# EDGAR Filing Document

**Accession Number:** 0001041514
**File Stem:** 0001562762-23-000040
**Filing Date:** 2023-2
**Character Count:** 303516
**Document Hash:** 38db04a9f5cd192b5feb76fbfff7b93b
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001562762-23-000040.hdr.sgml**: 20230207

**ACCESSION NUMBER**: 0001562762-23-000040

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 115

**CONFORMED PERIOD OF REPORT**: 20221231

**FILED AS OF DATE**: 20230207

**DATE AS OF CHANGE**: 20230207

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** LESAKA TECHNOLOGIES INC
- **CENTRAL INDEX KEY:** 0001041514
- **STANDARD INDUSTRIAL CLASSIFICATION:** FUNCTIONS RELATED TO DEPOSITORY BANKING, NEC [6099]
- **IRS NUMBER:** 980171860
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 000-31203
- **FILM NUMBER:** 23595178

**BUSINESS ADDRESS:**
- **STREET 1:** 4TH FLOOR, PRESIDENT PLACE
- **STREET 2:** CNR. JAN SMUTS & BOLTON
- **CITY:** ROSEBANK, JOHANNESBURG
- **STATE:** T3
- **ZIP:** 00000
- **BUSINESS PHONE:** 27 11 343 2000

**MAIL ADDRESS:**
- **STREET 1:** 4TH FLOOR, PRESIDENT PLACE
- **STREET 2:** CNR. JAN SMUTS & BOLTON
- **CITY:** ROSEBANK, JOHANNESBURG
- **STATE:** T3
- **ZIP:** 00000

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NET 1 UEPS TECHNOLOGIES INC
- **DATE OF NAME CHANGE:** 20000724

?xml version="1.0" encoding="UTF-8"?

**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, 2022

OR

**☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT OF 1934**

For the transition period from   To  

Commission file number: **000-31203**

**LESAKA TECHNOLOGIES, INC.**

(Exact name of registrant as specified in its charter)

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| | |
|:---|:---|
| &nbsp;&nbsp;**Florida** | &nbsp;&nbsp;**98-0171860** |
| &nbsp;&nbsp;(State or other jurisdiction | &nbsp;&nbsp;(IRS Employer |
| &nbsp;&nbsp;of incorporation or organization) | &nbsp;&nbsp;Identification No.) |

---

---

| |
|:---|
| &nbsp;&nbsp;**President Place, 4 Floor, Cnr. Jan Smuts Avenue and Bolton Road,** |
| &nbsp;&nbsp;**Rosebank, Johannesburg, 2196, South Africa** |
| &nbsp;&nbsp;(Address of principal executive offices, including zip code) |

---

Registrant's telephone number, including area code: **27-11-343-2000**

---

| |
|:---|
| &nbsp;&nbsp;**Not Applicable** |
| &nbsp;&nbsp;(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)<br>|

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Title of each class | &nbsp;&nbsp;Trading Symbol(s) | &nbsp;&nbsp;Name of each exchange<br>on which registered |
| &nbsp;&nbsp;Common stock, par value $0.001 per share | &nbsp;&nbsp;LSAK | &nbsp;&nbsp;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) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). YES ☒ NO ☐

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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act (check one):

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;☐ | &nbsp;&nbsp;Large accelerated filer | &nbsp;&nbsp;☒ | &nbsp;&nbsp;Accelerated filer |
| &nbsp;&nbsp;☐ | &nbsp;&nbsp;Non-accelerated filer | &nbsp;&nbsp;☒ | &nbsp;&nbsp;Smaller reporting company |
|  |  | &nbsp;&nbsp;☐ | &nbsp;&nbsp;Emerging growth company |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ☐ NO ☒

As of February 3, 2023 (the latest practicable date), 60,566,258 shares of the registrant's common stock, par value $0.001 per share, net of treasury shares, were outstanding.

------

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;**Form 10-Q**<br>**LESAKA TECHNOLOGIES, INC.**<br>**Table of Contents** |  |
|  |  | &nbsp;&nbsp;**Page No.** |
| &nbsp;&nbsp;**PART I. FINANCIAL INFORMATION** | &nbsp;&nbsp;**PART I. FINANCIAL INFORMATION** |  |
| &nbsp;&nbsp;[Item 1](#BMQP1Item1). | &nbsp;&nbsp;[Financial Statements](#BMQP1Item1) |  |
|  | &nbsp;&nbsp;[Unaudited Condensed Consolidated Balance Sheets as of December 31, 2022 and June 30, 2022](#BMQFSBS) | &nbsp;&nbsp;[2](#BMQFSBS) |
|  | &nbsp;&nbsp;[Unaudited Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2022 and 2021](#BMQFSSOO) | &nbsp;&nbsp;[3](#BMQFSSOO) |
|  | &nbsp;&nbsp;[Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended December 31, 2022 and 2021](#BMQFSSOCI) | &nbsp;&nbsp;[4](#BMQFSSOCI) |
|  | &nbsp;&nbsp;[Unaudited Condensed Consolidated Statement of Changes in Equity for the three and six months ended December 31, 2022 and 2021](#BMQFSSOCE) | &nbsp;&nbsp;[5](#BMQFSSOCE) |
|  | &nbsp;&nbsp;[Unaudited Condensed Consolidated Statements of Cash Flows for the three and six months ended December 31, 2022 and 2021](#BMQFSCF) | &nbsp;&nbsp;[7](#BMQFSCF) |
|  | &nbsp;&nbsp;[Notes to Unaudited Condensed Consolidated Financial Statements](#BMQFSNotes) | &nbsp;&nbsp;[8](#BMQFSNotes) |
| &nbsp;&nbsp;[Item 2](#BMQP1Item2). | &nbsp;&nbsp;[Management's Discussion and Analysis of Financial Condition and Results of Operations](#BMQP1Item2) | &nbsp;&nbsp;[39](#BMQP1Item2) |
| &nbsp;&nbsp;[Item 3.](#BMQP1Item3) | &nbsp;&nbsp;[Quantitative and Qualitative Disclosures About Market Risk](#BMQP1Item3) | &nbsp;&nbsp;[55](#BMQP1Item3) |
| &nbsp;&nbsp;[Item 4](#BMQP1Item4). | &nbsp;&nbsp;[Controls and Procedures](#BMQP1Item4) | &nbsp;&nbsp;[56](#BMQP1Item4) |
| &nbsp;&nbsp;[**Part II. OTHER INFORMATION**](#BMQP2) | &nbsp;&nbsp;[**Part II. OTHER INFORMATION**](#BMQP2) |  |
| &nbsp;&nbsp;[Item 6.](#BMQP2Item6) | &nbsp;&nbsp;[Exhibits](#BMQP2Item6) | &nbsp;&nbsp;[57](#BMQP2Item6) |
| &nbsp;&nbsp;[Signatures](#BMQSignatures) |  | &nbsp;&nbsp;[57](#BMQSignatures) |
| &nbsp;&nbsp;[<u>EXHIBIT 10.47</u>](#BMQP2Item61047) |  |  |
| &nbsp;&nbsp;[<u>EXHIBIT 10.48</u>](#BMQP2Item61048) |  |  |
| &nbsp;&nbsp;[<u>EXHIBIT 10.49</u>](#BMQP2Item61049) |  |  |
| &nbsp;&nbsp;[<u>EXHIBIT 10.50</u>](#BMQP2Item61050) |  |  |
| &nbsp;&nbsp;[<u>EXHIBIT 10.51</u>](#BMQP2Item61051) |  |  |

---

------

**Part I. Financial information**

**Item 1. Financial Statements**

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Balance Sheets**

---

| | | |
|:---|:---|:---|
|  | **December 31,**<br>**2022** | **June 30,**<br>**2022<sup>(A)</sup>** |
|  | (In thousands, except share data) | (In thousands, except share data) |
| **ASSETS** |  |  |
| CURRENT ASSETS |  |  |
| Cash and cash equivalents | $42402 | $43940 |
| Restricted cash related to ATM funding and credit facilities (Note 8) | 54374 | 60860 |
| Accounts receivable, net and other receivables (Note 2) | 28219 | 28898 |
| Finance loans receivable, net (Note 2) | 39674 | 33892 |
| Inventory (Note 3) | 34105 | 34226 |
| Total current assets before settlement assets | 198774 | 201816 |
| Settlement assets | 27650 | 15916 |
| Total current assets | 226424 | 217732 |
| PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - December: $36,735 June: $35,249 | 27528 | 24599 |
| OPERATING LEASE RIGHT-OF-USE (Note 16) | 6021 | 7146 |
| EQUITY-ACCOUNTED INVESTMENTS (Note 5) | 5267 | 5861 |
| GOODWILL (Note 6) | 155701 | 162657 |
| INTANGIBLE ASSETS, NET (Note 6) | 142187 | 156702 |
| DEFERRED INCOME TAXES | 4587 | 3776 |
| OTHER LONG-TERM ASSETS, including reinsurance assets (Note 5 and 7) | 78054 | 78092 |
| **TOTAL ASSETS** | 645769 | 656565 |
| **LIABILITIES** |  |  |
| CURRENT LIABILITIES |  |  |
| Short-term credit facilities for ATM funding (Note 8) | 54250 | 51338 |
| Short-term credit facilities (Note 8) | 10575 | 14880 |
| Accounts payable | 26275 | 18572 |
| Other payables (Note 9) | 30351 | 34362 |
| Operating lease liability - current (Note 16) | 2078 | 2498 |
| Current portion of long-term borrowings (Note 8) | 7425 | 6804 |
| Income taxes payable | 2211 | 2140 |
| Total current liabilities before settlement obligations | 133165 | 130594 |
| Settlement obligations | 26571 | 15276 |
| Total current liabilities | 159736 | 145870 |
| DEFERRED INCOME TAXES | 50125 | 54211 |
| OPERATING LEASE LIABILITY - LONG TERM (Note 16) | 4116 | 4827 |
| LONG-TERM BORROWINGS (Note 8) | 135440 | 134842 |
| OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 7) | 2393 | 2466 |
| **TOTAL LIABILITIES** | 351810 | 342216 |
| REDEEMABLE COMMON STOCK | 79429 | 79429 |
| **EQUITY** |  |  |
| COMMON STOCK (Note 10) |  |  |
| Authorized: 200,000,000 with $0.001 par value; |  |  |
| Issued and outstanding shares, net of treasury - December: 63,751,337 June: 62,324,321 | 83 | 83 |
| 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 | 332537 | 327891 |
| TREASURY SHARES, AT COST: December: 24,956,854 June: 24,891,292 | (287244) | (286951) |
| ACCUMULATED OTHER COMPREHENSIVE LOSS (Note 11) | (176238) | (168840) |
| RETAINED EARNINGS | 345392 | 362737 |
| TOTAL LESAKA EQUITY | 214530 | 234920 |
| NON-CONTROLLING INTEREST | - | - |
| **TOTAL EQUITY** | 214530 | 234920 |
| **TOTAL LIABILITIES, REDEEMABLE COMMON STOCK AND SHAREHOLDERS' EQUITY** | $645769 | $656565 |
| (A) – Derived from audited financial statements | (A) – Derived from audited financial statements | (A) – Derived from audited financial statements |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |

---

------

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Statements of Operations**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (In thousands, except per share data) | (In thousands, except per share data) | (In thousands, except per share data) | (In thousands, except per share data) |
| REVENUE (Note 15) | $136068 | $31114 | $260854 | $65618 |
| EXPENSE |  |  |  |  |
| Cost of goods sold, IT processing, servicing and support | 108824 | 20580 | 209352 | 44787 |
| Selling, general and administration | 23517 | 17746 | 46448 | 38188 |
| Depreciation and amortization | 5919 | 726 | 11917 | 1621 |
| Transaction costs related to Connect acquisition | - | 1489 | - | 1674 |
| OPERATING LOSS | (2192) | (9427) | (6863) | (20652) |
| UNREALIZED LOSS RELATED TO FAIR VALUE ADJUSTMENT TO CURRENCY OPTIONS (Note 4) | - | 2429 | - | 2429 |
| (LOSS) GAIN ON DISPOSAL OF EQUITY-ACCOUNTED INVESTMENT (Note 5) | (112) | - | 136 | - |
| INTEREST INCOME | 389 | 313 | 800 | 702 |
| INTEREST EXPENSE | 4388 | 765 | 8424 | 1581 |
| LOSS BEFORE INCOME TAX EXPENSE | (6303) | (12308) | (14351) | (23960) |
| INCOME TAX EXPENSE (Note 18) | 364 | 98 | 395 | 284 |
| NET LOSS BEFORE EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS | (6667) | (12406) | (14746) | (24244) |
| EARNINGS (LOSS) FROM EQUITY-ACCOUNTED INVESTMENTS (Note 5) | 18 | - | (2599) | (1156) |
| NET LOSS ATTRIBUTABLE TO LESAKA | $(6649) | $(12406) | $(17345) | $(25400) |
| **Net loss per share, in United States dollars** (Note 13): |  |  |  |  |
| Basic loss attributable to Lesaka shareholders | $(0.11) | $(0.22) | $(0.28) | $(0.44) |
| Diluted loss attributable to Lesaka shareholders | $(0.11) | $(0.22) | $(0.28) | $(0.44) |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |  |

---

------

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (In thousands) | (In thousands) | (In thousands) | (In thousands) |
| Net loss | $(6649) | $(12406) | $(17345) | $(25400) |
| Other comprehensive income (loss), net of taxes |  |  |  |  |
| Movement in foreign currency translation reserve | 12155 | (5601) | (9938) | (11514) |
| Release of foreign currency translation reserve related to disposal of Finbond equity securities (Note 11) | 97 | - | 99 | - |
| Movement in foreign currency translation reserve related to equity-accounted investments | - | - | 2441 | (644) |
| Total other comprehensive income (loss), net of taxes | 12252 | (5601) | (7398) | (12158) |
| Comprehensive income (loss) | 5603 | (18007) | (24743) | (37558) |
| Comprehensive income (loss) attributable to Lesaka | $5603 | $(18007) | $(24743) | $(37558) |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |  |  |  |

---

------

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** |  |  |  |
|  | **Number of Shares** | **Amount** | **Number of Treasury Shares** | **Treasury Shares** | **Number of shares, net of treasury** | **Additional Paid-In Capital** | **Retained Earnings** | **Accumulated other comprehensive loss** | **Total Lesaka Equity** | **Non-controlling Interest** | **Total** | **Redeemable common stock** |
|  | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** | **For the three months ended December 31, 2021 (dollar amounts in thousands)** |
| Balance – October 1, 2021 | 81887506 | $80 | (24891292) | $(286951) | 56996214 | $302277 | $393619 | $(152278) | $256747 | $- | $256747 | $84979 |
| Restricted stock granted (Note 12) | 448105 |  |  |  | 448105 |  |  |  | - |  | - |  |
| Exercise of stock options | 242853 | - |  |  | 242853 | 739 |  |  | 739 |  | 739 |  |
| Stock-based compensation charge (Note 12) |  |  |  |  | - | 788 |  |  | 788 |  | 788 |  |
| Reversal of stock-based compensation charge (Note 12) | (30000) |  |  |  | (30000) | - |  |  | - |  | - |  |
| Stock-based compensation charge related to equity-accounted investment (Note 5) |  |  |  |  | - | - |  |  | - |  | - |  |
| Net loss |  |  |  |  | - |  | (12406) |  | (12406) | - | (12406) |  |
| Other comprehensive loss (Note 11) |  |  |  |  |  |  |  | (5601) | (5601) | - | (5601) |  |
| Balance – December 31, 2021 | 82548464 | $80 | (24891292) | $(286951) | 57657172 | $303804 | $381213 | $(157879) | $240267 | $- | $240267 | $84979 |

---

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** | **For the six months ended December 31, 2021 (dollar amounts in thousands)** |
| Balance – July 1, 2021 | 81607912 | $80 | (24891292) | $(286951) | 56716620 | $301959 | $406613 | $(145721) | $275980 | $- | $275980 | $84979 |
| Restricted stock granted | 727699 |  |  |  | 727699 |  |  |  | - |  | - |  |
| Exercise of stock options | 242853 | - |  |  | 242853 | 739 |  |  | 739 |  | 739 |  |
| Stock-based compensation charge (Note 12) |  |  |  |  |  | 1132 |  |  | 1132 |  | 1132 |  |
| Reversal of stock-based compensation charge (Note 12) | (30000) |  |  |  | (30000) | (35) |  |  | (35) |  | (35) |  |
| Stock-based compensation charge related to equity-accounted investment |  |  |  |  |  | 9 |  |  | 9 |  | 9 |  |
| Net loss |  |  |  |  |  |  | (25400) |  | (25400) | - | (25400) |  |
| Other comprehensive income (Note 11) |  |  |  |  |  |  |  | (12158) | (12158) | - | (12158) |  |
| Balance – December 31, 2021 | 82548464 | $80 | (24891292) | $(286951) | 57657172 | $303804 | $381213 | $(157879) | $240267 | $- | $240267 | $84979 |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |

---

------

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Statements of Changes in Equity**

---

| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** | **Lesaka Technologies, Inc. Shareholders** |  |  |  |
|  | **Number of Shares** | **Amount** | **Number of Treasury Shares** | **Treasury Shares** | **Number of shares, net of treasury** | **Additional Paid-In Capital** | **Retained Earnings** | **Accumulated other comprehensive loss** | **Total Lesaka Equity** | **Non-controlling Interest** | **Total** | **Redeemable common stock** |
|  | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** | **For the three months ended December 31, 2022 (dollar amounts in thousands)** |
| Balance – October 1, 2022 | 87449136 | $83 | (24926752) | $(287136) | 62522384 | $329365 | $352041 | $(188490) | $205863 | $- | $205863 | $79429 |
| Shares repurchased (Note 12) |  |  | (30102) | (108) | (30102) |  |  |  | (108) |  | (108) |  |
| Restricted stock granted (Note 12) | 1151229 |  |  |  | 1151229 |  |  |  | - |  | - |  |
| Exercise of stock option (Note 12) | 107826 | - |  |  | 107826 | 327 |  |  | 327 |  | 327 |  |
| Stock-based compensation charge (Note 12) |  |  |  |  |  | 2849 |  |  | 2849 |  | 2849 |  |
| Stock-based compensation charge related to equity-accounted investment (Note 5) |  |  |  |  |  | (4) |  |  | (4) |  | (4) |  |
| Net loss |  |  |  |  |  |  | (6649) |  | (6649) | - | (6649) |  |
| Other comprehensive income (Note 11) |  |  |  |  |  |  |  | 12252 | 12252 | - | 12252 |  |
| Balance – December 31, 2022 | 88708191 | $83 | (24956854) | $(287244) | 63751337 | $332537 | $345392 | $(176238) | $214530 | $- | $214530 | $79429 |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |

---

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| | | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** | **For the six months ended December 31, 2022 (dollar amounts in thousands)** |
| Balance – July 1, 2022 | 87215613 | $83 | (24891292) | $(286951) | 62324321 | $327891 | $362737 | $(168840) | $234920 | $- | $234920 | $79429 |
| Shares repurchased (Note 12) |  |  | (65562) | (293) | (65562) |  |  |  | (293) |  | (293) |  |
| Restricted stock granted | 1382752 |  |  |  | 1382752 | - |  |  | - |  | - |  |
| Exercise of stock option (Note 12) | 109826 | - |  |  | 109826 | 333 |  |  | 333 |  | 333 |  |
| Stock-based compensation charge (Note 12) |  |  |  |  |  | 4311 |  |  | 4311 |  | 4311 |  |
| Stock-based compensation charge related to equity-accounted investment (Note 5) |  |  |  |  |  | 2 |  |  | 2 |  | 2 |  |
| Net loss |  |  |  |  |  |  | (17345) |  | (17345) | - | (17345) |  |
| Other comprehensive loss (Note 11) |  |  |  |  |  |  |  | (7398) | (7398) | - | (7398) |  |
| Balance – December 31, 2022 | 88708191 | $83 | (24956854) | $(287244) | 63751337 | $332537 | $345392 | $(176238) | $214530 | $- | $214530 | $79429 |
| See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements | See Notes to Unaudited Condensed Consolidated Financial Statements |

---

------

**LESAKA TECHNOLOGIES, INC.**

**Unaudited Condensed Consolidated Statements of Cash Flows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (In thousands) | (In thousands) | (In thousands) | (In thousands) |
| **Cash flows from operating activities** |  |  |  |  |
| Net loss | $(6649) | $(12406) | $(17345) | $(25400) |
| Depreciation and amortization | 5919 | 726 | 11917 | 1621 |
| Movement in allowance for doubtful accounts receivable | 1480 | 740 | 2529 | 1126 |
| Interest payable | 1436 | (113) | 1462 | (102) |
| Unrealized loss related to fair value adjustment to currency options (Note 4) | - | 2429 |  | 2429 |
| Fair value adjustment related to financial liabilities | 81 | (234) | 144 | (324) |
| Loss (Gain) on disposal of equity-accounted investments (Note 5) | 112 | - | (136) | - |
| (Earnings) Loss from equity-accounted investments | (18) | - | 2599 | 1156 |
| Profit on disposal of property, plant and equipment<sup>(1)</sup> | (113) | (1271) | (321) | (1296) |
| Facility fee amortized | 196 | - | 445 | - |
| Stock-based compensation charge (Note 12) | 2849 | 788 | 4311 | 1097 |
| Dividends received from equity-accounted investments | - | - | 21 | 137 |
| Decrease (Increase) in accounts receivable  | 1962 | (1001) | (981) | 1166 |
| Increase in finance loans receivable<sup>(2)</sup> | (5230) | (2466) | (8811) | (3445) |
| (Increase) Decrease in inventory | (1193) | (1429) | (1472) | 154 |
| Increase in accounts payable and other payables | 4829 | 676 | 4391 | 245 |
| (Decrease) Increase in taxes payable | (513) | (245) | 129 | 49 |
| (Decrease) Increase in deferred taxes | (1728) | 21 | (3122) | (346) |
| **Net cash provided by (used) in operating activities** | 3420 | (13785) | (4240) | (21733) |
| **Cash flows from investing activities** |  |  |  |  |
| Capital expenditures | (3992) | (189) | (8493) | (887) |
| Proceeds from disposal of property, plant and equipment | 345 | 1760 | 762 | 1991 |
| Proceeds from disposal of equity-accounted investment (Note 5) | 138 | - | 391 | - |
| Acquisition of intangible assets | (120) | - | (120) | - |
| Proceeds from disposal of equity-accounted investment - Bank Frick, net of expenses | - | 7500 | - | 7500 |
| Loan to equity-accounted investment (Note 5) | - | - | (112) | - |
| Repayment of loans by equity-accounted investments | - | - | 112 | - |
| Net change in settlement assets | (10131) | 97 | (12015) | 97 |
| **Net cash (used in) provided by investing activities** | (13760) | 9168 | (19475) | 8701 |
| **Cash flows from financing activities** |  |  |  |  |
| Proceeds from bank overdraft (Note 8) | 167224 | 172445 | 313292 | 311350 |
| Repayment of bank overdraft (Note 8) | (175380) | (172768) | (312302) | (271676) |
| Long-term borrowings utilized (Note 8) | 9083 | - | 10142 | - |
| Repayment of long-term borrowings (Note 8) | (1688) | - | (3268) | - |
| Acquisition of treasury stock (Note 12) | (108) |  | (293) |  |
| Proceeds from exercise of stock options | 327 | 739 | 333 | 739 |
| Guarantee fee | (100) | - | (100) | - |
| Net change in settlement obligations | 9581 | (97) | 11568 | (97) |
| **Net cash provided by financing activities** | 8939 | 319 | 19372 | 40316 |
| Effect of exchange rate changes on cash and cash equivalents | 4806 | (5979) | (3681) | (10905) |
| **Net increase (decrease) in cash, cash equivalents and restricted cash** | 3405 | (10277) | (8024) | 16379 |
| **Cash, cash equivalents and restricted cash – beginning of period** | 93371 | 250421 | 104800 | 223765 |
| **Cash, cash equivalents and restricted cash – end of period (Note 14)** | $96776 | $240144 | $96776 | $240144 |
| (1) Impairment losses of $85,000 and $225,000 respectively, previously reported in a separate caption during the three and six months ended December 31, 2021, have been included in the caption profit on disposal of property, plant and equipment for the three and six months ended December 31, 2021 | (1) Impairment losses of $85,000 and $225,000 respectively, previously reported in a separate caption during the three and six months ended December 31, 2021, have been included in the caption profit on disposal of property, plant and equipment for the three and six months ended December 31, 2021 | (1) Impairment losses of $85,000 and $225,000 respectively, previously reported in a separate caption during the three and six months ended December 31, 2021, have been included in the caption profit on disposal of property, plant and equipment for the three and six months ended December 31, 2021 | (1) Impairment losses of $85,000 and $225,000 respectively, previously reported in a separate caption during the three and six months ended December 31, 2021, have been included in the caption profit on disposal of property, plant and equipment for the three and six months ended December 31, 2021 | (1) Impairment losses of $85,000 and $225,000 respectively, previously reported in a separate caption during the three and six months ended December 31, 2021, have been included in the caption profit on disposal of property, plant and equipment for the three and six months ended December 31, 2021 |
| (2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption. Previous periods have been restated. | (2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption. Previous periods have been restated. | (2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption. Previous periods have been restated. | (2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption. Previous periods have been restated. | (2) The movement in accounts receivable and finance loans receivable were previously combined, however, it was determined in the three months ended December 31, 2022, to present the movement in finance loans receivable as a separate caption. Previous periods have been restated. |
| &nbsp;&nbsp;&nbsp;&nbsp;See Notes to Unaudited Condensed Consolidated Financial Statements | &nbsp;&nbsp;&nbsp;&nbsp;See Notes to Unaudited Condensed Consolidated Financial Statements | &nbsp;&nbsp;&nbsp;&nbsp;See Notes to Unaudited Condensed Consolidated Financial Statements | &nbsp;&nbsp;&nbsp;&nbsp;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, 2022 and 2021**

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

**1.** **Basis of Presentation and Summary of Significant Accounting Policies**

**Unaudited Interim Financial Information**

The accompanying unaudited condensed consolidated financial statements include all majority-owned subsidiaries over which the Company exercises control and have been prepared in accordance with U.S. generally accepted accounting principles ("GAAP") and the rules and regulations of the United States Securities and Exchange Commission for Quarterly Reports on Form 10-Q and include all of the information and disclosures required for interim financial reporting. The results of operations for the three and six months ended December 31, 2022 and 2021, are not necessarily indicative of the results for the full year. The Company believes that the disclosures are adequate to make the information presented not misleading.

These unaudited condensed consolidated financial statements should be read in conjunction with the financial statements, accounting policies and financial notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended June 30, 2022. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments (consisting only of normal recurring adjustments), which are necessary for a fair representation of financial results for the interim periods presented.

References to "Lesaka" are references solely to Lesaka Technologies, Inc. References to the "Company" refer to Lesaka and its consolidated subsidiaries, collectively, unless the context otherwise requires.

**Recent accounting pronouncements adopted**

In October 2021, the Financial Accounting Standards Board ("FASB") issued guidance which amends guidance in *Business Combinations (Topic 805)* regarding the recognition and measurement of contract assets and liabilities in a business combination. These items are recognized at fair value on acquisition under current guidance. The new guidance requires an acquiring entity to apply guidance in *Revenue Recognition (Topic 606)* to recognize and measure contract assets and contract liabilities in a business combination. The guidance became effective for the Company beginning July 1, 2022. The adoption of this guidance did not have a material impact on the Company's financial statements and related disclosures.

