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Significant Accounting Policies (Policy)
 12 Months Ended
Jun. 30, 2025
Significant Accounting Policies [Abstract]  
Principles Of Consolidation
Principles of consolidation
The financial statements of
 
entities which are controlled
 
by Lesaka, referred to as
 
subsidiaries, are consolidated. Inter-company
accounts and transactions are eliminated upon consolidation.
 
The Company, if it is the primary beneficiary,
 
consolidates entities which are considered to be variable interest entities (“VIE”).
The primary beneficiary is considered
 
to be the entity that will absorb a
 
majority of the entity's expected losses,
 
receive a majority of
the entity's expected residual returns, or both. The Company has an obligation to absorb the
 
financial losses of the Lesaka ESOP Trust
and also
 
has the
 
ability to
 
control this
 
trust and
 
therefore it
 
has been
 
consolidated. This
 
trust does
 
not generate
 
significant losses
 
or
residual returns.
Business Combinations
Business combinations
The
 
Company
 
accounts
 
for
 
its
 
business
 
acquisitions
 
under
 
the
 
acquisition
 
method
 
of
 
accounting.
 
The
 
total
 
value
 
of
 
the
consideration paid
 
for acquisitions is
 
allocated to
 
the underlying
 
net assets acquired,
 
based on their
 
respective estimated fair
 
values.
The Company uses a number
 
of valuation methods to determine
 
the fair value of assets and
 
liabilities acquired, including discounted
cash
 
flows,
 
external
 
market
 
values,
 
valuations
 
on
 
recent
 
transactions
 
or
 
a
 
combination
 
thereof,
 
and
 
believes
 
that
 
it
 
uses
 
the
 
most
appropriate
 
measure
 
or
 
a
 
combination
 
of
 
measures
 
to
 
value
 
each
 
asset
 
or
 
liability.
 
The Company
 
recognizes
 
measurement-period
adjustments in the reporting period in which the adjustment amounts are determined.
Use Of Estimates
Use of estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions
 
that
affect
 
the
 
reported
 
amounts
 
of
 
assets
 
and
 
liabilities
 
and
 
disclosure
 
of
 
contingent
 
assets
 
and
 
liabilities
 
at
 
the
 
date
 
of
 
the
 
financial
statements
 
and
 
the reported
 
amounts
 
of revenues
 
and
 
expenses during
 
the reporting
 
period.
 
Actual results
 
could
 
differ
 
from
 
those
estimates.
Translation Of Foreign Currencies
Translation of foreign
 
currencies
The primary
 
functional currency
 
of the
 
consolidated entities
 
is the
 
South African
 
Rand (“ZAR”)
 
and the
 
Company’s
 
reporting
currency is the U.S. dollar.
 
Assets and liabilities are translated
 
at the exchange rates in effect
 
at the balance sheet date. Revenues
 
and
expenses are translated at average
 
rates for the period. Translation
 
gains and losses are reported in
 
accumulated other comprehensive
income in total
 
equity.
 
The Company releases the
 
foreign currency translation
 
reserve included in accumulated
 
other comprehensive
income attributable
 
to a foreign
 
entity upon sale
 
or complete, or
 
substantially complete,
 
liquidation of the
 
investment in that
 
foreign
entity and includes the release in the gain or loss reported related to the sale or
 
liquidation of the foreign entity.
Foreign exchange transactions are translated at the spot rate ruling at the date of the transaction. Monetary items are translated at
the closing
 
spot rate
 
at the
 
balance sheet
 
date. Transactional
 
gains and
 
losses are
 
recognized
 
in selling,
 
general and
 
administration
expense on the Company’s consolidated
 
statement of operations for the period.
Cash, Cash Equivalents And Restricted Cash
Cash, cash equivalents and restricted cash
Cash and cash equivalents
 
include cash on hand and funds
 
deposited in bank accounts with
 
financial institutions that are liquid,
unrestricted and
 
readily available.
 
Restricted cash
 
represents cash
 
which is
 
legally or
 
contractually restricted
 
as to
 
use and
 
includes
cash related to cash withdrawn from the Company’s debt facilities to fund ATMs
 
as well cash in certain bank accounts that have been
ceded to under certain of the Company’s
 
borrowings.
Allowance For Credit Losses
Allowance for credit losses
The Company uses historical default experience over the lifetime of loans in order to calculate a lifetime loss rate for its lending
books. The allowance for credit losses related
 
to Consumer finance loans receivables is calculated by multiplying the
 
lifetime loss rate
with
 
the
 
month-end
 
outstanding
 
lending
 
book.
 
The
 
allowance
 
for
 
credit
 
losses
 
related
 
to
 
Merchant
 
finance
 
loans
 
receivables
 
is
calculated
 
by
 
adding
 
together
 
actual
 
receivables
 
in
 
default
 
plus
 
multiplying
 
the
 
lifetime
 
loss
 
rate
 
with
 
the
 
month-end
 
outstanding
lending book. The Company
 
writes off microlending
 
finance loans receivable and
 
related service fees and interest
 
if a borrower is
 
in
arrears with
 
repayments for
 
more than
 
three months
 
or is
 
deceased. The
 
Company writes
 
off merchant
 
and working
 
capital finance
receivables and related
 
fees when it is
 
evident that reasonable
 
recovery procedures,
 
including where deemed
 
necessary, formal
 
legal
action, have failed. Prior to July 1, 2023, the Company regularly reviewed the ageing of outstanding amounts due from borrowers and
adjusted its allowance based on management’s
 
estimate of the recoverability of the finance loans receivable.
 
