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Filed by Infonautics, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
Subject Company: I.I. Holding Company, Inc.
Commission File No. 0-28284
Investors and security holders of the Company are advised to read the joint
proxy statement/prospectus regarding the business combination transaction
referenced in the following information when it becomes available because it
will contain important information. The joint proxy statement/prospectus will be
filed with the Securities and Exchange Commission by Infonautics, Inc. Investors
and security holders may obtain a free copy of the joint proxy
statement/prospectus (when available) and other documents filed by Infonautics,
Inc. at the Commission's web site at www.sec.gov. The joint proxy
statement/prospectus and such other documents may also be obtained from
Infonautics by directing such request to Vice President & General Counsel,
Infonautics, Inc., 590 North Gulph Road, King of Prussia, PA 19406-2800.
The following presentation contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. These
forward-looking statements may include statements regarding, for example,
profitability, the completion of the transactions related to the merger, the
combined company's plans in the event the merger transactions is completed, the
operational leverage and the core capabilities of the combined company, and the
respective resources of each of the merger partners following the merger. Such
statements are based on management's current expectations and are subject to a
number of uncertainties and risks that could cause actual results to differ
materially from those described in the forward-looking statements, including,
the risk that the merger partners will be unsuccessful in merging and
integrating their businesses, and the combined company's inability to develop
and achieve commercial success and implement its business strategy. More
information about potential factors which could affect either Infonautics or IBS
Interactive, Inc. is included in the Risk Factors sections of each company's
respective filings with the Securities and Exchange Commission. All
forward-looking statements included in this document are based on information
available to each such company as of the date of this document, and neither
company assumes any obligation to update such forward-looking statements.
THE FOLLOWING IS THE SLIDE PRESENTATION SHOWN AT THE GROUNDHOGS ON TOUR 2000
INVESTMENT FORUM HELD IN LAS VEGAS, NEVADA ON SEPTEMBER 1, 2000:
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[INFONAUTICS LOGO]
The following presentation contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. These
forward-looking statements may include statements regarding, for example,
profitability, the completion of the transactions related to the merger, the
combined company's plans in the event the merger transactions is completed, the
operational leverage and the core capabilities of the combined company, and the
respective resources of each of the merger partners following the merger. Such
statements are based on management's current expectations and are subject to a
number of uncertainties and risks that could cause actual results to differ
materially from those described in the forward-looking statements, including,
the risk that the merger partners will be unsuccessful in merging and
integrating their businesses, and the combined company's inability to develop
and achieve commercial success and implement its business strategy. More
information about potential factors which could affect either Infonautics or IBS
Interactive, Inc. is included in the Risk Factors sections of each company's
respective filings with the Securities and Exchange Commission. All
forward-looking statements included in this document are based on information
available to each such company as of the date of this document, and neither
company assumes any obligation to update such forward-looking statements.
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[INFONAUTICS LOGO]
Welcome
Back to REALITY
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[INFONAUTICS LOGO]
A Lot Has Changed
- Irrational exuberance in the stock market has ended
- Internet company valuations are dramatically down from 52-week highs
- Investors are holding more cash
- Stagnant Internet IPO market
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A Lot of Things
Haven't Changed
- The Internet is fundamentally changing the way people do business
and communicate
- Internet usage continues to rise dramatically
- The technology and Internet revolution isn't over, it's just begun
- Many of tomorrow's leading businesses have yet to be created
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[INFONAUTICS LOGO]
"The problem with the new
economy is that there is TOO MUCH NEW
and NOT ENOUGH ECONOMY."
-Rich Masterson
CEO First Avenue Ventures
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[INFONAUTICS LOGO]
Perish or Prosper
PERISH
- Concept IPO's
- Cash Burn
- Low gross margins
- Inverted business models
- Incubators racking up lots of pre-revenue properties
- Companies dependent on access to cheap capital
PROSPER
- Real business models
- Cash Flow
- High gross margins
- Losses less than customer acquisition expense
- Brands
- Strong balance sheets
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INFO Today:
Operating Anchor Properties
- Search and Reference properties: profit stage business
- eLibrary consumer: profitable today
- Online research library
- $9 million revenue TTM
- Annuity business
- Encyclopedia.com
- Sleuth properties: revenue stage business
- Intelligent agents "do the surfing for you"
- Greater than 1.3 million users
- Low fixed cost
- Brand
- Reasonable path to profitability
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Email Notification
[WEB PAGE GRAPHIC]
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Company Sleuth
[WEB PAGE GRAPHIC]
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Infonautics Today
- Sleuth properties: post revenue, pre-profit
- eLibrary.com consumer business: profitable
- Encyclopedia.com: break even, delivering page views and audience
- 19% of bigchalk.com: post revenue, pre-profit
- EchoFactor: pre-revenue, developmental stage property
- Position in eBay stock: approximately $9 million
- Cash: approximately $13 million at end of Q2
- MARKET CAP LESS THAN $50 MILLION
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Infonautics Tomorrow