**Recent accounting pronouncements not yet adopted as of December 31, 2022**

In June 2016, the FASB issued guidance regarding *Measurement of Credit Losses on Financial Instruments*. The guidance replaces the incurred loss impairment methodology in current GAAP with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. For trade and other receivables, loans, and other financial instruments, an entity is required to use a forward-looking expected loss model rather than the incurred loss model for recognizing credit losses, which reflects losses that are probable. Credit losses relating to available-for-sale debt securities will also be recorded through an allowance for credit losses rather than as a reduction in the amortized cost basis of the securities. This guidance is effective for the Company beginning July 1, 2023. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures, but does not expect the impact on its financial results to be material.

In November 2019, the FASB issued guidance regarding *Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).* The guidance provides a framework to stagger effective dates for future major accounting standards and amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities, including Smaller Reporting Companies. The Company is a Smaller Reporting Company. Specifically, the guidance changes some effective dates for certain new standards on the following topics in the FASB Codification, namely Derivatives and Hedging (ASC 815); Leases (ASC 842); Financial Instruments — Credit Losses (ASC 326); and Intangibles — Goodwill and Other (ASC 350). The guidance defers the adoption date of guidance regarding *Measurement of Credit Losses on Financial Instruments* by the Company from July 1, 2020 to July 1, 2023. The Company is currently assessing the impact of this guidance on its financial statements and related disclosures, but does not expect the impact on its financial results to be material.

------

**2.** **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, 2022, and June 30, 2022, are presented in the table below:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Accounts receivable, trade, net  | $12073 | $13904 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, trade, gross  | 12163 | 14413 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful accounts receivable, end of period | 90 | 509 |
| Beginning of period | 509 | 267 |
| Reallocation to allowance for doubtful finance loans receivable<sup>(1)</sup> | (418) | - |
| Reversed to statement of operations | (9) | (133) |
| Charged to statement of operations  | 507 | 779 |
| Utilized  | (412) | (154) |
| Foreign currency adjustment  | (87) | (250) |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of amount outstanding related to sale of interest in Carbon, net of allowance: December 2022: $250 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Loans provided to Carbon, net of allowance: June 2022: $3,000 | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Current portion of total held to maturity investments  | - | - |
| Investment in 7.625% of Cedar Cellular Investment 1 (RF) (Pty) Ltd 8.625% notes | - | - |
| &nbsp;&nbsp;&nbsp;&nbsp;Other receivables  | 16146 | 14994 |
| Total accounts receivable, net and other receivables | $28219 | $28898 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents reallocation of a portion of the Merchant allowance for doubtful finance loans receivable as of June 30, 2022, which was included in the allowance for doubtful accounts receivable as of June 30, 2022.

Current portion of amount outstanding related to sale of interest in Carbon represents the amount due from the purchaser related to the sale of the Company's interest in Carbon Tech Limited ("Carbon"), an equity-accounted investment of $0.25 million, net of an allowance for doubtful loans receivable of $0.25 million, refer to Note 5 for additional information.

The loan of $3.0 million provided to Carbon was scheduled to be repaid before June 30, 2020, however, Carbon requested a payment holiday as a result of the impact of the COVID-19 pandemic on its business. The parties had not agreed to new repayment terms as of June 30, 2022. In June 2021, the Company determined to create an allowance for doubtful loans receivable of $3.0 million due to these circumstances and the ongoing operating losses incurred by Carbon. The loan was sold in September 2022 for $0.75 million (refer to Note 5).

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, 2022, and June 30, 2022, respectively was $0 (nil).

Other receivables includes prepayments, deposits, income taxes receivable and other receivables, and as of June 30, 2022, also includes transactions-switching funds receivable of $3.3 million which was received in full in November 2022.

**Contractual maturities of held to maturity investments**

Summarized below is the contractual maturity of the Company's held to maturity investment as of December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Cost basis** | **Estimated fair value<sup>(1)</sup>** |
| Due in one year or less  | $- | $- |
| Due in one year through five years<sup>(2)</sup> | - | - |
| Due in five years through ten years  | - | - |
| Due after ten years  | - | - |
| Total  | $- | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The estimated fair value of the Cedar Cellular note has been calculated utilizing the Company's portion of the assets held by Cedar Cellular, namely, Cedar Cellular's investment in Cell C.

&nbsp;&nbsp;&nbsp;&nbsp;(2) The cost basis is zero ($0.0 million).

------

**2.** **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, 2022, and June 30, 2022, is presented in the table below:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Microlending finance loans receivable, net | $21880 | 20058 |
| &nbsp;&nbsp;&nbsp;&nbsp;Microlending finance loans receivable, gross | 23401 | 21452 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful finance loans receivable, end of period | 1521 | 1394 |
| Beginning of period | 1394 | 2349 |
| Reversed to statement of operations  | - | (805) |
| Charged to statement of operations  | 730 | 1268 |
| Utilized  | (546) | (1179) |
| Foreign currency adjustment  | (57) | (239) |
| Merchant finance loans receivable, net | 17794 | 13834 |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant finance loans receivable, gross | 19705 | 14131 |
| &nbsp;&nbsp;&nbsp;&nbsp;Allowance for doubtful finance loans receivable, end of period | 1911 | 297 |
| Beginning of period | 297 | - |
| Reallocation from allowance for doubtful accounts receivable<sup>(1)</sup> | 419 | - |
| Reversed to statement of operations  | (2) | - |
| Charged to statement of operations  | 1301 | 442 |
| Utilized  | - | - |
| Foreign currency adjustment  | (104) | (145) |
| Total finance loans receivable, net  | $39674 | $33892 |

---

&nbsp;&nbsp;&nbsp;&nbsp; (1) Represents reallocation of a portion of the Merchant allowance for doubtful finance loans receivable as of June 30, 2022, which was included in the allowance for doubtful accounts receivable as of June 30, 2022.

Total finance loans receivable, net, comprises microlending finance loans receivable related to the Company's microlending operations in South Africa as well as its merchant finance loans receivable related to Connect's lending activities in South Africa. Certain merchant finance loans receivable have been pledged as security for the Company's revolving credit facility (refer to Note 8).

**3. Inventory**

The Company's inventory comprised the following categories as of December 31, 2022, and June 30, 2022:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Raw materials | $2393 | $2446 |
| Work-in-progress | 148 | 147 |
| Finished goods | 31564 | 31633 |
|  | $34105 | $34226 |

---

As of December 31, 2022 and June 30, 2022, finished goods includes $10.1 million and $13.7 million, respectively, of Cell C airtime inventory that was previously classified as finished goods subject to sale restrictions. In support of Cell C's liquidity position and pursuant to Cell C's recapitalization process, the Company limited the resale of this airtime to its own distribution channels. On September 30, 2022, Cell C concluded its recapitalization process and the Company and Cell C entered into an agreement under which Cell C agreed to repurchase, from October 2023, up to ZAR 10 million of Cell C inventory from the Company per month. The amount to be repurchased by Cell C will be calculated as ZAR 10 million less the face value of any sales made by the Company during that month. The Company continued to sell a minimum amount of Cell C airtime through its internal channels in late fiscal 2022/ early fiscal 2023 in support of Cell C's liquidity position. However, its ability to sell this airtime has increased significantly since the acquisition of Connect because Connect is a significant reseller of Cell C airtime. As a result, and depending on prevailing conditions in the airtime market, the Company has sold higher volumes of airtime through this channel than it did prior to the Cell C recapitalization. If the Company is able to sell at least ZAR 10 million a month through this channel from October 1, 2023, then Cell C would not be required to repurchase any airtime from the Company during any specific month. The Company has agreed to notify Cell C prior to selling any of this airtime, however, there is no restriction placed on the Company on the sale of the airtime.

------

**4.** **Fair value of financial instruments**

**Initial recognition and measurement**

Financial instruments are recognized when the Company becomes a party to the transaction. Initial measurements are at cost, which includes transaction costs.

**Risk management**

The Company manages its exposure to currency exchange, translation, interest rate, credit, microlending credit and equity price and liquidity risks as discussed below.

*Currency exchange risk*

The Company is subject to currency exchange risk because it purchases components for safe assets, that the Company assembles, and inventories that it is required to settle in other currencies, primarily the euro, renminbi, and U.S. dollar. The Company has used forward contracts in order to limit its exposure in these transactions to fluctuations in exchange rates between the South African rand ("ZAR"), on the one hand, and the U.S. dollar and the euro, on the other hand.

*Translation risk*

Translation risk relates to the risk that the Company's results of operations will vary significantly as the U.S. dollar is its reporting currency, but it earns a significant amount of its revenues and incurs a significant amount of its expenses in ZAR. The U.S. dollar to the ZAR exchange rate has fluctuated significantly over the past three years. As exchange rates are outside the Company's control, there can be no assurance that future fluctuations will not adversely affect the Company's results of operations and financial condition.

*Interest rate risk*

As a result of its normal borrowing activities, the Company's operating results are exposed to fluctuations in interest rates, which it manages primarily through regular financing activities. Interest rates in South Africa are trending upwards and the Company expects higher interest rates in the foreseeable future which will increase its cost of borrowing. The Company periodically evaluates the cost and effectiveness of interest rate hedging strategies to manage this risk. The Company generally maintains surplus cash in cash equivalents and held to maturity investments and has occasionally invested in marketable securities.

*Credit risk*

Credit risk relates to the risk of loss that the Company would incur as a result of non-performance by counterparties. The Company maintains credit risk policies in respect of its counterparties to minimize overall credit risk. These policies include an evaluation of a potential counterparty's financial condition, credit rating, and other credit criteria and risk mitigation tools as the Company's management deems appropriate. With respect to credit risk on financial instruments, the Company maintains a policy of entering into such transactions only with South African and European financial institutions that have a credit rating of "B" (or its equivalent) or better, as determined by credit rating agencies such as Standard & Poor's, Moody's and Fitch Ratings.

*Consumer microlending credit risk*

The Company is exposed to credit risk in its Consumer microlending activities, which provides unsecured short-term loans to qualifying customers. Credit bureau checks as well as an affordability test are conducted as part of the origination process, both of which being in line with local regulations. The Company considers this policy to be appropriate because the affordability test it performs takes into account a variety of factors such as other debts and total expenditures on normal household and lifestyle expenses. Additional allowances may be required should the ability of its customers to make payments when due deteriorate in the future. A significant amount of judgment is required to assess the ultimate recoverability of these finance loan receivables, including ongoing evaluation of the creditworthiness of each customer.

*Merchant lending*

The Company maintains an allowance for doubtful finance loans receivable related to its Merchant services segment with respect to short-term loans to qualifying merchant customers. The Company's risk management procedures include adhering to its proprietary lending criteria which uses an online-system loan application process, obtaining necessary customer transaction-history data and credit bureau checks. The Company considers these procedures to be appropriate because it takes into account a variety of factors such as the customer's credit capacity and customer-specific risk factors when originating a loan.

------

**4.** **Fair value of financial instruments (continued)**

**Risk management (continued**

*Equity price and liquidity risk*

Equity price risk relates to the risk of loss that the Company would incur as a result of the volatility in the exchange-traded price of equity securities that it holds. The market price of these securities may fluctuate for a variety of reasons and, consequently, the amount that the Company may obtain in a subsequent sale of these securities may significantly differ from the reported market value.

Equity liquidity risk relates to the risk of loss that the Company would incur as a result of the lack of liquidity on the exchange on which those securities are listed. The Company may not be able to sell some or all of these securities at one time, or over an extended period of time without influencing the exchange-traded price, or at all.

**Financial instruments**

The following section describes the valuation methodologies the Company uses to measure its significant financial assets and liabilities at fair value.

In general, and where applicable, the Company uses quoted prices in active markets for identical assets or liabilities to determine fair value. This pricing methodology would apply to Level 1 investments. If quoted prices in active markets for identical assets or liabilities are not available to determine fair value, then the Company uses quoted prices for similar assets and liabilities or inputs other than the quoted prices that are observable either directly or indirectly. These investments would be included in Level 2 investments. In circumstances in which inputs are generally unobservable, values typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques that include option pricing models, discounted cash flow models, and similar techniques. Investments valued using such techniques are included in Level 3 investments.

***Asset measured at fair value using significant unobservable inputs – investment in Cell C***

The Company's Level 3 asset represents an investment of 75,000,000 class "A" shares in Cell C, 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, 2022 and June 30, 2022, respectively, and valued Cell C at $0.0 (zero) and $0.0 (zero) as of December 31, 2022, and June 30, 2022, respectively. The Company incorporates the payments under Cell C's lease liabilities into the cash flow forecasts and assumes that Cell C's deferred tax assets would be utilized over the forecast period. The Company has increased the marketability discount from 10% to 20% and the minority discount from 15% to 30% due to the reduction in our shareholding percentage from 15% to 5% as well as current market conditions. The Company utilized the latest revised business plan provided by Cell C management for the period ended December 31, 2025, for the December 31, 2022, and June 30, 2022 valuations. Adjustments have been made to the WACC rate to reflect the Company's assessment of risk to Cell C achieving its business plan.

The following key valuation inputs were used as of December 31, 2022 and June 30, 2022:

---

| | |
|:---|:---|
| Weighted Average Cost of Capital ("WACC"): | Between 20% and 31% over the period of the forecast |
| Long term growth rate: | 3% (3% as of June 30, 2022) |
| Marketability discount: | 20% (10% as of June 30, 2022) |
| Minority discount: | 30% (15% as of June 30, 2022) |
| Net adjusted external debt - December 31, 2022:<sup>(1)</sup> | ZAR 6.9 billion ($0.4 billion), no lease liabilities included |
| Net adjusted external debt - June 30, 2022:<sup>(2)</sup> | ZAR 13.5 billion ($0.8 billion), no lease liabilities included |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) translated from ZAR to U.S. dollars at exchange rates applicable as of December 31, 2022.

&nbsp;&nbsp;&nbsp;&nbsp;(2) translated from ZAR to U.S. dollars at exchange rates applicable as of June 30, 2022.

The following table presents the impact on the carrying value of the Company's Cell C investment of a 1.0% increase and 1.0% decrease in the WACC rate and the EBITDA margins respectively used in the Cell C valuation on December 31, 2022, all amounts translated at exchange rates applicable as of December 31, 2022:

---

| | | |
|:---|:---|:---|
| **Sensitivity for fair value of Cell C investment** | **1.0% increase** | **1.0% decrease** |
| WACC rate | $- | $390 |
| EBITDA margin | $992 | $- |

---

The fair value of the Cell C shares as of December 31, 2022, represented 0% of the Company's total assets, including these shares. The Company expects to hold these shares for an extended period of time and that there will be short-term equity price volatility with respect to these shares particularly given that Cell C remains in a turnaround process.

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**4.** **Fair value of financial instruments (continued)**

**Financial instruments (continued)**

***Derivative transactions - Foreign exchange contracts***

As part of the Company's risk management strategy, the Company enters into derivative transactions to mitigate exposures to foreign currencies using foreign exchange contracts. These foreign exchange contracts are over-the-counter derivative transactions. Substantially all of the Company's derivative exposures are with counterparties that have long-term credit ratings of "B" (or equivalent) or better. The Company uses quoted prices in active markets for similar assets and liabilities to determine fair value (Level 2). The Company has no derivatives that require fair value measurement under Level 1 or 3 of the fair value hierarchy.

The Company's outstanding foreign exchange contracts as of December 31, 2022, were as follows:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Notional amount ('000)** | **Notional amount ('000)** | **Strike price** | **Strike price** | **Fair market** | **Fair market** | **Maturity** |
| EUR | 375.1 | ZAR | 18.0002 | ZAR | 18.1676 | January 31, 2023 |
| USD | 238.8 | ZAR | 17.1676 | ZAR | 17.0172 | January 31, 2023 |

---

The Company had no outstanding foreign exchange contracts as of June 30, 2022.

***Derivative transactions – Fiscal 2022 foreign exchange option contracts***

The Company held a significant amount of U.S. dollars in early fiscal 2022 and intended to use a portion of these funds to settle part of the purchase consideration related to the Connect acquisition. The purchase consideration was expected to be settled in ZAR. Accordingly, the Company entered into foreign exchange option contracts with FirstRand Bank Limited acting through its Rand Merchant Bank division ("RMB") in November 2021 in order to manage the risk of currency volatility and to fix the ZAR amount to be utilized for part of the purchase consideration settlement. These foreign exchange option contracts, also known as synthetic forwards, were over-the-counter derivative transactions (Level 2). RMB's long-term credit rating is "BB". The Company used quoted prices in active markets for similar assets and liabilities to determine fair value of the foreign exchange option contracts (Level 2).

The Company marked-to-market the synthetic forwards as of December 31, 2021, using a Black-Scholes option pricing model which determined the respective fair value of the options utilizing appropriate market parameters, and recorded an unrealized loss of $2.4 million during the three and six months ended December 31, 2021. The unrealized loss is included in the caption unrealized loss related to fair value adjustment to currency options in the Company's unaudited condensed consolidated statements of operations for the three and six months ended December 31, 2021. These currency options matured on February 24, 2022.

The following table presents the Company's assets measured at fair value on a recurring basis as of December 31, 2022, according to the fair value hierarchy:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quoted Price in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
|  | **Quoted Price in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
| Assets |  |  |  |  |
| Investment in Cell C | $- | $- | $- | $- |
| Related to insurance business:  |  |  |  |  |
| Cash, cash equivalents and restricted cash (included in other long-term assets)  | 279 | - | - | 279 |
| Fixed maturity investments (included in cash and cash equivalents) | 2268 | - | - | 2268 |
| Foreign exchange contracts  | - | 2 | - | 2 |
| Total assets at fair value  | $2547 | $2 | $- | $2549 |

---

------

**4.** **Fair value of financial instruments (continued)**

The following table presents the Company's assets measured at fair value on a recurring basis as of June 30, 2022, according to the fair value hierarchy:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Quoted Price in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
|  | **Quoted Price in Active Markets for Identical Assets**<br>**(Level 1)** | **Significant Other Observable Inputs**<br>**(Level 2)** | **Significant Unobservable Inputs**<br>**(Level 3)** | **Total** |
| Assets |  |  |  |  |
| Investment in Cell C | $- | $- | $- | $- |
| Related to insurance business |  |  |  |  |
| Cash and cash equivalents (included in other long-term assets) | 371 | - | - | 371 |
| Fixed maturity investments (included in cash and cash equivalents) | 1196 | - | - | 1196 |
| Total assets at fair value  | $1567 | $- | $- | $1567 |

---

There have been no transfers in or out of Level 3 during the three and six months ended December 31, 2022 and 2021, respectively.

There was no movement in the carrying value of assets measured at fair value on a recurring basis, and categorized within Level 3, during the three and six months ended December 31, 2022 and 2021.

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, 2022:

---

| | |
|:---|:---|
|  | **Carrying value** |
| Assets |  |
| Balance as of June 30, 2022 | $- |
| Foreign currency adjustment<sup>(1)</sup> | - |
| Balance as of December 31, 2022 | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar on the carrying value.

Summarized below is the movement in the carrying value of assets and liabilities measured at fair value on a recurring basis, and categorized within Level 3, during the six months ended December 31, 2021:

---

| | |
|:---|:---|
|  | **Carrying value** |
| Assets |  |
| Balance as of June 30, 2021 | $- |
| Foreign currency adjustment<sup>(1)</sup> | - |
| Balance as of December 31, 2021 | $- |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The foreign currency adjustment represents the effects of the fluctuations of the South African rand against the U.S. dollar on the carrying value.

***Assets measured at fair value on a nonrecurring basis***

The Company measures equity investments without readily determinable fair values at fair value on a nonrecurring basis. The fair values of these investments are determined based on valuation techniques using the best information available and may include quoted market prices, market comparables, and discounted cash flow projections. An impairment charge is recorded when the cost of the asset exceeds its fair value and the excess is determined to be other-than-temporary. Refer to Note 5 for impairment charges recorded during the reporting periods presented herein. The Company has no liabilities that are measured at fair value on a nonrecurring basis.

------

**5.** **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, 2022, 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, 2022, and June 30, 2022, was as follows:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Finbond Group Limited ("Finbond") | 28.4% | 29.3% |
| Sandulela Technology (Pty) Ltd ("Sandulela") | 49.0% | 49.0% |
| Carbon Tech Limited ("Carbon") | -% | 25.0% |
| SmartSwitch Namibia (Pty) Ltd ("SmartSwitch Namibia") | 50.0% | 50.0% |

---

*Finbond*

As of December 31, 2022, the Company owned 238,518,312 shares in Finbond representing approximately 28.4% of its issued and outstanding ordinary shares. Finbond is listed on the Johannesburg Stock Exchange ("JSE") and its closing price on December 30, 2022, the last trading day of the month, was ZAR 0.49 per share. The market value, using the December 30, 2022, closing price, of the Company's holding in Finbond on December 31, 2022, was ZAR 116.9 million ($6.9 million translated at exchange rates applicable as of December 31, 2022).

The Company sold 7,379,656 and 7,461,591 shares in Finbond for cash during the three and six months ended December 31, 2022, respectively, and recorded a loss of $0.112 million and $0.114 million, which is included in the caption net gain on disposal of equity-accounted investments in the Company's unaudited condensed consolidated statements of operations.

The following table presents the calculation of the loss on disposal of Finbond shares during the three and six months ended December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Three months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **2022** |
| **Loss on disposal of Finbond shares:** |  |  |
| Consideration received in cash | $138 | $141 |
| Less: carrying value of Finbond shares sold | (157) | (160) |
| Less: release of foreign currency translation reserve from accumulated other comprehensive loss | (97) | (99) |
| Add: release of stock-based compensation charge related to equity-accounted investment | 4 | 4 |
| Loss on sale of Finbond shares | $(112) | $(114) |

---

The Company did not identify any impairment indicators as of December 31, 2022. The Company considered the combination of the ongoing losses incurred and reported by Finbond and its lower share price as impairment indicators as of September 30, 2022. The Company performed an impairment assessment of its holding in Finbond as of September 30, 2022. The Company recorded an impairment loss of $1.1 million during the six months ended December 31, 2022, related to the other-than-temporary decrease in Finbond's value, which represented the difference between the determined fair value of the Company's interest in Finbond and the Company's carrying value (before the impairment). There continues to be limited trading in Finbond shares on the JSE because a small number of shareholders own approximately 80% of its issued and outstanding shares between them. The Company calculated a fair value per share for Finbond by applying a liquidity discount of 25% to the September 30, 2022, Finbond closing price of ZAR 0.49. The Company increased the liquidity discount from 15% (used in the previous impairment assessment) to 25% (used in the September 30, 2022 assessment) as a result of the ongoing limited trading activity observed on the JSE.

------

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

**Equity-accounted investments (continued)**

*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 25%, in Carbon to Etobicoke for $0.5 million and a loan due from Carbon, with a face value of $3 million, to Etobicoke for $0.75 million. Both the equity interest and the loan had a carrying value of $0 (nil) at June 30, 2022. The parties have agreed that Etobicoke pledge the Carbon shares purchased as security for the amounts outstanding under the binding term sheet.

The Company received $0.25 million on closing and the outstanding balance due by Etobicoke is expected to be paid as follows: (i) $0.25 million on September 30, 2023, which is included in the caption accounts receivable, net and other receivables in the Company's unaudited condensed consolidated balance sheet as of December 31, 2022, and (ii) the remaining amount, of $0.75 million in March 2024, which is included in the caption other long-term assets, including reinsurance assets in the Company's unaudited condensed consolidated balance sheet as of December 31, 2022. The Company has allocated the $0.25 million received to the sale of the equity interest and will allocate the funds received first to the sale of the equity interest and then to the loans.

The Company currently believes that the fair value of the Carbon shares provided as security is $0 (nil), which is in line with the carrying value as of June 30, 2022, and has created an allowance for doubtful loans receivable related to the $1.0 million due from Etobicoke. The Company did not incur any significant transaction costs. The Company has included the gain of $0.25 million related to the sale of the Carbon equity interest in the caption net gain on disposal of equity-accounted investments in the Company's unaudited condensed consolidated statements of operations.

The following table presents the calculation of the gain on disposal of Carbon in September 2022:

---

| | |
|:---|:---|
|  | **Three months ended September 30,** |
|  | **2022** |
| **Gain on disposal of Carbon shares:** |  |
| Consideration received in cash in September 2022 | $250 |
| Less: carrying value of Carbon | - |
| Gain on disposal of Carbon shares:<sup>(1)</sup> | $250 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company does not expect to pay taxes related to the sale of Carbon because the base cost of its investment exceeds the sales consideration received. The Company does not believe that it will be able to utilize the loss generated because Net1 BV does not generate taxable income.

------

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

**Equity-accounted investments (continued)**

Summarized below is the movement in equity-accounted investments and loans provided to equity-accounted investments during the six months ended December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Finbond** | **Other<sup>(1)</sup>** | **Total** |
| Investment in equity |  |  |  |
| Balance as of June 30, 2022 | $5760 | $101 | $5861 |
| Stock-based compensation  | 6 | - | 6 |
| Comprehensive income: | (190) | 32 | (158) |
| Other comprehensive income | 2441 | - | 2441 |
| Equity accounted (loss) earnings | (2631) | 32 | (2599) |
| Share of net (loss) earnings | (1521) | 32 | (1489) |
| Impairment | (1110) | - | (1110) |
| Dividends received  | - | (21) | (21) |
| Disposal of Finbond shares | (158) | - | (158) |
| Foreign currency adjustment<sup>(2)</sup> | (258) | (15) | (273) |
| Balance as of December 31, 2022 | $5160 | $97 | $5257 |
| Investment in loans: |  |  |  |
| Balance as of June 30, 2022 | $- | $- | $- |
| Loans granted | - | 112 | 112 |
| Loans repaid | - | (112) | (112) |
| Foreign currency adjustment<sup>(2)</sup> | - | - | - |
| Balance as of December 31, 2022 | $- | $- | $- |
|  | **Equity** | **Loans** | **Total** |
| Carrying amount as of : |  |  |  |
| June 30, 2022 | $5861 | $- | $5861 |
| December 31, 2022 | $5257 | $- | $5257 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Includes Carbon, Sandulela, and SmartSwitch Namibia;

&nbsp;&nbsp;&nbsp;&nbsp;(2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR, Nigerian naira and Namibian dollar, against the U.S. dollar on the carrying value.

------

**5.** **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, 2022, and June 30, 2022:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Total equity investments  | $76297 | $76297 |
| Investment in 5% of Cell C (June 30, 2022: 15%) at fair value (Note 4) | - | - |
| Investment in 10% of MobiKwik (June 30, 2022: 10%)<sup>(1)</sup> | 76297 | 76297 |
| Investment in 87.5% of CPS (June 30, 2022: 87.5%) at fair value<sup>(1)(2)</sup> | - | - |
| Long-term portion of amount due related to sale of loan to Carbon<sup>(3)</sup> | - | - |
| Policy holder assets under investment contracts (Note 7) | 279 | 371 |
| Reinsurance assets under insurance contracts (Note 7) | 1478 | 1424 |
| Total other long-term assets | $78054 | $78092 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company determined that MobiKwik and CPS do not have readily determinable fair values and therefore elected to record these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

&nbsp;&nbsp;&nbsp;&nbsp;(2) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that CPS be placed into liquidation.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Long-term portion of amount due related to sale of loan to Carbon represents $0.75 million related to the sale of a loan 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.

