Quantifying waste, fraud, and error in the US government Unemployment Insurance System

1. 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 Logo BeneChain 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 Improper Payment Rate - By State Source: https://dupress.deloitte.com/dup-us-en/multimedia/interactives/fraud-waste-and-abuse-in-entitlement-programs-benefits-fraud.html

2. 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 Time Delay Employee Terminated Co. 1 3 to 6 Weeks EE Report Fees 3 Benefits Start, Job Search

3. The first implementation of Benechain will focus on one state. If successful, expansion will follow

4. 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 *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

5. 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