[INFONAUTICS LOGO]
First Avenue Ventures [DIGITAL LOGO]
[INTERACTIVE LOGO]
* Subject to regulatory and shareholder approval
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Digital Fusion
DigitalFusion will be a publicly held Corporation that INVESTS IN, BUILDS, and
OPERATES, SEED-STAGE IT COMPANIES that engage in INTERNET SERVICES &
INFRASTRUCTURE
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[INFONAUTICS LOGO] [DIGITAL LOGO]
A Short History
of Public Venture Companies
Safeguard Scientific 1st mover: invented the model
CMGI Intellectual leverage
ICGE Category definition
Incubators Speed: over-hyped
Digital Fusion Operational leverage
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Digital Fusion's
Operational Leverage
[GRAPHIC]
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Case Study: bigchalk.com
Serving over 40K schools by providing
content, community, curriculum, and assessment
- 1997
- Info K-12 education business started as revenue extension for
the consumer eLibrary business
[GRAPHIC]
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Case Study: bigchalk.com
Serving over 40K schools by providing content, community,
curriculum, and assessment
[GRAPHIC]
- 1997
- Info K-12 education business started as revenue extension for
the consumer eLibrary business
- 1999
- $13 million revenue
- 20K schools - Market share leader
- Combined business with largest competitor to form bigchalk.com
(private company)
- INFO records $35 million profit and takes $16.5 million in
cash
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Case Study: bigchalk.com
Serving over 40K schools by providing
content, community, curriculum, and assessment
[GRAPHIC]
- 1997
- Info K-12 education business started as revenue extension for
the consumer eLibrary business
- 1999
- $13 million revenue
- 20K schools - Market share leader
- Combined business with largest competitor to form bigchalk.com
(private company)
- INFO records $35 million profit and takes $16.5 million in
cash
- 2000
- bigchalk raises $55 million from highly-regarded VC's
- bigchalk executes two acquisitions
- $17 million revenue in 1H 2000
- Info owns 19% of bigchalk.com
- Currently carried on balance sheet at value of $4.7 million
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Case Study: Half.com
Used books, CDs, videos and games
Fixed price auction category
[GRAPHIC]
- June 1999
- Infonautics executive, Josh Kopelman, departs to start own
company (Half.com)
- Info becomes founding investor
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Case Study: Half.com
Used books, CDs, videos and games
Fixed price auction category
[GRAPHIC]
- June 1999
- Infonautics executive, Josh Kopelman, departs to start own
company (Half.com)
- Info becomes founding investor
- 2000
- Info promotes Half.com through paid placements on Sleuth
properties, eLibrary, and Encyclopedia.com
- July 2000
- eBay buys Half.com
- INFO's $280K investment converts into 174,387 shares of eBay
worth approximately $9 million
- Carried on balance sheet as $280K
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Case Study: EchoFactor
Headline syndication creating a
"content traffic exchange"
Free Headline Syndication
[WEB PAGE GRAPHIC]
Creates a Traffic sold
Traffic to the highest
Network bidder on a
(Similar to CPC basis
an Ad
Network)
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Case Study: EchoFactor
Headline syndication creating a
"content traffic exchange"
[GRAPHIC]
- May 1
- Group assembled
- June 1
- Working prototype
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Case Study: EchoFactor
Headline syndication creating a
"content traffic exchange"
[GRAPHIC]
- May 1
- Group assembled
- June 1
- Working prototype
- August 15
- First launch
less than $300K invested to date
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Key to
Operational Leverage
"Capabilities"
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Digital Fusion's Core
Capabilities
[GRAPHIC]
INFO: Infonautics, Inc. Professional services (IBSX)
IBSX: IBS Interactive, Inc. IP Assets
FAV: First Avenue Ventures, Inc. Incubation (INFO)
Value creation
Management Expertise
Venture Capital
Operating Invernet Ventures (FAV)
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Capabilities:
Technology & Development
- IBSX
- 300 employees in 11 cities
- $6.7 million revenue MRQ
- $28 million proforma revenue
- Blue chip client base
- Improving fundamentals
- Employees and client base to serve as a source of, and a test
bed for, new ideas
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[INFONAUTICS LOGO] [DIGITAL LOGO]
IBSX
[BEAR STEARNS LOGO] [GM LOGO] [EXXON MOBIL LOGO]
[COMPAQ LOGO] [BRIDGESTONE FIRESTONE LOGO]
[CHASE LOGO] [TENNESSEE LOGO]
[SMARTMONEY.COM LOGO] [AETNA LOGO] [ARMY LOGO]
[WHARTON LOGO] [NASA LOGO] [BORDERS.COM LOGO]
[BLACK & DECKER LOGO] [COMMERCE BANK LOGO]
[SYBASE LOGO] [PRATT & WHITNEY LOGO]
[TRW LOGO]
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Capabilities:
Technology & Development (cont'd)
- Company Sleuth
- First version build for less than $250K
- $1 million revenue generated during first 5 quarters
- less than $1.5 million invested to date
- 1 million RU's generate 5-10 million page views per month
- Encyclopedia.com
- Build for less than $250K
- Second behind Encarta in sustained traffic
- 5-10 million page views per month
- Entertainment Sleuth
- Build for less than $150K
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Capabilities:
Guerilla Marketing
[WEB PAGE GRAPHIC]
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Capabilities:
International Reach & Leverage
- Cross Atlantic Partners
- Investing in FAV/Digital Fusion at an equivalent of $6.90 Info
share price
- Don Caldwell - former Safeguard Scientifics President
- Glen Rieger - former Safeguard Scientifics VP
- 22 investments, mostly overseas, concentrated in England,
Ireland, and Asia Pacific
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Summary
ASSETS
Operational
- E-Services business most of revenue
- eLibrary consumer
- Encyclopedia.com
- Company Sleuth
- Sports Sleuth
- Job Sleuth
- Entertainment Sleuth
- Echo Factor
Investment
- bigchalk.com
- eBay
CAPABILITIES
- Development technology
- Hosting services
- Traffic to test new ideas
- Guerilla marketing
- Seed capital
- International reach
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[INFONAUTICS LOGO] [DIGITAL LOGO]
Welcome Back to Reality
Digital Fusion is Poised for
the Next Chapter of the Internet
