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Basis Of Presentation, Restatement Of Financial Statement And Summary Of Significant Accounting Policies
3 Months Ended
Sep. 30, 2024
Basis Of Presentation, Restatement Of Financial Statement And Summary Of Significant Accounting Policies [Abstract]  
Basis Of Presentation, Restatement Of Financial Statement And Summary Of Significant Accounting Policies
1.
 
Basis of Presentation , Restatement of Financial Statement
 
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 months
ended
 
September 30,
 
2024 and
 
2023, are
 
not necessarily
 
indicative of
 
the results
 
for
 
the full
 
year.
 
The Company
 
believes that
 
the
disclosures are adequate to make the information presented not misleading.
These
 
unaudited
 
condensed
 
consolidated
 
financial
 
statements
 
should
 
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, 2024, except
 
as noted below,
 
there are no material
 
changes to significant
 
accounting policies. 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.
 
Restatement of Previously Issued Financial Statements
Subsequent to the issuance of the Company’s unaudited condensed consolidated financial statements for the three months ended
September 30, 2024, the Company’s
 
management determined that the Company incorrectly
 
classified and recorded revenue from the
sale of certain vouchers on an agent basis instead of as a principal
 
due to a misinterpretation of the accounting implications
 
related to
a
 
change
 
in
 
an
 
operating
 
process
 
with
 
its
 
supplier.
 
The
 
Company
 
understated
 
its
 
revenue
 
and
 
cost
 
of
 
goods
 
sold,
 
IT
 
processing,
servicing
 
and
 
support by
 
$
8.0
 
million
 
in its
 
unaudited
 
condensed consolidated
 
statement of
 
operations
 
for
 
the three
 
months ended
September 30, 2024.
The correction of
 
the misclassification did
 
not impact the
 
Company’s
 
basic and diluted
 
loss per share,
 
condensed consolidated
balance sheet as
 
of September 30,
 
2024, or
 
its unaudited condensed
 
consolidated statements of
 
comprehensive (loss) income,
 
unaudited
condensed consolidated
 
statement of changes
 
in equity and unaudited
 
condensed consolidated statements
 
of cash flows
 
for the three
months ended September 30, 2024.
The
 
tables
 
below
 
present
 
the
 
impact
 
of
 
the
 
restatement
 
on
 
the
 
Company’s
 
unaudited
 
condensed
 
consolidated
 
statement
 
of
operations for the three months ended September 30, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three months ended September 30, 2024
As previously
reported
Restatement
adjustment
As
 
restated
(in thousands)
Revenue
$
145,546
$
8,022
$
153,568
Cost of goods sold, IT processing, servicing and support
$
110,887
$
8,022
$
118,909
1.
 
Basis of Presentation , Restatement of Financial Statement
 
and Summary of Significant Accounting Policies (continued)
Revision of Previously Issued Financial Statements
In
 
April
 
2025,
 
the
 
Company
 
identified
 
that
 
it
 
had
 
misclassified
 
certain
 
of
 
its
 
long-term
 
borrowings.
 
The
 
Company’s
 
CCC
Revolving Credit
 
Facility was
 
scheduled to
 
be repaid
 
in full
 
on November
 
2024, but
 
this has
 
been extended
 
to June
 
30, 2025.
 
The
Company incorrectly
 
classified amounts due
 
under its CCC
 
Revolving Credit
 
Facility as long-term
 
borrowings instead of
 
as current
portion
 
of
 
long-term
 
borrowings
 
in
 
its unaudited
 
condensed
 
consolidated
 
balance
 
sheet as
 
of
 
September
 
30,
 
2024,
 
and its
 
audited
consolidated
 
balance
 
sheet
 
as
 
of
 
June
 
30,
 
2024.
 
The
 
table
 
below
 
presents
 
the
 
impact
 
of
 
the
 
revision
 
of
 
the
 
Company’s
 
financial
statements as of September 30, 2024 and June 30, 2024:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated balance sheet
As previously
reported
Correction
Revised
(in thousands)
September 30, 2024
Current portion of long-term borrowings
$
3,841
$
12,543
$
16,384
Long-term borrowings
$
144,679
(12,543)
$
132,136
June 30, 2024
Current portion of long-term borrowings
$
3,878
$
11,841
$
15,719
Long-term borrowings
$
139,308
$
(11,841)
$
127,467
The correction of the
 
misclassification did not impact
 
the Company’s audited consolidated statements
 
of operations, consolidated
statements of comprehensive (loss) income, consolidated statement of changes in equity,
 
or consolidated statements of cash flows for
the
 
year
 
ended
 
June
 
30,
 
2024
 
and,
 
except
 
as
 
noted
 
above,
 
the
 
Company’s
 
audited
 
balance
 
sheet
 
as
 
of
 
June
 
30,
 
2024.
 
The
misclassification did
 
not affect compliance
 
with any debt
 
covenants. The Company
 
assessed the materiality
 
of this error and
 
change
in presentation on
 
prior period consolidated
 
financial statements in
 
accordance with SEC
 
Staff Accounting
 
Bulletin (“SAB”) No. 99
“Materiality” and SAB No. 108, “Considering
 
the Effects of Prior
 
Year Misstatements when Quantifying Misstatements in the Current
Year
 
Financial Statements.”
 
Based on this
 
assessment, the Company
 
has concluded
 
that previously issued
 
financial statements were
not materially misstated based upon overall considerations of both quantitative
 
and qualitative factors.
The effects of
 
both the restatement
 
relating to the
 
correction of the
 
misclassification of revenue
 
and the revision
 
relating to the
correction of the misclassification of long-term borrowings have
 
been corrected in all impacted tables and footnotes throughout these
condensed consolidated financial statements.
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 is effective
 
for the Company
 
beginning July 1,
 
2024 for its
 
year
ended June 30, 2025, and for interim periods commencing from July 1, 2025 (i.e. for the
 
quarter ended September 30, 2025).
Recent accounting pronouncements not yet adopted
 
as of September 30, 2024
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.