Ann: Response to ASX Query, page-38

"...The key question is whether VitroGro has real prospects or is just hype. It is supposed to be used in healing wounds by helping cells to grow. If VitroGro’s potential benefits have knowingly been hyped by the “inadvertently” manipulated data, then there is a risk that this is all a start-up scam.Business start-up scams depend upon inflating the apparent value of a start-up company by promoting perceptions of a bright future such that investment money can be attracted.For example, the founders of the start-up put in  say 10 and raise say 90 with a few select investors. Hype then increases the apparent value of this 100 to say 1,000 (and there have been cases of reaching even 10,000) – all based on perceptions of prospects. The initial investors cash in through a listing on the stock exchange essentially spreading the risk by drawing in a great number of small shareholders. If there is no substance to the start-up, operations are prolonged as long as possible where the company’s officials know they have a limited time available to extract salaries or consultancy fees before the house of cards collapses.  If there is no substance to the start-up, it eventually collapses and a large volume of small shareholders lose whatever they had put in. The initial investors have long since exited though they may keep a small stake until the bitter end just to delay the inevitable end, prolong the period available for extraction of all that can be extracted and for public relations...."