*Cell C - reduced effective percentage holding following recapitalization*

On September 30, 2022, Cell C completed its recapitalization process which included the issuance of additional equity instruments by Cell C. The Company's effective percentage holding in Cell C's equity has reduced from 15% to 5% following the recapitalization.

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, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cost basis** | **Unrealized holding** | **Unrealized holding** | **Carrying** |
|  | **Cost basis** | **gains** | **losses** | **value** |
| Equity securities: |  |  |  |  |
| Investment in MobiKwik | $26993 | $49304 | $- | $76297 |
| Investment in CPS | - | - | - | - |
| Held to maturity: |  |  |  |  |
| Investment in Cedar Cellular notes (Note 2) | - | - | - | - |
| Total  | $26993 | $49304 | $- | $76297 |

---

Summarized below are the components of the Company's equity securities without readily determinable fair value and held to maturity investments as of June 30, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Cost basis** | **Unrealized holding** | **Unrealized holding** | **Carrying** |
|  | **Cost basis** | **gains** | **losses** | **value** |
| Equity securities: |  |  |  |  |
| Investment in MobiKwik | $26993 | $49304 | $- | $76297 |
| Investment in CPS | - | - | - | - |
| Held to maturity: |  |  |  |  |
| Investment in Cedar Cellular notes  | - | - | - | - |
| Total  | $26993 | $49304 | $- | $76297 |

---

------

**6.** **Goodwill and intangible assets, net**

**Goodwill**

Summarized below is the movement in the carrying value of goodwill for the six months ended December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Gross value** | **Accumulated impairment** | **Carrying value** |
| Balance as of June 30, 2022 | $175476 | $(12819) | $162657 |
| Foreign currency adjustment <sup>(1)</sup>  | (7258) | 302 | (6956) |
| Balance as of December 31, 2022 | $168218 | $(12517) | $155701 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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.

Refer to Note 17 for additional information regarding changes to the Company's reportable segments during the six months ended December 31, 2022. Goodwill has been allocated to the Company's reportable segments as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consumer** | **Merchant** | **Carrying value** |
| Balance as of June 30, 2022 | $- | $162657 | $162657 |
| Foreign currency adjustment <sup>(1)</sup>  | - | (6956) | (6956) |
| Balance as of December 31, 2022 | $- | $155701 | $155701 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(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, 2022, and June 30, 2022:

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** | **As of June 30, 2022** | **As of June 30, 2022** | **As of June 30, 2022** |
|  | **Gross carrying value** | **Accumulated amortization** | **Net carrying value** | **Gross carrying value** | **Accumulated amortization** | **Net carrying value** |
| Finite-lived intangible assets: |  |  |  |  |  |  |
| Customer relationships | $27643 | $(11705) | $15938 | $26937 | $(9140) | $17797 |
| Software, integrated platform and unpatented technology | 122421 | (9045) | 113376 | 127785 | (3075) | 124710 |
| FTS patent  | 2251 | (2251) | - | 2352 | (2352) | - |
| Brands and trademarks | 15330 | (2457) | 12873 | 16018 | (1823) | 14195 |
| Total finite-lived intangible assets  | $167645 | $(25458) | $142187 | $173092 | $(16390) | $156702 |

---

Aggregate amortization expense on the finite-lived intangible assets for the three months ended December 31, 2022 and 2021, was approximately $3.9 million and $0.1 million, respectively. Aggregate amortization expense on the finite-lived intangible assets for the six months ended December 31, 2022 and 2021, was approximately $7.8 million and $0.1 million, respectively. Future estimated annual amortization expense for the next five fiscal years and thereafter, assuming exchange rates that prevailed on December 31, 2022, is presented in the table below. Actual amortization expense in future periods could differ from this estimate as a result of acquisitions, changes in useful lives, exchange rate fluctuations and other relevant factors.

---

| | |
|:---|:---|
| Fiscal 2023 (six months ended June 30, 2023) | $7915 |
| Fiscal 2024 | 15833 |
| Fiscal 2025 | 15833 |
| Fiscal 2026 | 15832 |
| Fiscal 2027 | 15772 |
| Thereafter | 71002 |
| Total future estimated annual amortization expense | $142187 |

---

------

**7.** **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, 2022:

---

| | | |
|:---|:---|:---|
|  | **Reinsurance Assets<sup>(1)</sup>** | **Insurance contracts<sup>(2)</sup>** |
| Balance as of June 30, 2022 | $1424 | $(1955) |
| Increase in policy holder benefits under insurance contracts  | 551 | (3629) |
| Claims and decrease in policyholders' benefits under insurance contracts | (438) | 3526 |
| Foreign currency adjustment<sup>(3)</sup> | (59) | 82 |
| Balance as of December 31, 2022 | $1478 | $(1976) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in other long-term assets (refer to Note 5);

&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in other long-term liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;(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, 2022:

---

| | | |
|:---|:---|:---|
|  | **Assets<sup>(1)</sup>** | **Investment contracts<sup>(2)</sup>** |
| Balance as of June 30, 2022 | $371 | $(349) |
| Increase in policy holder benefits under investment contracts  | 10 | (10) |
| Claims and decrease in policyholders' benefits under investment contracts  | (81) | 81 |
| Foreign currency adjustment <sup>(3)</sup> | (21) | 16 |
| Balance as of December 31, 2022 | $279 | $(262) |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Included in other long-term assets (refer to Note 5);

&nbsp;&nbsp;&nbsp;&nbsp;(2) Included in other long-term liabilities;

&nbsp;&nbsp;&nbsp;&nbsp;(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.

------

**8.** **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, 2022, for additional information regarding its borrowings.

**South Africa**

The amounts below have been translated at exchange rates applicable as of the dates specified.

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

*Long-term borrowings - Facility G and Facility H*

On December 29, 2022, the Company, through Lesaka Technologies (Pty) Ltd, entered into an Amendment Agreement (the "Amendment Agreement"), with FirstRand Bank Limited, acting through its Rand Merchant Bank division ("RMB"), which amends its Senior Facility G Agreement and its Senior Facility H Agreement. Pursuant to the Amendment Agreement, the Senior Facility G Agreement was amended to (i) extend the final maturity date by approximately two years and eight months to December 31, 2025, (ii) delete the definitions of Trigger Event and Trigger Event Date and (iii) delete the clause (clause 12) regarding the operation of any trigger event. The Senior Facility H Agreement was amended to extend the final maturity date by approximately two years and eight months to December 31, 2025. Interest on Facility G and H is payable quarterly in arrears, however, RMB agreed to a delay in the payment of interest for the three months ended December 31, 2022, in order to support the Company's liquidity position.

*Available short-term facility - Facility E*

As of December 31, 2022, the aggregate amount of the Company's short-term South African overdraft facility with RMB was ZAR 1.4 billion ($82.3 million). As of December 31, 2022, the Company had utilized approximately ZAR 0.9 billion ($54.3 million) of this overdraft facility. This overdraft facility may only be used to fund ATMs and therefore the overdraft utilized and converted to cash to fund the Company's ATMs is considered restricted cash. The interest rate on this facility is equal to the prime rate. The prime rate on December 31, 2022, was 10.50%, and increased to 10.75% on January 27, 2023, following an increase in the South African repo rate.

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

As of December 31, 2022, the Connect Facilities include (i) an overdraft facility (general banking facility) of ZAR 205.0 million (of which ZAR 180.0 million has been utilized); (ii) Facility A of ZAR 700.0 million; (iii) Facility B of ZAR 350.0 million (both fully utilized); and (iv) an asset-backed facility of ZAR 200.0 million (of which ZAR 117.6 million has been utilized).

***K2020 facility, comprising long-term borrowings***

The Company, through K2020 Connect (Pty) Limited ("K2020"), an indirect South African subsidiary, entered into a revolving credit facility agreement with RMB on February 15, 2021. The revolving credit facility was for an amount of ZAR 150.0 million and matured on August 12, 2022, and has been replaced with the facility described below. The facility continued to operate normally in agreement with K2020's lender after maturity, while the parties concluded the legal agreements to significantly increase and extend the facility. Interest on the revolving credit facility was payable quarterly in arrears based on the prime rate in effect from time to time plus a margin. A commitment fee of 1.5% per annum was charged on the undrawn available facility amount.

On November 29, 2022, the Company, through its indirect South African subsidiary Cash Connect Capital (Pty) Limited ("CCC"), entered into a Revolving Credit Facility Agreement (the "Loan Document") with RMB and other Company subsidiaries within the Connect Group of companies listed therein, as guarantors. The transaction closed on December 1, 2022.

The Loan Document contains customary covenants that require CCC and K2020 to collectively maintain a specified capital adequacy ratio, restrict the ability of the entities to make certain distributions with respect to their capital stock, encumber their assets, incur additional indebtedness, make investments, engage in certain business combinations and engage in other corporate activities.

Pursuant to the Loan Document, CCC may borrow up to an aggregate of ZAR 300.0 million ("Revolving Credit Facility") for the sole purposes of funding CCC's consumer lending business, providing a limited recourse loan to K2020, settling up to ZAR 35.0 million related to an intercompany loan to CCC's direct parent, and paying the structuring and execution fee and legal costs. The Revolving Credit Facility replaces K2020's existing lending arrangement and increases the borrowings available to facilitate further growth of the business.

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 0.95% per annum.

The Company paid a non-refundable structuring and execution fee of ZAR 1.7 million, or $0.1 million, including value added taxation, to the Lenders on closing.

------

**8.** **Borrowings (continued)**

**South Africa (continued)**

***RMB facility, comprising indirect facilities***

As of December 31, 2022, the aggregate amount of the Company's short-term South African indirect credit facility with RMB was ZAR 135.0 million ($7.9 million), which includes facilities for guarantees, letters of credit and forward exchange contracts. As of December 31, 2022 and June 30, 2022, the Company had utilized approximately ZAR 33.1 million ($1.9 million) and ZAR 5.1 million ($0.3 million), respectively, of its indirect and derivative facilities of ZAR 135.0 million (June 30, 2022: ZAR 135.0 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19).

***Nedbank facility, comprising short-term facilities***

As of December 31, 2022, the aggregate amount of the Company's short-term South African credit facility with Nedbank Limited was ZAR 156.6 million ($9.2 million). The credit facility represents indirect and derivative facilities of up to ZAR 156.6 million ($9.2 million), which include guarantees, letters of credit and forward exchange contracts.

As of December 31, 2022 and June 30, 2022, the Company had utilized approximately ZAR 2.1 million ($0.1 million) and ZAR 92.1 million ($5.7 million), respectively, of its indirect and derivative facilities of ZAR 156.6 million (June 30, 2022: ZAR 156.6 million) to enable the bank to issue guarantees, letters of credit and forward exchange contracts (refer to Note 19).

**Movement in short-term credit facilities**

Summarized below are the Company's short-term facilities as of December 31, 2022, and the movement in the Company's short-term facilities from as of June 30, 2022 to as of December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **RMB** | **RMB** | **RMB** | **Nedbank** |  |
|  | **Facility E** | **Indirect** | **Connect** | **Facilities** | **Total** |
| Short-term facilities available as of December 31, 2022 | $82251 | $7931 | $12044 | $9198 | $111424 |
| Overdraft  | - | - | 12044 | - | 12044 |
| Overdraft restricted as to use for ATM funding only | 82251 | - | - | - | 82251 |
| Indirect and derivative facilities  | - | 7931 | - | 9198 | 17129 |
| Movement in utilized overdraft facilities:  |  |  |  |  |  |
| Restricted as to use for ATM funding only | 51338 | - | - | - | 51338 |
| No restrictions as to use  | - | - | 14880 | - | 14880 |
| Balance as of June 30, 2022 | 51338 | - | 14880 | - | 66218 |
| Utilized  | 312721 | - | 571 | - | 313292 |
| Repaid | (308064) | - | (4238) | - | (312302) |
| Foreign currency adjustment<sup>(1)</sup> | (1745) | - | (638) | - | (2383) |
| Balance as of December 31, 2022 | 54250 | - | 10575 | - | 64825 |
| Restricted as to use for ATM funding only | 54250 | - | - | - | 54250 |
| No restrictions as to use  | $- | $- | $10575 | $- | $10575 |
| Interest rate as of December 31, 2022 (%)<sup>(2)</sup> | 10.50 |  | 10.40 | - |  |
| Movement in utilized indirect and derivative facilities: |  |  |  |  |  |
| Balance as of June 30, 2022 | $- | $313 | $- | $5654 | $5967 |
| Guarantees cancelled | - | - | - | (5218) | (5218) |
| Utilized  | - | 1623 | - | - | 1623 |
| Foreign currency adjustment<sup>(1)</sup> | - | 9 | - | (312) | (303) |
| Balance as of December 31, 2022 | $- | $1945 | $- | $124 | $2069 |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Facility E interest set at prime and the Connect facility at prime less 0.10%.

------

**8.** **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, 2022 to as of December 31, 2022:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Facilities** | **Facilities** | **Facilities** | **Facilities** |  |
|  | **G & H** | **A&B** | **K2020** | **Asset backed** | **Total** |
| Included in current | $- | $4604 | $- | $2200 | $6804 |
| Included in long-term | 63354 | 59868 | 8346 | 3274 | 134842 |
| Opening balance as of June 30, 2022 | 63354 | 64472 | 8346 | 5474 | 141646 |
| Facilities utilized | - | - | 7377 | 2765 | 10142 |
| Facilities repaid | - | (2151) | - | (1117) | (3268) |
| Non-refundable fees paid | - | - | (100) | - | (100) |
| Non-refundable fees amortized | 393 | 31 | 20 | - | 444 |
| Foreign currency adjustment<sup>(1)</sup> | (2713) | (2818) | (257) | (211) | (5999) |
| Closing balance as of December 31, 2022 | 61034 | 59534 | 15386 | 6911 | 142865 |
| Included in current | - | 4406 | - | 3019 | 7425 |
| Included in long-term | 61034 | 55128 | 15386 | 3892 | 135440 |
| Unamortized fees | (535) | (276) | (97) | - | (908) |
| Due within 2 years | - | 5141 | 15483 | 2464 | 23088 |
| Due within 3 years | 61569 | 6609 | - | 1360 | 69538 |
| Due within 4 years | - | 5876 | - | 68 | 5944 |
| Due within 5 years | $- | $37778 | $- | $- | $37778 |
| Interest rates as of December 31, 2022 (%): | 9.3 - 10.3 | 11.01 | 11.45 | 11.25 |  |
| Base rate (%) | 7.26 | 7.26 | 10.50 | 10.50 |  |
| Margin (%) | Varies | 3.75 | 0.95 | 0.75 |  |
| Footnote number | (2)(3) | (4) | (5) | (6) |  |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Represents the effects of the fluctuations between the ZAR and the U.S. dollar.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Interest on Facility G is calculated based on the 3-month JIBAR in effect from time to time plus a margin of (i) 3.00% per annum until January 13, 2023; and then (ii) from January 14, 2023, (x) 2.50% per annum if the Facility G balance outstanding is less than or equal to ZAR 250.0 million, or (y) 3.00% per annum if the Facility G balance is between ZAR 250.0 million to ZAR 450.0 million, or (z) 3.50% per annum if the Facility G balance is greater than ZAR 450.0 million. The interest rate shall increase by a further 2.00% per annum in the event of default (as defined in the Loan Documents).

&nbsp;&nbsp;&nbsp;&nbsp;(3) Interest on Facility H is calculated based on JIBAR in effect from time to time plus a margin of 2.00% per annum which increases by a further 2.00% per annum in the event of default (as defined in the Loan Documents).

&nbsp;&nbsp;&nbsp;&nbsp;(4) Interest on Facility A and Facility B is calculated based on JIBAR plus a margin, of 3.75%, in effect from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Interest is charged at prime plus 1.25% per annum on the utilized balance.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Interest is charged at prime plus 1.00% 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 and six months ended December 31, 2022, was $3.0 million and $5.7 million, respectively. There was no interest expense incurred during the three and six months ended December 31, 2021. Prepaid facility fees amortized included in interest expense during the three and six months ended December 31, 2022, were $0.2 million and $0.4 million, respectively. There was no prepaid facility fee amortization during the three and six months ended December 31, 2021. 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 of $0.3 million and $0.5 million, respectively, is included in the caption cost of goods sold, IT processing, servicing and support on the condensed consolidated statement of operations for the three and six months ended December 31, 2022.

------

**9.** **Other payables**

Summarized below is the breakdown of other payables as of December 31, 2022, and June 30, 2022:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **June 30,** |
|  | **2022** | **2022** |
| Accruals | $8898 | $9948 |
| Provisions | 4479 | 7365 |
| Value-added tax payable | 840 | 845 |
| Payroll-related payables | 1179 | 1306 |
| Participating merchants' settlement obligation | 108 | 114 |
| Vendor consideration due to sellers of Connect  | - | 1459 |
| Other | 14847 | 13325 |
|  | $30351 | $34362 |

---

Other includes transactions-switching funds payable, deferred income, client deposits and other payables.

**10.** **Capital structure**

The following table presents a reconciliation between the number of shares, net of treasury, presented in the unaudited condensed consolidated statement of changes in equity during the six months ended December 31, 2022 and 2021, respectively, and the number of shares, net of treasury, excluding non-vested equity shares that have not vested as of December 31, 2022 and 2021, respectively:

---

| | | |
|:---|:---|:---|
|  | **December 31,** | **December 31,** |
|  | **2022** | **2021** |
| Number of shares, net of treasury: |  |  |
| Statement of changes in equity  | 63751337 | 57657172 |
| Non-vested equity shares that have not vested as of end of period | 3289920 | 1010612 |
| Number of shares, net of treasury, excluding non-vested equity shares that have not vested  | 60461417 | 56646560 |

---

**11.** **Accumulated other comprehensive loss**

The table below presents the change in accumulated other comprehensive (loss) income per component during the three months ended December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **December 31, 2022** | **December 31, 2022** |
|  | **Accumulated foreign currency translation reserve** | **Total** |
| Balance as of October 1, 2022 | $(188490) | $(188490) |
| Release of foreign currency translation reserve related to the disposal of Finbond equity securities (Note 5) | 97 | 97 |
| Movement in foreign currency translation reserve  | 12155 | 12155 |
| Balance as of December 31, 2022 | $(176238) | $(176238) |

---

------

**11.** **Accumulated other comprehensive loss (continued)**

The table below presents the change in accumulated other comprehensive loss per component during the three months ended December 31, 2021:

---

| | | |
|:---|:---|:---|
|  | **Three months ended** | **Three months ended** |
|  | **December 31, 2021** | **December 31, 2021** |
|  | **Accumulated foreign currency translation reserve** | **Total** |
| Balance as of October 1, 2021 | $(152278) | $(152278) |
| Movement in foreign currency translation reserve | (5601) | (5601) |
| Balance as of December 31, 2021 | $(157879) | $(157879) |

---

The table below presents the change in accumulated other comprehensive (loss) income per component during the six months ended December 31, 2022:

---

| | | |
|:---|:---|:---|
|  | **Six months ended** | **Six months ended** |
|  | **December 31, 2022** | **December 31, 2022** |
|  | **Accumulated foreign currency translation reserve** | **Total** |
| Balance as of July 1, 2022 | $(168840) | $(168840) |
| Release of foreign currency translation reserve related to disposal of Finbond equity securities (Note 5) | 99 | 99 |
| Movement in foreign currency translation reserve related to equity-accounted investment | 2441 | 2441 |
| Movement in foreign currency translation reserve  | (9938) | (9938) |
| Balance as of December 31, 2022 | $(176238) | $(176238) |

---

The table below presents the change in accumulated other comprehensive loss per component during the six months ended December 31, 2021:

---

| | | | |
|:---|:---|:---|:---|
| a |  | **Six months ended** | **Six months ended** |
|  |  | **December 31, 2021** | **December 31, 2021** |
|  |  | **Accumulated foreign currency translation reserve** | **Total** |
|  | Balance as of July 1, 2021 | $(145721) | $(145721) |
|  | Movement in foreign currency translation reserve related to equity-accounted investment | (644) | (644) |
|  | Movement in foreign currency translation reserve  | (11514) | (11514) |
|  | Balance as of December 31, 2021 | $(157879) | $(157879) |

---

During the three and six months ended December 31, 2022, the Company reclassified $0.1 million and $0.1 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 5). There were no reclassifications from accumulated other comprehensive loss to net (loss) income during the three and six months ended December 31, 2021.

------

**12.** **Stock-based compensation**

The Company's Amended and Restated 2015 Stock Incentive Plan ("2015 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, 2022.

On September 7, 2022, the Company's Board further amended and restated the Company's 2015 Plan, and on November 16, 2022, the Company's shareholders approved the Amended and Restated 2022 Stock Incentive Plan ("2022 Plan"). Amendments included: (1) increasing the number of shares available for issuance by 2,500,000; (2) extending the term of the plan to September 7, 2032; (3) addressed the treatment of equity awards upon a change in control; (4) clarified that all equity awards will generally have a vesting period of at least one year; (5) included an explicit prohibition on the payment of dividends and dividend equivalents on unvested full value awards; (6) clarified and updated repricing restrictions; (7) included mandatory application of our clawback policy to equity awards under the 2022 Plan; and (8) removed deadwood provisions related to the "performance based compensation" exemption under Section 162(m) of the Internal Revenue Code of 1986, as amended.

**Stock option and restricted stock activity** 

***Options***

The following table summarizes stock option activity for the six months ended December 31, 2022 and 2021:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Number of shares** | **Weighted average exercise price**<br>**($)** | **Weighted average remaining contractual term**<br>**(in years)** | **Aggregate intrinsic value**<br>**($'000)** | **Weighted average grant date fair value**<br>**($)** |
| Outstanding - June 30, 2022 | 926225 | 4.14 | 6.60 | 1249 | 1.60 |
| Exercised | (109826) | 3.04 | - | 126 | - |
| Outstanding - December 31, 2022 | 816399 | 4.29 | 5.94 | 689 | 1.64 |
| Outstanding - June 30, 2021 | 1294832 | 3.93 | 7.68 | 1624 | 1.45 |
| Exercised | (242853) | 3.05 | - | 457 | - |
| Forfeited | (85000) | 3.48 |  |  | 1.34 |
| Outstanding - December 31, 2021 | 966979 | 4.19 | 6.76 | 1056 | 1.53 |

---

No stock options were awarded during the three and six months ended December 31, 2022 and 2021. No stock options were forfeited during the three and six months ended December 31, 2022, and during the three months ended December 31, 2021. Employees forfeited 85,000 stock options during the six months ended December 31, 2021.

During the three and six months ended December 31, 2022, the Company received approximately $0.3 million and $0.3 million from the exercise of 107,826 and 109,826 stock options, respectively. During each of the three and six months ended December 31, 2021, the Company received approximately $0.7 million from the exercise of 242,853 stock options.

The following table presents stock options vested and expected to vest as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of**<br>**shares** | **Weighted average exercise price**<br>**($)** | **Weighted average remaining contractual term**<br>**(in years)** | **Aggregate intrinsic value**<br>**($'000)** |
| Vested and expecting to vest - December 31, 2022 | 816399 | 4.29 | 5.94 | 689 |

---

These options have an exercise price range of $3.01 to $11.23.

------

**12.** **Stock-based compensation (continued)**

**Stock option and restricted stock activity (continued)**

***Options (continued)***

The following table presents stock options that are exercisable as of December 31, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of**<br>**shares** | **Weighted average exercise price**<br>**($)** | **Weighted average remaining contractual term**<br>**(in years)** | **Aggregate intrinsic value**<br>**($'000)** |
| Exercisable - December 31, 2022 | 563163 | 4.42 | 4.83 | 173 |

---

During the three months ended December 31, 2022 and 2021, respectively, 217,316 and 145,015 stock options became exercisable. During the six months ended December 31, 2022 and 2021, respectively, 292,316 and 376,348 stock options became exercisable. The Company issues new shares to satisfy stock option exercises.

***Restricted stock***

The following table summarizes restricted stock activity for the six months ended December 31, 2022 and 2021:

---

| | | |
|:---|:---|:---|
|  | **Number of shares of restricted stock** | **Weighted average grant date fair value**<br>**($'000)** |
|  | **Number of shares of restricted stock** | **Weighted average grant date fair value**<br>**($'000)** |
|  | **Number of shares of restricted stock** | **Weighted average grant date fair value**<br>**($'000)** |
|  | **Number of shares of restricted stock** | **Weighted average grant date fair value**<br>**($'000)** |
|  | **Number of shares of restricted stock** | **Weighted average grant date fair value**<br>**($'000)** |
| Non-vested – June 30, 2022 | 2385267 | 11879 |
| Total granted | 1050347 | 4230 |
| Granted – July 2022 | 32582 | 172 |
| Granted – August 2022 | 179498 | 995 |
| Granted – November 2022 | 150000 | 605 |
| Granted – December 2022 | 430399 | 1862 |
| Granted – December 2022, with performance conditions | 257868 | 596 |
| Total vested | (145694) | 689 |
| Vested – July 2022 | (78801) | 410 |
| Vested – November 2022 | (59833) | 250 |
| Vested – December 2022 | (7060) | 29 |
| Total granted and vested - December 2022 | - | - |
| Granted - December 2022 | 300000 | 1365 |
| Vested - December 2022 | (300000) | 1365 |
| Non-vested – December 31, 2022 | 3289920 | 15232 |
| Non-vested – June 30, 2021 | 384560 | 1123 |
| Total Granted | 656052 | 3190 |
| Granted – July 2021 | 234608 | 963 |
| Granted – August 2021 | 44986 | 192 |
| Granted – November and December 2021 | 326158 | 1766 |
| Granted – December 2021 | 50300 | 269 |
| Total granted and vested - November and December 2021 | - | - |
| Granted - November and December 2021 | 71647 | 393 |
| Vested - November and December 2021 | (71647) | 393 |
| Non-vested – December 31, 2021 | 1010612 | 4629 |

---

------

**12.** **Stock-based compensation (continued)**

**Stock option and restricted stock activity (continued)**

***Restricted stock (continued)***

*Grants*

In July 2022 and December 2022, the Company awarded 32,582 and ,430399 shares of restricted stock, respectively, to employees and an executive officer which have time -based vesting conditions. In December 2022, the Company awarded 257,868 shares of restricted stock to executive officers which contained time and performance-based (market conditions related to share price performance) vesting conditions. The Company also agreed to match, on a one-for-one basis, (1) an employee's purchase of up to $1.0 million worth of the Company's shares of common stock in open market purchases, and in August 2022, the Company granted 179,498 shares of restricted stock to the employee, and (2) another employee's purchase of up to 150,000 shares of the Company's common stock, and in November 2022, the Company granted 150,000 shares of restricted stock to the employee. These shares of restricted stock contain time-based vesting conditions. The Company awarded 300,000 shares to an executive officer on December 31, 2022, which vested on the date of the award.

The 257,868 shares of restricted stock awarded to executive officers are subject to a time-based vesting condition and a market condition and vest in full only on the date, if any, that the following conditions are satisfied: (1) a compounded annual 10% appreciation in the Company's stock price off a base price of $4.94 over the measurement period commencing on December 1, 2022 through December 1, 2025, and (2) the recipient is employed by the Company on a full-time basis when the condition in (1) is met. If either of these conditions is not satisfied, then none of the shares of restricted stock will vest and they will be forfeited. The Company's closing price on December 1, 2022, was $4.08.

The appreciation levels (times and price) and vesting percentages as of each period ended are as follows:

 Prior to the first anniversary of the grant date: 0%;

 Fiscal 2024, stock price as of December 1, 2023 is 1.1 times higher (i.e. $5.43 or higher) than $4.94: 33%;

 Fiscal 2025, stock price as of December 1, 2024 is 1.21 times higher (i.e. $5.97 or higher) than $4.94: 67%;

 Fiscal 2026, stock price as of December 1, 2025 is 1.331 times higher (i.e. $6.57) than $4.94:100 %.

