The fact that Larry Large believes the company will "double the size within a year" can be considered as an exaggeration and a reasonable person may consider this as misrepresentation without reasonable grounds.

In section 734, there are no specific requirements for advertising in prospectus. However, in s728(2) of the Corporations Act 2001 (Cth), it clearly states that a person will be taken into making a false or misleading statement about any matter, if there are no reasonable grounds to give those statements. Therefore, the statements that are made with no reasonable grounds and without any clear perspective on any underlying assumptions of risk factors, can be considered as breaching s734 and s728(2). Directors can be liable pursuant to s729 and s730 and penalties may apply.