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Equity-Accounted Investments And Other Long-Term Assets | 12 Months Ended
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Jun. 30, 2025
Equity-Accounted Investments And Other Long-Term Assets [Abstract] |
Equity-Accounted Investments And Other Long-Term Assets | 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS Equity-accounted investments The Company’s ownership percentage in its equity-accounted investments as of June 30, 2025 and 2024, was as follows: June 30, June 30, 2025 2024 Sandulela Technology Proprietary Limited ("Sandulela") 49 % 49 % SmartSwitch Namibia (Pty) Ltd (“SmartSwitch Namibia”) 50 % 50 % Finbond In December 2023, the Company sold its entire remaining equity interest in Finbond which comprised of 220,523,358 shares, and which represented approximately 27.8 % of Finbond’s issued and outstanding ordinary shares immediately prior to the sale. Lesaka SA had pledged, among other things, its entire equity interest in Finbond as security for its previous South African facilities described in Note 12. Sale of Finbond shares during the years ended June 30, 2024 and 2023 On August 10, 2023, the Company, through its wholly owned subsidiary Net1 Finance Holdings (Pty) Ltd, entered into an agreement with Finbond to sell its remaining shareholding to Finbond for a cash consideration of ZAR 64.2 million ($ 3.5 million), or ZAR 0.2911 per share. The transaction closed in December 2023. The Company did no t record a gain or loss on the disposal because the sale proceeds were equivalent to the net carrying value, including accumulated reserves, of the investment in Finbond as of the disposal date. The cash proceeds received of ZAR 64.2 million ($ 3.5 million) were used to repay capitalized interest under our borrowing facilities, refer to Note 12. The Company sold 25,456,545 shares in Finbond for cash during the year ended June 30, 2023, and recorded a loss of $ 0.4 million in the caption loss on equity-accounted investment in the Company’s consolidated statement of operations for the years ended June 30, 2023. 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Equity-accounted investments (continued) Finbond (continued) Sale of Finbond shares during the years ended June 30, 2024 and 2023 (continued) The following table presents the calculation of the loss on disposal of Finbond shares during the years ended June 30, 2024 and 2023: Year ended June 30, 2024 2023 Loss on disposal of Finbond shares: Consideration received in cash $ 3,508 $ 265 Less: carrying value of Finbond shares sold (2,112) (363) Less: release of foreign currency translation reserve from accumulated other comprehensive loss (1,543) (252) Add: release of stock-based compensation charge related to equity-accounted investment 147 9 Loss on sale of Finbond shares $ - $ (341) Finbond impairments recorded during the year ended June 30, 2024 The Company performed an impairment assessment of its holding in Finbond, including the foreign currency translation reserve and other equity account amounts, as of September 30, 2023. The Company recorded an impairment loss of $ 1.2 million during the quarter ended September 30, 2023, which represented the difference between the determined fair value of the Company’s interest in Finbond and the Company’s carrying value, including the foreign currency translation reserve (before the impairment). The Company used the price of ZAR 0.2911 referenced in the August 2023 agreement referred to above to calculate the determined fair value for Finbond. Finbond impairments recorded during the year ended June 30, 2023 The Company considered the combination of the ongoing losses incurred and reported by Finbond and its lower share price as impairment indicators as of September 30, 2022. The Company performed an impairment assessment of its holding in Finbond as of September 30, 2022. The Company recorded an impairment loss of $ 1.1 million during the year ended June 30, 2023, related to the other-than-temporary decrease 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). During fiscal 2023, there continued to be limited trading in Finbond shares on the JSE because a small number of shareholders owned 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. Carbon In September 2022, the Company entered into a binding term sheet to sell its entire interest, or 25 %, in Carbon for $ 0.5 million and a loan due from Carbon, with a face value of $ 3 million, for $ 0.75 million. Both the equity interest and the loan had a carrying value of $ 0 (zero) at June 30, 2022. The Company received $ 0.25 million on closing and the outstanding balance due by Etobicoke was expected to be paid as follows: (i) $ 0.25 million on September 30, 2023 (the amount was received in October 2023), and (ii) the remaining amount, of $ 0.75 million in March 2024 (the amount has not been received as of June 30, 2024 (refer to Note 4)). The Company has allocated the $ 0.25 million received on closing to the sale of the equity interest and allocated the subsequent funds received first to the sale of the equity interest and then to the loans. 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Equity-accounted investments (continued) Carbon (continued) The Company believed that the fair value of the Carbon shares provided as security was $ 0 (zero), which was in line with the carrying value as of June 30, 2022, and created an allowance for doubtful loans receivable related to the $ 1.0 million previously 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 consolidated statements of operations. The following table presents the calculation of the gain on disposal of Carbon during the year ended June 30, 2023: Year ended June 30, 2023 Gain on disposal of Carbon shares: Consideration received in cash in September 2022 $ 250 Less: carrying value of Carbon - Gain on disposal of Carbon shares: (1) $ 250 (1) The Company did not 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. VantagePay Limited The Company provided VantagePay with a working capital facility of $ 1.5 million. The Company created an allowance for credit losses related to loans receivable of $ 1.5 million during the year ended June 30, 2021, related to the full amount outstanding as of June 30, 2021. This amount was still outstanding as of June 30, 2025. Summarized below is the movement in