I often wonder if this thing didn't actually start out at intentional fraud.
If you don't know much about how lab tests are done you might think something like: if it only takes a few drops of blood and a little machine to test for a particular disease, why can't you test for all diseases the same way? It might then be a logical leap to get to why couldn't you use the same few drops of blood to test for multiple diseases? And if you think that's a sensible question then, why couldn't you do that with one machine.
Now a sensible, intelligent person would probably have done a little research at that point to find out if there were good answers to those questions. The current wisdom is of course that some blood tests are quite complicated and require more than a few drops of blood. Testing for one disease will generally render the sample useless for further tests. And given the answers to the first two questions the third question is a none starter.
However, maybe just maybe you somehow got to question three without properly considering the first two questions. You saw a machine used to test for a single ailment from a few drops of blood and being impetuous and arrogant you thought "I bet I could develop a bigger version of this machine that could diagnose multiple conditions from just a few drops of blood and from there decided to stay up a company to do so.
If course if you were going to do this then you'd need to employ doctors and scientists and even if you were pretty rich you'd need investment. So you go out to get investment. Rather than being entirely honest you tell potential investors that you are developing this machine. The honest thing might have been to say that you were researching the viability of such a machine, but hey you're arrogant enough to know you're going to succeed.
Investment secured you start pulling a team together at which point you start to learn that maybe this is going to be harder than you thought. Not only would you need to make the machine, you'd even need to develop some new testing technologies. But hey you're arrogant, you know you'll succeed, but maybe it's going to take more investment.
At some point in this process you've probably lost confidence in your convictions the question of course is at what point did they go from thinking that maybe they could succeed to knowing they couldn't? And were they still chasing investment at that point?
I don't think we're dealing with a couple of idiots here. They seem reasonably intelligent people. So *if* they originally thought they could succeed then they must have arrived at the realisation that they probably wouldn't fairly quickly.
The puzzling thing for me is that while there have been many cons that followed a similar pattern most such cons involved cutting and running, or at least planning to cut and run. In this case if they did plan to cut and run they were clearly a long way from reaching that part of the plan when it all fell apart. Which gets me back again to the question, was it arrogance or stupidity?