The fair value of these shares of restricted stock was calculated using a Monte Carlo simulation.

In scenarios where the shares do not vest, the final vested value at maturity is zero. In scenarios where vesting occurs, the final vested value on maturity is the share price on vesting date. In its calculation of the fair value of the restricted stock, the Company used an equally weighted volatility of 50.1% for the closing price (of $4.08), a discounting based on U.S. dollar overnight indexed swap rates for the grant date, and no future dividends. The equally weighted volatility was extracted from the time series for closing prices as the standard deviation of log prices for the three years preceding the grant date.

On July 1, 2021, the Company granted its Group Chief Executive Officer, 117,304 shares of restricted stock, which are subject to time-based vesting conditions and vest in full on June 30, 2024, subject to Mr. Meyer's continued service to the Company through June 30, 2024. Mr. Meyer was also awarded 117,304 shares of restricted stock which include performance-based conditions and which only vest on June 30, 2024 if the performance conditions are met and Mr. Meyer remains employed with the Company through June 30, 2024. Vesting of half of these awards, or 58,652 shares of restricted stock, is subject to the Company achieving its three-year financial services plan during the specific measurement period from June 30, 2021, to June 30, 2024, and the other half is subject to share price growth targets, and only vest if the Company's share price is $8.14 or higher on June 30, 2024. In August 2021, the Company awarded 44,986 shares of restricted stock to an employee which contained time and performance-based (market conditions related to share price performance) vesting conditions.

In August 2021 and December 2021, the Company awarded 44,986 and 50,300 shares of restricted stock, respectively, to employees which have time and performance-based (market conditions related to share price performance) vesting conditions.

Upon joining the Company, each of Messrs. Chris G.B. Meyer and Lincoln C. Mali, were entitled to receive an award of shares of restricted stock which were subject to them purchasing an agreed value of shares ("matching awards") in the market during a prescribed period of time. The executives acquired shares during November and December 2021, and the Company granted the executives 326,158 matching awards and 71,647 top up awards. The shares vest ratably over three years on the applicable vesting date based on the anniversary of each executive's date of joining the Company.

As fully 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, 2022, the Company granted a further 12,962 and 32,405 shares to an advisor during the three and six months ended December 31, 2022, respectively, which were ineligible for transfer until the earlier of December 31, 2022, or the occurrence of the agreed event.

------

**12.** **Stock-based compensation (continued)**

**Stock option and restricted stock activity (continued)**

***Restricted stock (continued)***

*Vesting*

In July 2022, 78,801 shares of restricted stock granted to Mr. Meyer vested and he elected for 35,460 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. In November and December 2022, an aggregate of 66,893 shares of restricted stock granted to employees vested and they elected for 30,102 shares to be withheld to satisfy the withholding tax liability on the vesting of these shares. These 65,562 (35,460 plus 30,102) shares have been included in our treasury shares.

Except as discussed above, no shares of restricted stock vested during the three months ended December 31, 2021. During the three and six months ended December 31, 2021, 30,000 shares of restricted stock were forfeited by an executive officer as the market condition (related to share price performance) was not achieved.

**Stock-based compensation charge and unrecognized compensation cost**

The Company recorded a stock-based compensation charge, net during the three months ended December 31, 2022 and 2021, of $2.9 million and $0.8 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, 2022 |  |  |  |
| Stock-based compensation charge  | $2849 | $- | $2849 |
| Total - three months ended December 31, 2022 | $2849 | $- | $2849 |
| Three months ended December 31, 2021 |  |  |  |
| Stock-based compensation charge  | $788 | $- | $788 |
| Total - three months ended December 31, 2021 | $788 | $- | $788 |

---

The Company recorded a stock-based compensation charge, net during the six months ended December 31, 2022 and 2021, of $4.3 million and $1.1 million respectively, which comprised:

---

| | | | | |
|:---|:---|:---|:---|:---|
| a |  | **Total charge**  | **Allocated to cost of goods sold, IT processing, servicing and support** | **Allocated to selling, general and administration** |
|  | Six months ended December 31, 2022 |  |  |  |
|  | Stock-based compensation charge  | $4311 | $- | $4311 |
|  | Reversal of stock compensation charge related to stock options forfeited | - | - | - |
|  | Total - six months ended December 31, 2022 | $4311 | $- | $4311 |
|  | Six months ended December 31, 2021 |  |  |  |
|  | Stock-based compensation charge  | $1132 | $- | $1132 |
|  | Reversal of stock compensation charge related to stock options and restricted stock forfeited | (35) | - | (35) |
|  | Total - six months ended December 31, 2021 | $1097 | $- | $1097 |

---

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.

------

**12.** **Stock-based compensation (continued)**

As of December 31, 2022, the total unrecognized compensation cost related to stock options was approximately $0.3 million, which the Company expects to recognize over approximately two years. As of December 31, 2022, the total unrecognized compensation cost related to restricted stock awards was approximately $11.5 million, which the Company expects to recognize over approximately three years.

As of December 31, 2022, and June 30, 2022, respectively, the Company recorded a deferred tax asset of approximately $0.5 million and $0.3 million, related to the stock-based compensation charge recognized related to employees of Lesaka. As of December 31, 2022, and June 30, 2022, respectively, the Company recorded a valuation allowance of approximately $0.5 million and $0.3 million, related to the deferred tax asset because it does not believe that the stock-based compensation deduction would be utilized as it does not anticipate generating sufficient taxable income in the United States. The Company deducts the difference between the market value on the date of exercise by the option recipient and the exercise price from income subject to taxation in the United States.

**13.** **(Loss) Earnings per share**

The Company has issued redeemable common stock which is redeemable at an amount other than fair value. Redemption of a class of common stock at other than fair value increases or decreases the carrying amount of the redeemable common stock and is reflected in basic earnings per share using the two-class method. There were no redemptions of common stock, or adjustments to the carrying value of the redeemable common stock during the six months ended December 31, 2022 and 2021. Accordingly, the two-class method presented below does not include the impact of any redemption. The Company's redeemable common stock is described in Note 14 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

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 six months ended December 31, 2022 and 2021, reflects only undistributed earnings. The computation below of basic (loss) earnings per share excludes the net loss attributable to shares of unvested restricted stock (participating non-vested restricted stock) from the numerator and excludes the dilutive impact of these unvested shares of restricted stock from the denominator.

Diluted (loss) earnings per share has been calculated to give effect to the number of shares of additional common stock that would have been outstanding if the potential dilutive instruments had been issued in each period. Stock options are included in the calculation of diluted (loss) earnings per share utilizing the treasury stock method and are not considered to be participating securities, as the stock options do not contain non-forfeitable dividend rights. The Company has excluded employee stock options to purchase 76,572 and 143,551 shares of common stock from the calculation of diluted loss per share during the six months ended December 31, 2022, because the effect would be antidilutive.

The calculation of diluted (loss) earnings per share includes the dilutive effect of a portion of the restricted stock granted to employees as these shares of restricted stock are considered contingently returnable shares for the purposes of the diluted (loss) earnings per share calculation and the vesting conditions in respect of a portion of the restricted stock had been satisfied. The vesting conditions for all awards made are discussed in Note 17 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

------

**13.** **(Loss) Earnings per share (continued)**

The following table presents net loss attributable to Lesaka and the share data used in the basic and diluted loss per share computations using the two-class method:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
|  | (in thousands except | (in thousands except | (in thousands except | (in thousands except |
|  | percent and | percent and | percent and | percent and |
|  | per share data) | per share data) | per share data) | per share data) |
| Numerator:  |  |  |  |  |
| Net loss attributable to Lesaka | $(6649) | $(12406) | $(17345) | $(25400) |
| Undistributed loss | (6649) | (12406) | (17345) | (25400) |
| Percent allocated to common shareholders |  |  |  |  |
| (Calculation 1)  | 96% | 99% | 96% | 99% |
| Numerator for loss per share: basic and diluted  | $(6377) | (12234) | $(16668) | $(25080) |
| Denominator |  |  |  |  |
| Denominator for basic (loss) earnings per share: |  |  |  |  |
| weighted-average common shares outstanding  | 60194 | 56413 | 60058 | 56373 |
| Effect of dilutive securities:  |  |  |  |  |
| Denominator for diluted (loss) earnings per share: adjusted weighted average common shares outstanding and assuming conversion  | 60194 | 56413 | 60058 | 56373 |
| Loss per share: |  |  |  |  |
| Basic  | $(0.11) | $(0.22) | $(0.28) | $(0.44) |
| Diluted  | $(0.11) | $(0.22) | $(0.28) | $(0.44) |
| (Calculation 1) |  |  |  |  |
| Basic weighted-average common shares outstanding (A)  | 60194 | 56413 | 60058 | 56373 |
| Basic weighted-average common shares outstanding and unvested restricted shares expected to vest (B)  | 62763 | 57204 | 62498 | 57093 |
| Percent allocated to common shareholders |  |  |  |  |
| (A) / (B)  | 96% | 99% | 96% | 99% |

---

Options to purchase 324,619 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, 2022, 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. Options to purchase 270,832 shares of the Company's common stock at prices ranging from $6.20 to $11.23 per share were outstanding during the three and six months ended December 31, 2021, 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, 2022.

**14.** **Supplemental cash flow information**

The following table presents supplemental cash flow disclosures for the three and six months ended December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Cash received from interest  | $386 | $306 | $795 | $688 |
| Cash paid for interest  | $2952 | $876 | $6963 | $1680 |
| Cash paid for income taxes  | $2382 | $279 | $3059 | $290 |

---

------

**14.** **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 to fund ATMs and is considered restricted as to use and therefore is classified as restricted cash. Cash, cash equivalents and restricted cash also includes cash in certain bank accounts that 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 8 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, 2022 and 2021, and June 30, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2022** | **December 31, 2021** | **June 30, 2022** |
| Cash and cash equivalents | $42402 | $182356 | $43940 |
| Restricted cash | 54374 | 57788 | 60860 |
| Cash, cash equivalents and restricted cash | $96776 | $240144 | $104800 |

---

**Leases**

The following table presents supplemental cash flow disclosure related to leases for the three and six months ended December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022**  | **2021**  | **2022**  | **2021**  |
| Cash paid for amounts included in the measurement of lease liabilities |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $756 | $838 | $1561 | $1763 |
| Right-of-use assets obtained in exchange for lease obligations |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating leases | $389 | $514 | $450 | $1018 |

---

**15.** **Revenue recognition**

**Disaggregation of revenue**

The following table presents the Company's revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consumer** | **Merchant** | **Total** |
| Processing fees | $6723 | $28283 | $35006 |
| South Africa | 6723 | 26907 | 33630 |
| Rest of world | - | 1376 | 1376 |
| Technology products | 249 | 7838 | 8087 |
| South Africa | 249 | 7787 | 8036 |
| Rest of world | - | 51 | 51 |
| Telecom products and services  | 6 | 81812 | 81818 |
| South Africa | 6 | 77523 | 77529 |
| Rest of world | - | 4289 | 4289 |
| Lending revenue | 4569 | - | 4569 |
| Interest from customers | - | 1476 | 1476 |
| Insurance revenue | 2353 | - | 2353 |
| Account holder fees | 1410 | - | 1410 |
| Other | 124 | 1225 | 1349 |
| South Africa | 124 | 1177 | 1301 |
| Rest of world | - | 48 | 48 |
| Total revenue, derived from the following geographic locations | 15434 | 120634 | 136068 |
| South Africa | 15434 | 114870 | 130304 |
| Rest of world | $- | $5764 | $5764 |

---

------

**15.** **Revenue recognition (continued)**

**Disaggregation of revenue (continued)**

The following table presents the Company's revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the three months ended December 31, 2021:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consumer** | **Merchant** | **Total** |
| Processing fees | $7801 | $8885 | $16686 |
| South Africa | 7801 | 8489 | 16290 |
| Rest of world | - | 396 | 396 |
| Technology products | 80 | 3021 | 3101 |
| Telecom products and services  | - | 2030 | 2030 |
| Lending revenue | 5181 | - | 5181 |
| Insurance revenue | 2034 | - | 2034 |
| Account holder fees | 1378 | - | 1378 |
| Other | 165 | 539 | 704 |
| Total revenue, derived from the following geographic locations | 16639 | 14475 | 31114 |
| South Africa | 16639 | 14079 | 30718 |
| Rest of world | $- | $396 | $396 |

---

The following table presents the Company's revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the six months ended December 31, 2022:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consumer** | **Merchant** | **Total** |
| Processing fees | $13258 | $55580 | $68838 |
| South Africa | 13258 | 52935 | 66193 |
| Rest of world | - | 2645 | 2645 |
| Technology products | 286 | 11735 | 12021 |
| South Africa | 286 | 11617 | 11903 |
| Rest of world | - | 118 | 118 |
| Telecom products and services  | 6 | 157932 | 157938 |
| South Africa | 6 | 149552 | 149558 |
| Rest of world | - | 8380 | 8380 |
| Lending revenue | 9280 | - | 9280 |
| Interest from customers | - | 2699 | 2699 |
| Insurance revenue | 4534 | - | 4534 |
| Account holder fees | 2821 | - | 2821 |
| Other | 253 | 2470 | 2723 |
| South Africa | 253 | 2378 | 2631 |
| Rest of world | - | 92 | 92 |
| Total revenue, derived from the following geographic locations | 30438 | 230416 | 260854 |
| South Africa | 30438 | 219181 | 249619 |
| Rest of world | $- | $11235 | $11235 |

---

------

**15.** **Revenue recognition (continued)**

**Disaggregation of revenue (continued)**

The following table presents the Company's revenue disaggregated by major revenue streams, including a reconciliation to reportable segments for the nine months ended December 31, 2021:

---

| | | | |
|:---|:---|:---|:---|
|  | **Consumer** | **Merchant** | **Total** |
| Processing fees | $15460 | $17320 | $32780 |
| South Africa | 15460 | 16497 | 31957 |
| Rest of world | - | 823 | 823 |
| Technology products | 212 | 7974 | 8186 |
| Telecom products and services  | - | 4307 | 4307 |
| Lending revenue | 10557 | - | 10557 |
| Insurance revenue | 4227 | - | 4227 |
| Account holder fees | 2821 | - | 2821 |
| Other | 526 | 2214 | 2740 |
| Total revenue, derived from the following geographic locations | 33803 | 31815 | 65618 |
| South Africa | 33803 | 30992 | 64795 |
| Rest of world | $- | $823 | $823 |

---

**16.** **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 financial services 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 financial services business from locations which it leases for a period of less than one year. The Company's operating lease expense during each of the three months ended December 31, 2022 and 2021 was $0.8 million, respectively. The Company's operating lease expense during the six months ended December 31, 2022 and 2021 was $1.6 million and $1.8 million, respectively. The Company does not have any significant leases that have not commenced as of December 31, 2022.

The Company has also entered into short-term leasing arrangements, primarily for the lease of branch locations and other locations, to operate its financial services business in South Africa. The Company's short-term lease expense during the three months ended December 31, 2022 and 2021, was $0.9 million and $1.3 million, respectively. The Company's short-term lease expense during the six months ended December 31, 2022 and 2021, was $2.0 million and $2.6 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, 2022 and June 30, 2022:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31,** | **December 31,** | **June 30,** | **June 30,** |
|  | **2022** | **2022** | **2022** | **2022** |
| Right of use assets obtained in exchange for lease obligations: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average remaining lease term (years) |  | 2.77 |  | 2.14 |
| &nbsp;&nbsp;&nbsp;&nbsp;Weighted average discount rate (percent) |  | 9.3 |  | 9.3 |

---

The maturities of the Company's operating lease liabilities as of December 31, 2022, are presented below:

---

| | |
|:---|:---|
| Maturities of operating lease liabilities |  |
| Year ended June 30, |  |
| &nbsp;&nbsp;&nbsp;&nbsp;2023 (excluding six months to December 31, 2022) | $1428 |
| &nbsp;&nbsp;&nbsp;&nbsp;2024 | 2058 |
| &nbsp;&nbsp;&nbsp;&nbsp;2025 | 1207 |
| &nbsp;&nbsp;&nbsp;&nbsp;2026 | 944 |
| &nbsp;&nbsp;&nbsp;&nbsp;2027 | 961 |
| &nbsp;&nbsp;&nbsp;&nbsp;Thereafter | 849 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total undiscounted operating lease liabilities | 7447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Less imputed interest | 1253 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities, included in | 6194 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - current | 2078 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Operating lease liability - long-term | $4116 |

---

------

**17.** **Operating segments**

**Operating segments**

The Company discloses segment information as reflected in the management information systems reports that its chief operating decision maker uses in making decisions and to report certain entity-wide disclosures about products and services, and the countries in which the entity holds material assets or reports material revenues. A description of the Company's operating segments is contained in Note 21 to the Company's audited consolidated financial statements included in its Annual Report on Form 10-K for the year ended June 30, 2022.

**Reallocation of certain activities in Other to Merchant**

During the second quarter of fiscal 2023, certain processing activities performed outside South Africa which were within our Other operating segment commenced reporting to management within our Merchant operating segment as part of the integration of Connect. The Company has allocated these operations from its Other reporting segment to Merchant in its reportable segments during the second quarter of fiscal 2023. Previously reported information has been restated.

The reconciliation of the reportable segment's revenue to revenue from external customers for the three months ended December 31, 2022 and 2021, is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Revenue** | **Revenue** | **Revenue** |
|  | **Reportable Segment** | **Inter-segment** | **From external customers** |
| Consumer | $15434 | $- | $15434 |
| Merchant | 120634 | - | 120634 |
| Total for the three months ended December 31, 2022 | $136068 | $- | $136068 |
| Consumer | $16639 | $- | $16639 |
| Merchant | 14475 | - | 14475 |
| Total for the three months ended December 31, 2021 | $31114 | $- | $31114 |

---

The reconciliation of the reportable segment's revenue to revenue from external customers for the six months ended December 31, 2022 and 2021, is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **Revenue** | **Revenue** | **Revenue** |
|  | **Reportable Segment** | **Inter-segment** | **From external customers** |
| Consumer | $30438 | $- | $30438 |
| Merchant | 230416 | - | 230416 |
| Total for the six months ended December 31, 2022 | $260854 | $- | $260854 |
| Consumer | $33803 | $- | $33803 |
| Merchant | 31815 | - | 31815 |
| Total for the six months ended December 31, 2021 | $65618 | $- | $65618 |

---

The Company evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization ("EBITDA"), adjusted for items mentioned in the next sentence ("Segment Adjusted EBITDA"). The Company does not allocate once-off items, stock-based compensation charges, certain lease charges ("Lease adjustments"), depreciation and amortization, impairment of goodwill or other intangible assets, other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, 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 represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. The Lease adjustments reflect lease charges and the Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation 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.

------

**17.** **Operating segments (continued)**

**Operating segments (continued)**

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, 2022 and 2021, is as follows:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Reportable segments measure of profit or loss  | $9698 | $(3362) | $16197 | $(10643) |
| Operating loss: Group costs | (2256) | (2076) | (4556) | (3649) |
| Once-off items | (119) | (1642) | (717) | (1885) |
| Lease adjustments | (747) | (833) | (1559) | (1757) |
| Stock-based compensation charge adjustments | (2849) | (788) | (4311) | (1097) |
| Depreciation and amortization | (5919) | (726) | (11917) | (1621) |
| Unrealized loss related to fair value adjustment to currency options | - | (2429) | - | (2429) |
| Loss (Gain) on disposal of equity-accounted investment | (112) | - | 136 | - |
| Interest income  | 389 | 313 | 800 | 702 |
| Interest expense  | (4388) | (765) | (8424) | (1581) |
| Loss before income taxes  | $(6303) | $(12308) | $(14351) | $(23960) |

---

------

**17.** **Operating segments (continued)**

**Operating segments (continued)**

The following tables summarize supplemental segment information for the three and six months ended December 31, 2022 and 2021:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** |
|  | **2022** | **2021** | **2022** | **2021** |
| Revenues |  |  |  |  |
| Consumer | $15434 | $16639 | $30438 | $33803 |
| Merchant | 120634 | 14475 | 230416 | 31815 |
| Total  | 136068 | 31114 | 260854 | 65618 |
| Segment Adjusted EBITDA |  |  |  |  |
| Consumer | 578 | (4366) | (816) | (13722) |
| Merchant | 9120 | 1004 | 17013 | 3079 |
| Total Segment Adjusted EBITDA | 9698 | (3362) | 16197 | (10643) |
| Depreciation and amortization |  |  |  |  |
| Consumer | 278 | 499 | 523 | 1151 |
| Merchant | 1823 | 211 | 3624 | 436 |
| Subtotal: Operating segments  | 2101 | 710 | 4147 | 1587 |
| Group costs | 3818 | 16 | 7770 | 34 |
| Total  | 5919 | 726 | 11917 | 1621 |
| Expenditures for long-lived assets |  |  |  |  |
| Consumer | 340 | 168 | 968 | 810 |
| Merchant | 3652 | 21 | 7525 | 77 |
| Subtotal: Operating segments  | 3992 | 189 | 8493 | 887 |
| Group costs | - | - | - | - |
| Total  | $3992 | $189 | $8493 | $887 |

---

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.

**18.** **Income tax**

**Income tax in interim periods**

For the purposes of interim financial reporting, the Company determines the appropriate income tax provision by first applying the effective tax rate expected to be applicable for the full fiscal year to ordinary income. This amount is then adjusted for the tax effect of significant unusual items, for instance, changes in tax law, valuation allowances and non-deductible transaction-related expenses that are reported separately, and have an impact on the tax charge. The cumulative effect of any change in the enacted tax rate, if and when applicable, on the opening balance of deferred tax assets and liabilities is also included in the tax charge as a discrete event in the interim period in which the enactment date occurs.

The South African corporate income tax rate was expected to reduce from 28% to 27% from July 1, 2022. The change in the income tax rate has not been enacted as of December 31, 2022, and accordingly all deferred taxes assets and liabilities related to the Company's South African operations are still recorded using the enacted corporate income tax rate of 28%.

------

**18.** **Income tax (continued)**

**Income tax in interim periods (continued)**

For the three and six months ended December 31, 2022, the Company's effective tax rate was impacted by 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.

For the three and six months ended December 31, 2021, the Company's effective tax rate was impacted by the tax effect of 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 (including the unrealized loss on the foreign currency options (refer to Note 4)).

**Uncertain tax positions**

The Company had no significant uncertain tax positions during the three and six months ended December 31, 2022, and therefore, the Company had no accrued interest related to uncertain tax positions on its balance sheet. The Company does not expect changes related to its unrecognized tax benefits will have a significant impact on its results of operations or financial position in the next 12 months.

The Company has no unrecognized tax benefits. The Company files income tax returns mainly in South Africa, Germany, Hong Kong, India, the United Kingdom, Botswana and in the U.S. federal jurisdiction. As of December 31, 2022, 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, 2018. The Company is subject to income tax in other jurisdictions outside South Africa, none of which are individually material to its financial position, statement of cash flows, or results of operations.

**19.** **Commitments and contingencies**

**Guarantees**

The South African Revenue Service and certain of the Company's customers, suppliers and other business partners have asked the Company to provide them with guarantees, including standby letters of credit, issued by South African banks. The Company is required to procure these guarantees for these third parties to operate its business

RMB has issued guarantees to these third parties amounting to ZAR 33.1 million ($1.9 million, translated at exchange rates applicable as of December 31, 2022) 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, 2022) thereby utilizing part of the Company's short-term facilities. The Company pays commission of between 0.4% per annum to 1.82% 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, 2022. 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, 2022). As discussed in Note 8, 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 3.0 million ($0.2 million, translated at exchange rates applicable as of December 31, 2022). The guarantees have reduced the amount available under its indirect and derivative facilities in the Company's short-term credit facilities described in Note 8.

**Contingencies**

The Company is subject to a variety of insignificant claims and suits that arise from time to time in the ordinary course of business. Management currently believes that the resolution of these other matters, individually or in the aggregate, will not have a material adverse impact on the Company's financial position, results of operations or cash flows.

------

**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, 2022, and the unaudited condensed consolidated financial statements and the accompanying notes included in this Form 10-Q.

**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 of 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, 2022. 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. We 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 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** 

This quarter represents a significant milestone for Lesaka. We made significant progress in our turnaround strategy, a process that commenced in earnest at the beginning of fiscal 2022. This quarter demonstrates successful execution against a carefully considered transformation strategy.

Key highlights in the second quarter of fiscal 2023 include:

 outperformance of the Merchant business ahead of our expectations and guidance reported, delivering a segment adjusted EBITDA of ZAR 160 million for the period;

 turn around in the Consumer business, returning it to profitability with segment adjusted EBITDA of ZAR10 million in the second quarter of fiscal 2023, compared to a ZAR 67 million loss in the second quarter of fiscal 2022; and

 the group achieving adjusted EBITDA of ZAR 130 million, exceeding the upper end of our guidance of ZAR 123 million for the second quarter of fiscal 2023, compared with an adjusted EBITDA loss of ZAR 84 million in the second quarter of fiscal 2022.

**Merchant business outperformance**

Our Merchant business has been transformed by the successful conclusion of the Connect acquisition.

The Merchant business has shown strong growth across all the products but particularly in its card acquiring and credit businesses, in particular Capital Connect and Kazang Pay advance. The integration of the Connect Group continues to create new opportunities within our micro small and medium enterprises ("MSME") offering and is a business that is supported by growth drivers and secular trends underpinning financial inclusion, cash management and digitization for MSME's.

Our Merchant offering continues to grow:

 In the Value-Added-Service ("VAS") and supplier payments business, Kazang and EasyPay have seen strong adoption by MSME's in the informal sector, with a 47% year-on-year growth in the number of devices deployed. We had approximately 64,400 POS devices in field as of December 31, 2022, compared to approximately 57,000 as of September 30, 2022, and approximately 44,000 POS devices a year ago;

 Our automated cash management and payments business, Cash Connect, effectively puts the "bank" in approximately 4,300 merchants' stores (compared to approximately 3,900 merchants' stores a year ago). Cash Connect is a provider of robust cash vaults in the formal sector, and is expanding rapidly in the informal sector. This has provided significant operational and risk benefits for our informal merchant customer base;

 In the card acquiring business, card-enabled POS devices increased to approximately 34,500 as of December 31, 2022, compared to approximately 17,100 a year ago, and approximately 27,800 as of September 30, 2022. Kazang Pay, which is our card acquiring offering to the informal sector, has been the primary driver of this growth in devices deployed, where we are seeing rapid adoption of card payments in the informal sector. As a result, our card acquiring business has recorded in excess of 100% growth in devices deployed compared to a year ago; and

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 We provide merchants quick access to credit through Capital Connect. We continue to see strong demand for this credit offering, disbursed over ZAR 262 million during the quarter, compared to ZAR 154 million in the comparable period ended December 2021.

**Consumer business achieves profitability and is well positioned for growth**

We have achieved our goal of returning our Consumer segment to profitability at a segment adjusted EBITDA level. Over the past four quarters, we have consistently referenced the three levers underpinning our strategy of returning the consumer business to profitability – cost optimization, increasing average revenue per user ("ARPU") through cross-selling and growing active EPE account numbers.

This result achieved was primarily through the first two levers. The first is cost savings through the optimization of our distribution network, including the rationalization of infrastructure, rebalancing and investing in our staff complement, as well as improving processes around client onboarding and service.

The progress on our three key initiatives to drive the turnaround is as follows:

* Progress on cost optimization*

o Improved profitability in the Consumer business was predominantly driven by realized cost savings following the implementation of our Project Spring initiative just less than a year ago. Under this initiative we decommissioned approximately 800 underperforming ATMs and sold 400 mobile ATMs, leaving us with approximately 800 operating ATMs. Our ATM optimization program has been assisted by the retailer partnership strategy we implemented, which has resulted in a placement of more ATMs out of our branches infrastructure and into retailers. This has produced greater foot traffic, reduced security costs and extended operating hours of our ATMs. We've also deployed almost 40 through-the-wall ATMs. These ATMs are optimally positioned within the retailer stores or shopping malls resulting in longer operating hours and higher consumer utilization. Despite the reduction in overall number of ATMs within our estate, we have experienced an increase in the number of transactions per ATM. Additionally, we have also closed over 100 unprofitable retail branches and sold 200 vehicles.

* Driving customer acquisition*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;○ Our total active EasyPay Everywhere ("EPE") transactional account base stood at approximately 1.3 million at the end of December 31, 2022, of which just over 1.1 million (or approximately 85%) are permanent grant recipients. For the first time we are separately reporting the temporary SRD customer base. This is because we offer a more limited service to our SRD grant recipient customer base. As at the end of December 2022, we increased our permanent grant account base by 4% on a net basis compared to a year ago. The net growth of our permanent grant recipient base has been slower than anticipated as we continue to transition the business into a sales driven, customer-centric, financial services provider.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;○ Our priority is to grow our permanent grant recipient customer base, where we can build deeper relationships by offering other products such as insurance and lending. We do not offer the same breadth of service to the SRD grant base due to the more temporary nature of the grant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;○ We continue to focus our efforts in the Consumer business on implementing initiatives to improve account activation and utilization.

* Progress on cross selling*

EasyPay loans (previously referred to as Moneyline)

o We issued approximately 225,000 loans in the quarter compared to approximately 198,000 in the previous quarter (first quarter of fiscal 2023) evidencing improved loan conversion rates following the implementation of more targeted loan campaigns during the quarter. The portfolio loss ratio, calculated as the loans written off during the period as a percentage of the total loan book, remains encouragingly low at around 1.00% for the quarter (i.e., approximately 4% per annum).

EasyPay insurance (previously referred to as SmartLife)

o Our insurance product sales continue to grow and provides an important growth opportunity for our cross-selling strategy, with penetration higher, now around 27%, of the active permanent grant account base as of December 31, 2022. Over 29,000 new standalone policies were initiated during the second quarter of fiscal 2023, growing the total number of active policies to approximately 294,000.

ARPU for our permanent client base has increased to ZAR 75 for the second quarter of fiscal 2023 from ZAR 71 in the first quarter of fiscal 2023.

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**Strengthening our relationships with key stakeholders**

We continue to build our relationship with the South African Social Security Agency ("SASSA") through proactive engagement at a local, provincial and national level.

We have also made good progress on building relationships with our various key stakeholders, be it shareholders, regulators, suppliers and other participants in our sectors.

**Impact of COVID-19**

During the most recent quarter, we did not experience any significant disruptions from the COVID-19 outbreak, and the risk relating to the outbreak appears to have substantially reduced. Refer to Part I, Item 1A. "Risk Factors— We are unable to ascertain the full impact the COVID-19 pandemic will have on our future financial position, operations, cash flows and stock price" in our Annual Report on Form 10-K for the year ended June 30, 2022. We will continue to evaluate the nature and extent of the impact to our business, consolidated results of operations, and financial condition.

**Impact of loadshedding** 

The trading environment remains challenging with increased loadshedding in the past few months. This adversely impacts our customers on a daily basis, especially in our Merchant business, where they lose valuable trading hours if they do not have access to alternative power supplies and back-up facilities to process electronic payments and value-added services. Our teams have delivered excellent growth in the merchant business despite these challenges.

**Critical Accounting Policies**

Our unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP, which requires management to make estimates and assumptions about future events that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities, including the ongoing uncertainty in the current economic environment due to the outbreak of COVID-19. As future events and their effects cannot be determined with absolute certainty, the determination of estimates requires management's judgment based on a variety of assumptions and other determinants such as historical experience, current and expected market conditions and certain scientific evaluation techniques.

Critical accounting policies are those that reflect significant judgments or uncertainties and may potentially result in materially different results under different assumptions and conditions. We have identified the following critical accounting policies that are described in more detail in our Annual Report on Form 10-K for the year ended June 30, 2022:

 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; and

 Accounts Receivable and Allowance for Doubtful Accounts Receivable.

**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, 2022**

Refer to Note 1 to our unaudited condensed consolidated financial statements for a full description of recent accounting pronouncements not yet adopted as of December 31, 2022, including the expected dates of adoption and effects on our financial condition, results of operations and cash flows.

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**Currency Exchange Rate Information** 

**Actual exchange rates**

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

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Table 1** | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** | **Year ended** |
|  | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **June 30,** |
|  | **2022** | **2021** | **2022** | **2021** | **2022** |
| ZAR : $ average exchange rate  | 17.6279 | 15.4320 | 17.3240 | 15.0283 | 15.2154 |
| Highest ZAR : $ rate during period  | 18.3617 | 16.2968 | 18.3617 | 16.2968 | 16.2968 |
| Lowest ZAR : $ rate during period  | 16.9840 | 14.4684 | 16.2035 | 14.1630 | 14.1630 |
| Rate at end of period  | 17.0212 | 15.9306 | 17.0212 | 15.9306 | 16.2903 |

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![Picture 2](image_000.gif)

**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, 2022 and 2021, vary slightly from the averages shown in the table above. The translation rates we use in presenting our results of operations are the rates shown in the following table:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **Three months ended** | **Three months ended** | **Six months ended** | **Six months ended** | **Year ended** |
| **Table 2** | **December 31,** | **December 31,** | **December 31,** | **December 31,** | **June 30,** |
|  | **2022** | **2021** | **2022** | **2021** | **2022** |
| Income and expense items: $1 = ZAR  | 17.5160 | 15.3800 | 17.2482 | 14.9748 | 15.1978 |
| Balance sheet items: $1 = ZAR  | 17.0212 | 15.9306 | 17.0212 | 15.9306 | 16.2903 |

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**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. We analyze our results of operations both in 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 revenue and is the currency in which the majority of our transactions are initially incurred and measured. Due to the significant impact of currency fluctuations between the U.S. dollar and the ZAR on our reported results and because we use the U.S. dollar as our reporting currency, we believe that the supplemental presentation of our results of operations in ZAR is useful to investors to understand the changes in the underlying trends of our business.

Our operating segment revenue presented in "—Results of operations by operating segment" represents total revenue per operating segment before intercompany eliminations. A reconciliation between total operating segment revenue and revenue presented in our unaudited condensed consolidated financial statements is included in Note 17 to those statements. Our chief operating decision maker is our Group Chief Executive Officer and he evaluates segment performance based on segment earnings before interest, tax, depreciation and amortization ("EBITDA"), adjusted for items mentioned in the next sentence ("Segment Adjusted EBITDA"). We do not allocate once-off items (as defined below), stock-based compensation charges, depreciation and amortization, impairment of goodwill or other intangible assets, certain lease charges ("Lease adjustments"), other items (including gains or losses on disposal of investments, fair value adjustments to equity securities, fair value adjustments to currency options), interest income, interest expense, income tax expense or loss from equity-accounted investments to our reportable segments. Once-off items represents non-recurring expense items, including costs related to acquisitions and transactions consummated or ultimately not pursued. The Lease adjustments reflect lease charges and the Stock-based compensation adjustments reflect stock-based compensation expense and are both excluded from the calculation 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.

Group Adjusted EBITDA represents Segment Adjusted EBITDA after deducting group costs. Unless otherwise stated, reference to EBITDA in the discussion below refers to Segment Adjusted EBITDA.

Fiscal 2023 includes Connect for the entire quarter and first half of fiscal 2023, and this business is not included in the results for fiscal 2022.

We analyze our business and operations in terms of two inter-related but independent operating segments: (1) Consumer and (2) Merchant. 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 Corporate/ Eliminations.

**Second quarter of fiscal 2023 compared to second quarter of fiscal 2022**

The following factors had a significant impact on our results of operations during the second quarter of fiscal 2023 as compared with the same period in the prior year:

*** Higher revenue:*** Our revenues increased 398% in ZAR, primarily due to the contribution from Connect, higher ad hoc hardware sales revenue, and an increase in account fees and insurance revenues;

*** Lower operating losses:*** Operating losses decreased, delivering an improvement of 74% in ZAR compared with the prior period primarily due to the contribution from Connect, strong hardware sales and the implementation of various cost reduction initiatives in our Consumer business, which was partially offset by an increase in acquisition related intangible asset amortization;

*** Higher net interest charge:*** The net interest charge increased to ZAR 70.0 million from ZAR 7.0 million due to the additional borrowings incurred in order to fund the acquisition of Connect as well as the debt acquired within the Connect business itself; and

*** Foreign exchange movements:*** The U.S. dollar was 14% stronger against the ZAR during the second quarter of fiscal 2023 compared to the prior period, which impacted our reported results.

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**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:

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| | | | |
|:---|:---|:---|:---|
| **Table 3** | **In United States Dollars** | **In United States Dollars** | **In United States Dollars** |
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **2021** |  |
|  | **$'000** | **$'000** | **change** |
| Revenue  | 136068 | 31114 | 337% |
| Cost of goods sold, IT processing, servicing and support  | 108824 | 20580 | 429% |
| Selling, general and administration  | 23517 | 17746 | 33% |
| Depreciation and amortization  | 5919 | 726 | 715% |
| Transaction costs related to Connect Group acquisition | - | 1489 | nm |
| Operating loss | (2192) | (9427) | (77%) |
| Unrealized loss related to fair value adjustment to currency options | - | 2429 | nm |
| Net loss on disposal of equity-accounted investments | 112 | - | nm |
| Interest income  | 389 | 313 | 24% |
| Interest expense  | 4388 | 765 | 474% |
| Loss before income tax expense  | (6303) | (12308) | (49%) |
| Income tax expense | 364 | 98 | 271% |
| Net loss before earnings from equity-accounted investments  | (6667) | (12406) | (46%) |
| Earnings from equity-accounted investments  | 18 | - | nm |
| Net loss attributable to us  | (6649) | (12406) | (46%) |

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| | | | |
|:---|:---|:---|:---|
| **Table 4** | **In South African Rand** | **In South African Rand** | **In South African Rand** |
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **2021** |  |
|  | **ZAR '000** | **ZAR '000** | **change** |
| Revenue  | 2383367 | 478533 | 398% |
| Cost of goods sold, IT processing, servicing and support  | 1906161 | 316520 | 502% |
| Selling, general and administration  | 411923 | 272933 | 51% |
| Depreciation and amortization  | 103677 | 11165 | 829% |
| Transaction costs related to Connect Group acquisition | - | 22901 | nm |
| Operating loss | (38394) | (144986) | (74%) |
| Unrealized loss related to fair value adjustment to currency options | - | 37358 | nm |
| Net loss on disposal of equity-accounted investments | 1962 | - | nm |
| Interest income  | 6814 | 4814 | 42% |
| Interest expense  | 76860 | 11766 | 553% |
| Loss before income tax expense  | (110402) | (189296) | (42%) |
| Income tax expense | 6376 | 1508 | 323% |
| Net loss before earnings from equity-accounted investments  | (116778) | (190804) | (39%) |
| Earnings from equity-accounted investments  | 315 | - | nm |
| Net loss attributable to us  | (116463) | (190804) | (39%) |

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The increase in revenue was primarily due to the inclusion of Connect, which has substantial low margin prepaid airtime sales in addition to its core processing revenue, higher hardware sales revenue, and an increase in account fees and insurance revenues.

The increase in cost of goods sold, IT processing, servicing and support was primarily due to the inclusion of Connect, which were partially offset by the benefits of various cost reduction initiatives in our Consumer business and lower insurance-related claims.

In ZAR, the increase in selling, general and administration expenses was primarily due to higher employee-related expenses related to the expansion of our senior management team, the year-over-year impact of inflationary increases on employee-related expenses and the inclusion of expenses related to Connect's operations, which were partially offset by the benefits of various cost reduction initiatives in our Consumer business.

Depreciation and amortization expense increased in the second quarter of fiscal 2023 compared with the second quarter of fiscal 2022 due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Connect acquisition, as well as the inclusion of depreciation expense related to Connect's property, plant and equipment.

Transaction costs related to the Connect Group acquisition include fees paid to external service providers for various advisory services procured during the second quarter of fiscal 2022.

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Our operating loss margin for the second quarter of fiscal 2023 and 2022 was (1.6%) and (30.3%), respectively. We discuss the components of operating loss margin under "—Results of operations by operating segment."

We did not record any changes in the fair value of equity interests in MobiKwik and Cell C during the second quarter of fiscal 2023 and 2022, respectively. We continue to carry our investment in Cell C at $0 (zero). Refer to Note 4 for the methodology and inputs used in the fair value calculation for Cell C.

Interest on surplus cash increased to $0.4 million (ZAR 6.8 million) from $0.3 million (ZAR 4.8 million), primarily due to the inclusion of Connect.

Interest expense increased to $4.4 million (ZAR 76.9 million) from $0.8 million (ZAR 11.8 million), primarily as a result of additional interest expense incurred related to borrowings obtained to partially fund the acquisition of Connect, interest expenses incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our ATMs, which was also coupled with an increase in the interest rate on those ATM facilities.

Fiscal 2023 tax expense was $0.36 million (ZAR 6.4 million) compared to the tax expense of $0.1 million (ZAR 1.5 million) in fiscal 2022. Our effective tax rate for fiscal 2023 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities.

Our effective tax rate for fiscal 2022 was impacted by the tax effect of the tax expense recorded by our profitable South African operations, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities (including the unrealized loss on the foreign currency options).

Finbond is listed on the Johannesburg Stock Exchange and reports its six-month results during our first quarter and its annual results during our fourth quarter. The table below presents the relative (loss) earnings from our equity-accounted investments:

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| | | | |
|:---|:---|:---|:---|
| **Table 5** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **2021** | **$%** |
|  | **$'000** | **$'000** | **change** |
| Other | 18 | - | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total loss from equity-accounted investments** | 18 | - | nm |

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**Results of operations by operating segment**

The composition of revenue and the contributions of our business activities to operating (loss) income are illustrated below:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Table 6** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** |
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **% of** | **2021** | **% of** | **% change** |
| **Operating Segment** | **$'000** | **total** | **$'000** | **total** | **% change** |
| Consolidated revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 15434 | 11% | 16639 | 53% | (7%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 120634 | 89% | 14475 | 47% | 733% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal: Operating segments  | 136068 | 100% | 31114 | 100% | 337% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate/Eliminations  | - | - | - | - | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total consolidated revenue**  | **136068** | **100%** | **31114** | **100%** | **337%** |
| Segment Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 578 | 8% | (4366) | 80% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 9120 | 123% | 1004 | (18%) | 808% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Segment Adjusted EBITDA** | **9698** | **131%** | **(3362)** | **62%** | **nm** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group costs | (2256) | (30%) | (2076) | 38% | 9% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group Adjusted EBITDA | 7442 | 100% | (5438) | 100% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once-off items | (119) |  | (1642) |  | (93%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | (2849) |  | (788) |  | 262% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease adjustments | (747) |  | (833) |  | (10%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | (5919) |  | (726) |  | 715% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consolidated operating loss | (2192) |  | (9427) |  | (77%) |

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Table 7** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** |
|  | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **% of** | **2021** | **% of** | **% change** |
| **Operating Segment** | **ZAR '000** | **total** | **ZAR '000** | **total** | **% change** |
| Consolidated revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 270342 | 11% | 255908 | 53% | 6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 2113025 | 89% | 222625 | 47% | 849% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal: Operating segments  | 2383367 | 100% | 478533 | 100% | 398% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Corporate/Eliminations  | - | - | - | - | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total consolidated revenue**  | **2383367** | **100%** | **478533** | **100%** | **398%** |
| Segment Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 10124 | 8% | (67160) | 80% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 159746 | 123% | 15453 | (18%) | 934% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Segment Adjusted EBITDA** | **169870** | **131%** | **(51707)** | **62%** | **nm** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group costs | (39516) | (30%) | (31929) | 38% | 24% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group Adjusted EBITDA | 130354 | 100% | (83636) | 100% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once-off items | (2084) |  | (25254) |  | (92%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | (49903) |  | (12119) |  | 312% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease adjustments | (13084) |  | (12812) |  | 2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | (103677) |  | (11165) |  | 829% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consolidated operating loss | (38394) |  | (144986) |  | (74%) |

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***Consumer***

Segment revenue increased primarily due to higher insurance revenues and higher account holder fees, though this was partially offset by lower ATM transaction fees. This revenue growth was achieved notwithstanding the significant downsizing of our branch network and sales team. The cost reduction initiatives we initiated in fiscal 2022 delivered a significant reduction in our Consumer segment's operating expenses which resulted in a positive EBITDA result compared with an EBITDA loss in fiscal 2022. Specifically, expenses associated with operating a mobile distribution network were discontinued in early fiscal 2022, and we have streamlined our fixed distribution network through reductions in certain expenses including employee-related costs, security, guarding and premises costs.

Our EBITDA (loss) margin (calculated as EBITDA (loss) divided by revenue) for the second quarter of fiscal 2023 and 2022 was 3.7% and (26.2%), respectively.

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***Merchant***

Segment revenue increased due to the contribution from Connect as well as strong ad hoc hardware sales. The increase in EBITDA is primarily due to the inclusion of Connect, as well as the higher hardware sales, which was partially offset by higher employee-related expenses. Connect records a significant proportion of its airtime sales in revenue and cost of sales, while only earning a relatively small margin. This significantly depresses the EBITDA margins shown by the business.

Our EBITDA margin for the second quarter of fiscal 2023 and 2022 was 7.6% and 6.9%, respectively.

***Group costs***

Our 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.

Our group costs for fiscal 2023 increased compared with the prior period due to higher employee costs and an increase in director and officer's insurance premiums, which was partially offset by lower consulting fees.

**First half of fiscal 2023 compared to first half of fiscal 2022**

The following factors had a significant impact on our results of operations during the first half of fiscal 2023 as compared with the same period in the prior year:

*** Higher revenue:*** Our revenues increased 358% in ZAR, primarily due to the contribution from Connect, higher ad hoc hardware sales revenue, and an increase in account fees and insurance revenues;

*** Lower operating losses:*** Operating losses decreased, delivering an improvement of 62% in ZAR compared with the prior period primarily due to the contribution from Connect, strong hardware sales, and the implementation of various cost reduction initiatives in our Consumer business, which was partially offset by an increase in acquisition related intangible asset amortization;

*** Higher net interest charge:*** The net interest charge increased to ZAR 131.5 million from ZAR 13.2 million due to the additional borrowings incurred in order to fund the acquisition of Connect as well as the debt acquired within the Connect business itself; and

*** Foreign exchange movements:*** The U.S. dollar was 15% stronger against the ZAR during the first half of fiscal 2023 compared to the prior period, which impacted our 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:

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| | | | |
|:---|:---|:---|:---|
| **Table 8** | **In United States Dollars** | **In United States Dollars** | **In United States Dollars** |
|  | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **2021** |  |
|  | **$'000** | **$'000** | **change** |
| Revenue  | 260854 | 65618 | 298% |
| Cost of goods sold, IT processing, servicing and support  | 209352 | 44787 | 367% |
| Selling, general and administration  | 46448 | 38188 | 22% |
| Depreciation and amortization  | 11917 | 1621 | 635% |
| Transaction costs related to Connect Group acquisition | - | 1674 | nm |
| Operating loss | (6863) | (20652) | (67%) |
| Unrealized loss related to fair value adjustment to currency options | - | 2429 | nm |
| Net gain on disposal of equity-accounted investments | 136 | - | nm |
| Interest income  | 800 | 702 | 14% |
| Interest expense  | 8424 | 1581 | 433% |
| Loss before income tax expense  | (14351) | (23960) | (40%) |
| Income tax expense | 395 | 284 | 39% |
| Net loss before loss from equity-accounted investments  | (14746) | (24244) | (39%) |
| Loss from equity-accounted investments  | (2599) | (1156) | 125% |
| Net loss attributable to us  | (17345) | (25400) | (32%) |

---

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| | | | |
|:---|:---|:---|:---|
| **Table 9** | **In South African Rand** | **In South African Rand** | **In South African Rand** |
|  | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **2021** |  |
|  | **ZAR '000** | **ZAR '000** | **change** |
| Revenue  | 4499262 | 982616 | 358% |
| Cost of goods sold, IT processing, servicing and support  | 3610946 | 670676 | 438% |
| Selling, general and administration  | 801144 | 571858 | 40% |
| Depreciation and amortization  | 205547 | 24274 | 747% |
| Transaction costs related to Connect Group acquisition | - | 25068 | nm |
| Operating loss | (118375) | (309260) | (62%) |
| Unrealized loss related to fair value adjustment to currency options | - | 36374 | nm |
| Net gain on disposal of equity-accounted investments | 2346 | - | nm |
| Interest income  | 13799 | 10512 | 31% |
| Interest expense  | 145298 | 23675 | 514% |
| Loss before income tax expense  | (247528) | (358797) | (31%) |
| Income tax expense | 6813 | 4253 | 60% |
| Net loss before loss from equity-accounted investments  | (254341) | (363050) | (30%) |
| Loss from equity-accounted investments  | (44828) | (17311) | 159% |
| Net loss attributable to us  | (299169) | (380361) | (21%) |

---

The increase in revenue was primarily due to the inclusion of Connect, which has substantial low margin prepaid airtime sales in addition to its core processing revenue, higher hardware sales revenue, and an increase in account fees and insurance revenues.

The increase in cost of goods sold, IT processing, servicing and support was primarily due to the inclusion of Connect, which were partially offset by the benefits of various cost reduction initiatives in our Consumer business and lower insurance-related claims.

In ZAR, the increase in selling, general and administration expenses was primarily due to higher employee-related expenses related to the expansion of our senior management team, the year-over-year impact of inflationary increases on employee-related expenses and the inclusion of expenses related to Connect's operations, which were partially offset by the benefits of various cost reduction initiatives in our Consumer business.

Depreciation and amortization expense increased in the first half of fiscal 2023 compared with the first half of fiscal 2022 due to the inclusion of acquisition-related intangible asset amortization related to intangible assets identified pursuant to the Connect acquisition, as well as the inclusion of depreciation expense related to Connect's property, plant and equipment.

Transaction costs related to the Connect Group acquisition include fees paid to external service providers for various advisory services procured during fiscal 2022.

------

Our operating loss margin for the first half of fiscal 2023 and 2022 was (1.6%) and (30.3%), respectively. We discuss the components of operating loss margin under "—Results of operations by operating segment."

We did not record any changes in the fair value of equity interests in MobiKwik and Cell C during the first half of fiscal 2023 and 2022, respectively. We continue to carry our investment in Cell C at $0 (zero). Refer to Note 4 for the methodology and inputs used in the fair value calculation for Cell C.

We recorded a gain of $0.3 million related to the disposal of our entire interest in Carbon during the first half of fiscal 2023. Refer to Note 5 to our unaudited condensed consolidated financial statements for additional information regarding this disposal.

Interest on surplus cash increased to $0.8 million (ZAR 13.8 million) from $0.7 million (ZAR 10.5 million), primarily due to the inclusion of Connect.

Interest expense increased to $8.4 million (ZAR 145.3 million) from $1.6 million (ZAR 23.7 million), primarily as a result of additional interest expense incurred related to borrowings obtained to partially fund the acquisition of Connect, interest expenses incurred in Connect to fund our cash management, digitization and VAS offerings, and a higher utilization of our facilities to fund our ATMs, which was also coupled with an increase in the interest rate on these ATM facilities.

Fiscal 2023 tax expense was $0.4 million (ZAR 6.8 million) compared to the tax expense of $0.3 million (ZAR 4.3 million) in fiscal 2022. Our effective tax rate for fiscal 2023 was impacted by the tax expense recorded by our profitable South African operations, a deferred tax benefit related to acquisition-related intangible asset amortization, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities.

Our effective tax rate for fiscal 2022 was impacted by the tax effect of the tax expense recorded by our profitable South African operations, non-deductible expenses, the on-going losses incurred by certain of our South African businesses and the associated valuation allowances created related to the deferred tax assets recognized regarding net operating losses incurred by these entities (including the unrealized loss on the foreign currency options).

Finbond is listed on the Johannesburg Stock Exchange and reports its six-month results during our first quarter and its annual results during our fourth quarter. The table below presents the relative (loss) earnings from our equity-accounted investments:

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| | | | |
|:---|:---|:---|:---|
| **Table 10** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **2021** | **$%** |
|  | **$'000** | **$'000** | **change** |
| Finbond | (2631) | (1156) | 128% |
| &nbsp;&nbsp;&nbsp;&nbsp;Share of net loss | (1521) | (1156) | 32% |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment | (1110) | - | nm |
| Other | 32 | - | nm |
|  | (2599) | (1156) | 125% |

---

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**Results of operations by operating segment**

The composition of revenue and the contributions of our business activities to operating (loss) income are illustrated below:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Table 11** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** | ***In United States Dollars*** |
|  | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **% of** | **2021** | **% of** | **% change** |
| **Operating Segment** | **$'000** | **total** | **$'000** | **total** | **% change** |
| Consolidated revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 30438 | 12% | 33803 | 52% | (10%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 230416 | 88% | 31815 | 48% | 624% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal: Operating segments  | 260854 | 100% | 65618 | 100% | 298% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total consolidated revenue**  | **260854** | **100%** | **65618** | **100%** | **298%** |
| Segment Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | (816) | (7%) | (13722) | 96% | (94%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 17013 | 146% | 3079 | (22%) | 453% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Segment Adjusted EBITDA** | **16197** | **139%** | **(10643)** | **74%** | **nm** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group costs | (4556) | (39%) | (3649) | 26% | 25% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group Adjusted EBITDA | 11641 | 100% | (14292) | 100% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once-off items | (717) |  | (1885) |  | (62%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | (4311) |  | (1097) |  | 293% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease adjustments | (1559) |  | (1757) |  | (11%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | (11917) |  | (1621) |  | 635% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consolidated operating loss | (6863) |  | (20652) |  | (67%) |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Table 12** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** | ***In South African Rand*** |
|  | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **% of** | **2021** | **% of** | **% change** |
| **Operating Segment** | **ZAR '000** | **total** | **ZAR '000** | **total** | **% change** |
| Consolidated revenue: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | 525001 | 12% | 506193 | 52% | 4% |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 3974261 | 88% | 476423 | 48% | 734% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subtotal: Operating segments  | 4499262 | 100% | 982616 | 100% | 358% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total consolidated revenue**  | **4499262** | **100%** | **982616** | **100%** | **358%** |
| Segment Adjusted EBITDA: |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Consumer | (14075) | (7%) | (205484) | 96% | (93%) |
| &nbsp;&nbsp;&nbsp;&nbsp;Merchant | 293444 | 146% | 46107 | (22%) | 536% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Total Segment Adjusted EBITDA** | **279369** | **139%** | **(159377)** | **74%** | **nm** |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group costs | (78583) | (39%) | (54644) | 26% | 44% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Group Adjusted EBITDA | 200786 | 100% | (214021) | 100% | nm |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Once-off items | (12367) |  | (28227) |  | (56%) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation | (74357) |  | (16427) |  | 353% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease adjustments | (26890) |  | (26311) |  | 2% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | (205547) |  | (24274) |  | 747% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total consolidated operating loss | (118375) |  | (309260) |  | (62%) |

---

***Consumer***

Segment revenue increased primarily due to higher insurance revenues and higher account holder fees, though this was partially offset by lower ATM transaction fees. The cost reduction initiatives we initiated in fiscal 2022 delivered a significant reduction in our Consumer segment's operating expenses which resulted in a significantly lower EBITDA loss compared with fiscal 2022. Specifically, expenses associated with operating a mobile distribution network were discontinued in early fiscal 2022, and we have streamlined our fixed distribution network through reductions in certain expenses including employee-related costs, security, guarding and premises costs.

