Improper Payment Rate - By State Logo BeneChain Quantifying waste, fraud, and error in the US government Unemployment Insurance System Unemployment Insurance (UI) has the fifth highest rate of improper payments among all government departments Improper Payment Rate - By State In 2015: $3.5B in improper payments || 10.7% of UI Benefits Causes of improper payments include: Payments to claimant continue after individuals have returned to work Failure or claimant to register for reemployment services Failure of employers to timely or correctly report on worker separation Inaccurate calculation of benefits based on wages earned prior to unemployment Source: https://dupress.deloitte.com/dup-us-en/multimedia/interactives/fraud-waste-and-abuse-in-entitlement-programs-benefits-fraud.html

Benechain significantly reduces administrative overhead, cycle time, and improper payments Federal Unemployment Benefit Fund Administered by States 1 ER Report ER Report EE Report EE Report 4 2 Automated Employee Hired at Co. 2, Benefits stop Employee Terminated Co. 1 Time Delay 3 to 6 Weeks EE Report Fees 3 Benefits Start, Job Search

The first implementation of Benechain will focus on one state The first implementation of Benechain will focus on one state. If successful, expansion will follow Full State Adoption Under Federal solution In Future: “Fed Coin” could be used to administer payments Multi-State Unemployment Insurance (UI) Ethereum Solution Full blockchain solution; distributed ledger network for all states Each user represents a node on the private UI blockchain Single State POC (NC) Hybrid database/blockchain solution 3 Key Parties: Employers, Claimants, US Dept. Labor Validate process and cooperation among parties

Business Model & Monetization Cyclical Revenue Model Opportunity for Immediate Monetization Implementation Contract: Charge pilot state - NC (and successive partner states) a platform development, implementation, and training fee commensurate with comparable IT system implementations Transaction Fees: Extract minimal transaction fee from state (<$1) every time a new record (claim, new job offer, etc.) is written to the chain by an employer - in this model, states could receive direct reimbursement from companies, or pay fees with admin $ saved by program Ongoing Services: Receive revenue from ongoing maintenance of state systems, training/consulting on Benechain updates, and eventual move to 100% blockchain solution Implementation Contract Transaction Fees Ongoing Services Revenue Component Est. Contribution (per state) Implementation $200 – 300k Transaction Fees $150k* (annually) Ongoing Services $20 – 50k (annually) *Assumes base fee of $.50 per transaction, 200,000 initial claims filed per year (recent NC avg.), 50% of term. employees assuming new roles within year

Next Steps & Future Applications Next Steps (next 1-2 Years) Secure contract with state of North Carolina to build hybrid blockchain/database system & continue to refine platform technology and capabilities Onboard North Carolina platform and train state employees to use system and communicate new requirements to companies employing people in the state Begin writing and storing employment and unemployment records using Benechain Begin formalized contractual process with additional state employment agencies in the South East A B C D 2017 2018 2019 Additional Application Opportunities (at least 3-5 years away) Fed Coin Currency: Champion implementation of proposed currency to interact with Benechain applications Food Stamps: Provide better method of managing and distributing nutritional benefits through blockchain Social Security: Expand blockchain solutions to additional benefit programs at the national level like SS