2.
 
SIGNIFICANT ACCOUNTING POLICIES (continued)
Allowance for credit losses (continued)
The Company uses a lifetime loss rate by expressing write-off
 
experience as a percentage of corresponding invoice amounts (as
opposed to outstanding balances).
 
The allowance for credit
 
losses related to these
 
receivables has been calculated
 
by multiplying the
lifetime loss
 
rate with
 
recent invoice/origination amounts.
 
Prior to
 
July 1,
 
2023, a specific
 
provision is
 
established where it
 
is considered
likely that all or
 
a portion of
 
the amount due
 
from customers renting
 
safe assets, point of
 
sale (“POS”) equipment,
 
receiving support
and
 
maintenance
 
or
 
transaction
 
services
 
or
 
purchasing
 
licenses
 
or
 
SIM
 
cards
 
from
 
the
 
Company
 
will
 
not
 
be
 
recovered.
 
Non-
recoverability
 
is assessed
 
based
 
on a
 
quarterly
 
review
 
by management
 
of
 
the ageing
 
of outstanding
 
amounts,
 
the
 
location
 
and
 
the
payment history of the customer in relation to those specific amounts.
Inventory
Inventory
Inventory
 
is valued
 
at the
 
lower of
 
cost and
 
net realizable
 
value. Cost
 
is determined
 
on a
 
first-in,
 
first-out basis
 
and includes
transport and handling costs.
Property, Plant And Equipment
Property, plant
 
and equipment
Property,
 
plant and
 
equipment are
 
shown at
 
cost less accumulated
 
depreciation. Property,
 
plant and
 
equipment are
 
depreciated
on the straight-line basis at rates which
 
are estimated to amortize the assets to
 
their anticipated residual values over their useful
 
lives.
Within the following asset classifications, the expected
 
economic useful lives are approximately:
Vaults
10
 
years
Computer equipment
3
 
to
8
 
years
Office equipment
2
 
to
10
 
years
Vehicles
3
 
to
8
 
years
Furniture and fittings
3
 
to
10
 
years
The gain or loss arising
 
on the disposal or retirement
 
of an asset is determined
 
as the difference between
 
the sales proceeds and
the carrying amount of the asset and is recognized in income.
Leases
Leases
The Company determines whether an arrangement is a lease at inception.
 
Operating leases are included in operating lease right-
of-use assets (“ROU”),
 
operating lease liability
 
- current, and
 
operating lease liability
 
– long term
 
in its consolidated
 
balance sheets.
The Company
 
does not
 
have any
 
significant finance
 
leases as
 
of June
 
30, 2025
 
and 2024,
 
respectively,
 
but its
 
policy is
 
to include
finance leases in property and equipment, other payables, and other
 
long-term liabilities in its consolidated balance sheets.
A ROU asset
 
represents the
 
Company’s
 
right to use
 
an underlying
 
asset for the
 
lease term and
 
the lease liabilities
 
represent its
obligation to
 
make lease
 
payments arising
 
from the
 
lease arrangement.
 
Operating lease
 
ROU assets
 
and liabilities
 
are recognized
 
at
commencement date based on
 
the present value of
 
lease payments over the
 
lease term. As
 
most of the
 
Company’s leases do not provide
an implicit rate,
 
the Company generally
 
uses its incremental
 
borrowing rate
 
based on
 
the estimated rate
 
of interest for
 
collateralized
borrowing over
 
a similar term
 
of the lease
 
payments at commencement
 
date. The operating
 
lease ROU asset
 
also includes any
 
lease
prepayments made
 
and excludes lease
 
incentives. The terms
 
of the Company’s
 
lease arrangements may
 
include options to
 
extend or
terminate
 
the
 
lease
 
when
 
it is
 
reasonably
 
certain
 
that
 
the Company
 
will exercise
 
that
 
option.
 
Lease
 
expense
 
for
 
lease payments
 
is
recognized on a straight-line basis over the lease term.
The Company does not recognize right-of-use assets and lease liabilities for lease arrangements with a term of twelve months or
less. The Company
 
accounts for all
 
components in a
 
lease arrangement as
 
a single combined
 
lease component. Costs
 
incurred in the
adaptation of leased properties to
 
serve the requirements of
 
the Company (leasehold improvements) are
 
capitalized and amortized over
the shorter of the estimated useful life of the asset and the remaining term of
 
the lease.
Equity-accounted Investments
Equity-accounted investments
The Company uses the equity
 
method to account for
 
investments in companies when
 
it has significant influence but
 
not control
over
 
the operations
 
of the
 
company.
 
Under the
 
equity method,
 
the Company
 
initially records
 
the investment
 
at cost
 
and
 
thereafter
adjusts the carrying value of the investment to recognize its proportional share of the equity-accounted company’s net income or loss.
In addition, when an investment qualifies for the equity
 
method (as a result of an increase in the level of ownership
 
interest or degree
of influence),
 
the cost
 
of acquiring
 
the additional
 
interest in
 
the investee
 
is added
 
to the
 
current basis
 
of the
 
Company’s
 
previously
held interest and the equity method would be
 
applied subsequently from the date on which
 
the Company obtains the ability to exercise
significant influence over the investee.
The Company
 
releases a
 
pro rata
 
portion of
 
the foreign
 
currency translation
 
reserve related
 
to an
 
equity-accounted investment
that is
 
included
 
in accumulated
 
other comprehensive
 
income to
 
earnings upon
 
the sale
 
of a
 
portion of
 
its ownership
 
interest in
 
the
equity-accounted
 
investment.
 
