That statement is incorrect. Budding is a form of asexual reproduction where a new organism develops from an outgrowth or bud due to cell division at a specific site. This results in the formation of two organisms, not three or more.

Here's how it works:

* Parent organism: The original organism develops a bud.

* Bud growth: The bud grows and develops, eventually becoming a smaller version of the parent.

* Separation: The bud separates from the parent, becoming an independent organism.

Examples of budding include:

* Yeast: Single-celled organisms reproduce by budding.

* Hydra: Small, freshwater animals reproduce by budding.

* Sponges: Some sponges reproduce asexually through budding.

Let me know if you have any other questions!