and

(ii) no

Investor may

assign, transfer

or delegate

any of

its rights

or obligations

under

this Agreement other than to (x) one of the other Investors, (y) an Affiliate of such Investor or (z) any Person (other than those in sub-

clauses (x) and (y)) without the prior written consent of the Company.

Section 7.08.

Amendments, Waivers and Consents

Any amendment or waiver of, or any consent

given under, any provision

of this Agreement shall be in writing and, in the case of an amendment, signed

by all of the parties hereto.

Section 7.09.

Counterparts

This Agreement may

be executed in

several counterparts, each

of which is

an original, but all

of which constitute one and the same agreement.

Section 7.10.

Costs, Expenses and Third Party

Claims

The Company shall (a) pay to the Investors

or as the Investors may

direct the reasonable and documented costs and expenses incurred by

any Investor in relation to efforts to enforce or protect its rights

under this Agreement, or the

exercise of its rights

or powers consequent upon or

arising out of any

breach of this Agreement, including

reasonable and documented

legal and other

professional consultants’ fees,

if the Investors

are successful in

whole or in

part, and (b)

shall indemnify, defend and hold harmless each

Investor and its

Affiliates from, against and in

respect of any damages,

losses, charges,

liabilities,

claims,

payments,

judgments,

settlements,

assessments,

and

costs

and

expenses

(including

attorneys’

fees,

charges

and

disbursements)

imposed

on,

sustained,

incurred

or suffered

by,

or asserted

against

such Investor

its Affiliates

arising

out of,

connection with,

or related

to any

actual or

prospective third

party claim,

litigation, investigation

or proceeding

relating to

(x) any

breach by the Company of

any of its obligations under

the Transaction Documents or

(y) the gross negligence,

willful misconduct or

fraudulent acts of the Company or its directors, officers or employees

in connection with any transaction contemplated thereby.

Section 7.11.

Entire Agreement

This Agreement, together

with the

Subscription Agreement, supersedes

all prior

discussions,

memoranda of

understanding, agreements

and arrangements

(whether written

or oral,

including all

correspondence and

that certain

Confidentiality

Agreement

between

the

parties

dated

September

24,

2015),

any,

between

the

parties

with

respect

the

subject

matter of this Agreement, and this Agreement (together with any

amendments or modifications and the other Transaction Documents)

contains

the

sole

and

entire

agreement

between

the

parties

with

respect

the

subject

matter

this

Agreement

and

the

other

Transaction Documents.

This Agreement restates

and replaces, in

its entirety,

the Original Policy

Agreement; and any

references in

any of the other Transaction Documents

to the Original Policy Agreement shall mean this Agreement.

Section 7.12.

Invalid Provisions

. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any

law from time to time: (a) such provision will be fully severable; (b) this Agreement will be construed

and enforced as if such illegal,

invalid or unenforceable provision had never comprised a part hereof; and (c) the remaining provisions of this Agreement will remain

in full force and effect and will not be affected

by the illegal, invalid or unenforceable provision or by its severance

herefrom so long

as this Agreement as so modified continues to express, without

material change, the original intentions of the parties as to the

subject

matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair

the

respective

expectations

reciprocal

obligations

the

parties

the

practical

realization

the

benefits

that

would

otherwise

conferred upon

the parties.

The parties

will endeavor

in good

faith negotiations

to replace

the prohibited,

invalid or

unenforceable

provision(s) with a valid provision(s), the effect of which comes as close as

possible to that of the prohibited, invalid or unenforceable

provision(s).

(

Signature Pages Follow)

IN WITNESS WHEREOF,

the parties hereto, acting through their duly authorized

representatives, have caused this Agreement to be

signed in their respective names as of the date first written above.

LESAKA TECHNOLOGIES, INC.

By:

/s/

Ali

Mazanderani__________

Name:

Ali

Mazanderani

Title: Executive Chair

INTERNATIONAL

FINANCE CORPORATION

By:

/s/

Andi

Dervishi__________________________

Name:

Andi

Dervishi

Title: Global Head, Fintech Investments

IFC AFRICAN, LATIN

AMERICAN AND CARIBBEAN FUND, LP

By:

IFC

African,

Latin

American

and

Caribbean

Fund

(GP)

LLC,

its general partner

By:

/s/

Selena

Baxa__________________________

Name:

Selena

Baxa

Title: Authorized Signatory

IFC FINANCIAL INSTITUTIONS GROWTH FUND, LP

By: IFC FIG Fund (GP), LLP,

its general partner

By:

/s/

Jun

Nitta______________________

Name:

Jun

Nitta

Title: Authorized Signatory

ANNEX A

ANTI-CORRUPTION

GUIDELINES

FOR

IFC TRANSACTIONS

The purpose of these Guidelines is to clarify the meaning of the terms “Corrupt Practice”, “Fraudulent Practice”, “Coercive Practice”,

“Collusive Practice” and “Obstructive Practice” in the context of the Investors’

operations.