The
 
release
 
of
 
the
 
pro
 
rata
 
portion
 
of
 
the
 
foreign
 
currency
 
translation
 
reserve
 
is
 
included
 
in
 
the
measurement of
 
the gain
 
or loss
 
on sale
 
of a
 
portion of
 
the Company’s
 
ownership interest
 
in the
 
equity-accounted investment.
 
The
Company does not recognize cumulative losses in excess of its investment or loans in an equity-accounted
 
investment except if it has
an obligation to provide additional financial support.
Dividends received from an equity-accounted investment reduce the carrying value
 
of the Company’s investment. The Company
has elected to classify distributions received from equity method investees using the nature of the distribution approach.
 
This election
requires the Company to evaluate
 
each distribution received on the
 
basis of the source of the
 
payment and classify the distribution
 
as
either
 
operating
 
cash
 
inflows
 
or
 
investing
 
cash
 
inflows.
 
The
 
Company
 
reviews
 
its
 
equity-accounted
 
investments
 
for
 
impairment
whenever events or circumstances indicate that the carrying amount of
 
the investment may not be recoverable.
Goodwill
Goodwill
Goodwill
 
represents
 
the
 
excess
 
of
 
the
 
purchase
 
price
 
of
 
an
 
acquired
 
enterprise
 
over
 
the
 
fair
 
values
 
of
 
the
 
identifiable
 
assets
acquired and liabilities assumed based
 
upon their estimated fair
 
value at the date
 
of purchase. The Company
 
reviews the carrying value
of goodwill annually or more frequently if circumstances indicate impairment
 
has occurred.
 
Circumstances that
 
could trigger
 
an impairment test
 
include but are
 
not limited to:
 
a significant adverse
 
change in the
 
business
climate or legal
 
factors; an adverse
 
action or assessment
 
by a regulator;
 
unanticipated competition; loss
 
of key personnel;
 
the likelihood
that a reporting unit or
 
significant portion of a reporting
 
unit will be sold
 
or otherwise disposed; and results
 
of testing for recoverability
of a significant asset group within a reporting unit. If goodwill is allocated to a reporting unit
 
and the carrying amount of the reporting
unit exceeds
 
the fair value
 
of that reporting
 
unit, an impairment
 
loss is recorded
 
in the statement
 
of operations.
 
Measurement of
 
the
fair value of a reporting unit is based on present value techniques of estimated
 
future cash flows.
Intangible Assets
Intangible assets
Intangible assets are shown at
 
cost less accumulated amortization. Intangible assets
 
are amortized over the following
 
useful lives:
Customer relationships
1
 
to
15
 
years
Software, integrated platform and unpatented technology
3
 
to
10
 
years
FTS patent
10
 
years
Exclusive licenses
7
 
years
Brands and trademarks
0.5
 
to
20
 
years
Intangible assets
 
are periodically
 
evaluated for
 
recoverability,
 
and those
 
evaluations take
 
into account
 
events or
 
circumstances
that warrant revised estimates of useful lives or that indicate that impairment
 
exists.
Debt And Equity Securities
Debt and equity securities
Debt securities
The Company is required to
 
classify all applicable debt securities
 
as either trading securities, available
 
for sale or held
 
to maturity
upon investment in the security.
 
Held to maturity
Debt securities acquired by the Company which it has the ability and the positive intent to hold to maturity are classified as held
to maturity debt securities. The Company is required to make an election to classify these debt securities as held to maturity and these
securities are carried at amortized cost. The amortized cost
 
of held to maturity debt securities
 
is adjusted for amortization of premiums
and accretion of discounts to maturity.
 
Interest received from the held to
 
maturity security together with this amortization
 
is included
in interest income in the Company’s consolidated statement of operations. The Company had
 
a held to maturity security as of
 
June 30,
2025 and
 
2024, respectively,
 
refer to
 
Note 4.
 
The Company
 
uses historical
 
default experience
 
over the
 
lifetime of
 
debt securities
 
in
order
 
to
 
calculate
 
a
 
lifetime loss
 
rate
 
for
 
its held
 
to
 
maturity debt
 
securities.
 
As of
 
each of
 
June 30,
 
2024,
 
and
 
June 30,
 
2025,
 
the
carrying value of the Company’s
 
held to maturity debt securities was $
0
.
Impairment of debt securities
Up
 
until
 
the
 
adoption
 
of
 
guidance
 
regarding
Measurement
 
of
 
Credit
 
Losses
 
on
 
Financial
 
Instruments
 
on
 
July
 
1,
 
2023,
 
the
Company’s available for sale and held to maturity debt securities with unrealized
 
losses are reviewed quarterly to identify other-than-
temporary impairments in value.
With regard to available for sale and held to maturity debt securities, the Company considers (i) the ability and intent to hold the
debt security for a
 
period of time to
 
allow for recovery of
 
value (ii) whether it
 
is more likely than
 
not that the Company
 
will be required
to sell the debt security;
 
and (iii) whether it expects
 
to recover the entire carrying
 
amount of the debt security.
 
