SafeTone Technology Ltd.
Coal Mine Safety and
Communication Systems
www.safetone.net
New Regulations Created New Market
China state Administration of Coal mine Work Safety (ACMWS)
announced its’ new regulations for 2006-2010. Regulations
Document number is #216, issued on Feb 17, 2007
In the section about safety, It says:
 The coal production methods and the demand for increasing coal
production will not change dramatically in next 5 years.
 Goal for safety: Reduce 25% of death toll; Reduce by 10% the
death toll in greater than 10 people/accident incidents.
 Improve the safety technology: Build an underground safety network
monitoring system:
 Tracking system
 Coal Mines must have have underground communication system
The Market Size for Tracking and Communication systems


Trend: Increase the safety level in coal mines worldwide.
Coal mine Management takes responsibilities:
 mine GM will loose his position if more than 10 die in one accident
 mine Group GM will loose his position if more than 30 die
 The provincial safety officer will loose his position if more than 100 die in one
accident
Investment for increasing the safety in underground coal mines is the top priority
for state owned coal mines in China.
In 2005, the top 54 coal mines should have $10 B investment for safety. Ref. Page
4/13, Doc 216. ACMWS.

Mandated safety fund is $1.1/ton for Tracking, Communication and
Production monitoring system.
China 2008 coal production was about 2.5B ton. The fund should be $2.8B.
Conservatively, the total fund for tracking and communication together will be at
least $1.4B/year.
Existing Safety Products and Technology Have Very Limited Capabilities

Tracking:
– RFID, Gate system
» No real time tracking information
– Networked RFID-Short distance, (10+ meters)
» expensive, large power consumption, inaccurate and difficult to
maintain

Communication:
– Fixed pole phone
» separated by kilometers
– PHS phone with Coaxial cable connected base stations.
» Installation and cable are expensive and signal is poor quality.
» Narrow bandwidth (can only do voice)
» It can not be extended to any other applications such as video,
digital data, tracking and gas monitoring.
In most coal mines when an accident occurs, the emergency information
is only transmitted by a person running to the fixed phone pole and
making a call to the surface.
Milestones
 2005
 From May to August, Wang led the team in on-site (underground)
investigations in several mines of the Datong Coalmine Group (one of
the largest coalmine production companies in China).
 Analysis of the situation in the coalmines led to the conclusion that
applications should focus on Gas Monitoring, Personnel Tracking,
Wireless Communication and Wireless Mobile Video;
 From August to December, the team developed prototypes of devices
for those applications and completed a demonstration in a coalmine.
Feedback from the customer was extremely positive.
 Suggestions were made by the Datong Coalmine Group that four mines
will be selected for the first trial. Each mine will invest of RMB5 million.
If successful, the system will be employed by all of its mines.
Milestones
 2006
 Yajun Wang starts MWnet
• focus on coalmine safety communications system business;
 MWnet commenced software system development, including:
• mining wireless communications software system;
• mining wireless tracking software system;
• mining wireless gas monitoring system;
• mining wireless video monitoring system;
 MWnet commenced hardware R&D for various mine communications
equipment, including:
• mining wireless base station;
• mining wireless phone;
• mining wireless tracker device;
• mining wireless gas data relay device;
• mining wireless video camera;
Milestones
 2007
 March
• trial of the system was conducted at Xiaoyu Datong
Underground Coalmine.
• base stations, trackers and explosion proof wireless phones
were successfully tested；
 May
• MWnet system achieved top rating at MSHA;
 September
• Application for China MA certificate.
Milestones
 2008
 First quarter
• provide samples for certification; mine wireless phone, wireless base
station, tracking device and data transmission device；
 October
• Because MWnet cannot meet all of the requirements of China MA
certification, Yajun Wang, joins with new partners, Xiaojia Ma and
Wentao Ji, to start a new company, SafeTone Technology Ltd.
• Xiaojia Ma and Wentao Ji bring manufacturing capability and
hardware technology to the venture, which will allow SafeTone to
fulfill the certification requirements.
 December
• Wang and his new partners start the new company SafeTone
Technology LTD.
Major Achievements
 SafeWIN safety & monitoring software system
 Gas monitor system: GAS WIN (Mar 06)
 Call center system: COM WIN (Oct 07)
 Personnel tracking system: MPS WIN (Mar 06)
Copyright registration is achieved by Jan 2009 for all software
above listed.
 Hardware design and pre-production