ORRUPT

RACTICES

A “Corrupt Practice” is the offering, giving, receiving or soliciting, directly or indirectly, of anything of value to influence improperly

the actions of another party.

NTERPRETATION

Corrupt Practices are

understood as

kickbacks and bribery.

The conduct in

question must involve

the use

of improper

means (such as bribery) to violate or derogate a duty owed by the recipient in order for the payor to obtain an undue

advantage or to

avoid an obligation.

Antitrust, securities

and other violations

of law that

are not of

this nature are

excluded from the definition of Corrupt Practices.

It is acknowledged that foreign investment agreements, concessions

and other types of contracts commonly require

investors to make

contributions for bona

fide social development

purposes or to

provide funding for

infrastructure

unrelated to the project.

Similarly, investors are often required or expected to make contributions to bona fide local

charities.

These practices are not viewed

as Corrupt Practices for purposes

of these definitions, so long

as they are

permitted under

local law

and fully disclosed

in the

payor’s books

and records.

Similarly,

an investor

will not be

held liable

for corrupt

or fraudulent

practices committed

by entities

that administer

bona fide

social development

funds or charitable contributions.

In the context of conduct

between private parties, the offering, giving,

receiving or soliciting of corporate hospitality

and

gifts

that

are customary

internationally-accepted

industry

standards

shall

not

constitute

Corrupt

Practices

unless the action violates Applicable Law.

Payment by

private sector

persons of

the reasonable

travel and

entertainment expenses

of public

officials that

are

consistent

with

existing

practice

under relevant

law

and

international

conventions

will not

be viewed

as Corrupt

Practices.

The

World

Bank

Group

does

not

condone

facilitation

payments.

For

the

purposes

implementation,

the

interpretation

“Corrupt

Practices”

relating

facilitation

payments

will

take

into

account

relevant

law

and

international conventions pertaining to corruption.

RAUDULENT

RACTICES

A “Fraudulent Practice” is any action or omission, including a misrepresentation that knowingly or recklessly misleads, or attempts to

mislead, a party to obtain a financial or other benefit or to avoid an obligation.

NTERPRETATION

An action, omission, or

misrepresentation will be regarded

as made recklessly if

it is made

with reckless indifference

as to whether it is true or

false.

Mere inaccuracy in such information,

committed through simple negligence, is

not

enough to constitute a “Fraudulent Practice” for purposes of this Agreement.

Fraudulent Practices are intended

to cover actions or omissions

that are directed to

or against a World

Bank Group

entity.

It also covers Fraudulent Practices directed

to or against a World Bank Group member country

in connection

with the award or implementation

of a government contract or

concession in a project financed

by the World

Bank

Group.

Frauds

other

third

parties

are

not

condoned

but

are

not

specifically

sanctioned

IFC,

Multilateral

Investment

Guarantee

Agency,

Partial

Risk

Guarantee

operations.

Similarly,

other

illegal

behavior

not

condoned, but will not be considered as a Fraudulent Practice for purposes of this Agreement.

OERCIVE

RACTICES

A “Coercive Practice” is impairing or harming, or threatening to impair or

harm, directly or indirectly, any party or the property of the

party to influence improperly the actions of a party.

The “World

Bank” is the International

Bank for Reconstruction and

Development, an international organization

established

by Articles of

Agreement among its

member countries and

the “World Bank Group” refers

to the

International Bank for

Reconstruction

and

Development,

the

International

Development

Association,

the

International

Finance

Corporation,

the

Multilateral

Investment

Guarantee Agency,

and the International Centre for Settlement of Investment Disputes.

NTERPRETATION

Coercive Practices

are actions undertaken

for the purpose

of bid rigging

or in connection

with public procurement

or government contracting or in furtherance of a Corrupt Practice or a Fraudulent

Practice.

