# EXHIBIT 99.1

CAUTIONARY STATEMENTS FOR
 PURPOSES OF THE "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

We desire to take advantage
of the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. Many of the following important factors discussed below have
been discussed in our prior SEC filings.

You should be cautioned
that the following important factors have affected, and in the future could
affect, our actual results. There may also be additional factors not discussed
in this report that could also affect future results. These factors could cause
our future financial results to differ materially from those expressed in any
forward-looking statements made by us. Forward-looking statements may relate to
such matters as:

Forward-looking statements
may include words such as will, should,
could, anticipate, believe,
plan, estimate, expect, intend,
and other similar expressions. This list does not constitute all factors which
you should consider prior to making an investment decision in our securities.
You should also not assume that the information contained herein is complete or
accurate in all respects after the date of this filing. We disclaim any duty to
update the statements contained herein.

WE HAVE EXPERIENCED NET OPERATING LOSSES SINCE OUR INCEPTION, MAY CONTINUE TO EXPERIENCE NET OPERATING LOSSES IN THE SHORT TERM, AND
MAY NEVER BECOME PROFITABLE.

We have experienced net
operating losses since our inception. As of January 31, 2002, we have an
accumulated deficit of $106,274,000. Until we realize significant revenues from
sales of our nutritional products, we expect to continue to experience net
operating losses. Our balance of cash and cash equivalents at January 31, 2002
was approximately $29 million and as of January 31, 2002, we had approximately
$14 million in short term investments and marketable securities. Although this
cash should allow us to meet our operating needs for at least the next 12
months, we must achieve sustained profitability to generate the cash necessary
to be a viable business in the long term, and at this time we have not yet
generated a sustained source of revenues to achieve this.

IF INFANT FORMULAS
CONTAINING OUR NUTRITIONAL OILS DO NOT GAIN WIDESPREAD ACCEPTANCE IN THE UNITED
STATES, OR OUR INFANT FORMULA LICENSEES DO NOT BROADEN THEIR USE OF OUR
NUTRITIONAL OILS IN THEIR PRODUCTS OVERSEAS, WE MAY NOT BE ABLE TO REACH REVENUE
LEVELS THAT WOULD ALLOW US TO BE PROFITABLE.

Ultimately our success in
the infant formula industry depends on growing acceptance of our nutritional
oils as necessary or beneficial additives to infant formulas. Notwithstanding
existing clinical results that have demonstrated the beneficial effects of
adding our nutritional oils to infant formula, some experts in the field of
infant nutrition do not believe that our nutritional oils are necessary or that
they provide any long-term beneficial effects. There have also been clinical
studies where no beneficial effects have been found, possibly due to dose,
duration or other factors. Also, many experts recommend that mothers breastfeed
rather than use infant formulas whether or not they contain our nutritional
oils. Some experts also believe that infant formula without our oils contains
sufficient precursor fats that infants can convert into DHA and ARA as needed.
In addition, some physicians are unimpressed by studies showing that infant
formulas fortified with our oils improve infants cognitive ability at
early ages, suggesting that these results may not carryover to improved results
later in life. Due to these differences in opinion, we are subject to the risk
that the use of DHA and ARA in infant formula may never gain widespread
acceptance.

IF WE ARE UNABLE TO
INCREASE OUR PRODUCTION CAPACITY OR ENTER INTO FAVORABLE AGREEMENTS WITH THIRD
PARTIES TO PRODUCE OUR OILS, OUR CUSTOMERS MAY NOT BE ABLE TO OBTAIN A
SUFFICIENT SUPPLY OF DHA AND ARA AT A COMMERCIALLY REASONABLE PRICE TO GAIN A
BROAD ACCEPTANCE OF THESE PRODUCTS AND OUR FUTURE REVENUES FROM THESE PRODUCTS
MAY BE LIMITED.

