Loans held for investment represent funds advanced under a line of credit agreement, through a partnership with a third-party bank (the Originating Bank Partner). Loans held for investment are included in prepaid expenses and other current assets in the accompanying consolidated balance sheets and consisted of

the following as of the dates presented (in thousands):


	June 30,
	2026		2025
Unpaid principal balance	$	64,925	$	61,938

Less: Discount at loan purchase, net of amortization	(1,712)		(1,527)
Less: Allowance for expected credit losses	(14,190)		(14,853)
Loans held for investment, net	$	49,023	$	45,558

The Company conducts an eligibility assessment prior to loan origination by the Originating Bank Partner. This process is performed at the invoice level and involves evaluating the invoice repayment likelihood by the respective network members associated with each invoice. Subsequently, the credit quality of these loans is monitored based on the delinquency trends or past due status of the loans held for investment, which are considered the credit quality indicators. Below is a summary of the loans held for investment by class (i.e., past due status) as of the dates presented (in thousands):


	June 30,
	2026		2025
Current and less than 30 days past due	$	57,994	$	55,540
30 ~ 59 days past due	2,202		1,471
60 ~ 89 days past due	1,638		1,461
90 ~ 119 days past due	1,379		1,685
Over 119 days past due	—		254
Total	$	63,213	$	60,411


	June 30,
	2026		2025
Balance, beginning	$	14,853	$	4,700
Provision for expected credit losses	16,468		27,032
Charge-off amounts	(18,486)		(17,382)
Recoveries collected	1,355		503
Balance, end of period	$	14,190	$	14,853

The provision for expected credit losses related to loans held for investment decreased during the year ended June 30, 2026 compared to the prior year due to a decrease in estimated loss rates in fiscal 2026 compared to fiscal 2025, and improved delinquency performance, partially offset by portfolio growth.