The Company records
an impairment
 
loss in its
 
consolidated statement
 
of operations representing
 
the difference between
 
the debt securities
 
carrying value
and the current fair value as
 
of the date of the impairment
 
if the Company determines that
 
it intends to sell the debt
 
security or if that
it is
 
more likely
 
than not
 
that it
 
will be
 
required to
 
sell the
 
debt security
 
before recovery
 
of the
 
amortized cost
 
basis. However,
 
the
impairment loss
 
is split
 
between a
 
credit loss
 
and a
 
non-credit loss
 
for debt
 
securities that
 
the Company
 
determines that
 
it does
 
not
intend to sell or that it is more likely than not that it will
 
not be required to sell the debt securities before the recovery of the amortized
cost basis. The credit loss portion, which is measured as the difference
 
between the debt security’s cost
 
basis and the present value of
expected future cash flows,
 
is recognized in the Company’s
 
consolidated statement of operations.
 
The non-credit loss portion,
 
which
is measured
 
as the
 
difference between
 
the debt
 
security’s
 
cost basis and
 
its current
 
fair value,
 
is recognized
 
in other
 
comprehensive
income, net of applicable taxes.
Equity securities
Equity
 
securities
 
are
 
measured
 
at
 
fair
 
value.
 
Changes
 
in
 
the
 
fair
 
value
 
of
 
equity
 
securities
 
are
 
recorded
 
in
 
the
 
Company’s
consolidated statement
 
of operations within
 
the caption titled
 
“change in fair
 
value of equity
 
securities”. The
 
Company may elect
 
to
measure equity securities without readily determinable fair
 
values at its cost
 
minus impairment, if any, plus or minus changes resulting
from observable price changes in orderly transactions for the identical or
 
a similar investment of the same issuer (“cost minus changes
in observable
 
prices equity
 
securities”). Changes
 
in the fair
 
value of
 
the Company’s
 
cost minus
 
changes in
 
observable prices
 
equity
securities are discussed
 
in Note 9.
 
During the Company’s
 
second and third
 
quarter of fiscal
 
2025, the Company
 
recorded changes in
the
 
fair
 
value
 
of
 
equity
 
securities
 
as
 
a
 
result
 
of
 
changes
 
in
 
market
 
prices
 
related
 
to
 
its
 
investment
 
in
 
One
 
MobiKwik
 
Limited
(“MobiKwik”). During the fourth quarter of fiscal 2025, the Company disposed
 
of its entire interest in MobiKwik and incurred a loss
on disposal.
 
The changes
 
in fair
 
value and
 
the loss
 
on disposal
 
are included
 
in the
 
caption change
 
in fair
 
value of
 
equity securities
during the
 
year ended
 
June 30,
 
2025. There
 
were
no
 
changes in
 
the fair
 
value of
 
the Company’s
 
cost minus
 
changes in
 
observable
prices equity securities during the years ended June 30, 2024 and 2023, respectively.
 
The Company performs a qualitative assessment
on a quarterly basis and recognizes an impairment loss if there are sufficient indicators
 
that the fair value of the equity security is less
than its carrying value.
 
2.
 
SIGNIFICANT ACCOUNTING POLICIES (continued)
Policy Reserves And Liabilities
Policy reserves and liabilities
 
Reserves for policy benefits and claims payable
The Company determines its reserves for policy benefits under
 
its life insurance products using a model which estimates claims
incurred
 
that have
 
not been
 
reported
 
and
 
total
 
present
 
value
 
of disability
 
claims-in-payment
 
at
 
the balance
 
sheet
 
date. This
 
model
allows for
 
best estimate
 
assumptions based
 
on experience
 
(where sufficient)
 
plus prescribed
 
margins,
 
as required
 
in the
 
markets
 
in
which these products are offered, namely South Africa.
The best estimate assumptions include (i) mortality and morbidity assumptions reflecting the company’s
 
most recent experience
and (ii) claim reporting delays reflecting Company specific and industry experience. Most of the disability claims-in-payment reserve
is
 
reinsured
 
and
 
the
 
reported
 
values
 
were
 
based
 
on
 
the
 
reserve
 
held
 
by
 
the
 
relevant
 
reinsurer.
 
The
 
values
 
of
 
matured
 
guaranteed
endowments are increased by late payment interest (net of the asset management
 
fee and allowance for tax on investment income).
Deposits on investment contracts
For the Company’s interest-sensitive
 
life contracts, liabilities approximate the policyholder’s account
 
value.
Reinsurance Contracts Held
Reinsurance contracts held
The Company enters into reinsurance
 
contracts with reinsurers under
 
which the Company is compensated
 
for the entire amount
or a portion of losses arising on one or more of the insurance contracts it issues.
The expected benefits to which the Company is
 
entitled under its reinsurance contracts held are recognized as reinsurance
 
assets.
These assets consist
 
of short-term
 
balances due from
 
reinsurers (classified within
 
Accounts receivable,
 
net and other
 
receivables) as
well as long-term receivables (classified within other long-term assets) that are dependent on the expected claims and benefits arising
under the
 
related reinsurance
 
contracts. Amounts
 
recoverable from
 
or due
 
to reinsurers
 
are measured
 
consistently with
 
the amounts
associated with the reinsured contracts and in accordance with the terms of each reinsurance contract. Reinsurance assets are assessed
for impairment at
 
each balance sheet
 
date. If there
 
is reliable
 
objective evidence that
 
amounts due may
 
not be recoverable,
 
the Company
reduces the carrying amount of the reinsurance asset to its recoverable amount and recognizes that impairment loss in its consolidated
statement of operations. Reinsurance premiums are recognized when
 
due for payment under each reinsurance contract.
Redeemable Common Stock
Redeemable common stock
Common stock
 
that is
 
redeemable (1)
 
at a
 
fixed or
 
determinable price
 
on a
 
fixed or
 
determinable date,
 
(2) at
 
the option
 
of the
holder,
 
or (3)
 
upon the
 
occurrence of
 
an event
 
that is
 
not solely
 
within the
 
control of
 
Company is
 
presented outside
 
of total
 
Lesaka
equity (i.e. permanent equity). Redeemable common stock is
 
initially recognized at issuance date fair value
 
and the Company does not
adjust
 
the
 
issuance date
 
fair value
 
if redemption
 
is not
 
probable.
 