Coercive Practices are threatened or actual illegal actions such as personal injury or abduction, damage

to property,

or injury to legally recognizable

interests, in order to obtain an

undue advantage or to avoid an

obligation.

It is not

intended to cover hard bargaining, the exercise of legal or contractual

remedies or litigation.

OLLUSIVE

RACTICES

A “Collusive Practice” is

an arrangement between two or

more parties designed to

achieve an improper purpose,

including to influence

improperly the actions of another party.

NTERPRETATION

Collusive

Practices

are

actions

undertaken

for

the

purpose

bid

rigging

connection

with

public

procurement

government contracting or in furtherance of a Corrupt Practice or a Fraudulent

Practice.

BSTRUCTIVE

RACTICES

“Obstructive

Practice”

(i)

deliberately

destroying,

falsifying,

altering

concealing

evidence

material

the

investigation

or making

of false

statements

investigators,

order to

materially

impede a

World

Bank

Group investigation

into

allegations

Corrupt

Practice,

Fraudulent

Practice,

Coercive

Practice

Collusive

Practice,

and/or

threatening,

harassing

intimidating

any

party

prevent

from

disclosing

its

knowledge

matters

relevant

the

investigation

from

pursuing

the

investigation,

(ii)

act

intended

materially

impede

the

exercise

IFC’s

access

contractually

required

information

connection with

a World

Bank Group

investigation into

allegations of

a Corrupt

Practice, Fraudulent

Practice, Coercive

Practice or

Collusive Practice.

NTERPRETATION

Any action legally or otherwise properly taken by a party to maintain or preserve its regulatory,

legal or constitutional rights

such as the attorney-client

privilege, regardless of whether

such action had the effect

of impeding an investigation, does

not

constitute an Obstructive Practice.

ENERAL

NTERPRETATION

A person should

not be liable for

actions taken by

unrelated third parties

unless the first party

participated in the

prohibited

act in question.

ex1043p31i1 ex1043p31i2

ANNEX B

FORM OF ANNUAL MONITORING REPORT

NTERNATIONAL

INANCE

ORPORATION

●

ENVIRONMENTAL AND

SOCIAL PERFORMANCE

ANNUAL MONITORING REPORT (AMR)

South Africa

Lesaka Technologies,

Inc.

37402

EPORTING

ERIOD

(month/year) through (month/year)

AMR COMPLETION DATE

(day/month/year)

Environment and Social Development Department

2121 Pennsylvania Avenue,

Washington,

DC 20433 USA

www.ifc.org/enviro

●

INTRODUCTION

The Annual Monitoring Report

The Investors’ Policy Agreement

requires the Company to

prepare a comprehensive Annual

Monitoring Report (AMR) for

all of the

Company’s

relevant

facilities

and

operations.

This

document

comprises

the

Investors’

and

the

Company’s

agreed

format

for

environmental and social performance reporting.

The AMR informs the Investors’ Environment and

Social Development Department

about the environmental and social state of the investment.

●

Preparation Instructions

The

following

points

should

assist

you

completing

this

form.

Please

descriptive

your

responses

and

attach

additional

information as needed.

●

The Investors’ Policy Agreement requires the Company to complete and submit annual environmental and social monitoring

reports in compliance with the schedule stipulated in the Policy Agreement.

●

The Company must collect

relevant information in all

of its relevant

operations, and report qualitative

and quantitative project

performance data each year of the Investors’ investment for the environmental

and social monitoring parameters included in

this report format.

●

The main purpose of completing this form is to provide the following information:

Environmental and Social Management

Occupational Health and Safety (OHS) Performance

Significant Environmental and Social Events

General Information and Feedback

Sustainability of Project and Associated Operations

Compliance with World

Bank Group and local environmental requirements as specified in the Investment

Agreement

Compliance with World

Bank Group and local social requirements as specified in the Investment Agreement

Data Interpretation and Corrective Measures

Specialist Contact Information

If you

have any

questions regarding

the AMR or

wish to discuss

its completion,

please contact

the following

Investment Officer

Environmental Specialist

Investment

Officer

Name: Henrik Blaeute

Telephone

Number:

In U.S.A., XXX

XXX

Environment

Specialist

Name: Jeff Anhang

Telephone

Number:

In U.S.A., XXX

XXX

●

1 ENVIRONMENTAL

AND SOCIAL MANAGEMENT

1.1

AMR Preparer

completed

the

Company

authorized representative

Name and Title:

Phone:

Email: