Lesaka Technologies (LSAK) Risk Analysis

We are required to comply with anti-corruption laws and regulations, including the FCPA and UK

We are required to comply with certain laws and regulations, including economic and trade sanctions,

In August 2019, the National Credit Amendment Bill, or debt-relief bill, was signed into law in South Africa. The effective date of the debt-relief bill has not yet been announced and has been significantly delayed. We believe that the debt-relief bill will restrict the ability of financial services providers to provide lending products to certain low-income earners and will increase the cost of credit to these consumers. As a result, compliance with the debt -relief bill may adversely impact our micro-lending operations in South Africa. Furthermore, we expect that it will take us, and other credit providers, some time to fully understand, interpret and implement this new legislation in our lending processes and practices. Non-compliance with the provisions of this new legislation may result in financial loss and penalties, reputational loss or other administrative punishment.

Amendments to the NCA were signed into law in South Africa in August 2019. Compliance with these

without alternate means of access to a banking license. We are also required to comply with the requirements

businesses if we fail to comply with payment scheme rules, and/or fail to maintain certain regulatory licenses

and regulatory framework, which may have a material adverse effect on our business. On March 3, 2025, the South African Reserve Bank ("SARB") published certain draft regulatory documents for commentary that are expected to have a substantial impact on how we conduct our business namely: (i) a draft directive entitled "Directive in respect of specific payment activities within the national payment system" (the "Directive"); (ii) a draft exemption notice entitled "Designation by the Prudential Authority of specific activities conducted in the national payment system which shall be deemed not to constitute ‘the business of a bank' under paragraph (cc) in section 1(1) of the Banks Act, 1990" (the "Exemption Notice"); and (iii) the National Payment System Bill ("NPS Bill"), which seeks to replace the existing National Payment System Act, 1998. The proposed regulations were made available for comment, and we submitted detailed comments to our industry body, Association of South African Payment Providers, on the proposed regulations. The key objectives of the proposed regulations are to clarify the mandate and objectives of the SARB with respect to the national payment system ("NPS"); and establish a robust regulatory, oversight, and supervisory framework for the NPS. The proposed regulations also aim to promote financial inclusion, competition, the prevention of financial crime, and the fair treatment and protection of customers, while introducing an activity-based licensing and authorization regime. In this regard, the Directive defines thirteen "payment activities" and provides that a person, which can be a bank or a non-bank, providing a "payment activity" must obtain authorisation from the SARB to undertake such activity. Under the Exemption Notice, certain payment activities are exempted from the definition of ‘the business of a bank'. Prior to the Exemption Notice, these activities could only be undertaken by a bank. Pursuant to the Exemption Notice, these activities can be undertaken by non-banks, subject to certain conditions. Certain of our businesses,including EasyPay Everywhere, Adumo and Kazang Pay, currently undertake activities which would qualify as "payment activities"under the Directive and the NPS Bill. Under the current regulatory framework, these activities are undertaken in partnership with a sponsoring bank and the sponsoring bank is subject to regulation by the SARB. In other words, the business undertaking the "payment activity" is not subject to direct regulation with respect to such payment activities. It is uncertain if and when the proposed regulations will enter into effect and whether a non-bank such as the relevant Lesaka subsidiary may elect whether to conduct an exempted payment activity by partnering with a bank to do so, or on its own, if it is authorised by the SARB - i.e. whether both options will be available to a non-bank. Should our businesses be subject to direct regulation under this new regime (i.e., if our current sponsorship model is no longer available), we expect that we will incur significant operating costs to comply with the new requirements, and to obtain authorization with respect thereto. Furthermore, while some requirements may already exist under other current regulatory frameworks for certain of our businesses, we will likely need to invest in additional resources, systems and processes to satisfy the regulatory requirements contemplated in the proposed regulations, which may also lead to increased operational costs, which may have a material adverse effect on our business.

lead to increased operating costs for our business as we work to ensure compliance with the new legislative

on the South African payments industry. It may change the manner in which we conduct business and likely

Proposed regulatory changes to the national payments system are expected to have a substantial impact

While Lesaka is incorporated in the state of Florida, United States, substantially all of the company's assets are located outside the United States. For this reason, the majority of Lesaka's directors and all its officers reside outside of the United States and the majority of our experts, including our independent registered public accountants, are based in South Africa. As a result, even though you could effect service of legal process upon Lesaka, as a Florida corporation, in the United States,you may not be able to collect any judgment obtained against Lesaka in the United States, including any judgment based on the civil liability provisions of U.S. federal securities laws, because substantially all of our assets are located outside the United States. Any legal processes initiating action in the United States against Lesaka's directors, officers, and experts who are located outside of the United States, will need to be served on them in that country, in accordance with the procedures prescribed by the relevant U.S. court. South Africa is not a party to any treaties regarding the enforcement of foreign commercial judgments. In order to be able to enforce a foreign judgment, it is required for the South African courts to first "recognize" the U.S. judgment – in the absence of this,the foreign judgment has no automatic extra territorial effect. The foreign judgment constitutes a "cause of action" which may be recognized and enforced by South African courts. In order to achieve this, legal proceedings must be commenced in the South African courts. South Africa is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, and its International Arbitration Act 15 of 2017 provides that foreign arbitral awards must be recognised and enforced in South Africa. However, application must still be made to the South African High Court in order for the award to be recognised and enforceable in South Africa. Additional, practical, considerations relating to the enforcement of foreign judgments and arbitration awards in South Africa include the following: If a foreign judgment is enforced by a South African court, the approval of the SARB (or an Authorised Dealer of SARB) is required (i) before a defendant resident in South Africa may pay money to a non-resident plaintiff; and (ii) to settle the judgement in a currency other than South African Rand; and A plaintiff who is not resident in South Africa may be required to provide security for costs when initiating court proceedings in South Africa (including for the enforcement of foreign judgments and awards).

You may experience some difficulties in effecting service of legal process, enforcing U.S and/or foreign

African businesses, we may be subject to fines and we risk losing our government and/or private contracts.

other things, to increase existing income tax rates, including the corporate income tax rate, amend existing

government requires additional income to fund future government expenditures and may be required, among

The economy of South Africa is exposed to high rates of inflation, interest and corporate tax, which

If we do not achieve applicable Broad-Based Black Economic Empowerment objectives in our South

South Africa's high levels of poverty, unemployment and crime may increase our costs and impair our

Geopolitical conflicts, including the conflict between Russia and Ukraine and in the Middle East, may

As of June 30, 2025, we had aggregate borrowings outstanding of ZAR 3.6 billion ($200.8 million translated at exchange rates as of June 30, 2025). We partially funded certain of our recent acquisitions through South African bank borrowings. We, together with Lesaka SA and the majority of Lesaka SA's directly and indirectly wholly-owned subsidiaries, have agreed to guarantee the obligations of Lesaka SA and of the other borrowers under the certain of the borrowings to the lenders. Certain of these borrowings contain customary covenants which include a requirement for Lesaka SA to maintain specified Net Debt to EBITDA and Interest Cover Ratios (as defined in the lending agreements) and restricts the ability of Lesaka SA, and certain of its subsidiaries to make certain distributions with respect to their capital stock, prepay other debt, encumber their assets, incur additional indebtedness, make investment above specified levels, engage in certain business combinations and engage in other corporate activities. The borrowings through our merchant lending operations, through Cash Connect Capital (Pty) Ltd ("CCC") and K2020 Connect (Pty) Ltd ("K2020"), include a ZAR 400 million revolving credit facility agreement. This facility contains customary covenants that require the borrowing parties 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. These security arrangements and covenants may reduce our operating flexibility or our ability to engage in other transactions that may be beneficial to us. If we are unable to comply with the covenants, we could be in default and the indebtedness could be accelerated. If this were to occur, we might not be able to obtain waivers of default or to refinance the debt with another lender and as a result, our business, financial condition and stock price would suffer.

Emerging markets such as Southern Africa are subject to greater risks than more developed markets. While we focus our business primarily on emerging markets because that is where we perceive the greatest opportunities to market our products and services successfully, the political, economic and market conditions in these markets present risks that could make it more difficult to operate our business successfully. Some of these risks include: Political, legal and economic instability, including higher rates of inflation and currency fluctuations; High levels of corruption, including bribery of public officials; Loss due to civil strife, acts of war or terrorism, guerrilla activities and insurrection; A lack of well-developed legal systems which could make it difficult for us to enforce our intellectual property and contractual rights; Logistical, utilities (including electricity and water supply) and communications challenges; Potential adverse changes in laws and regulatory practices, including import and export license requirements and restrictions, tariffs, legal structures and tax laws; Difficulties in staffing and managing operations and ensuring the safety of our employees; Restrictions on the right to convert or repatriate currency or export assets; Greater risk of uncollectible accounts and longer collection cycles; Indigenization and empowerment programs; Exposure to liability under the UK Bribery Act; and Exposure to liability under U.S. securities and foreign trade laws, including the Foreign Corrupt Practices Act, or FCPA,and regulations established by the U.S. Department of Treasury's Office of Foreign Assets Control, or OFAC.

Operating in Southern and East Africa, both emerging markets, subjects us to greater risks than those

We may not be able to effectively and efficiently manage the disruption to our operations as a result of

In May 2016, we issued an aggregate of 9,984,311 shares of our common stock to the IFC Investors. Certain IFC Investors were also investors in Adumo and on October 1, 2024, we issued an aggregate of 1,989,162 additional shares of our common stock to these IFC Investors pursuant to the Adumo transaction agreement. As of June 30, 2025, the IFC Investors held 9,356,028 shares. We granted the IFC Investors certain rights, including the right to require us to repurchase any share held by the IFC Investors pursuant to the May 2016 and October 2024 transactions upon the occurrence of specified triggering events, which we refer to as a "put right." The put price per share will be the higher of the price per share paid to us by the IFC Investors and the volume-weighted average price per share prevailing for the 60 trading days preceding the triggering event, except that with respect to a put right triggered by rejection of a bona fide offer, the put price per share will be the highest price offered by the offeror. If a put triggering event occurs, it could adversely impact our liquidity and capital resources. In addition, the existence of the put right could also affect whether or on what terms a third party might in the future offer to purchase our company. Our response to any such offer could also be complicated,delayed or otherwise influenced by the existence of the put right.

The legislative framework for the promotion of Broad-Based Black Economic Empowerment ("BEE") in South Africa has been established through the Broad-Based Black Economic Empowerment Act, No. 53 of 2003, as amended from time to time, and the Amended BEE Codes of Good Practice, 2013, or BEE Codes, and any sector-specific codes of good practice, or Sector Codes,published pursuant thereto. Sector Codes are fully binding between and among businesses operating in a sector for which a Sector Code has been published. Achievement of BEE objectives is measured by a scorecard which establishes a weighting for the various elements. Scorecards are independently reviewed by accredited BEE verification agencies which issue a verification certificate that presents an entity's BEE Status Level. This BEE verification process must be conducted on an annual basis, and the resultant BEE verification certificate is only valid for a period of 12 months from the date of issue. Under our consolidated scorecard, which includes all South African businesses, we currently hold a BEE Status Level 2. Two of our South African businesses, being EasyPay Financial Services (Pty) Ltd ("EP FS") and EasyPay Insurance Limited,are subject to the Amended Financial Sector Code, or the FS Sector Code, and all other businesses are consolidated under the Department of Trade and Industry (DTI) Generic Codes. The FS Sector Code have been amended and aligned with the new BEE Codes and were promulgated in December 2017. Licensing and/or regulatory authorities overseeing these South African businesses may set minimum adherence requirements to BEE standards as a condition for an operating license to trade. The minimum requirement under the Financial Sector Code is Level 8. We currently have a BEE Status Level 5 for EP FS and BEE Status Level 4 for EasyPay Insurance. The BEE scorecard includes a component relating to management control, which serves to determine the participation of Black people in the board, as well as at various levels of management within a measured entity (including, inter alia, Executive Management, Senior Management, Middle Management and Junior Management). The BEE Codes and/or Sector Codes define the terms "Senior Management", "Middle Management" and "Junior Management" as those occupational categories as determined in accordance with the Employment Equity Regulations, with specific emphasis on improving participation in proportion to the demographics of the Economically Active Population of South Africa, as published by Statistics South Africa, from time to time. Employment Equity legislation seeks to drive the alignment of the workforce with the racial composition of the economically active population of South Africa and accelerate the achievement of employment equity targets, introducing monetary fines for non-compliance with the Employment Equity legislation and misrepresented submissions. Annexure EEA9 to the Employment Equity Regulations sets out the various occupational levels which are determined in accordance with the relevant grading systems applied by the measured entity and referred to in said Annexure. During fiscal 2025, we made cash contributions to 36 community-based organizations and enterprises to enable them to promote growth and strengthen their capacity to develop innovative platforms or provide services to the markets they serve. We were also involved in disaster relief efforts for 275 families who were affected by disasters such as floods, cyclones and fires. We also advanced digital transformation in over 80 high schools by donating over 3,800 mobile devices. On November 14, 2024, our shareholders voted on and approved the funding and issuance of 2,490,000 shares of our common stock to the Lesaka ESOP Trust. The Lesaka Employee Share Ownership Plan ("ESOP") is designed to create alignment with our long-term growth objectives. The Lesaka ESOP Trust is also expected to advance our transformation initiatives and plays an important role in improving our BEE Status Level. However, it is possible that these and other actions may not be sufficient to enable us to achieve the applicable BEE objectives set out for specific financial years. In that event, in order to maintain competitiveness in the South African marketplace, we may have to seek to increase compliance through other means, including by selling or placing additional shares of Lesaka or of our South African subsidiaries to Black South Africans (either directly or indirectly), over and above what has already been approved, and/or changing to suppliers that have higher BEE Status Levels. Such sales or placements of shares could have a dilutive impact on your ownership interest, which could cause the market price of our stock to decline. We expect that our BEE Status Level will be important in order for us to remain competitive in the South African marketplace. We continually seek ways to improve our BEE Status Level, especially the ownership (so-called "equity") and procurement elements thereof.

partnerships with South African banks. We will be unable to provide our payments and card-acquiring

of payment schemes, including VISA and Mastercard. Furthermore, we provide certain of our services under

payments and card acquiring services. The South African retail banking market is highly regulated. Under current law and regulations, our EasyPay Everywhere ("EPE") business activities require us to be registered as a bank in South Africa or to have access to an existing banking license. We are not currently so registered, but we have an agreement with African Bank Limited, that enables us to implement our EPE program in compliance with the relevant laws and regulations. If this agreement were to be terminated, we would not be able to operate these services unless we were able to obtain access to a banking license through alternate means. Furthermore, we have to comply with the South African Financial Intelligence Centre Act, 2001 and money laundering and terrorist financing control regulations, when we open new bank accounts for our customers and when they transact. Failure to effectively implement and monitor responses to the legislation and regulations may result in significant fines or prosecution of African Bank and ourselves. The South African Financial Advisory and Intermediary Services Act, 2002, requires persons who act as intermediaries between financial product suppliers and consumers in South Africa to register as financial service providers. EasyPay Insurance was granted a Financial Service Provider ("FSP") license on June 9, 2015, and EP FS was granted a FSP license on July 11, 2017. If our FSP licenses are withdrawn or suspended, we may be stopped from continuing our financial services businesses in South Africa unless we are able to enter into a representative arrangement with a third party FSP. Furthermore, the proposed Conduct of Financial Institutions ("COFI") Bill will overhaul the current regulatory and legislative framework by replacing the rules-based approach with an outcomes-driven and principles-based model, and the adoption of an activity-based licensing regime. It will establish a uniform legislative framework to regulate the conduct of all financial institutions across the financial services sector. While the framework will make significant changes, including the conversion of existing licences through transitional arrangements and new activities requiring licensing, it is likely to increase operational costs to meet regulatory expectations. The final draft of the COFI Bill is expected to be tabled before Parliament late 2025 or early 2026 for approval. However,contingencies are in place to ensure smooth transition should the COFI Bill face further delays which will include formal consultations and the phased introduction of the new legislative framework. We are required to comply with the requirements of payment schemes, including VISA and Mastercard. We have deployed a significant number of devices, and any mandatory compliance upgrades to our deployed POS devices would require significant capital expenditures and/or be disruptive to our customer base. Failure to comply with the payment schemes' rules may result in significant fines and/or a loss of license to participate in the scheme(s). We provide card acquiring services to our customers by partnering with Nedbank Limited and ABSA Bank Limited, and payment processing services in partnership with the largest banks in South Africa. If these agreements were to be terminated, Adumo would not be able to operate its payment services unless it were able to obtain alternative card acquiring or payment processing agreements with other partners or obtain a direct designation license with the schemes and regulatory bodies. In addition, if we were to lose our Payment Association of South Africa ("PASA ") registrations or fail to have them renewed, it would be unable to operate its payment services. Compliance with the requirements under these various regulatory regimes may cause us to incur significant additional costs and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition of liens, fines and/or civil or criminal liability.

erratic electricity supply in South Africa, which could adversely affect our, financial position, cash flows and