State takes note of foundering Collexis

It would appear that The State newspaper has rediscovered Collexis, the Columbia, SC, technology company it was all too happy to puff up just a couple short years ago.

Last week, The State reported that Collexis was selling stock to raise enough money to operate through July.

According to the paper, “The company said it had a $3.12 million commitment from a private investor and expects to receive an additional $300,000 over the next 15 days. With that money and regular operating revenue, ‘we believe we will have sufficient cash to fund our operations through July 31, 2009,’ the company said in the report.

“However, that will not be enough money for Collexis to repay $2.2 million of debt that is owed over the next three months, the report said.”

The report added that the company lost $1.4 million during the first three months of 2009.

What’s remarkable about the story is that, according to Lexis, the piece marks the first time in more than a year that The State has bothered to report on Collexis’s struggling financial condition.

Here’s what the paper neglected to cover over the past year:

• Collexis lost more than $11 million during the fiscal year ended June 30, 2008, and another $4 million-plus over the last six months of 2008.
• The company’s independent accounting firm included an explanatory paragraph in Collexis’s annual report last October that expressed substantial doubt about Collexis’s ability to continue as a going concern.
• Over the past few weeks, Collexis has diluted its stock by issuing nearly 40 million shares at 7 cents a share in an effort to raise money to meet operating costs.

The thing is, there was a time when The State couldn’t get enough of Collexis. The paper ran six full stories about the company between Sept. 24, 2006, and Oct 4, 2007, and another half dozen shorter mentions, according to a Lexis search.

The highlight was a profile that ran in September 2006. The 1,200-word piece was titled “Google on Steroids.”

But since May 2008 – once the bad news really started to pile up at the tech company – the paper has managed little more than a handful of short pieces, basically rewriting company press releases on such events as former University of South Carolina President Andrew Sorensen joining the Collexis’s board and the company getting an award.

It’s not like Columbia and South Carolina have a lengthy list of corporate entities which precludes The State from being able to keep close track of publicly traded companies.

If The State believes a company’s worth profiling when it’s ostensibly got a good story to tell, doesn’t it have an obligation to its readers to follow up when things aren’t going so well?