To meet our customers
projected demand for our nutritional oils, we have developed a process for the
large-scale production of our oils at our Winchester, Kentucky manufacturing
plant. We estimate the worldwide infant formula market to be approximately $6 to
$8 billion. If our licensees were to penetrate 100% of this market with DHA and
ARA supplemented formulas, we estimate that we would receive approximately $350
to $400 million in revenues annually from these sales. To date, our licensees
have penetrated less than 5% of the worldwide infant formula market. While our
current production level in our plant is sufficient to meet this current demand,
if demand increases beyond our current production capabilities, we may be unable
to produce the required quantities of oil cost effectively. Although our
licensees have a right to manufacture DHA and ARA, we are not aware of any of
our licensees doing so or preparing to do so. We estimate that it may take a
licensee approximately one year or more to develop their process of making our
oils. Accordingly, if we are unable to meet demand, our licensees may not be
able to manufacture product themselves for at least one year. We believe that
with the current expansion that began late in 2001 at our Winchester, KY plant,
we will be able to produce enough DHA to supply approximately 20% to 30% of the
worldwide infant formula market. However, our ability to maintain commercial
production at those levels at our plant has not been successfully tested. We
believe that this buildout, which should more than double our production
capacity at our plant, will cost as much as $15 million. We have also conducted
DHA production trials with third party manufacturers. We are currently in
negotiations with FermPro Manufacturing L.P., a contract fermentation company in
South Carolina, to further expand our production capacity. We have signed a
non-binding letter of intent to acquire certain assets and assume certain
liabilities of FermPro, and are now finalizing a bridge tolling agreement for
DHA production at the facility. This agreement would be in effect while the due
diligence process related to the acquisition is being completed, which is
anticipated in early summer 2002. However, we do not currently have a third
party manufacturing agreement in place to supply us with DHA-containing oil. If
we are unable to cost effectively manufacture our DHA-containing oils at our
plant, unable to complete the acquisition of FermPro, or unable to enter into a
favorable third party manufacturing agreement, or our licensees are unable to
find alternative sources for our DHA-containing oils, our licensees may not be
able to meet future demand and our revenues may be limited in the future.

Although we are able to
produce ARA-containing oil at our Winchester plant, we have entered into an
agreement with a third party manufacturer, DSM, to supply our ARA-containing
oil. We believe that DSM can provide us with sufficient quantities of ARA oil to
supply approximately 20% to 30% of the worldwide infant formula market. If DSM
fails to supply us with required amounts under the contract, we would not be
able to meet our customers demands unless we were able to utilize
alternative sources of supply. In this regard, we would have to either
manufacture the ARA-containing oil at our plant, which would reduce our
DHA-containing oil production capacity, or enter into other third party
manufacturer supply agreements. If we are unable to find alternative supply
sources or are unable to cost effectively manufacture the ARA-containing oil in
our Winchester plant, our licensees may not be able to meet future product
demand and our future revenues from sales of ARA-containing oils may be limited.

WE MAY EXPERIENCE DIFFICULTIES IN SCALING UP OUR COMMERCIAL MANUFACTURING
PROCESS WHICH WOULD ADVERSELY AFFECT OUR FUTURE REVENUES.

As we increase our production at our Winchester, KY plant and at other locations, we may encounter many risks associated with scaling
up our commercial manufacturing such as:
- the planned expansion of our production facility may not be completed in the timeframe that we have planned;
- the costs of operating and maintaining our production facility may exceed our expectations;
- product defects may result;
- product losses may be higher than we anticipate; and
- the scale-up of our production process may result in regulatory issues.
If we were to experience any one or more of these problems, there could be a material adverse effect on our business, financial
condition, or results of operation.

IF ADDITIONAL POSITIVE CLINICAL RESULTS ARE NOT OBTAINED, WE MAY NOT BE ABLE TO DEVELOP A PROFITABLE MARKET FOR OUR NUTRITIONAL OILS
OUTSIDE OF THE INFANT FORMULA MARKET.

Approximately 10% of our
current nutritional product revenues come from sales of our nutritional oils to
distributors and directly to consumers in the adult supplement market.
Investigators at universities and at other research centers, such as the
National Institutes of Health, have observed a relationship between low levels
of DHA and a variety of health risks, including increased cardiovascular
problems, cystic fibrosis, cancer, and neurological and visual disorders. We are
currently trying to establish what contribution, if any, supplementation with
our oils will make in addressing these problems. Although clinical data is not
required to market nutritional supplements to consumers or distributors outside
of the infant formula market, we believe that further clinical studies are
needed to validate the benefits of DHA supplementation. Accordingly, we have
recently begun sponsoring studies to further investigate the potential benefit
of DHA supplementation on cardiovascular health and breast cancer, and we, as
well as others, are conducting research regarding the impact of DHA
supplementation on cystic fibrosis and certain visual and neurological
disorders. Unless these studies, which are more extensive than earlier pilot
studies, establish and quantify the positive impact of DHA supplementation, we
may only have a limited adult nutritional supplement market opportunity.