The Company
 
re-measures
 
the redeemable
 
common
 
stock
 
to the
maximum
 
redemption
 
amount
 
at
 
the
 
balance
 
sheet
 
date
 
once
 
redemption
 
is
 
probable.
 
Reduction
 
in
 
the
 
carrying
 
amount
 
of
 
the
redeemable common stock is
 
only appropriate to the
 
extent that the Company
 
has previously recorded increases
 
in the carrying amount
of the
 
redeemable
 
equity instrument
 
as the
 
redeemable common
 
stock may
 
not be
 
carried at
 
an amount
 
that is
 
less than
 
the initial
amount reported outside of permanent equity.
Redeemable common stock is reclassified as permanent equity when presentation outside
 
permanent equity is no longer required
(if, for example, a redemption
 
feature lapses, or there
 
is a modification of the
 
terms of the instrument). The
 
existing carrying amount
of the redeemable common
 
stock is reclassified to permanent
 
equity at the date of
 
the event that caused the
 
reclassification and prior
period consolidated financial statements are not adjusted.
 
2.
 
SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue Recognition
Revenue recognition
 
The
 
Company
 
recognizes
 
revenue
 
upon
 
transfer
 
of
 
control
 
of
 
promised
 
products
 
or
 
services
 
to
 
customers
 
in
 
an
 
amount
 
that
reflects
 
the
 
consideration
 
the
 
Company
 
expects
 
to
 
receive
 
in
 
exchange
 
for
 
those
 
products
 
or
 
services.
 
The
 
Company
 
enters
 
into
contracts that can include various combinations of products and services, which are generally capable of being distinct and accounted
for as
 
separate performance
 
obligations
based on
 
observable standalone
 
selling prices.
 
Revenue is
 
recognized net
 
of allowances
 
for
returns and any taxes collected from customers, which are subsequently remitted
 
to governmental authorities.
Nature of products and services
Prepaid airtime sold
The Company purchases airtime vouchers for resale to customers and acts as
 
a principal in these transactions.
 
Airtime purchased
for resale is included in inventory and released to cost of goods sold,
 
IT processing, servicing and support upon sale of the inventory.
The Company negotiates and agrees sales prices for airtime sales
 
with its customers and revenue is measured at the agreed contractual
price. The Company recognizes revenue when the airtime is delivered
 
to the customer.
Processing fees
The Company earns processing fees from transactions processed for its customers.
 
The Company provides its customers with transaction processing services that involve the collection, transmittal and retrieval of
all transaction data in exchange for consideration upon completion of the transaction and recognizes revenue from these activities at a
point in time.
 
In certain instances,
 
the Company also
 
provides a funds
 
collection and settlement
 
service for its
 
customers and recognizes
revenue from these activities at a point in time.
 
The Company also provides customers with cash management and digitization services which enables its merchant customers to
deposit
 
cash into
 
digital vaults
 
operated
 
by the
 
Company,
 
after which
 
the funds
 
are then
 
electronically
 
accessible by
 
customers
 
to
either transfer to their nominated bank account or to pay certain pre-selected suppliers and recognizes revenue from these activities at
a point in time.
 
The Company considers
 
each of these services
 
as a single performance
 
obligation. The Company’s
 
contracts specify
a transaction
 
price for
 
services provided.
 
Processing revenue fluctuates
 
based on
 
the type and
 
the volume of
 
transactions processed.
Revenue is recognized on the completion of the processed transaction.
The Company provides
 
rental and support
 
services under a
 
master rental agreement
 
with customers. Control
 
of the rental
 
asset
is transferred through the right of
 
use on a monthly basis as per
 
the master rental agreement terms. Customers
 
are required to pay the
monthly
 
rental and
 
support fee
 
in advance
 
.
 
The performance
 
obligation
 
for the
 
service component
 
is provided
 
over the
 
month and
revenue is recognized at the end of the month. The Company recognizes revenue
 
from these activities over time.
The
 
Company,
 
as
 
a
 
transaction
 
processor
 
and
 
in
 
the
 
capacity
 
of
 
an
 
agent,
 
facilitates
 
the
 
delivery
 
of
 
ADP
 
to
 
its
 
customers
(including
 
prepaid
 
airtime
 
vouchers,
 
prepaid
 
electricity
 
and
 
gaming
 
vouchers)
 
and
 
earns
 
a
 
commission
 
once
 
these
 
services
 
are
delivered to the customer.
 
