Lesaka Technologies Files 10-Q, Details Fair Value & Equity Investments

TL;DR

**Lesaka's latest 10-Q shows fair value measurements and equity investments, crucial for understanding its financial health.**

AI Summary

Lesaka Technologies Inc. (formerly Net 1 UEPS Technologies Inc.) filed its 10-Q for the period ending December 31, 2023, on February 6, 2024. The filing indicates the company is an Accelerated Filer and has a fiscal year ending June 30. Key financial details, such as specific revenue or net income figures, are not explicitly provided in the excerpt, but the document details fair value measurements and equity method investments. This matters to investors as it provides a snapshot of the company's financial health and operational structure, particularly regarding its microlending finance and investments in entities like Finbond Group Limited, which can impact future profitability and risk.

Why It Matters

This filing provides transparency into Lesaka's financial position, including how it values certain assets and its investments, which directly influences its reported earnings and overall valuation.

Risk Assessment

Risk Level: medium — The filing mentions Level 3 fair value inputs, which often involve unobservable data and can introduce significant estimation uncertainty and volatility.

Analyst Insight

Investors should delve deeper into the full 10-Q to understand the specific financial figures, especially the details behind the Level 3 fair value measurements and the performance of equity method investments, as these can significantly impact the company's valuation and future earnings.

Key Numbers

• 2023-12-31 — Conformed Period of Report (The end date of the financial period covered by this 10-Q filing.)
• 2024-02-06 — Filed As Of Date (The date the 10-Q filing was officially submitted to the SEC.)
• 000-31203 — SEC File Number (The unique identification number for Lesaka Technologies Inc. with the SEC.)
• 0630 — Fiscal Year End (Lesaka Technologies Inc.'s fiscal year ends on June 30th.)

Key Players & Entities

• LESAKA TECHNOLOGIES INC (company) — the filer of the 10-Q
• Net 1 UEPS Technologies Inc. (company) — former name of Lesaka Technologies Inc.
• Finbond Group Limited (company) — an equity method investment of Lesaka
• 02 Finance (company) — organization name associated with the filer

Forward-Looking Statements

• Lesaka Technologies will continue to report significant Level 3 fair value measurements in future filings. (LESAKA TECHNOLOGIES INC) — medium confidence, target: 2024-06-30
• The company's equity method investments, particularly in Finbond Group Limited, will remain a material component of its balance sheet. (Finbond Group Limited) — medium confidence, target: 2024-06-30

FAQ

Key Financial Figures

• $0.001 — ich registered Common stock, par value $0.001 per share LSAK NASDAQ Global Select

Filing Documents

• form10q.htm (10-Q) — 3109KB
• form10qp47i0.gif (GRAPHIC) — 18KB
• ex311.htm (EX-31.1) — 23KB
• ex312.htm (EX-31.2) — 23KB
• ex32.htm (EX-32) — 9KB
• 0001562762-24-000021.txt ( ) — 17038KB
• lsak-20231231.xsd (EX-101.SCH) — 166KB
• lsak-20231231_cal.xml (EX-101.CAL) — 103KB
• lsak-20231231_def.xml (EX-101.DEF) — 826KB
• lsak-20231231_lab.xml (EX-101.LAB) — 1541KB
• lsak-20231231_pre.xml (EX-101.PRE) — 1074KB
• form10q_htm.xml (XML) — 3095KB

Financial Statements

Financial Statements Unaudited Condensed Consolidated Balance Sheets as of December 31, 2023 and June 30, 2023 2 Unaudited Condensed Consolidated Statements of Operations for the three and six months ended December 31, 2023 and 2022 3 Unaudited Condensed Consolidated Statements of Comprehensive (Loss) Income for the three and six months ended December 31, 2023 and 2022 4 Unaudited Condensed Consolidated Statement of Changes in Equity for the three and six months ended December 31, 2023 and 2022 5 Unaudited Condensed Consolidated Statements of Cash Flows for the three and six months ended December 31, 2023 and 2022 7 Notes to Unaudited Condensed Consolidated Financial Statements 8 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 41 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 59 Item 4.

Controls and Procedures

Controls and Procedures 60

OTHER INFORMATION

Part II. OTHER INFORMATION Item 1A.

Risk Factors

Risk Factors 61 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 61 Item 5. Other Information 61 Item 6. Exhibits 62

Signatures

Signatures 63 EXHIBIT 44 EXHIBIT 45 2

Financial information

Part I. Financial information

Financial Statements

Item 1. Financial Statements LESAKA TECHNOLOGIES, INC. Unaudited Condensed Consolidated Balance Sheets December 31, June 30, 2023 2023 (A) (In thousands, except share data) ASSETS CURRENT ASSETS Cash and cash equivalents $ 44,316 $ 35,499 Restricted cash related to ATM funding and credit facilities (Note 8) 23,522 23,133 Accounts receivable, net and other receivables (Note 2) 41,114 25,665 Finance loans receivable, net (Note 2) 39,056 36,744 Inventory (Note 3) 27,622 27,337 Total current assets before settlement assets 175,630 148,378 Settlement assets 26,974 15,258 Total current assets 202,604 163,636 PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation of - December: $ 39,667 June: $ 36,563 28,340 27,447 OPERATING LEASE RIGHT-OF-USE (Note 16) 5,649 4,731 EQUITY-ACCOUNTED INVESTMENTS (Note 5) 161 3,171 GOODWILL (Note 6) 137,666 133,743 INTANGIBLE ASSETS, NET (Note 6) 117,953 121,597 DEFERRED INCOME TAXES 10,256 10,315 OTHER LONG-TERM ASSETS, including reinsurance assets (Note 5 and 7) 77,963 77,594 TOTAL ASSETS 580,592 542,234 LIABILITIES CURRENT LIABILITIES Short-term credit facilities for ATM funding (Note 8) 23,407 23,021 Short-term credit facilities (Note 8) 9,291 9,025 Accounts payable 18,884 12,380 Other payables (Note 9) 45,115 36,297 Operating lease liability - current (Note 16) 1,691 1,747 Current portion of long-term borrowings (Note 8) 3,429 3,663 Income taxes payable 670 1,005 Total current liabilities before settlement obligations 102,487 87,138 Settlement obligations 26,090 14,774 Total current liabilities 128,577 101,912 DEFERRED INCOME TAXES 45,929 46,840 OPERATING LEASE LIABILITY - LONG TERM (Note 16) 4,108 3,138 LONG-TERM BORROWINGS (Note 8) 139,337 129,455 OTHER LONG-TERM LIABILITIES, including insurance policy liabilities (Note 7) 2,489 1,982 TOTAL LIABILITIES 320,440 283,327 REDEEMABLE COMMON STOCK 79,429 79,429 EQUITY C

financial statements and related disclosures, refer to Note 2

financial statements and related disclosures, refer to Note 2. 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 guidance became effective for the Company beginning July 1, 2023. The adoption of this guidance did not have a material impact on the Company's

financial statements

financial statements and related disclosures, refer to Note 2. The Company's updated accounting policy regarding allowance for credit losses is as follows: Allowance for doubtful accounts receivable Allowance for doubtful finance loans receivable 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. 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. 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. 9 1. Basis of Presentation and Summary of Significant Accounting Policies (continued) Allowance for doubtful accounts receivable (continued) Allowance for doubtful accounts receivable 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/originatio

View Full Filing

View this 10-Q filing on SEC EDGAR