EVEN IF OUR PRODUCTS DO OBTAIN WIDESPREAD ACCEPTANCE, WE MAY NOT BE ABLE TO PRICE THE PRODUCTS AT A LEVEL THAT WOULD ALLOW US TO BE
PROFITABLE.

Infant formula pricing is
very competitive and the market is very sensitive to product price changes.
Because the inclusion of our oils into infant formula may add 10% to 20% to the
retail cost of standard infant formula, there is the risk that our licensees may
never be able to sell supplemented products at a price that will allow them to
gain broad market acceptance while at the same time be profitable. Although our
current contracts with licensees outline product pricing and royalty rates, we
cannot predict whether these pricing structures will allow our licensees to be
competitive in the future. If we have to reduce our prices, we may not be able
to sell products at a price that would enable us to be profitable. Since
December 2000, over 95% of our sales to infant formula licensees have been made
under all-inclusive pricing, and we anticipate that this trend will continue for
future sales to infant formula licensees. We do not believe that this change is
material to investors as the economics of all-inclusive pricing is similar to
our royalty bearing arrangements, with the current transfer price and royalty
combined into one price with a slight discount. Although either our
all-inclusive pricing structure or our royalty bearing arrangements will enable
us to achieve profitability if our products receive widespread acceptance, we
cannot predict whether either of these pricing structures will enable our
licensees to achieve success marketing these products. None of our license
agreements requires our licensees to purchase any minimum amount of products
from us now or in the future and all of our license agreements allow our
licensees to manufacture our products themselves or purchase nutritional oils
from other sources.

BECAUSE WE ARE STILL IN
THE EARLY STAGES OF PRODUCT DEVELOPMENT, WE WILL NEED SIGNIFICANT ADDITIONAL
CAPITAL TO EXPAND OUR PRODUCTION CAPABILITY, CONTINUE OUR RESEARCH AND
DEVELOPMENT EFFORTS, CONDUCT PRODUCT TESTING, INCLUDING PRECLINICAL AND CLINICAL
TRIALS, AND MARKET OUR PRODUCTS.

We have a number of
products that are in the early stages of research and development, product
testing, manufacturing or marketing. Our nutritional oils sales are increasing,
and meeting future demand will require expanding our production capability for
DHA oil. We estimate that our initial fermentation expansion may cost up to
 $15 million, and our office, warehouse and packaging expansion may cost an additional $4 million.
Although at January 31, 2002 we had approximately $43 million in cash and cash
equivalents and short term investments and marketable securities available to meet these capital requirements, we believe that
additional funds of $10 to $20 million may be needed in the longer-term to fund
additional expansion of our production capacity (at our Winchester, KY facility
and at other third party manufacturing facilities), our research and
development, product testing, and marketing activities. The timing and extent of
our additional cash needs will primarily depend on the timing and extent of
future launches of infant formula products containing our oils by our licensees,
and our ability to generate profits from the sales of these oils.

To continue to fund our
growth, we will pursue various sources of funding, which may include equity
issuances, debt financing, asset based borrowing, lease financing, and
collaborative arrangements with partners. Because debt financing arrangements
may require us to comply with financial covenants, we may not be able to secure
debt financing on terms acceptable to us. Additionally, funding from other
sources may not be available, or may not be available on terms that would be
commercially acceptable or permit us to continue the planned commercialization
of our products or expansion of our production capacity. If we obtain funds
through collaborative or strategic partners, these partners may require us to
give them technology or product rights, including patents, that could ultimately
diminish our value. If we cannot secure adequate funding, we may need to scale
back our research, development, manufacturing, and commercialization programs
which may have a materially adverse affect on our future business.

THE MARKET PRICE OF OUR COMMON STOCK MAY EXPERIENCE A HIGH LEVEL OF VOLATILITY DUE TO FACTORS SUCH AS ITS RELATIVE ILLIQUIDITY, THE
VOLATILITY IN THE MARKET FOR BIOTECHNOLOGY STOCKS GENERALLY, AND THE EFFECT OF SHORT TERM EVENTS LIKE PRODUCT LAUNCHES AND LICENSE
ANNOUNCEMENTS.