The Company recognizes revenue from these activities at
 
a point in time. Revenue from these transactions
fluctuates based on the volume of ADP services distributed.
Customers
 
serviced
 
by the
 
Company’s
 
Consumer
 
operating segment
 
that have
 
a bank
 
account managed
 
by the
 
Company
 
are
issued cards that can be utilized to withdraw
 
funds at an ATM or to transact at a merchant point of sale device
 
(“POS”). The Company
also earns processing
 
fees from transactions
 
processed for these
 
customers. The
 
Company’s contracts
 
specify a transaction
 
price for
each service
 
provided (for
 
instance, ATM
 
withdrawal,
 
balance enquiry,
 
etc.). Processing
 
revenue
 
fluctuates
 
based on
 
the type
 
and
volume of transactions performed by the customer. Revenue is recognized on the completion of the processed transaction at a point in
time.
Account holder fees
The Company
 
provides bank accounts
 
to customers
 
and this service
 
is underwritten
 
by a regulated
 
banking institution
 
because
the Company is not
 
a bank. The Company
 
charges its customers
 
a fixed monthly
 
bank account administration
 
fee for all active
 
bank
accounts regardless of
 
whether the account
 
holder has transacted
 
or not. The
 
Company recognizes account
 
holder fees on a
 
monthly
basis on
 
all active
 
bank
 
accounts,
 
which
 
are earned
 
over
 
time and
 
billed
 
on a
 
monthly
 
basis. Revenue
 
from account
 
holders’
 
fees
fluctuates based on the number of active bank accounts.
 
2.
 
SIGNIFICANT ACCOUNTING POLICIES (continued)
Revenue recognition (continued)
Nature of products and services (continued)
Lending revenue
The Company provides
 
short-term loans to
 
customers (consumers) in
 
South Africa and charges
 
up-front initiation fees,
 
interest
and monthly
 
service fees.
 
Interest earned
 
from customers
 
is recognized
 
using the
 
effective interest
 
rate method,
 
which requires
 
the
utilization of the rate of return implicit in the loan, that is, the contractual interest rate adjusted for any
 
net deferred loan initiation fees
or costs, premium,
 
or discount existing at
 
the origination or acquisition
 
of the loan. Monthly
 
service fee revenue is
 
recognized under
the contractual terms of
 
the loan. The monthly service
 
fee are earned over time
 
and is fixed upon initiation
 
and does not change over
the term of the loan and is recognized when billed on a monthly basis.
Interest earned from
 
customers
The Company provides short-term loans to merchants in South Africa and levies interest on the amount lent. The Company does
not charge
 
these customers
 
up-front initiation
 
fees or
 
monthly service
 
fees. Interest
 
earned from
 
customers is
 
recognized using
 
the
effective interest
 
rate method,
 
which requires
 
the utilization
 
of the
 
rate of
 
return implicit
 
in the
 
loan, that
 
is, the
 
contractual interest
rate adjusted
 
for any net
 
deferred loan
 
fees or
 
costs, premium,
 
or discount
 
existing at
 
the origination
 
or acquisition
 
of the
 
loan. The
interest rate included in the contract with the customer generally changes with changes to benchmark rates of interest set by the South
African Reserve Bank (“SARB”).
Technology
 
products
 
The Company supplies hardware and licenses for its customers to use the Company’s
 
technology. Hardware includes the sale of
POS devices, SIM cards and other consumables which
 
can occur on an ad
 
hoc basis. The Company recognizes revenue from hardware
at
 
the
 
transaction
 
price
 
specified
 
in
 
the contract
 
as the
 
hardware
 
is delivered
 
to the
 
customer.
 
Licenses
 
include
 
the right
 
to access
certain technology developed by the Company and the associated revenue
 
is recognized ratably over the license period.
Insurance revenue
The Company writes
 
life insurance contracts, and
 
policy holders pay
 
the Company a
 
monthly insurance premium at
 
the beginning
of each month. Premium revenue
 
is recognized on a monthly basis net of
 
policy lapses. Policy lapses are provided
 
for on the basis of
expected non-payment of policy premiums.
Accounts Receivable, Contract Assets and Contract Liabilities
The
 
Company
 
recognizes
 
accounts
 
receivable
 
when
 
its
 
right
 
to
 
consideration
 
under
 
its
 
contracts
 
with
 
customers
 
becomes
unconditional. The Company has no contract assets or contract liabilities.
Research And Development Expenditure
Research and development expenditure
Research and
 
development expenditure
 
is charged
 
to net
 
income in
 
the period
 
in which
 
it is
 
incurred. During
 
the years
 
ended
June 30, 2025,
 
2024 and 2023, the
 
Company incurred research
 
and development expenditures
 
of $
0.5
 
million, $
0.5
 
million and $
0.5
million, respectively.
Computer Software Development
Computer software development
Product
 
development
 
costs in
 
respect
 
of
 
software
 
intended
 
for
 
sale
 
to
 
licensees
 
are
 
expensed
 
as
 
incurred
 
until
 
technological
feasibility is attained.
 
Technological
 
feasibility is attained
 
when the Company’s
 
software has completed
 
system testing and has
 
been
determined
 
to
 
be
 
viable
 
for
 
its
 
intended
 
use.
 
Once
 
technological
 
feasibility
 
is
 
reached,
 
the
 
Company
 
capitalized
 
such
 
costs
 
and
amortizes
 
these costs over
 
the products’
 
estimated life. The
 
time between
 
the attainment
 
of technological feasibility
 
and completion
of software development is generally short with insignificant amounts of development
 
costs incurred during this period.
 
Costs in
 
respect of
 
the development
 
of software
 
for the
 
Company’s
 
internal use
 
are expensed
 
as incurred,
 
except to
 
the extent
that
 
these
 
costs
 
are
 
incurred
 
during
 
the
 
application
 
development
 
stage.
 