Our EBITDA loss margin (calculated as EBITDA loss divided by revenue) for the first half of fiscal 2023 and 2022 was (2.7%) and (40.6%), respectively.

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***Merchant***

Segment revenue increased due to the contribution from Connect as well as strong ad hoc hardware sales. The increase in EBITDA is primarily due to the inclusion of Connect, as well as the higher hardware sales, which was partially offset by higher employee-related expenses.

Our EBITDA margin for the first half of fiscal 2023 and 2022 was 7.4% and 9.7%, respectively.

***Group costs***

Our group costs for fiscal 2023 increased compared with the prior period due to higher employee costs and an increase in director and officer's insurance premiums, which was partially offset by lower consulting fees.

**Liquidity and Capital Resources**

As of December 31, 2022, our cash and cash equivalents were $42.4 million and comprised of U.S. dollar-denominated balances of $7.5 million, ZAR-denominated balances of ZAR 561.6 million ($33.0 million), and other currency deposits, primarily Botswana pula, of $1.9 million, all amounts translated at exchange rates applicable as of December 31, 2022. The decrease in our unrestricted cash balances from June 30, 2022, was primarily due to the utilization of cash reserves to fund our Consumer operations, make certain scheduled repayments of our borrowings, purchase ATMs and safe assets, and to make an investment in working capital in our Consumer and Merchant operations, which was partially offset by the utilization of our available borrowings and a positive contribution from Connect.

We generally invest any surplus cash held by our South African operations in overnight call accounts that we maintain at South African banking institutions, and any surplus cash held by our non-South African companies in U.S. dollar-denominated money market accounts.

Historically, we have financed most of our operations, research and development, working capital, and capital expenditures, as well as acquisitions and strategic investments, through internally generated cash and our financing facilities. When considering whether to borrow under our financing facilities, we consider the cost of capital, cost of financing, opportunity cost of utilizing surplus cash and availability of tax efficient structures to moderate financing costs. For instance, in fiscal 2022, we obtained loan facilities from RMB to fund a portion of our acquisition of Connect, with the balance being funded from cash resources. 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 safe assets. Refer to Note 12 to our consolidated financial statements for the year ended June 30, 2022, for additional information related to our borrowings.

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**Available short-term borrowings**

Summarized below are our short-term facilities available and utilized as of December 31, 2022:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Table 13** | **RMB Facility E** | **RMB Facility E** | **RMB Indirect** | **RMB Indirect** | **RMB Connect** | **RMB Connect** | **Nedbank** | **Nedbank** |
|  | **$'000** | **ZAR '000** | **$'000** | **ZAR '000** | **$'000** | **ZAR '000** | **$'000** | **ZAR '000** |
| ***Total short-term facilities available, comprising:*** |  |  |  |  |  |  |  |  |
| Overdraft  | - | - | - | - | 12044 | 205000 | - | - |
| Overdraft restricted as to use<sup>(1)</sup> | 82251 | 1400000 | - | - | - | - | - | - |
| Total overdraft | 82251 | 1400000 | - | - | 12044 | 205000 | - | - |
| Indirect and derivative facilities<sup>(2)</sup> | - | - | 7931 | 135000 | - | - | 9198 | 156556 |
| **Total short-term facilities available** | **82251** | **1400000** | **7931** | **135000** | **12044** | **205000** | **9198** | **156556** |
| ***Utilized short-term facilities:*** |  |  |  |  |  |  |  |  |
| Overdraft  | - | - | - | - | 10575 | 180000 | - | - |
| Overdraft restricted as to use<sup>(1)</sup> | 54250 | 923395 | - | - | - | - | - | - |
| Indirect and derivative facilities<sup>(2)</sup> | - | - | 1945 | 33100 | - | - | 124 | 2110 |
| **Total short-term facilities available** | **54250** | **923395** | **1945** | **33100** | **10575** | **180000** | **124** | **2110** |
| Interest rate, based on South African prime rate |  | 10.50% |  |  |  | 10.40% |  |  |

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&nbsp;&nbsp;&nbsp;&nbsp;(1) Overdraft may only be used to fund ATMs and upon utilization is considered restricted cash.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Indirect and derivative facilities may only be used for guarantees, letters of credit and forward exchange contracts to support guarantees issued by RMB and Nedbank to various third parties on our behalf.

**Long-term borrowings**

We have aggregate long-term borrowing outstanding of ZAR 2.4 billion ($142.9 million translated at exchange rates as of December 31, 2022) as described in Note 8. These borrowings include outstanding long-term borrowings obtained by Lesaka SA of ZAR 1.0 billion to partially fund the acquisition of Connect. In contemplation of the Connect transaction, Connect obtained total facilities of approximately ZAR 1.3 billion which were utilized to repay its existing borrowings, to fund a portion of its capital expenditures and to settle obligations under the transaction documents. 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.

**Restricted cash**

We have credit facilities with RMB in order to access cash to fund our ATMs in South Africa. Our cash, cash equivalents and restricted cash presented in our consolidated statement of cash flows as of December 31, 2022, includes restricted cash of approximately $54.2 million related to cash withdrawn from our debt facility to fund ATMs. This cash may only be used to fund ATMs and is considered restricted as to use and therefore is classified as restricted cash on our consolidated balance sheet.

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, 2022, includes restricted cash of approximately $0.2 million that has been ceded and pledged.

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**Cash flows from operating activities**

***Second quarter***

Net cash provided by operating activities during the second quarter of fiscal 2023 was $3.4 million (ZAR 59.9 million) compared to net cash used in operating activities of $13.8 million (ZAR 212.0 million) during the second quarter of fiscal 2022. Excluding the impact of income taxes, our cash used in operating activities during the second quarter of fiscal 2023 was impacted by month-end working capital movements (primarily an increase in accounts payable balances) within our merchant business which generally unwind in the following month, and growth in our consumer and merchant finance loans receivable books, which was partially offset by the positive contribution from Connect.

During the second quarter of fiscal 2023, we paid first provisional South African tax payments of $2.5 million (ZAR 42.6 million) related to our 2023 tax year. During the second quarter of fiscal 2022, we paid first provisional South African tax payments of $0.4 million (ZAR 6.9 million) related to our 2023 tax year.

Taxes paid during the second quarter of fiscal 2023 and 2022 were as follows:

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| | | | |
|:---|:---|:---|:---|
| **Table 14** | **Three months ended December 31,** | **Three months ended December 31,** | **Three months ended December 31,** |
|  | **2022** | **2022** | **2021** |
|  | **$** | $**ZAR** | **ZAR** |
|  | **'000** | **'000** | **'000** |
| First provisional payments  | 2463 | 42582 | 6933 |
| Taxation paid related to prior years  | 10 | 180 | - |
| Tax refund received | (141) | (2570) | (2851) |
| Total South African taxes paid (received)  | 2332 | 40192 | 4082 |
| Foreign taxes paid | 50 | 889 | 540 |
| **Total tax paid**  | 2382 | 41081 | 4622 |

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***First half***

Net cash used in operating activities during the first half of fiscal 2023 was $4.2 million (ZAR 73.1 million) compared to $21.7 million (ZAR 325.4 million) during the first half of fiscal 2022. Excluding the impact of income taxes, our cash used in operating activities during the first half of fiscal 2023 was impacted by month-end working capital movements (primarily an increase in accounts payable balances) within our merchant business which generally unwind in the following month, and growth in our consumer and merchant finance loans receivable books, and the utilization of cash reserves to fund our Consumer operations, which was partially offset by the positive contribution from Connect.

During the first half of fiscal 2023, we paid first provisional South African tax payments of $3.0 million (ZAR 50.8 million) related to our 2023 tax year, and additional second provisional South African tax payments of $0.2 million (ZAR 3.4 million) related to our 2022 tax year. During the first half of fiscal 2022, we paid first provisional South African tax payments of $0.4 million (ZAR 6.9 million) related to our 2022 tax year.

Taxes paid during the first half of fiscal 2023 and 2022 were as follows:

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| | | | |
|:---|:---|:---|:---|
| **Table 15** | **Six months ended December 31,** | **Six months ended December 31,** | **Six months ended December 31,** |
|  | **2022** | **2022** | **2021** |
|  | **$** | $**ZAR** | **ZAR** |
|  | **'000** | **'000** | **'000** |
| First provisional payments  | 2955 | 50798 | 6933 |
| Second provisional payments  | 191 | 3371 | - |
| Taxation paid related to prior years  | 10 | 180 | - |
| Tax refund received | (198) | (3540) | (3227) |
| Total South African taxes paid  | 2958 | 50809 | 3706 |
| Foreign taxes paid | 101 | 1775 | 1065 |
| **Total tax paid**  | 3059 | 52584 | 4771 |

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**Cash flows from investing activities**

***Second quarter***

Cash used in investing activities for the second quarter of fiscal 2023 included capital expenditures of $4.0 million (ZAR 69.9 million), primarily due to the acquisition of safe assets and POS devices.

Cash used in investing activities for the second quarter of fiscal 2022 included capital expenditures of $0.2 million (ZAR 2.9 million), primarily due to the acquisition of computer equipment. During the second quarter of fiscal 2022, we received a scheduled payment of $7.5 million related to the sale of Bank Frick in fiscal 2021.

***First half***

Cash used in investing activities for the first half of fiscal 2023 included capital expenditures of $8.5 million (ZAR 146.5 million), primarily due to the acquisition of safe assets, POS devices and computer equipment. During the first half of fiscal 2023, we received proceeds of $0.25 million related to the first tranche (of two) from the disposal of our entire equity interest in Carbon.

Cash used in investing activities for the first half of fiscal 2022 included capital expenditures of $0.9 million (ZAR 13.3 million), primarily due to the roll out of our new express branches and the acquisition of computer equipment. During the first half of fiscal 2022 we received a scheduled payment of $7.5 million related to the sale of Bank Frick in fiscal 2021.

**Cash flows from financing activities**

***Second quarter***

During the second quarter of fiscal 2023, we utilized approximately $167.2 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect, and repaid $175.4 million of those facilities. We utilized approximately $9.1 million of our long-term borrowings to fund our merchant finance loans receivable business and to fund the acquisition of certain capital expenditures. We repaid approximately $1.7 million of long-term borrowings in accordance with our repayment schedule. We received $0.3 million from the exercise of stock options. We also paid $0.1 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock.

During the second quarter of fiscal 2022, we received $0.7 million from the exercise of stock options, and utilized approximately $172.4 million from our South African overdraft facilities to fund our ATMs and repaid $172.8 million of those facilities.

***First half***

During the first half of fiscal 2023, we utilized approximately $313.3 million from our South African overdraft facilities to fund our ATMs and our cash management business through Connect, and repaid $312.3 million of those facilities. We utilized approximately $10.1 million of our long-term borrowings to fund our merchant finance loans receivable business and to fund the acquisition of certain capital expenditures. We repaid approximately $3.3 million of long-term borrowings in accordance with our repayment schedule. We received $0.3 million from the exercise of stock options. We also paid $0.3 million to repurchase shares from employees in order for the employees to settle taxes due related to the vesting of shares of restricted stock.

During the first half of fiscal 2022, we received $0.7 million from the exercise of stock options, and utilized approximately $311.4 million from our South African overdraft facilities to fund our ATMs and repaid $271.7 million of these facilities.

**Off-Balance Sheet Arrangements**

We have no off-balance sheet arrangements.

**Capital Expenditures**

We expect capital spending for the third quarter of fiscal 2023 to primarily include investments into our ATM infrastructure and branch network in South Africa as well as IT equipment, and through Connect, spending for POS devices, safe assets, vehicles, computer and office equipment. Our capital expenditures for the second quarter of fiscal 2023 and 2022 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. We had outstanding capital commitments as of December 31, 2022, of $3.1 million. We expect to fund these expenditures through internally generated funds and available facilities.

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**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

In addition to the tables below, see Note 4 to the unaudited condensed consolidated financial statements for a discussion of market risk.

We 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, 2022, 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, 2022. 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, 2022, are shown. The selected 1% hypothetical change does not reflect what could be considered the best- or worst-case scenarios.

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| | | | |
|:---|:---|:---|:---|
| **Table 16** | **As of December 31, 2022** | **As of December 31, 2022** | **As of December 31, 2022** |
|  | **Annual expected interest charge** <br>**($'000)** | **Hypothetical change in interest rates** | **Estimated annual expected interest charge after hypothetical change in interest rates** <br>**($'000)** |
| Interest on South African borrowings | 22043 | 1% | 24130 |
|  |  | (1%) | 19956 |

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------

**Item 4. Controls and Procedures**

Under the supervision and with the participation of our management, including our group chief executive officer and our group chief financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended, as of December 31, 2022. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on this evaluation, the group chief executive officer and the group chief financial officer concluded that our disclosure controls and procedures were effective as of December 31, 2022.

***Changes in Internal Control over Financial Reporting***

There have not been any changes in our internal control over financial reporting during the fiscal quarter ended December 31, 2022, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

------

**Item 6. Exhibits**

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

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  |  |  | &nbsp;&nbsp;**Incorporated by Reference Herein** | &nbsp;&nbsp;**Incorporated by Reference Herein** | &nbsp;&nbsp;**Incorporated by Reference Herein** |
| &nbsp;&nbsp;**Exhibit No.** | &nbsp;&nbsp;**Description of Exhibit** | &nbsp;&nbsp;**Included Herewith** | &nbsp;&nbsp;**Form** | &nbsp;&nbsp;**Exhibit** | &nbsp;&nbsp;**Filing Date** |
| &nbsp;&nbsp;10.47 | &nbsp;&nbsp;[<u>Revolving Credit Facility Agreement, dated November 29, 2022, between Cash Connect Capital Proprietary Limited, the Parties Listed in Part I of Schedule 1 (the Original Guarantors) and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as Lender)</u>](http://www.sec.gov/Archives/edgar/data/1041514/000106299322023314/exhibit10-1.htm) |  | &nbsp;&nbsp;8-K | &nbsp;&nbsp;10.1 | &nbsp;&nbsp;December 5, 2022 |
| &nbsp;&nbsp;10.48 | &nbsp;&nbsp;[<u>Amendment Agreement, dated December 29, 2022, between Lesaka Technologies Proprietary Limited (as borrower), FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as lender), and FirstRand Bank Limited (acting through its Rand Merchant Bank division) (as facility agent)</u>](http://www.sec.gov/Archives/edgar/data/1041514/000106299322024571/exhibit10-1.htm) |  | &nbsp;&nbsp;8-K | &nbsp;&nbsp;10.1 | &nbsp;&nbsp;December 30, 2022 |
| &nbsp;&nbsp;[<u>10.49</u>](ex1049.htm) | &nbsp;&nbsp;[<u>Form of Restricted Stock Agreement</u>](ex1049.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;[<u>10.50</u>](ex1050.htm) | &nbsp;&nbsp;[<u>Form of Stock Option Agreement</u>](ex1050.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;[<u>10.51</u>](ex1051.htm) | &nbsp;&nbsp;[<u>Form of Restricted Stock Agreement (non-employee directors)</u>](ex1051.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;[<u>31.1</u>](ex311.htm) | &nbsp;&nbsp;[<u>Certification of Principal Executive Officer pursuant to Rule 13a-14(a) under the Exchange Act</u>](ex311.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;[<u>31.2</u>](ex312.htm) | &nbsp;&nbsp;[<u>Certification of Principal Financial Officer pursuant to Rule 13a-14(a) under the Exchange Act</u>](ex312.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;[<u>32</u>](ex32.htm) | &nbsp;&nbsp;[<u>Certification pursuant to 18 USC Section 1350</u>](ex32.htm) | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.INS | &nbsp;&nbsp;XBRL Instance Document | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.SCH | &nbsp;&nbsp;XBRL Taxonomy Extension Schema | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.CAL | &nbsp;&nbsp;XBRL Taxonomy Extension Calculation Linkbase | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.DEF | &nbsp;&nbsp;XBRL Taxonomy Extension Definition Linkbase | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.LAB | &nbsp;&nbsp;XBRL Taxonomy Extension Label Linkbase | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;101.PRE | &nbsp;&nbsp;XBRL Taxonomy Extension Presentation Linkbase | &nbsp;&nbsp;X |  |  |  |
| &nbsp;&nbsp;104 | &nbsp;&nbsp;Cover page formatted as Inline XBRL and contained in 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 7, 2023.

LESAKA TECHNOLOGIES, INC.

By: /s/ Chris G.B. Meyer

<u>Chris G.B. Meyer</u>

Group Chief Executive Officer

By: /s/ Naeem E. Kola

<u>Naeem E. Kola</u> 

Group Chief Financial Officer, Treasurer and Secretary

## Exhibit 10.49

#### LESAKA TECHNOLOGIES INC.

#### RESTRICTED STOCK AGREEMENT
Lesaka Technologies Inc., a Florida corporation (the "

#### Company
") has granted to the Employee named

below ("

#### you
" or "

#### your
"), effective as of the Grant Date specified below, restricted shares (each, an "

#### Award

#### Share
," and collectively, the "

#### Award Shares
") of common stock, par value $0.001 per share, of the Company

(the "

#### Common Stock
") upon the terms and conditions set forth in this Restricted Stock Agreement

(the "

#### Agreement
") and the Amended and Restated Stock Incentive Plan of Lesaka Technologies Inc.

(the "

#### Plan
"), the provisions of which are incorporated into this Agreement. Except as otherwise provided in

Section 7 of this Agreement with respect to applicable tax and social insurance withholding, you are not

required to pay any amount to the Company for the receipt of these Award Shares. By signing this

Agreement, you: (a) acknowledge that you have read this Agreement; (b) accept the Award Shares subject to

all of the terms and conditions of this Agreement; and (c) agree to accept as binding, conclusive, and final all

decisions or interpretations of the Company upon any questions arising under this Agreement. For purposes

of this Agreement, actions and determinations to be made by the Company may be made by the Board of

Directors of the Company or by such committee or delegate as may be appointed by the Board of Directors

from time to time.

#### Name of Employee:
_______________________________________

#### Grant Date:
_______________________________________

#### Number of Award Shares:
_______________________________________

1. #### D

#### EFINITIONS AND

#### C

#### ONSTRUCTION
.

Unless otherwise defined in this Agreement, capitalized terms have the meanings ascribed to them in

the Plan. The captions and titles contained in this Agreement are for convenience only and do not affect the

meaning or interpretation of any provision of this Agreement.

2. #### V

#### ESTING

#### ;

#### T

#### ERMINATION OF

#### E

#### MPLOYMENT OR

#### S

#### ERVICE
.

(a) All of the Award Shares are nonvested and forfeitable as of the Grant Date. For clarity, as used

in this Agreement, the term "vest" means the lapse of restrictions on the Award Shares in accordance with the

terms of this Agreement.

(b) The Award Shares shall become vested and nonforfeitable, if at all, in accordance with the rules

set forth below, provided that your employment or other service with the Company or its affiliate (such

employment or other service with the Company or its affiliate referred to hereafter as "

#### Service
") is continuous

from the Grant Date through the applicable vesting date and the conditions for vesting have been satisfied. No

Award Shares shall vest or become nonforfeitable after the date your Service terminates for any reason. If

your Service with the Company ceases for any reason, all Award Shares that are not then vested and

nonforfeitable will be immediately forfeited by you and transferred to the Company upon such cessation for

no consideration. Any accrued dividends attributable to such forfeited Award Shares shall also be forfeited if

and when the Award Shares are forfeited.

(c) Vesting of the Award Shares is conditioned upon your continuous Service through the

applicable vesting date. The aggregate number of whole Award Shares subject to this Agreement that shall

have become vested as of any date is determined by multiplying the number of Award Shares listed above by

the following percentage and rounding down:

Vesting Date

Percentage

Prior to the first anniversary of the Grant Date

0%

#### Exhibit 10.49

On or after the first anniversary of the Grant Date and prior

to the second anniversary of the Grant Date

33.333%

On or after the second anniversary of the Grant Date and

prior to the third anniversary of the Grant Date

66.666%

On or after the third anniversary of the Grant Date

100%

(d) You acknowledge and agree that upon the forfeiture of any unvested Award Shares in

accordance with this Section 2, (i) your right to vote and to receive cash dividends on, and all other rights, title

or interest in, to or with respect to, the forfeited Award Shares shall automatically, without further act,

terminate and (ii) the forfeited Award Shares shall be returned to the Company. You hereby irrevocably

appoint (which appointment is coupled with an interest) the Company as your agent and attorney-in-fact to

take any necessary or appropriate action to cause the forfeited Award Shares to be returned to the Company,

including without limitation executing and delivering stock powers and instruments of transfer, making

endorsements and/or making, initiating or issuing instructions or entitlement orders, all in your name and on

your behalf. You hereby ratify and approve all acts done by the Company as such attorney-in-fact. Without

limiting the foregoing, you expressly acknowledge and agree that any transfer agent for the Common Stock of

the Company is fully authorized and protected in relying on, and shall incur no liability in acting on, any

documents, instruments, endorsements, instructions, orders or communications from the Company in

connection with the forfeited Award Shares or the transfer thereof, and that any such transfer agent is a third

party beneficiary of this Agreement.

3. #### R

#### ESTRICTIONS ON

#### T

#### RANSFER
.

(a) Until an Award Share becomes vested and nonforfeitable, it may not be sold, assigned,

transferred, pledged, hypothecated, exchanged, or disposed of in any way (whether by operation of law or

otherwise), except by will or the laws of descent and distribution and shall not be subject to execution,

attachment, anticipation, alienation, encumbrance, garnishment by your creditors or beneficiaries, or similar

process.

(b) Any attempt to dispose of any such Award Shares in contravention of the restrictions set

forth in

Section 3(a)

shall be null and void and without effect. The Company shall not be required to

(i) transfer on its books any Award Shares that have been sold or transferred in contravention of this

Agreement or (ii) treat as the owner of Award Shares, or otherwise accord voting, dividend, or liquidation

rights to, any transferee to whom Award Shares have been transferred in contravention of this Agreement.

4. #### C

#### OMPANY

#### -A

#### SSISTED

#### S

#### ALES OF

#### S

#### HARES

#### ;

#### G

#### RANT OF

#### P

#### OWER OF

#### A

#### TTORNEY FOR

#### S

#### ALE OF

#### S

#### HARES
.

You acknowledge that you have been advised that it may be impracticable for you on your own to sell,

or to arrange for a sale through a broker or otherwise, vested Award Shares. Therefore, the Company expects

to assist you in this regard by facilitating the sale of vested Award Shares, with the method and timing of such

sales to be determined by the Executive Committee of the Company, although the Company has no obligation

to do so. However, in the event that the Company does attempt to facilitate any such sale of vested Award

Shares, the Company does not represent to you that such sale will be completed, or if it is completed, that

vested Award Shares will be sold at any particular price or require any particular level of brokerage

commissions. You hereby irrevocably constitute and appoint the Company's chief executive officer or

successor, and the Company's chief financial officer or successor, each with full power and authority to act

together or alone in any matter hereunder and with full power of substitution, your true and lawful

attorneys-in-fact (individually an "

#### Attorney
," and collectively, the "

#### Attorneys
"), with full power and authority

in your name, for and on your behalf, with respect to all matters arising in connection with the sale of vested

Award Shares, including, but not limited to, the power and authority on your behalf to take any and all of the

following actions: (i) to sell such vested Award Shares through a broker, including a transaction in which the

broker will act as a principal, at a purchase price per share as determined by negotiation between the

Company, the Attorneys, and the broker and to complete, execute, and deliver a stock power in relation to the

sale of vested Award Shares; (ii) on your behalf, to make representations and warranties and enter into

appropriate agreements to effect the sale of such vested Award Shares; (iii) to instruct the Company's transfer

agent as the Attorneys shall determine on all matters pertaining to the delivery and custody of certificates for

such vested Award Shares; (iv) to incur or authorize the incurrence of any necessary or appropriate expense in

connection with the sale of such vested Award Shares; (v) if necessary, to endorse (in blank or otherwise) on

your behalf the certificate(s) representing such vested Award Shares and a stock power or powers attached to

such certificate(s); and (vi) to sign such other certificates, documents, and agreements and take any and all

other actions as the Attorneys may deem necessary or desirable in connection with the consummation of the

transactions contemplated by the power of attorney granted under this

Section 4

. Each Attorney may act alone

in exercising the rights and powers conferred on the Attorneys. Each Attorney is hereby empowered to

determine in his sole discretion the time or times when, the purpose for and the manner in which any power

herein conferred upon him shall be exercised, and the conditions, provisions, or covenants of any instrument

or document which may be executed by him pursuant hereto. The power of attorney granted under this

Section 4

is an agency coupled with an interest and all authority conferred hereby shall be irrevocable, and

shall not be terminated by any act of yours or by operation of law, whether by your death, disability, or

incapacity or by the occurrence of any other event or events. It is understood that the Attorneys assume no

responsibility or liability for any aspect of offering or selling any vested Award Shares and shall not be liable

for any error of judgment or for any act done or omitted or for any mistake of fact or law except for the

Attorneys' own gross negligence, willful misconduct, or bad faith. It is understood that the Attorneys, in

acting pursuant to this power of attorney, are not acting in a fiduciary capacity on your behalf and are not

required to, nor will they necessarily, obtain the best available price or the lowest possible fee or commission

when negotiating or otherwise facilitating any sale of Award Shares pursuant to this power of attorney. The

power of attorney granted under this

Section 4

shall be binding upon you and your heirs, legal representatives,

distributees, successors, and assigns.

5. #### C

#### ERTIFICATE

#### R

#### EGISTRATION
.

Physical possession or custody of such stock certificates shall be retained by the Company until such

time as the Award Shares are transferable without restriction and, thereafter, the Company shall either issue

and deliver to you one or more certificates in your name for the applicable number of vested Award Shares or

provide for uncertificated book entry issuance of those Award Shares.

6. #### L

#### EGENDS
.

Until the Award Shares become vested and nonforfeitable, the Company may at any time place legends

referencing any restrictions on transfer and any applicable U.S. federal, state, or foreign securities law

restrictions on all certificates representing Award Shares subject to the provisions of this Agreement. You

shall, at the request of the Company, promptly present to the Company any and all certificates representing

Award Shares in your possession in order to carry out the provisions of this

Section 6

.

7. #### T

#### AX AND

#### /

#### OR

#### S

#### OCIAL

#### I

#### NSURANCE

#### W

#### ITHHOLDING
.

7.1 #### Generally
. At the time any withholding is required by applicable law, or at any time

thereafter as requested by the Company, you hereby authorize withholding from payroll and any other

amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfy the

federal, state, local, and foreign tax and social insurance withholding obligations of the Company or its

affiliate, if any, which arise in connection with the grant or vesting of the Award Shares. The Company shall

have no obligation to deliver shares of Common Stock or issue any Common Stock certificate until you have

satisfied the tax and social insurance withholding obligations of the Company or its affiliate. The Company

may, in its sole discretion, permit you to satisfy, in whole or in part, any tax and social insurance withholding

obligation which may arise in connection with the grant or vesting of Award Shares either by electing to have

the Company withhold the issuance or delivery of shares of Common Stock due to you, or by electing to

deliver to the Company already-owned Award Shares, in either case having a Fair Market Value (as defined in

the Plan) equal to the amount necessary to satisfy the statutory minimum withholding amount due.