EX base station: safeRAP, developed in Feb 2009;
EX wireless phone: safePhone, developed by Feb 2009;
EX tracker: safeTracker, under development;
EX gas data transmission device: safeBridge, under development;
Software
Hardware
Current Situation
 Moving Forward
 Copyright and patent application will be completed
under the name of SafeTone;
 MA certification will be applied for under the name of
SafeTone;
 Preparation for marketing and sales;
 Major Challenges
 Lack of operation capital to carry out marketing and
production work
Operation Goal
 Finalise Intellectual Property ownership
 Be the leading SI company in the professional
mining industry
 Providing the industry with a wireless technology,
integrated solution for mine safety, protection
and production.
 Press home first mover advantage and gain
dominant market share in the blossoming
underground wireless communications market.
Application of Funds
 Amount: $10M
 For operational period of 18 months
 The funds will be used in the following area:







Loan payback: $1M
Factory buildup: $3M
Hardware R&D: $1M
Sample production: $1M
Marketing & sales: $2M
Operation costs: $1M
Cash reserve: $1M
Funding Requirements
ITEM
06-12/2009 01-06/2010
Loan payback: $1M
0.5M
0.5M
Factory buildup: $3M
1M
1M
Hardware R&D: $1M
0.5M
0.5M
Sample production: $1M
1M
Marketing & sales: $2M
0.5M
Operation cost: $1M
0.5M
Cash reserve: $1M
TOTAL:10M
4M
01-06/2011
1M
1.5M
0.5M
0.5M
0.5M
3M
3M
2009 Plan
Task
Q1
1
Software Copyright requisition
Hardware patent requisition
safeCOM system samples production
safeCOM system China mine
Authentication
Marketing Private Placement
safeMPS system sample production
safeGAS system sample production
safeMPS & safeGAS China mine
Authentication
Factory scale-up
Resource scale-up
Marketing & Sales
2
Q2
3
4
5
Q3
6
7
8
Q4
9
10
11
12
Program Moving Forward
 2009
 Reorganize the company
 Obtain system certification
 Trial system Installation:
• Bofang coalmine, Lanhua Group, one of the large-scale coalmines in
China
• Wangzhuang coalmine, Luan Group, one the large-scale coalmines in
China
 standard Model buildup
• 4 coalmines at Datong Group
• Datun China Coal Group, the 2nd largest coal production group in
China
 2010-2011
 Promote to all domestic coalmines including
• Other coalmines in Datong Group
 Mass promotion domestically
• All other coalmines in China Coal group
• Other domestic coalmines and groups
SafeTone Current investment structure
Yajun, Wang
&Wentao Ji
Xiaojian, Ma
&Zuo Wang
65%
35%
SafeTone LTD
(CN/BeiJing)
100%
SafeTone Factory
(CN/ChongQing)
SafeTone Current Operation structure
Board of Directors
Yajun Wang/Xiaojia Ma
Wentao Ji、wang Zuo、Guiping Wang
CEO: Yajun Wang
SafeTone (Beijing) Yajun Wang
SafeTone (Chongqing) Xiaojia Ma
Sales & Marketing: Java Wood
Base station:Wentao Ji
Software Develop: Guiping Wang
Tracker& Bridge:Wentao Ji
HR
Wifi Phone:Wang Zuo
Accounting
Network Engineering
Financial Data:The stabilized Net Margin Should be Around 35%
USD(1K)
2006
2008
2007
2009
Sales and Service revenue
2010
2011
2012
2,081.25
12,936.72
23,023.44
32,631.25
COGS
123.08
230.77
138.46
416.25
2,587.34
4,604.69
6,526.25
Product Margin
-123.08
-230.77
-138.46
1,665.00
10,349.38
18,418.75
26,105.00
Depreciation
181.13
455.70
655.52
771.81
Gross Profit
1,483.87
9,893.68
17,763.23
25,333.19
Operation Expenses
Salaries, and Benefits
93.73
134.95
218.57
655.16
1,145.79
1,487.14
1,807.63
Payroll Taxes & Benefits
26.61
37.57
54.64
79.96
135.14
175.39
213.19
Employee Relations
0.00
1.50
2.03
51.91
100.40
148.71
180.76
Payroll Service
6.67
6.67
14.60
494.28
688.10
760.47
652.63
Fixed Assets
23.92
26.49
4.15
905.67
1,372.83
999.11
581.47
5.92
16.65
1.84
69.61
122.81
159.40
193.75
14.40
24.34
39.42
143.00
276.00
332.00
360.00
Utilities
0.11
0.19
0.56
163.96
288.93
375.01
455.83
Sales Promotions
0.00
4.34
2.06
62.44
388.10
690.70
978.94
Commissions
0.00
0.00
0.00
520.31
3,234.18
5,755.86
8,157.81
Meals & Entertainment
1.44
1.93
1.01
26.17
44.11
57.25
69.58
Training & Seminars
0.00
2.34
0.00
25.81
70.60
91.64
111.39
75.00
100.00
112.00
120.00
Travel
Rent
advertisement
Admininstration Expenses
6.59
7.45
4.14
63.17
108.31
140.58
170.88
Total Operating Expenses
179.38
264.40
34.30
3,336.44
8,075.30
11,285.26
14,053.85
Operating Profit
-179.38
-264.40
-34.30
-1,255.19
4,861.41
11,738.18
18,577.40
2,465.02
3,901.25
Income Tax
Net profit/Loss
Net profit:Income
-179.38
-264.40
-34.30
-126.12
4,859.81
9,271.12
14,673.82
-6.06%
37.57%
40.27%
44.97%
Management
Yajun Wang, Founder and CEO, SafeTone