All
 
other
 
costs
 
including
 
those
 
incurred
 
in
 
the
 
project
development and post-implementation stages are expensed as incurred.
Income Taxes
Income taxes
 
The Company
 
provides for income
 
taxes using the
 
asset and liability
 
method. This
 
approach recognizes
 
the amount of
 
income
taxes payable or refundable
 
for the current year,
 
as well as deferred
 
tax assets and liabilities for
 
the future tax consequence
 
of events
recognized in the financial statements and tax returns. Deferred taxes are
 
adjusted to reflect the effects of changes in tax laws or rates
in the
 
period of
 
enactment. The
 
majority of
 
the Company’s
 
income
 
taxes and
 
deferred tax
 
balances arise
 
in the
 
South Africa.
 
The
Company used the enacted statutory tax rate of
27
% for the years ended June 30, 2025, 2024 and 2023 to measure current
 
tax expense
(benefit) and deferred tax expense (benefit) in South Africa. There was a change in the South African enacted tax rate during the year
ended June 30,
 
2023, from
28
% to
27
%. The Company
 
measured its South African
 
current tax expense
 
for the years
 
ended June 30,
2025
 
and 2024 and
 
its South African
 
deferred tax assets and
 
liabilities as of
 
June 30, 2025
 
and 2024, using
 
the enacted statutory
 
tax
rate in South Africa of
27
%.
In establishing the appropriate deferred tax asset valuation allowances, the Company assesses the realizability of its deferred tax
assets, and based on all available evidence, both positive
 
and negative, determines whether it is more likely than not
 
that the deferred
tax
 
assets
 
or
 
a
 
portion
 
thereof
 
will
 
be
 
realized.
 
The
 
Company
 
does
 
not
 
consider
 
future
 
reversals
 
of
 
existing
 
taxable
 
temporary
differences associated with indefinite lived assets
 
where the timing of the
 
reversal cannot be predicted as
 
a source of income to
 
support
deferred tax assets for carryforward that do not expire.
Unrecognized tax
 
benefits are recorded
 
in the financial
 
statements for positions
 
which are not
 
considered more likely
 
than not,
based on
 
the technical
 
merits of the
 
position, of being
 
sustained upon
 
examination by
 
the taxing authorities.
 
For positions that
 
meet
the more likely than not
 
standard, the measurement of
 
the tax benefit recognized
 
in the financial statements is based
 
upon the largest
amount of tax benefit that, in management’s judgement, is greater than 50% likely of being
 
realized based on a cumulative probability
assessment
 
of
 
the possible
 
outcomes.
 
The
 
Company’s
 
policy
 
is to
 
include
 
interest
 
related
 
to
 
income
 
taxes
 
in
 
interest expense
 
and
penalties in selling, general and administration in the consolidated statements of
 
operations.
The Company has elected the period cost method
 
and records U.S. inclusions in taxable income related to global
 
intangible low
taxed income (“GILTI”)
 
as a current-period expense when incurred.
Stock-based Compensation
Stock-based compensation
Stock-based compensation represents the
 
cost related to
 
stock-based awards granted.
 
The Company measures
 
equity-based stock-
based compensation cost at
 
the grant date, based on
 
the estimated fair value of
 
the award, and recognizes the
 
cost as an expense on
 
a
straight-line basis (net of estimated forfeitures) over the requisite
 
service period. In respect of awards with only service
 
conditions that
have a graded
 
vesting schedule, the
 
Company recognizes compensation
 
cost on a straight-line
 
basis over the
 
requisite service period
for the
 
entire award.
 
The forfeiture
 
rate is
 
estimated using
 
historical trends
 
of the
 
number of
 
awards forfeited
 
prior to
 
vesting.
 
The
expense is recorded in
 
the statement of operations and
 
classified based on the recipients’
 
respective functions. The Company
 
records
deferred tax
 
assets for awards
 
that result in
 
deductions on the
 
Company’s
 
income tax returns,
 
based on the
 
amount of compensation
cost recognized and the Company’s
 
statutory tax rate in the jurisdiction
 
in which it will receive a deduction.
 
Differences between the
deferred tax
 
assets recognized
 
for financial
 
reporting purposes
 
and the
 
actual tax
 
deduction reported
 
on the
 
Company’s
 
income tax
return are recorded in income tax expense in the consolidated statement
 
of operations.
Equity Instruments Issued To Third Parties
Equity instruments issued to third parties
Equity
 
instruments issued
 
to third
 
parties
 
for services
 
provided
 
represents the
 
cost related
 
to equity
 
instruments granted.
 
The
Company measures
 
this cost at
 
the grant date,
 
based on the
 
estimated fair value
 
of the award,
 
and recognizes the
 
cost as an
 
expense
on a
 
straight-line basis
 
(net of
 
estimated forfeitures)
 
over the
 
requisite service
 
period. The
 
forfeiture rate
 
is estimated
 
based on
 
the
Company’s
 
expectation of the
 
number of awards
 
that will be forfeited
 
prior to vesting.
 
The Company records
 
deferred tax assets
 
for
equity instrument
 
awards that
 
result in
 
deductions on
 
the Company’s
 
income tax
 
returns, based
 
on the
 
amount of
 
equity instrument
cost recognized and the Company’s
 
statutory tax rate in the jurisdiction
 
in which it will receive a deduction.
 