7.2 #### Section 83(b) Election
. If you are a United States taxpayer, you hereby acknowledge

that you have been advised by the Company to seek independent tax advice from your own advisors regarding

the availability and advisability of making an election under Section 83(b) of the Internal Revenue Code of

1986, as amended, and that any such election, if made, must be made within 30 days of the Grant Date. You

expressly acknowledge that you are solely responsible for filing any such Section 83(b) election with the

appropriate governmental authorities, irrespective of the fact that such election is also delivered to the

Company. You may not rely on the Company or any of its officers, directors, or employees for tax or legal

advice regarding this award. You acknowledge that you have sought tax and legal advice from your own

advisors regarding this award or have voluntarily and knowingly foregone such consultation.

8. #### R

#### IGHTS AS A

#### S

#### TOCKHOLDER

#### ,

#### D

#### IRECTOR

#### ,

#### E

#### MPLOYEE

#### ,

#### OR

#### C

#### ONSULTANT
.

8.1 #### Rights as a Stockholder
. Any or all dividends or other distributions paid on this Award

during the period of such restrictions shall be accumulated (without interest) or reinvested in additional

Shares, which in either case shall be subject to the same restrictions as this underlying Award or such other

restrictions as the Committee may determine. Any accrued dividends attributable to forfeited Award Shares

shall also be forfeited if and when Award Shares are forfeited. Except as otherwise provided in this Agreement

with respect to restrictions on transfer of any nonvested and forfeitable Award Shares, you are entitled to all

rights of a stockholder of the Company, including the right to vote the Award Shares and accrue dividends

and/or other distributions declared on the Award Shares.

8.2 #### Director, Employee, or Consultant Status
. You understand and acknowledge that,

except as otherwise provided in a separate, written employment agreement between you and the Company or

an affiliate, your employment is "at will" and is for no specified term. Nothing in this Agreement or the Plan

shall confer upon you any right to continue in the Service of the Company or an affiliate or interfere in any

way with any right of the Company or an affiliate to terminate your Service as a director, an employee, or

consultant, as the case may be, at any time.

9. #### M

#### ISCELLANEOUS

#### P

#### ROVISIONS
.

9.1 #### Further Instruments
. The parties hereto agree to execute such further instruments and

to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

9.2 #### Binding Effect; Parties; Entire Agreement
. Subject to the restrictions on transfer set

forth herein, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their

respective heirs, executors, administrators, successors, and assigns. This Agreement is between you and the

Company. This Agreement shall constitute the entire understanding and agreement between you and the

Company with respect to the subject matter contained in this Agreement and supersedes any prior agreements,

understandings, restrictions, representations, or warranties among you and the Company with respect to such

subject matter.

9.3 #### Amendment
. This Agreement may be amended from time to time by the Company in

its discretion; provided, however, that this Agreement may not be modified in a manner that would have a

materially adverse effect on the Award Shares as determined in the discretion of the Company, except as

provided in the Plan or in a written document signed by each of the parties hereto.

9.4 #### Delivery of Documents and Notices
. Any notice required or permitted under this

Agreement shall be given in writing and shall be deemed effectively given (except to the extent that this

Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, upon

electronic delivery at the e-mail address, if any, provided for you by the Company, or, upon deposit with an

internationally recognized overnight courier service with postage and fees prepaid, addressed to the other party

at the address of such party set forth in this Agreement or at such other address as such party may designate in

writing from time to time to the other party.

(a) #### Description of Electronic Delivery
*.*

This Agreement, the Plan, and any reports

of the Company provided generally to the Company's stockholders may be delivered to you electronically.

Such means of electronic delivery may include but do not necessarily include the delivery of a link to a

Company intranet or the internet site of a third party involved in administering this Agreement, the delivery of

the document via e-mail or such other means of electronic delivery specified by the Company.

(b) #### Consent to Electronic Delivery
. You consent to the electronic delivery of this

Agreement and any reports of the Company provided generally to the Company's stockholders. You

acknowledge that you may receive from the Company a paper copy of any documents delivered electronically

at no cost to you by contacting the Company by telephone or in writing. You further acknowledge that you

will be provided with a paper copy of any documents if the attempted electronic delivery of such documents

fails. Similarly, you understand that you must provide the Company or any designated third party

administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.

You may revoke your consent to the electronic delivery of documents or may change the electronic mail

address to which such documents are to be delivered (if you have provided an electronic mail address) at any

time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service,

or electronic mail. Finally, you understand that you are not required to consent to electronic delivery of

documents.

9.5 #### Applicable Law
. This Agreement shall be governed by the laws of the State of Florida

as such laws are applied to agreements between Florida residents entered into and to be performed entirely

within the State of Florida.

9.6 #### Counterparts
. This Agreement may be executed in counterparts, each of which shall

be deemed an original, but all of which together shall constitute one and the same instrument.

9.7 #### No Future Entitlement
. By execution of this Agreement, you acknowledge and agree

that: (i) the grant of Award Shares is a one-time benefit which does not create any contractual or other right to

receive future grants of Award Shares, or compensation in lieu of Award Shares; (ii) all determinations with

respect to any such future grants, including, but not limited to, the times when Award Shares shall be granted

and the maximum number of Award Shares granted , will be at the sole discretion of the Company; (iii) the

value of the Award Shares is outside the scope of your employment contract; (iv) the value of the Award

Shares is not part of normal or expected compensation for purposes of calculating any severance, resignation,

redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or similar

payments; (v) the vesting of the Award Shares ceases upon termination of Service with the Company or

transfer of employment from the Company, or other cessation of eligibility for any reason, except as may

otherwise be explicitly provided in this Agreement; and (vi) no claim or entitlement to compensation or

damages arises if the Award Shares do not increase in value and you irrevocably release the Company from

any such claim that does arise. Neither this Agreement nor any provision hereunder shall be construed so as to

grant you any right to remain in the Service of the Company.

9.8 #### Personal Data
. For the exclusive purpose of implementing, administering, and

managing the Award Shares, you, by execution of this Agreement, consent to the collection, receipt, use,

retention, and transfer, in electronic or other form, of your personal data by and among the Company and its

third party vendors. You understand that personal data (including but not limited to, name, home address,

telephone number, employee number, employment status, social security number, tax identification number,

job, and payroll location, data for tax withholding purposes, and Award Shares granted, forfeited, vested, and

unvested) may be transferred to third parties assisting in the implementation, administration, and management

of the Award Shares and you expressly authorize such transfer as well as the retention, use, and the subsequent

transfer of the data by the recipient(s). You understand that these recipients may be located in your country or

elsewhere, and that the recipient's country may have different data privacy laws and protections than your

country. You understand that data will be held only as long as is necessary to implement, administer, and

manage the Award Shares . You understand that you may, at any time, request a list with the names and

addresses of any potential recipients of the personal data, view data, request additional information about the

storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents

herein, in any case without cost, by contacting in writing the Company's legal department representative. You

understand, however, that refusing or withdrawing your consent may affect your ability to accept an Award

Share.

9.9 #### The Company's Rights
. The existence of the Award Shares shall not affect in any way

the right or power of the Company or its stockholders to make or authorize any or all adjustments,

recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any

merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with

preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the

dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets or

business, or any other corporate act or proceeding, whether of a similar character or otherwise.

9.10 #### Adjustments for Corporate Transactions and Other Events
. Adjustments for

corporate transactions and other events will be governed under the terms of the Plan.

9.11 #### Conformity with Plan
. This Agreement is intended to conform in all respects with,

and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan

shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or

any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is

available upon

request to the Company.

#### LESAKA TECHNOLOGIES INC. EMPLOYEE
By:

Signature

Its:

Date

Address: President Place

4th Floor Address

Johannesburg 2196

South Africa

## Exhibit 10.50

#### LESAKA TECHNOLOGIES INC.

#### STOCK OPTION AGREEMENT
Lesaka Technologies Inc., a Florida corporation (the "

#### Company
") has granted to the Employee named

below (the "

#### Employee
"), effective as of the Grant Date specified below, an option (the

*"*

#### Option
*"*) to purchase

certain shares of common stock, par value $0.001 per share, of the Company (the "

#### Shares
") upon the terms

and conditions set forth in this Stock Option Agreement (the "

#### Agreement
") and the Amended and Restated

Stock Incentive Plan of Lesaka Technologies Inc. (the "

#### Plan
"), the provisions of which are incorporated into

the Agreement. By signing this Agreement, the Employee: (a) acknowledges he/she has read this Agreement,

(b) accepts the Option subject to all of the terms and conditions of this Agreement, and (c) agrees to accept as

binding, conclusive and final all decisions or interpretations of the Company upon any questions arising under

this Agreement. For purposes of this Agreement, actions and determinations to be made by the Company may

be made by the Board of Directors of the Company or by such committee or delegate as may be appointed by

the Board of Directors from time to time.

#### Name of Employee:
__________________________

#### Grant Date:
__________________________

#### Number of Option Shares:
__________________________

#### Exercise Price:
US$ ____ per Share

#### Option Expiration Date:
Tenth anniversary of the Grant Date

For clarity, as used in this Agreement, the term "exercise" means to acquire ownership of Shares which

are the subject of the Option in accordance with the terms of this Agreement. Except as provided in Section 6

below, the aggregate number of whole Shares for which this Option may be exercised as of any date is

determined by multiplying the number of Option Shares listed above by the following percentage, and

reducing that result by the number of Shares previously acquired upon exercise of the Option:

Exercise Date

Percentage

Prior to the first anniversary of the Grant Date

0%

On or after the first anniversary of the Grant Date and prior to the

second anniversary of the Grant Date

33.33%

On or after the second anniversary of the Grant Date and prior to

the third anniversary of the Grant Date

66.66%

On or after the third anniversary of the Grant Date.

100.00%

#### Exhibit 10.50

The Option shall not become exercisable for any additional Option Shares after the date the

Employee's employment or other service with the Company and its affiliates terminates for any reason.

1. #### D

#### EFINITIONS AND

#### C

#### ONSTRUCTION
.

Unless otherwise defined in this Agreement, capitalized terms have the meanings ascribed to them in

the Plan. The captions and titles contained in this Agreement are for convenience only and do not affect the

meaning or interpretation of any provision of this Agreement.

2. #### T

#### AX

#### C

#### ONSEQUENCES
.

This Option is intended to be a nonstatutory stock option and shall not be treated as an incentive stock

option within the meaning of Section 422(b) of the Code. This Option will be subject to the tax laws of the

country or jurisdiction in which the Employee is a tax resident or is otherwise subject to taxation.

3. #### E

#### XERCISE OF THE

#### O

#### PTION
.

3.1 #### Discretionary Exercise

#### .
The Option shall be exercisable in the discretion of the

Employee prior to termination of the Option in an amount not to exceed the number of Shares for which the

Option is then exercisable less the number of Shares previously acquired upon exercise of the Option.

Exercise of the Option shall be by means of electronic or written notice (the

*"*

#### Exercise Notice
*"*) in a form

authorized by the Company which states the Employee's election to exercise the Option, the number of

whole Shares for which the Option is being exercised and such other representations and agreements as to

the Employee's investment intent with respect to such Shares as may be required pursuant to the provisions

of this Agreement, the Plan or by applicable law. Further, each Exercise Notice must be (a) signed or

otherwise authenticated by the Employee in a manner acceptable to the Company, (b) received by the

Company or the Company's authorized representative, in a manner acceptable to the Company, prior to the

termination of the Option as set forth in Section 5 of this Agreement, and (c) accompanied by full payment

of the aggregate Exercise Price for the number of Shares being purchased. The Option exercise will be

effective upon receipt by the Company or the Company's authorized representative of such electronic or

written Exercise Notice and the aggregate Exercise Price. Notwithstanding the foregoing, if at any time the

Company determines that the delivery of Shares under the Plan or this Agreement is or may be unlawful

under the laws of any applicable jurisdiction, or Federal, state or foreign (non-United States) securities laws,

the right to exercise the Option or receive Shares pursuant to the Option shall be suspended until the

Company determines that such delivery is lawful.

3.2 #### Payment of Exercise Price
.

(a) #### Forms of Consideration Authorized

#### .
Except as otherwise provided below,

payment of the aggregate Exercise Price for the number of Shares for which the Option is being exercised may

be made (i) in cash (US dollars) or cash equivalent acceptable to the Company (including offset against US

dollars, if any, owed by the Company to the Employee as of the date of exercise), (ii) if permitted by the

Company, by tender to the Company, or attestation to the ownership, of whole Shares owned by the

Employee, including Shares deliverable upon exercise of the Option, (iii) by means of a Cashless Exercise, as

defined in Section 3.2(b) of this Agreement, (iv) if permitted by the Company and the Employee is not an

executive officer or director of the Company, with a promissory note in such form as the Company may

specify that bears a market rate of interest and is fully recourse, (v) by any other means acceptable to the

Company, or (v) by any combination of the foregoing as may be permitted by the Company, in its sole

discretion. Shares tendered in payment of the Exercise Price will be valued at their Fair Market Value as of

the date that the exercise occurs.

(b) #### Limitations on Forms of Consideration
.

(i) #### Tender of Stock.
Notwithstanding the foregoing, the Option may not be

exercised by tender to the Company, or attestation to the ownership, of Shares to the extent such tender or

attestation would violate any law, regulation or agreement restricting the redemption of the Company's stock.

(ii) #### Cashless Exercise.
A

*"*

#### Cashless Exercise
*"*

means the delivery of a

properly executed Exercise Notice together with irrevocable instructions to a broker in a form acceptable to

the Company providing for the assignment to the Company of the proceeds of a sale or loan with respect to

some or all of the Shares acquired upon the exercise of the Option pursuant to a program or procedure

approved by the Company. The Company reserves the sole and absolute right to establish, decline, suspend or

terminate any such program or procedure, including with respect to the Employee notwithstanding that such

program or procedures may be available to others.

3.3 #### Company-Assisted Sales of Shares; Grant of Power of Attorney for Sale of

#### Shares
. The Employee acknowledges that he or she has been advised that it may be impracticable for the

Employee on his or her own to sell, or to arrange for a sale through a broker or otherwise of the Shares

acquired upon exercise of the Option. Therefore, the Company expects to assist the Employee in this regard

by facilitating the sale of Shares obtained through the exercise of the Option, with the method and timing of

such sales to be determined by the Executive Committee of the Company, although the Company has no

obligation to do so. However, in the event that the Company does attempt to facilitate any such Share sale,

the Company does not represent to the Employee that such sale will be completed, or if it is completed, that

Shares will be sold at any particular price or require any particular level of brokerage commissions. The

Employee hereby irrevocably constitutes and appoints the Company's chief executive officer or successor,

and the Company's chief financial officer or successor, each with full power and authority to act together or

alone in any matter hereunder and with full power of substitution, the true and lawful attorneys-in-fact of

the Employee (individually an "

#### Attorney
" and collectively the "

#### Attorneys
"), with full power and authority

in the name of, for and on behalf of, the Employee with respect to all matters arising in connection with the

sale of the Shares acquired upon the exercise of the Option, including, but not limited to, the power and

authority on behalf of the Employee to take any and all of the following actions: (i) to sell such Shares (to

be represented by stock option exercise forms executed by the Attorneys) through a broker, including a

transaction in which the broker will act as a principal, at a purchase price per Share as determined by

negotiation between the Company, the Attorneys and the broker and to complete, execute and deliver a

stock power in relation to the sale of the Shares; (ii) to execute and deliver any document that may be

required in connection with the exercise of the Option and deliver the aggregate Exercise Price and

applicable withholding taxes to the Company on behalf of the Employee; (iii) on behalf of the Employee, to

make representations and warranties and enter into appropriate agreements to effect the sale of such Shares;

(iv) to instruct the Company's transfer agent as the Attorneys shall determine on all matters pertaining to the

delivery and custody of certificates for such Shares; (v) to incur or authorize the incurrence of any necessary

or appropriate expense in connection with the sale of such Shares; (vi) if necessary, to endorse (in blank or

otherwise) on behalf of the Employee the certificate(s) representing such Shares and a stock power or

powers attached to such certificate(s); and (vii) to sign such other certificates, documents and agreements

and take any and all other actions as the Attorneys may deem necessary or desirable in connection with the

consummation of the transactions contemplated by the power of attorney granted under this Section 3.3.

Each Attorney may act alone in exercising the rights and powers conferred on the Attorneys.

Each Attorney is hereby empowered to determine in his sole discretion the time or times when, the purpose

for and the manner in which any power herein conferred upon him shall be exercised, and the conditions,

provisions or covenants of any instrument or document which may be executed by him pursuant hereto.

The power of attorney granted under this Section 3.3 is an agency coupled with an interest and all authority

conferred hereby shall be irrevocable, and shall not be terminated by any act of the Employee or by

operation of law, whether by the death, disability or incapacity of the Employee or by the occurrence of any

other event or events. It is understood that the Attorneys assume no responsibility or liability for any aspect

of offering or selling any Shares acquired upon exercise of the Option and shall not be liable for any error of

judgment or for any act done or omitted or for any mistake of fact or law except for the Attorneys' own

gross negligence, willful misconduct or bad faith. It is understood that the Attorneys, in acting pursuant to

this power of attorney, are not acting in a fiduciary capacity on behalf of the Employee and are not required

to, nor will they necessarily, obtain the best available price or the lowest possible fee or commission when

negotiating or otherwise facilitating any sale of Shares pursuant to this power of attorney. The power of

attorney granted under this Section 3.3 shall be binding upon the Employee and the Employee's heirs, legal

representatives, distributees, successors and assigns.

3.4 #### Tax and/or Social Insurance Withholding

#### .
At the time any withholding is required

by applicable law, or at any time thereafter as requested by the Company, the Employee hereby authorizes

withholding from payroll and any other amounts payable to the Employee, and otherwise agrees to make

adequate provision for (including by means of a Cashless Exercise to the extent permitted by the Company),

any sums required to satisfy the federal, state, local and foreign tax and social insurance withholding

obligations of the Company or its affiliate, if any, which arise in connection with the Option. The Company

shall have no obligation to deliver Shares until the tax and social insurance withholding obligations of the

Company or its affiliate have been satisfied by the Employee. The Company may, in its sole discretion,

permit the Employee to satisfy, in whole or in part, any tax and social insurance withholding obligation

which may arise in connection with the Option either by electing to have the Company withhold from the

Shares to be issued upon exercise that number of Shares, or by electing to deliver to the Company already-

owned Shares, in either case having a Fair Market Value (as defined in the Plan) equal to the amount

necessary to satisfy the statutory minimum withholding amount due.

3.5 #### Certificate Registration

#### .
Physical possession or custody of such stock certificates

shall be retained by the Company until such time as the shares are transferable without restriction and,

thereafter, the Company shall either issue and deliver to the Employee one or more certificates in the name

of the Employee for that number of Shares purchased by the Employee or provide for uncertificated, book

entry issuance of those Shares.

3.6 #### Restrictions on Issuance of Shares

#### .
The issuance of Shares upon exercise are

subject to compliance with all applicable requirements of U.S. federal, state, local or foreign law with

respect to such securities. The Option may not be exercised if the issuance of Shares upon exercise would

violate any applicable laws or regulations, or any requirement of any stock exchange or market system upon

which the Shares may then be listed. In addition, the Option may not be exercised unless (i) a registration

statement under the Securities Act of 1933 (the

*"*

#### Securities Act
*"*) shall at the time of exercise of the Option

be in effect with respect to the Shares issuable upon exercise of the Option or (ii) in the opinion of legal

counsel to the Company, the Shares issuable upon exercise of the Option may be issued in accordance with

the terms of an applicable exemption from the registration requirements of the Securities Act. THE

EMPLOYEE IS CAUTIONED THAT THE OPTION MAY NOT BE EXERCISED UNLESS THE

FOREGOING CONDITIONS ARE SATISFIED. ACCORDINGLY, THE EMPLOYEE MAY NOT BE

ABLE TO EXERCISE THE OPTION WHEN DESIRED EVEN THOUGH THE OPTION IS THEN

EXERCISABLE.

The inability of the Company to obtain from any regulatory body having jurisdiction the authority, if any,

deemed by the Company's legal counsel to be necessary to the lawful issuance and sale of any Shares

subject to the Option shall relieve the Company of any liability in respect of the failure to issue or sell such

Shares as to which such requisite authority shall not have been obtained. As a condition to the exercise of

the Option, the Company may require the Employee to satisfy any qualifications that may be necessary or

appropriate, to evidence compliance with any applicable law or regulation and to make any representation

or warranty with respect thereto as may be requested by the Company.

3.7 #### Fractional Shares

#### .
The Company shall not be required to issue fractional shares

upon the exercise of the Option.

4. #### N

#### ONTRANSFERABILITY OF THE

#### O

#### PTION
.

During the lifetime of the Employee, the Option shall be exercisable only by the Employee or the

Employee's guardian, legal representative or attorney-in-fact. The Option shall not be subject in any manner

to anticipation, alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or garnishment by

creditors of the Employee or the Employee's beneficiary, except transfer by will or by the laws of descent and

distribution. Following the death of the Employee, to the extent provided in Section 6 of this Agreement, the

Option may be exercised by the Employee's legal representative or by any person empowered to do so under

the deceased Employee's will or under the then-applicable laws of descent and distribution.

5. #### T

#### ERMINATION OF THE

#### O

#### PTION
.

The Option shall terminate and may no longer be exercised after the first to occur of (a) the close of

business at the Company's principal executive office on the Option Expiration Date, (b) the date specified in

Section 6 of this Agreement in the event of the termination of the Employee's employment or other service

with the Company (such employment or other service with the Company referred to hereafter as "

#### Service
"), or

(c) the occurrence of an event described in Section 9 of the Plan to the extent determined by the Company.

6. #### E

#### FFECT OF

#### T

#### ERMINATION OF

#### S

#### ERVICE
.

6.1 #### Option Exercisability.
The Option shall terminate immediately upon the

Employee's termination of Service with the Company and its affiliates to the extent that it is not exercisable

on the date such Service terminates. To the extent the Option is exercisable on the date such Service

terminates, whether or not such portion of the Option shall continue to be exercisable after such termination

shall be determined in accordance with the remaining provisions of this Section 6.

(a) #### Disability

#### .
If the Employee's Service terminates because of the Employee's

Disability (as defined below), (i) the portion of the Option that is not then exercisable shall terminate

immediately, and (ii) the portion of the Option that is then exercisable shall remain exercisable during the six-

month period following such termination of Service, but in no event beyond the Expiration Date of the Option.

Unless sooner terminated, any remaining unexercised portion of the Option shall terminate upon the expiration

of such six-month period. For purposes of this Agreement, "Disability" means the inability of the Employee

to perform in all material respects the Employee's duties and responsibilities to the Company, or any affiliate

of the Company, by reason of a physical or mental disability or infirmity which inability is reasonably

expected to be permanent and has continued (i) for a period of six consecutive months or (ii) such shorter

period as the Company may reasonably determine in good faith. The Disability determination shall be in the

sole discretion of the Company and the Employee (or the Employee's representative) shall furnish the

Company with medical evidence documenting the Employee's disability or infirmity which is satisfactory to

the Company.

(b) #### Death

#### .
If the Employee's Service terminates because of the death of the

Employee, (i) the portion of the Option that is not then exercisable shall terminate immediately, and (ii) the

portion of the Option that is then exercisable shall remain exercisable, by the Employee's legal representative

or other person who acquired the right to exercise the Option by reason of the Employee's death, during the

six-month period following such termination of Service, but in no event beyond the Expiration Date of the

Option. Unless sooner terminated, any remaining unexercised portion of the Option shall terminate upon the

expiration of such six-month period.

(c) #### No-Fault Termination.
If the Employee's Service terminates because of a No-

Fault Termination, (i) the portion of the Option that is not then exercisable shall terminate immediately, and

(ii) the portion of the Option that is then exercisable shall remain exercisable during the 30-day period

following such termination of Service, but in no event beyond the Expiration Date of the Option. Unless

sooner terminated, any remaining unexercised portion of the Option shall terminate upon the expiration of

such 30-day period. "

#### No-Fault Termination
" means the termination of the Employee's Service for any

reason (other than Disability or death) based on (i) the constructive dismissal of the Employee; (ii) the early or

compulsory retirement of the Employee in terms of the rules of any relevant Company or affiliate retirement

fund; (iii) the operational requirements of the Company or its affiliate or (iv) termination by mutual

agreement. No-Fault Termination shall not include any voluntary termination of Service by the Employee

other than for the reasons described in clauses (i) through (iv) of the preceding sentence or any termination of

the Employee's Service due to the Employee's misconduct or other misdemeanor

*.*

6.2 #### Other Termination of Service.
If the Employee's Service terminates for any

reason, except Disability, death, or No-Fault Termination, the Option shall terminate on the date the

Employee's Service terminates.

7. #### R

#### IGHTS AS A

#### S

#### TOCKHOLDER

#### ,

#### D

#### IRECTOR

#### ,

#### E

#### MPLOYEE OR

#### C

#### ONSULTANT
.

The Employee shall have no rights as a stockholder with respect to any Shares covered by the Option

until the date of the issuance of the Shares for which the Option has been exercised (as evidenced by the

appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company). No

adjustment shall be made for dividends, distributions or other rights for which the record date is prior to the

date the Shares are issued. The Employee understands and acknowledges that, except as otherwise provided

in a separate, written employment agreement between the Company or an affiliate and the Employee, the

Employee's employment is "at will" and is for no specified term. Nothing in this Agreement or the Plan shall

confer upon the Employee any right to continue in the Service of the Company or an affiliate or interfere in

any way with any right of the Company or an affiliate to terminate the Employee's service as a director, an

employee or consultant, as the case may be, at any time.

8. #### L

#### EGENDS
.

The Company may at any time place legends referencing any restrictions on transfer and any

applicable U.S. federal, state, or foreign securities law restrictions on all certificates representing Shares

subject to the provisions of this Agreement. The Employee shall, at the request of the Company, promptly

present to the Company any and all certificates representing Shares acquired pursuant to the Option in the

possession of the Employee in order to carry out the provisions of this Section.

9. #### M

#### ISCELLANEOUS

#### P

#### ROVISIONS
.

9.1 #### Reservation of Shares.
The Company will reserve and set apart and have at all

times, free from preemptive rights, a number of authorized but unissued Shares deliverable upon the

exercise of this Option sufficient to enable it at any time to fulfill all its obligations hereunder.

9.2 #### Further Instruments.
The parties hereto agree to execute such further instruments

and to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

9.3 #### Binding Effect; Parties; Entire Agreement.
Subject to the restrictions on transfer

set forth herein, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their

respective heirs, executors, administrators, successors and assigns. This Agreement is between the

Employee and the Company. This Agreement shall constitute the entire understanding and agreement of

the Employee and the Company with respect to the subject matter contained in this Agreement and

supersedes any prior agreements, understandings, restrictions, representations, or warranties among the

Employee and the Company with respect to such subject matter. To the extent contemplated in this

Agreement, the provisions of this Agreement shall survive any exercise of the Option and shall remain in

full force and effect.