2006－2008：MWnet’s founder & CEO.


2000-2008:



He has more than 15 years solid management and technology leadership and a track record of success.
Built his own software company with total over USD$10M revenue
Software became the top SW vendor choice of the largest private bank in China
1992-2000: CEP Hexun Communications, a subsidiary of China Telecom.


He developed the hardware and software for safeock trading through mobile phone system.
Achieved sales of $60M annually and awarded VC funding for $50M.

Has strong relationship with Datong coal mines given his family
background.

Has broad network in China telecommunication and software industry.

BE and MS in EE & ME from Chengdu Communication University.
Management
Xiaojian Ma, Founder & President, SafeTone
 1998-2008: VP of Bird Inc., Chairman of Bird Chongqing Corp.
 Responsible for manufacturing and group customer sales. Hands
on experience in sales and marketing at China’s wireless product
market, close relationship with China Mobile;
 1987-1998: General Manager of Product Development at China
NASA, Chongqing Branch
 focus on communications product development;
 BE and MS in EE & ME from Chengdu Communication
University.
Management
Wentao Ji Founder & Vice President, SafeTone
 2007-current, Chairman of Shenzhen Zheyang
Technology
• focus on wireless product development;
 2006-2007, VP of MWnet
• responsible for hardware R&D management;
 Master of EE, Cornell Univ.,
• engineering expert
• Previously worked at Titan Wireless (US), ChinaSat and
Shenzhen Kingsky Inc.
Management
Zuo Wang, Founder & Vice President, SafeTone
 2006-Current, CEO and founder of Shenzhen Celltel
Ltd.
• focus on cell phone development and production;
 1998-2005, VP of Bird Chongqing
• responsible for cell phone production;
 1987-1997, Deputy General Manager Product
Development at China NASA Chongqing Branch;
 BS EE degree, Beijing Insafeitute of Technology;
SafeTone> Core Team
 AP & Zigbee design team:
 Lead by Yaming XU, master of ME, Shanghai Communications Univ.
 wireless expert, previously worked at Shenzhen Kingsky Inc.
 WiFi Phone design team:
 Led by Yang Bing
 15 engineers spun off from Bird Wireless Chongqing and now merged
with SafeTone.
 They own the fundamental layer of the code with WiFi chip. This team
can customize WiFi phone application with special features.
 Software team:

Lead by Guiping Wang, assited Yajun Wang for 5 years on software
development.
 Sales team:
 Lead by Java Wu, Sales Manager with successful sales experience on
IPTV, a similar system which focuses on insafeitution customers.
SafeTone new structure of ownership
investors(can)
Yajun Wang
&Wentao Ji
39%
40%
SafeTone International Inc.
100%
WFOE(cn)
100%
SafeTone(cn/Beijing)
100%
SafeTone(cn/ChongQing)
Xiaojian MA
&Zuo Wang
21%
SafeTone New structure
Board
5 members
CEO/President
Yajun Wang
/Xiaojian MA
VP production
Zuo Wang
VP hardware
Wentao Ji
VP software
Guiping Wang
Adsafen Director
Lang Yuru
Marketing Director
Java Wu
material
safePhone
Server & PC
Accounting
Marker
production
AP Team
PDA
HR
Sales
testing
Tracker Team
safePhone
administration
Gas Team
system integration
AD
Appendix: SafeTone Product & Service>Brief(1)
 Roadmap of product and solutions
 Safe WIN-the software platform
 PC version
 PDA version
 safePhone version
 mine LAN-the network platform
 Wired network
 Wifi wireless network
 Zigbee wireless network
 Safe COM-the wireless communication system
 Safe GAS-the gas monitoring system
 Safe MPS-the tracking system
Appendix: SafeTone Product & Service>Brief(2)
SafeTone
Solution
SafeWIN
(software)
SafeLAN
(Solution)
SafeTone
Terminal
Safe
Safe
MPS
COM
PC &
PDA
PC &
PDA
Mobil &
Phone
Gas
Monitor
MPS
Monitor
Call Center
Safe
GAS
Backbone network(FDDI/RJ45/Wireless)
safeRAP
safeSENSOR
safeTRACKER
safePHONE
Appendix: SafeTone Product & Service>Brief(3)
safeWIN
6.
safePDA
safePDA
safeRAP
safeCOM
safeRAP
7.
safeVIEW
safeCOM
safeMPS
safeGAS
safeGAS
safeMPS
safeMPS
Appendix: SafeTone Product & Service>SafeWIN
 Safety monitoring software platform
 For: mines, oil refineries,
municipalities
 Functions:





Phone
GasMonitor
Personnel Tracking
Video Monitor
Alarm Process
 Features:
 Supports PC, PDA and EX wireless phones
 GIS and database selectable
Appendix: SafeTone Product & Service>SafeLAN(1)
 Ethernet for mining industry
 explosive or hazardous environment
 Including
 Backbone: fiber-optic
 Ethernet: wireless
 Access: Ethernet, Wifi and ZigBee
 Applications:
 Wireless phone calls, personnel
tracking, gas monitoring and video
transmission
Appendix: SafeTone Product & Service>SafeLAN(2)
Phone
Dual Sensor gas monitor
iTrans
safeCOM
Tracker
4 sensor portable gas
monitor safeGAS
safeMPS
Wireless Cam
Single sensor gas
Monitor safeGAS
SafeLAN platform can have all these devices link up to the
surface monitor and control center at the same time.
Appendix: SafeTone Product & Service>SafeCOM
 Total solution for industrial & mining Wireless Communications
 Including:
 Device: safePhone
 Network: SafeLAN
 Software: SafeWIN
 Functions:







Voip
SMS
Push-to-talk
Alarm
Broadcast
Tracking
Management
Appendix: SafeTone Product & Service>SafeGAS
 Total solution for industrial & mining Gas Monitoring
 Including:
 Terminals: iTrans/zBridge,
GBEX/zBridge, MX4/zBridge
 Network: SafeLAN
 Software: SafeWIN Gas
 Functions:
 Fixed position gas monitoring
 Portable gas monitoring
Appendix: SafeTone Product & Service>SafeMPS
 Total solution for industrial & mining Tracking
 Including:
 Terminal: safeMPS
 Network: SafeLAN
 Software: SafeWIN MPS
 Functions:




Personnel tracking
Attendance management
SOS
Alarm process