Differences between the
deferred tax
 
assets recognized
 
for financial
 
reporting purposes
 
and the
 
actual tax
 
deduction reported
 
on the
 
Company’s
 
income tax
return are recorded in the statement of operations.
Settlement Assets And Settlement Obligations
Settlement assets and settlement obligations
The
 
Company
 
provides
 
customers
 
with
 
cash
 
management
 
and
 
digitization
 
services
 
which
 
enable
 
its
 
merchant
 
customers
 
to
deposit
 
cash into
 
digital vaults
 
operated
 
by the
 
Company,
 
after which
 
the funds
 
are then
 
electronically
 
accessible by
 
customers
 
to
either transfer to their nominated bank account or to pay certain pre-selected suppliers.
Settlement assets comprise (1) cash received from merchant customers
 
from cash deposits into the Company’s safe assets, which
are
 
then
 
electronically
 
accessible
 
by
 
customers
 
to
 
either
 
transfer
 
to
 
their
 
nominated
 
bank
 
account
 
or
 
to
 
pay
 
certain
 
pre-selected
suppliers,
 
and
 
(2)
 
cash
 
received
 
from
 
credit
 
card
 
companies
 
(as
 
well
 
as
 
other
 
types
 
of
 
payment
 
services)
 
which
 
have
 
business
relationships
 
with
 
merchants
 
selling
 
goods
 
and
 
services
 
that
 
are
 
the
 
Company’s
 
customers
 
and
 
on
 
whose
 
behalf
 
it
 
processes
 
the
transactions between various parties.
Settlement
 
obligations
 
comprise
 
(1)
 
amounts
 
that
 
the
 
Company
 
is
 
obligated
 
to
 
disburse
 
to
 
merchant
 
customers
 
or
 
to
 
their
nominated pre-selected suppliers, and (2)
 
amounts that the Company is obligated
 
to disburse to merchants selling goods
 
and services
that are the Company’s customers and on whose behalf it processes
 
the transactions between various parties and settles the funds from
the credit card companies to the Company’s
 
merchant customers.
The balances
 
at each reporting
 
date may vary
 
widely depending on
 
the timing of
 
the receipts and
 
payments of these
 
assets and
obligations.
Recent Accounting Pronouncements Adopted
Recent accounting pronouncements adopted
In November 2023,
 
the Financial Accounting
 
Standards Board (“FASB”)
 
issued guidance regarding
Segment Reporting (Topic
280)
 
to
 
improve
 
reportable
 
segment
 
disclosure
 
requirements,
 
primarily
 
through
 
enhanced
 
disclosures
 
about
 
significant
 
segment
expenses. In addition, the
 
guidance enhances interim disclosure
 
requirements, clarifies circumstances in
 
which an entity can disclose
multiple
 
segment
 
measures
 
of
 
profit
 
or
 
loss,
 
provides
 
new
 
segment
 
disclosure
 
requirements
 
for
 
entities
 
with
 
a
 
single
 
reportable
segment, and contains other disclosure requirements. This guidance was effective for the Company beginning July 1, 2024
 
for its year
ended June 30, 2025, and for interim periods commencing from July 1, 2025 (i.e. for the quarter ended September 30, 2025). Refer to
Note 21.
Recent Accounting Pronouncements Not Yet Adopted As Of June 30, 2025
Recent accounting pronouncements not yet adopted
 
as of June 30, 2025
In
 
December
 
2023,
 
the
 
FASB
 
issued
 
guidance
 
regarding
Income
 
Taxes
 
(Topic
 
740)
 
to
 
improve
 
income
 
tax
 
disclosure
requirements. The guidance requires
 
entities, on an
 
annual basis, to
 
(1) disclose specific categories
 
in the income tax
 
rate reconciliation
and (2) provide additional information for reconciling items that meet a quantitative threshold (if the effect
 
of those reconciling items
is equal
 
to or
 
greater
 
than
 
five percent
 
of the
 
amount computed
 
by multiplying
 
pre-tax
 
income
 
or loss
 
by the
 
applicable
 
statutory
income tax rate). This guidance
 
is effective for the Company
 
beginning July 1, 2025. The Company
 
is currently assessing the impact
of this guidance on its financial statements and related disclosures.
In
 
November
 
2024,
 
the
 
FASB
 
issued
 
guidance
 
regarding
Income
 
Statement—Reporting
 
Comprehensive
 
Income—Expense
Disaggregation
 
Disclosures
(Subtopic
 
220-40)
 
which
 
requires
 
disaggregated
 
disclosure
 
of
 
income
 
statement
 
expenses
 
for
 
public
business entities. The guidance does not change the expense captions an
 
entity presents on the face of the income statement; rather,
 
it
requires
 
disaggregation
 
of
 
certain
 
expense
 
captions
 
into
 
specified
 
categories
 
in
 
disclosures
 
within
 
the
 
footnotes
 
to
 
the
 
financial
statements. This guidance is effective for the
 
Company beginning July 1, 2027. Early
 
adoption is permitted. The Company is
 
currently
assessing the impact of this guidance on its financial statements and related disclosures.
In
 
July
 
2025,
 
the
 
FASB
 
issued
 
guidance
 
regarding
Financial
 
Instruments-Credit
 
Losses
 
(Topic
 
326)
 
Measurement
 
of
 
Credit
Losses for Accounts Receivable and Contract Assets
 
which amends current guidance to provide a practical
 
expedient (for all entities)
and an accounting
 
policy election (for
 
all entities, other than
 
public business entities,
 
that elect the practical
 
expedient) related to
 
the
estimation of expected credit
 
losses for current accounts receivable
 
and current contract assets that
 
arise from transactions accounted
for under
Revenue From Contracts With
 
Customers (Topic
 
606).
This guidance is effective for
 
the Company beginning July 1, 2026,
and interim
 
reporting periods during
 
that fiscal year.
 
Early adoption
 
is permitted. The
 
Company is currently
 
assessing the impact
 
of
this guidance on its financial statements and related disclosures.