equity-accounted investments during the years ended June 30, 2025 and 2024, which includes the investment in equity and the investment in loans provided to equity-accounted investees: Finbond Other (1) Total Investment in equity Balance as of June 30, 2023 $ 3,040 $ 131 $ 3,171 Stock-based compensation 14 - 14 Comprehensive loss: (956) 166 (790) Other comprehensive income 489 - 489 Equity accounted (loss) earnings (1,445) 166 (1,279) Share of net (loss) income (278) 166 (112) Impairment (1,167) - (1,167) Dividends received - (95) (95) Sale of shares in equity-accounted investment (2,096) - (2,096) Foreign currency adjustment (2) (2) 4 2 Balance as of June 30, 2024 - 206 206 Comprehensive income: - 114 114 Equity accounted earnings - 114 114 Share of net income - 114 114 Dividends received - (96) (96) Sale of shares in equity-accounted investment - (507) (507) Equity-accounted investment acquired in business combination (Note 3) - 477 477 Foreign currency adjustment (2) - 5 5 Balance as of June 30, 2025 $ - $ 199 $ 199 (1) Includes Sandulela and SmartSwitch Namibia; (2) The foreign currency adjustment represents the effects of the fluctuations of the ZAR and Namibian dollar, against the U.S. dollar on the carrying value. 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Other long-term assets Summarized below is the breakdown of other long-term assets as of June 30, 2025, and June 30, 2024: June 30, June 30, 2025 2024 Total equity investments $ - $ 76,297 Investment in MobiKwik (June 30, 2024: 10 %) (1) - 76,297 Investment in 5 % of Cell C (June 30, 2024: 5 %) at fair value (Note 6) - - Investment in 87.50 % of CPS (June 30, 2024: 87.50 %) at fair value (1)(2) - - Policy holder assets under investment contracts (Note 11) 125 216 Reinsurance assets under insurance contracts (Note 11) 1,837 1,469 Other long-term assets 1,847 - Total other long-term assets $ 3,809 $ 77,982 (1) The Company determined that MobiKwik (up until December 2024) and CPS do not have readily determinable fair values and therefore elected to record these investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The Company disposed of its entire investment in MobiKwik in late June 2025. (2) On October 16, 2020, the High Court of South Africa, Gauteng Division, Pretoria ordered that Cash Paymaster Services (Pty) Ltd (“CPS”) be placed into liquidation. MobiKwik The Company signed a subscription agreement with MobiKwik, which is one of India’s largest independent mobile payments networks and buy now pay later businesses. Pursuant to the subscription agreement, the Company agreed to make an equity investment of up to $ 40.0 million in MobiKwik over a 24 -month period. The Company made an initial $ 15.0 million investment in August 2016 and a further $ 10.6 million investment in June 2017, under this subscription agreement. During the year ended June 30, 2019, the Company paid $ 1.1 million to subscribe for additional shares in MobiKwik. The Company owned 6,215,620 equity shares in MobiKwik, which as of June 30, 2024, represented approximately 10 % of MobiKwik’s issued share capital. Refer to Note 6 for additional information regarding the determination of the fair value of Company’s investment in MobiKwik as of June 30, 2025. The Company disposed of its entire equity interest in MobiKwik for $ 16.4 million during the year ended June 30, 2025, and recorded a loss of $ 59.8 million. This loss comprised of (i) fair value adjustments to decrease the carrying value of its investment by $ 54.2 million from $ 76.3 million as of June 30, 2024, to $ 22.1 million as of March 31, 2025, and (ii) a further loss $ 5.6 million upon disposal in the fourth quarter of fiscal 2025. The loss is included in the caption “Change in fair value of equity securities” in the consolidated statement of operations for the year ended June 30, 2025. The Company did not identify any observable transactions during the years ended June 30, 2024 and 2023, respectively, and therefore there was no change in the fair value of MobiKwik during these years. During the year ended June 30, 2021, MobiKwik entered into a number of separate agreements with new shareholders to raise additional capital through the issuance of additional shares. The Company used the valuation from MobiKwik’s June 2021 capital raise as the basis for its fair value determination of $ 76.3 million as of June 30, 2024. Cell C On August 2, 2017, the Company, through its subsidiary, Net1SA, purchased 75,000,000 class “A” shares of Cell C for an aggregate purchase price of ZAR 2.0 billion ($ 151.0 million) in cash. The Company funded the transaction through a combination of cash and a borrowing facility. Net1 SA has pledged, among other things, its entire equity interest in Cell C as security for the previous South African facilities described in Note 12. 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. The Company’s investment in Cell C is carried at fair value. Refer to Note 6 for additional information regarding changes in the fair value of Cell C. CPS The Company deconsolidated its investment in CPS in May 2020. As of June 30, 2025 and 2024, respectively, the Company owned 87.5 % of CPS’ issued share capital. 9. EQUITY-ACCOUNTED INVESTMENTS AND OTHER LONG-TERM ASSETS (continued) Other long-term assets (continued) Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of June 30, 2025: Cost basis Unrealized holding gains Unrealized holding losses Carrying value Equity securities: Investment in CPS $ - $ - $ - $ - Held to maturity: Investment in Cedar Cellular notes - - - - Summarized below are the components of the Company’s equity securities without readily determinable fair value and held to maturity investments as of June 30, 2024: Cost basis Unrealized holding gains Unrealized holding losses Carrying value Equity securities: Investment in MobiKwik $ 26,993 $ 49,304 $ - $ 76,297 Investment in CPS - - - - Held to maturity: Investment in Cedar Cellular notes - - - - Total $ 26,993 $ 49,304 $ - $ 76,297

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 740 -SubTopic 323 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org/1943274/2147478156/740-323-50-2 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org/1943274/2147481687/323-10-50-3 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org/323/tableOfContent + Details
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