9.4 #### Termination or Amendment.
The Company may terminate, amend or suspend the

Option at any time; provided, however, that except as provided in Section 9 of the Plan, no such termination

or amendment may adversely affect the Option or any unexercised portion of the Option without the

consent of the Employee unless such termination or amendment is necessary to comply with any applicable

law or government regulation. No amendment or addition to this Agreement shall be effective unless in

writing.

9.5 #### Delivery of Documents and Notices.
Any notice required or permitted under this

Agreement shall be given in writing and shall be deemed effectively given (except to the extent that this

Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, upon

electronic delivery at the e-mail address, if any, provided for the Employee by the Company, or, upon

deposit with an internationally recognized overnight courier service with postage and fees prepaid,

addressed to the other party at the address of such party set forth in this Agreement or at such other address

as such party may designate in writing from time to time to the other party.

(a) #### Description of Electronic Delivery.
The Agreement, the Plan and any reports of

the Company provided generally to the Company's stockholders may be delivered to the Employee

electronically. In addition, if permitted by the Company, the Employee may deliver electronically the

Exercise Notice called for by Section 3 of this Agreement to the Company or to such third party as the

Company may designate from time to time. Such means of electronic delivery may include but do not

necessarily include the delivery of a link to a Company intranet or the internet site of a third party involved in

administering the Agreement, the delivery of the document via e-mail or such other means of electronic

delivery specified by the Company.

(b) #### Consent to Electronic Delivery

#### .
The Employee consents to the electronic

delivery of this Agreement and any reports of the Company provided generally to the Company's stockholders

and, if permitted by the Company, the electronic delivery of the Exercise Notice. The Employee

acknowledges that he or she may receive from the Company a paper copy of any documents delivered

electronically at no cost to the Employee by contacting the Company by telephone or in writing. The

Employee further acknowledges that the Employee will be provided with a paper copy of any documents if the

attempted electronic delivery of such documents fails. Similarly, the Employee understands that the

Employee must provide the Company or any designated third party administrator with a paper copy of any

documents if the attempted electronic delivery of such documents fails. The Employee may revoke his or her

consent to the electronic delivery of documents or may change the electronic mail address to which such

documents are to be delivered (if Employee has provided an electronic mail address) at any time by notifying

the Company of such revoked consent or revised e-mail address by telephone, postal service or electronic

mail. Finally, the Employee understands that he or she is not required to consent to electronic delivery of

documents.

9.6 #### Applicable Law.
This Agreement shall be governed by the laws of the State of

Florida as such laws are applied to agreements between Florida residents entered into and to be performed

entirely within the State of Florida.

9.7 #### Counterparts.
This Agreement may be executed in counterparts, each of which

shall be deemed an original, but all of which together shall constitute one and the same instrument.

9.8 #### No Future Entitlement.
By execution of this Agreement, the Employee

acknowledges and agrees that: (i) the grant of an Option is a one-time benefit which does not create any

contractual or other right to receive future grants of Options, or compensation in lieu of Options; (ii) all

determinations with respect to any such future grants, including, but not limited to, the times when Options

shall be granted, the maximum number of Shares subject to each Option and the Exercise Price, will be at

the sole discretion of the Company; (iii) the value of the Option is outside the scope of the Employee's

employment contract; (iv) the value of the Option is not part of normal or expected compensation for

purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-

service awards, pension or retirement benefits or similar payments; (v) the vesting of the Option ceases

upon termination of Service with the Company or transfer of employment from the Company, or other

cessation of eligibility for any reason, except as may otherwise be explicitly provided in this Agreement;

(vi) if the underlying stock does not increase in value, this Option will have no value, nor does the Company

guarantee any future value; and (vii) no claim or entitlement to compensation or damages arises if the

Option does not increase in value and the Employee irrevocably releases the Company from any such claim

that does arise. Neither this Agreement nor any provision thereunder shall be construed so as to grant the

Employee any right to remain in the Service of the Company.

9.9 #### Personal Data
. For the exclusive purpose of implementing, administering and

managing the Option, the Employee by execution of this Agreement, consents to the collection, receipt, use,

retention and transfer, in electronic or other form, of his or her personal data by and among the Company

and its third party vendors. The Employee understands that personal data (including but not limited to,

name, home address, telephone number, employee number, employment status, social security number, tax

identification number, job and payroll location, data for tax withholding purposes and Shares awarded,

cancelled, exercised, vested and unvested) may be transferred to third parties assisting in the

implementation, administration and management of the Option and the Employee expressly authorizes such

transfer as well as the retention, use, and the subsequent transfer of the data by the recipient(s). The

Employee understands that these recipients may be located in the Employee's country or elsewhere, and

that the recipient's country may have different data privacy laws and protections than the Employee's

country. The Employee understands that data will be held only as long as is necessary to implement,

administer and manage the Option. The Employee understands that he or she may, at any time, request a

list with the names and addresses of any potential recipients of the personal data, view data, request

additional information about the storage and processing of data, require any necessary amendments to data

or refuse or withdraw the consents herein, in any case without cost, by contacting in writing the Company's

legal department representative. The Employee understands, however, that refusing or withdrawing his or

her consent may affect his or her ability to accept an Option.

9.10 #### The Company's Rights.
The existence of the Option shall not affect in any way the

right or power of the Company or its stockholders to make or authorize any or all adjustments,

recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any

merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with

preference ahead of or convertible into, or otherwise affecting the Shares or the rights thereof, or the

dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets

or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

9.11 #### Adjustments for Corporate Transactions and Other Events
. Adjustments for

corporate transactions and other events will be governed under the terms of the Plan.

9.12 #### Conformity with Plan
. This Agreement is intended to conform in all respects with,

and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan

shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement

or any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is available

upon request to the Company.

#### LESAKA TECHNOLOGIES INC . EMPLOYEE
By:

Signature

Its:

Date

Address: President Place

4th Floor Address

Johannesburg 2196

South Africa

Employee:

Nonstatutory Stock Option

Date:

#### STOCK OPTION EXERCISE NOTICE
Lesaka Technologies Inc.

Attention: Chief Financial Officer

President Place

4th Floor

Johannesburg 2196

South Africa

Ladies and Gentlemen:

1. #### Option.
I was granted an option (the

*"*

#### Option
*"*) to purchase shares of the common stock (the

*"*

#### Shares
*"*) of

Lesaka Technologies Inc. (the

*"*

#### Company
*"*) pursuant to my Stock Option Agreement (the

*"*

#### Agreement
*"*) as follows:

Grant Date:

Number of Option Shares:

Exercise Price per Share: US$

2. #### Exercise of Option.
I hereby elect to exercise the Option to purchase the following number of Shares in

accordance with the Agreement:

Total Shares Purchased:

Total Exercise Price

(Total Shares X Price per Share)

US$

3. #### Payments.
I enclose payment in full of the total exercise price for the Shares in the following form(s), as

authorized by my Agreement:

☐

Cash: US$

☐

Check: US$

☐

Tender of Company Stock: Contact Company

☐

Promissory Note: Contact Company

4. #### Tax and Social Insurance Withholding.
I authorize payroll withholding and otherwise will make adequate

provision for the federal, state, local and foreign tax and social insurance withholding obligations, if any, of the Company or its

affiliate in connection with the Option. I enclose payment in full of my withholding taxes, if any, as follows:

#### (Contact Company for amount of tax due.)
☐

Cash: US$

☐

Check: US$

5. #### Employee Information.
My address is:

My Tax Identification Number is:

6. #### Binding Effect.
I agree that the Shares are being acquired in accordance with and subject to the terms, provisions

and conditions of the Agreement, to all of which I hereby expressly assent. This Agreement shall inure to the benefit of and be

binding upon my heirs, executors, administrators, successors and assigns.

I understand that I am purchasing the Shares pursuant to the terms of my Agreement, a copy of which I have received and

carefully read and understand.

Very truly yours,

____________________________________

(Signature)

Receipt of the above is hereby acknowledged.

LESAKA TECHNOLOGIES INC.

By:

Title:

Dated:

## Exhibit 10.51

#### LESAKA TECHNOLOGIES INC.

#### RESTRICTED STOCK AGREEMENT

#### FOR NON-EMPLOYEE DIRECTORS
Lesaka Technologies Inc., a Florida corporation (the "

#### Company
") has granted to the Non-Employee

Director named below ("

#### you
" or "

#### your
"), effective as of the Grant Date specified below, restricted shares

(each, an "

#### Award Share
," and collectively, the "

#### Award Shares
") of common stock, par value $0.001 per

share, of the Company (the "

#### Common Stock
") upon the terms and conditions set forth in this Restricted Stock

Agreement (the "

#### Agreement
") and the Amended and Restated Stock Incentive Plan of Lesaka Technologies

Inc. (the "

#### Plan
"), the provisions of which are incorporated into this Agreement. Except as otherwise provided

in Section 7 of this Agreement with respect to applicable tax and social insurance withholding, you are not

required to pay any amount to the Company for the receipt of these Award Shares. By signing this

Agreement, you: (a) acknowledge that you have read this Agreement; (b) accept the Award Shares subject to

all of the terms and conditions of this Agreement; and (c) agree to accept as binding, conclusive, and final all

decisions or interpretations of the Company upon any questions arising under this Agreement. For purposes

of this Agreement, actions and determinations to be made by the Company may be made by the Board of

Directors of the Company or by such committee or delegate as may be appointed by the Board of Directors

from time to time.

#### Name of Director:
____________________________________

#### Grant Date:
____________________________________

#### Number of Award Shares:
____________________________________

1. #### D

#### EFINITIONS AND

#### C

#### ONSTRUCTION
.

Unless otherwise defined in this Agreement, capitalized terms have the meanings ascribed to them in

the Plan. The captions and titles contained in this Agreement are for convenience only and do not affect the

meaning or interpretation of any provision of this Agreement.

2. #### V

#### ESTING

#### ;

#### T

#### ERMINATION OF

#### E

#### MPLOYMENT OR

#### S

#### ERVICE
.

(a) All of the Award Shares are nonvested and forfeitable as of the Grant Date. For clarity, as used

in this Agreement, the term "vest" means the lapse of restrictions on the Award Shares in accordance with the

terms of this Agreement.

(b) The Award Shares shall become vested and nonforfeitable, if at all, in accordance with the rules

set forth below, provided that your service with the Company as a member of its Board of Directors ("

#### Service
") is continuous from the Grant Date through the applicable vesting date. No Award Shares shall vest

or become nonforfeitable after the date your Service terminates for any reason. If your Service with the

Company ceases for any reason, all Award Shares that are not then vested and nonforfeitable will be

immediately forfeited by you and transferred to the Company upon such cessation for no consideration. Any

accrued dividends attributable to such forfeited Award Shares shall also be forfeited if and when the Award

Shares are forfeited.

(c) Vesting of the Award Shares is conditioned upon your continuous Service through the

applicable vesting date. The aggregate number of whole Award Shares subject to this Agreement that shall

have become vested as of any date is determined by multiplying the number of Award Shares listed above by

the following percentage and rounding down:

Vesting Date

Percentage

#### Exhibit 10.51

Prior to the first anniversary of the Grant Date

0%

On or after the first anniversary of the Grant Date and prior

to the second anniversary of the Grant Date

33.333%

On or after the second anniversary of the Grant Date and

prior to the third anniversary of the Grant Date

66.666%

On or after the third anniversary of the Grant Date

100%

3. #### R

#### ESTRICTIONS ON

#### T

#### RANSFER
.

Any attempt to dispose of any such Award Shares in contravention of this Agreement shall be null and

void and without effect. The Company shall not be required to (i) transfer on its books any Award Shares that

have been sold or transferred in contravention of this Agreement or (ii) treat as the owner of Award Shares, or

otherwise accord voting, dividend, or liquidation rights to, any transferee to whom Award Shares have been

transferred in contravention of this Agreement.

4. #### C

#### OMPANY

#### -A

#### SSISTED

#### S

#### ALES OF

#### S

#### HARES

#### ;

#### G

#### RANT OF

#### P

#### OWER OF

#### A

#### TTORNEY FOR

#### S

#### ALE OF

#### S

#### HARES
.

You acknowledge that you have been advised that it may be impracticable for you on your own to sell,

or to arrange for a sale through a broker or otherwise, vested Award Shares. Therefore, the Company expects

to assist you in this regard by facilitating the sale of vested Award Shares, with the method and timing of such

sales to be determined by the Executive Committee of the Company, although the Company has no obligation

to do so. However, in the event that the Company does attempt to facilitate any such sale of vested Award

Shares, the Company does not represent to you that such sale will be completed, or if it is completed, that

vested Award Shares will be sold at any particular price or require any particular level of brokerage

commissions. You hereby irrevocably constitute and appoint the Company's chief executive officer or

successor and the Company's chief financial officer or successor, each with full power and authority to act

together or alone in any matter hereunder and with full power of substitution, your true and lawful

attorneys-in-fact (individually an "

#### Attorney
," and collectively, the "

#### Attorneys
"), with full power and authority

in your name, for and on your behalf, with respect to all matters arising in connection with the sale of vested

Award Shares, including, but not limited to, the power and authority on your behalf to take any and all of the

following actions: (i) to sell such vested Award Shares through a broker, including a transaction in which the

broker will act as a principal, at a purchase price per share as determined by negotiation between the

Company, the Attorneys, and the broker and to complete, execute, and deliver a stock power in relation to the

sale of vested Award Shares; (ii) on your behalf, to make representations and warranties and enter into

appropriate agreements to effect the sale of such vested Award Shares; (iii) to instruct the Company's transfer

agent as the Attorneys shall determine on all matters pertaining to the delivery and custody of certificates for

such vested Award Shares; (iv) to incur or authorize the incurrence of any necessary or appropriate expense in

connection with the sale of such vested Award Shares; (v) if necessary, to endorse (in blank or otherwise) on

your behalf the certificate(s) representing such vested Award Shares and a stock power or powers attached to

such certificate(s); and (vi) to sign such other certificates, documents, and agreements and take any and all

other actions as the Attorneys may deem necessary or desirable in connection with the consummation of the

transactions contemplated by the power of attorney granted under this

Section 4

. Each Attorney may act alone

in exercising the rights and powers conferred on the Attorneys. Each Attorney is hereby empowered to

determine in his sole discretion the time or times when, the purpose for and the manner in which any power

herein conferred upon him shall be exercised, and the conditions, provisions, or covenants of any instrument

or document which may be executed by him pursuant hereto. The power of attorney granted under this

Section 4

is an agency coupled with an interest and all authority conferred hereby shall be irrevocable, and

shall not be terminated by any act of yours or by operation of law, whether by your death, disability, or

incapacity or by the occurrence of any other event or events. It is understood that the Attorneys assume no

responsibility or liability for any aspect of offering or selling any vested Award Shares and shall not be liable

for any error of judgment or for any act done or omitted or for any mistake of fact or law except for the

Attorneys' own gross negligence, willful misconduct, or bad faith. It is understood that the Attorneys, in

acting pursuant to this power of attorney, are not acting in a fiduciary capacity on your behalf and are not

required to, nor will they necessarily, obtain the best available price or the lowest possible fee or commission

when negotiating or otherwise facilitating any sale of Award Shares pursuant to this power of attorney. The

power of attorney granted under this

Section 4

shall be binding upon you and your heirs, legal representatives,

distributees, successors, and assigns.

5. #### C

#### ERTIFICATE

#### R

#### EGISTRATION
.

Physical possession or custody of such stock certificates shall be retained by the Company until such

time as the Award Shares are transferable without restriction and, thereafter, the Company shall either issue

and deliver to you one or more certificates in your name for the applicable number of vested Award Shares or

provide for uncertificated book entry issuance of those Award Shares.

6. #### L

#### EGENDS
.

Until the Award Shares become transferable, the Company may at any time place legends referencing

any restrictions on transfer and any applicable U.S. federal, state, or foreign securities law restrictions on all

certificates representing Award Shares subject to the provisions of this Agreement. You shall, at the request

of the Company, promptly present to the Company any and all certificates representing Award Shares in your

possession in order to carry out the provisions of this

Section 6

.

7. #### T

#### AX AND

#### /

#### OR

#### S

#### OCIAL

#### I

#### NSURANCE

#### W

#### ITHHOLDING
.

7.1 #### Generally
. At the time any withholding is required by applicable law, or at any time

thereafter as requested by the Company, you hereby authorize withholding from payroll and any other

amounts payable to you, and otherwise agree to make adequate provision for any sums required to satisfy the

federal, state, local, and foreign tax and social insurance withholding obligations of the Company or its

affiliate, if any, which arise in connection with the grant or vesting of the Award Shares. The Company shall

have no obligation to deliver shares of Common Stock or issue any Common Stock certificate until you have

satisfied the tax and social insurance withholding obligations of the Company or its affiliate. The Company

may, in its sole discretion, permit you to satisfy, in whole or in part, any tax and social insurance withholding

obligation which may arise in connection with the grant or vesting of Award Shares either by electing to have

the Company withhold the issuance or delivery of shares of Common Stock due to you, or by electing to

deliver to the Company already-owned Award Shares, in either case having a Fair Market Value (as defined in

the Plan) equal to the amount necessary to satisfy the statutory minimum withholding amount due.

7.2 #### Section 83(b) Election
. If you are a United States taxpayer, you hereby acknowledge

that you have been advised by the Company to seek independent tax advice from your own advisors regarding

the availability and advisability of making an election under Section 83(b) of the Internal Revenue Code of

1986, as amended, and that any such election, if made, must be made within 30 days of the Grant Date. You

expressly acknowledge that you are solely responsible for filing any such Section 83(b) election with the

appropriate governmental authorities, irrespective of the fact that such election is also delivered to the

Company. You may not rely on the Company or any of its officers, directors, or employees for tax or legal

advice regarding this award. You acknowledge that you have sought tax and legal advice from your own

advisors regarding this award or have voluntarily and knowingly foregone such consultation.

8. #### R

#### IGHTS AS A

#### S

#### TOCKHOLDER

#### ,

#### D

#### IRECTOR

#### ,

#### OR

#### C

#### ONSULTANT
.

8.1 #### Rights as a Stockholder
. Any or all dividends or other distributions paid on this

Award during the period of such restrictions shall be accumulated (without interest) or reinvested in additional

Shares, which in either case shall be subject to the same restrictions as this underlying Award or such other

restrictions as the Committee may determine. Any accrued dividends attributable to forfeited Award Shares

shall also be forfeited if and when Award Shares are forfeited. Except as otherwise provided in this Agreement

with respect to restrictions on transfer of any nonvested and forfeitable Award Shares, you are entitled to all

rights of a stockholder of the Company, including the right to vote the Award Shares and accrue dividends

and/or other distributions declared on the Award Shares.

8.2 #### Director or Consultant Status.
You understand and acknowledge that, except as

otherwise provided in a separate, written service or consulting agreement between you and the Company or an

affiliate, your Service is at the discretion of the Company and is for no specified term. Nothing in this

Agreement or the Plan shall confer upon you any right to continue in the Service of the Company or an

affiliate or interfere in any way with any right of the Company or an affiliate to terminate your Service as a

director or consultant, as the case may be, at any time.

9. #### M

#### ISCELLANEOUS

#### P

#### ROVISIONS
.

9.1 #### Further Instruments.
The parties hereto agree to execute such further instruments and

to take such further action as may reasonably be necessary to carry out the intent of this Agreement.

9.2 #### Binding Effect; Parties; Entire Agreement.
Subject to the restrictions on transfer set

forth herein, this Agreement shall inure to the benefit of and be binding upon the parties hereto and their

respective heirs, executors, administrators, successors, and assigns. This Agreement is between you and the

Company. This Agreement shall constitute the entire understanding and agreement between you and the

Company with respect to the subject matter contained in this Agreement and supersedes any prior agreements,

understandings, restrictions, representations, or warranties among you and the Company with respect to such

subject matter.

9.3 #### Amendment
. This Agreement may be amended from time to time by the Company in

its discretion; provided, however, that this Agreement may not be modified in a manner that would have a

materially adverse effect on the Award Shares as determined in the discretion of the Company, except as

provided in the Plan or in a written document signed by each of the parties hereto.

9.4 #### Delivery of Documents and Notices.
Any notice required or permitted under this

Agreement shall be given in writing and shall be deemed effectively given (except to the extent that this

Agreement provides for effectiveness only upon actual receipt of such notice) upon personal delivery, upon

electronic delivery at the e-mail address, if any, provided for you by the Company, or, upon deposit with an

internationally recognized overnight courier service with postage and fees prepaid, addressed to the other party

at the address of such party set forth in this Agreement or at such other address as such party may designate in

writing from time to time to the other party.

(a) #### Description of Electronic Delivery.
This Agreement, the Plan, and any reports

of the Company provided generally to the Company's stockholders may be delivered to you electronically.

Such means of electronic delivery may include but do not necessarily include the delivery of a link to a

Company intranet or the internet site of a third party involved in administering this Agreement, the delivery of

the document via e-mail or such other means of electronic delivery specified by the Company.

(b) #### Consent to Electronic Delivery

#### .
You consent to the electronic delivery of this

Agreement and any reports of the Company provided generally to the Company's stockholders. You

acknowledge that you may receive from the Company a paper copy of any documents delivered electronically

at no cost to you by contacting the Company by telephone or in writing. You further acknowledge that you

will be provided with a paper copy of any documents if the attempted electronic delivery of such documents

fails. Similarly, you understand that you must provide the Company or any designated third party

administrator with a paper copy of any documents if the attempted electronic delivery of such documents fails.

You may revoke your consent to the electronic delivery of documents or may change the electronic mail

address to which such documents are to be delivered (if you have provided an electronic mail address) at any

time by notifying the Company of such revoked consent or revised e-mail address by telephone, postal service,

or electronic mail. Finally, you understand that you are not required to consent to electronic delivery of

documents.

9.5 #### Applicable Law.
This Agreement shall be governed by the laws of the State of Florida

as such laws are applied to agreements between Florida residents entered into and to be performed entirely

within the State of Florida.

9.6 #### Counterparts.
This Agreement may be executed in counterparts, each of which shall

be deemed an original, but all of which together shall constitute one and the same instrument.

9.7 #### No Future Entitlement.
By execution of this Agreement, you acknowledge and agree

that: (i) the grant of Award Shares is a one-time benefit which does not create any contractual or other right to

receive future grants of Award Shares, or compensation in lieu of Award Shares; (ii) all determinations with

respect to any such future grants, including, but not limited to, the times when Award Shares shall be granted

and the maximum number of Award Shares granted , will be at the sole discretion of the Company; (iii) the

value of the Award Shares is outside the scope of your service or consulting contract, if any; (iv) the value of

the Award Shares is not part of normal or expected compensation for purposes of calculating any severance,

resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement

benefits, or similar payments; (v) the vesting of the Award Shares ceases upon termination of Service with the

Company or other cessation of eligibility for any reason, except as may otherwise be explicitly provided in

this Agreement; and (vi) no claim or entitlement to compensation or damages arises if the Award Shares do

not increase in value and you irrevocably release the Company from any such claim that does arise. Neither

this Agreement nor any provision hereunder shall be construed so as to grant you any right to remain in the

Service of the Company.

9.8 #### Personal Data
. For the exclusive purpose of implementing, administering, and

managing the Award Shares, you, by execution of this Agreement, consent to the collection, receipt, use,

retention, and transfer, in electronic or other form, of your personal data by and among the Company and its

third party vendors. You understand that personal data (including but not limited to, name, home address,

telephone number, employee number, employment status, social security number, tax identification number,

job, and payroll location, data for tax withholding purposes, and Award Shares granted, forfeited, vested, and

unvested) may be transferred to third parties assisting in the implementation, administration, and management

of the Award Shares and you expressly authorize such transfer as well as the retention, use, and the subsequent

transfer of the data by the recipient(s). You understand that these recipients may be located in your country or

elsewhere, and that the recipient's country may have different data privacy laws and protections than your

country. You understand that data will be held only as long as is necessary to implement, administer, and

manage the Award Shares . You understand that you may, at any time, request a list with the names and

addresses of any potential recipients of the personal data, view data, request additional information about the

storage and processing of data, require any necessary amendments to data or refuse or withdraw the consents

herein, in any case without cost, by contacting in writing the Company's legal department representative. You

understand, however, that refusing or withdrawing your consent may affect your ability to accept an Award

Share.

9.9 #### The Company's Rights
. The existence of the Award Shares shall not affect in any way

the right or power of the Company or its stockholders to make or authorize any or all adjustments,

recapitalizations, reorganizations or other changes in the Company's capital structure or its business, or any

merger or consolidation of the Company, or any issue of bonds, debentures, preferred or other stocks with

preference ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the

dissolution or liquidation of the Company, or any sale or transfer of all or any part of the Company's assets or

business, or any other corporate act or proceeding, whether of a similar character or otherwise.

9.10 #### Adjustments for Corporate Transactions and Other Events
. Adjustments for

corporate transactions and other events will be governed under the terms of the Plan.

9.11 #### Conformity with Plan
. This Agreement is intended to conform in all respects with,

and is subject to all applicable provisions of, the Plan. Inconsistencies between this Agreement and the Plan

shall be resolved in accordance with the terms of the Plan. In the event of any ambiguity in this Agreement or

any matters as to which this Agreement is silent, the Plan shall govern. A copy of the Plan is

available upon

request to the Company.

#### LESAKA TECHNOLOGIES INC. DIRECTOR
By:

Its Signature

Date: ____________________________ Date: _______________________________

Address: President Place

4th Floor Address

Johannesburg 2196

South Africa

## Exhibit 31.1

#### Exhibit 31.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULES 13A-14(A) AND 15D-14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Chris G.B. Meyer, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lesaka Technologies, Inc. ("Lesaka") for the quarter ended December 31,

2022;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a 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;

3. 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;

4. 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 be

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 of Lesaka's disclosure controls and procedures and presented in 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, or is reasonably likely to materially affect, Lesaka's internal control over

financial reporting; and

5. 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 in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect Lesaka's ability to record, process, summarize and report financial

information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

Lesaka's internal control over financial reporting.

Date: February 7, 2023

/s/ Chris G.B. Meyer

Chris G.B. Meyer

Group Chief Executive Officer

## Exhibit 31.2

#### Exhibit 31.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULES 13A-14(A) AND 15D-14(A)

UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Naeem E. Kola, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Lesaka Technologies, Inc. ("Lesaka") for the quarter ended December 31,

2022;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a 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;

3. 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;

4. 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 be

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 of Lesaka's disclosure controls and procedures and presented in 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, or is reasonably likely to materially affect, Lesaka's internal control over

financial reporting; and

5. 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 in the design or operation of internal control over financial

reporting which are reasonably likely to adversely affect Lesaka's ability to record, process, summarize and report financial

information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in

Lesaka's internal control over financial reporting.

Date: February 7, 2023

/s/ Naeem E. Kola

Naeem E. Kola

Group Chief Financial Officer

## Ex-32

#### Exhibit 32
CERTIFICATION

PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the quarterly report of Lesaka Technologies, Inc. ("Lesaka") on Form 10-Q for the quarter ended

December 31, 2022, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), Chris G.B. Meyer and

Naeem E. Kola, Group Chief Executive Officer and Group Chief Financial Officer, respectively, of Lesaka, certify, pursuant to 18

U.S.C. § 1350, that to their knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934,

as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results

of operations of Lesaka.

Date: February 7, 2023

/s/: Chris G.B. Meyer

Name: Chris G.B. Meyer

Group Chief Executive Officer

Date: February 7, 2023

/s/: Naeem E. Kola

Name: Naeem E. Kola

Group Chief Financial Officer