We are a public emerging
growth company in the biosciences sector. As frequently occurs among these
companies, the market price for our common stock may experience a high level of
volatility. During the fifty-two week period ending January 31, 2002, our common
stock price traded between $30.90 and $12.25. During the fifty-two week period
ending January 31, 2001, our common stock price traded between $32.00 and
$11.00. The following are examples of items that may significantly impact the
market price for our common stock:

Because we may experience a high level of volatility in our common stock, you should not invest in our stock unless you are prepared
to handle a significant loss of your capital.  At any given time, you may not be able to sell your shares at a price that you think
is acceptable.

The market liquidity for
our stock is very low. As of January 31, 2002, we had 20,961,806 shares of
common stock outstanding. Since our initial public offering of common stock on
November 23, 1993, the average daily trading volume in our common stock as
reported on the NASDAQ National market has been 77,808 shares. The average
trading volume in our common stock during the fifty-two week period ending
January 31, 2002 was 117,227 shares. Although a more active trading market may
develop in the future, the limited market liquidity for our stock may affect
your ability to sell and the price at which you are able to sell your shares of
common stock.

IF SIGNIFICANT SHARES
ELIGIBLE FOR FUTURE SALE ARE SOLD OR REGISTRATION RIGHTS ARE EXERCISED, THE
RESULT MAY DEPRESS OUR STOCK PRICE BY INCREASING THE SUPPLY OF OUR SHARES IN THE
MARKET AT A TIME WHEN DEMAND MAY BE LIMITED.

Because we continue to
require additional outside sources of capital to finance, among other things,
our research and development, product testing, and the manufacturing or
marketing of our products, we may need to raise additional capital through the
sale of equity securities. As of March 12, 2002, we had 21,099,498 shares of
common stock outstanding, stock options outstanding to purchase an aggregate of
3,325,520 shares of common stock at various exercise prices ranging from
$6.25 to $34.25 per share, and warrants outstanding to purchase up to
549,520 shares of common stock at exercise prices between $10.84 and $19.05. To
the extent that these options and warrants for our common stock are exercised,
the increase in the number of our outstanding shares of common stock may
adversely affect the price for our common stock. This could hurt our ability to
raise capital through the sale of equity securities. Additionally, some of our
stockholders who bought shares or warrants from us in private placements have
registration rights. If the stockholders were to exercise their registration
rights when we are seeking to raise capital by selling stock in a registered
offering, the result could effectively prevent us from doing so.

OUR CURRENT PATENTS MAY NOT BE ABLE TO PROVIDE PROTECTION AGAINST COMPETITIVE PRODUCTS AND WE MAY BE UNABLE TO PROTECT OUR
INTELLECTUAL PROPERTY PORTFOLIO IN THE FUTURE.

European and United States
patent authorities have not adopted a consistent policy regarding the breadth of
claims allowed for health and bioscience patents. Our issued patents, or patents
that we may obtain in the future, may not afford adequate protection against
competitors with competing technology because governmental agencies may revoke
our patents for being too broad or may limit the scope of our patents. If this
happens, companies may be able to produce products using our previously patented
technology.

OmegaTech, Inc., Monsanto
Corporation, Aventis S.A. and Nagase & Co. Ltd. are challenging our European
patent covering our DHA-containing oils. At a hearing in October 2000, a
division of the European Patent Office (EPO) revoked our patent on
the grounds that it is too broad. We immediately appealed this ruling, and as a
result, our patent was reinstated so that it will remain in effect during the
appeal process. A hearing on the appeal is likely to be held during the second
half of 2002. If the revocation is upheld upon our appeal, or if any of the
challenges described below or any other challenges to our patents which may arise in the future are successful,
our competitors may be able to produce
our products and, as a result, we may experience decreases in the future sales
of our nutritional oils, decreases in the revenues on sales of infant formula
containing our oils and decreases in license fees related to our oils. Although
our revenues may decrease under our license agreements, the revocation of our
European DHA patent, ARA patent or blended-oils patent would not terminate any of our license agreements.

BASF A.G., F. Hoffman - LaRoche A.G., Friesland Brands B.V., OmegaTech, Inc., Societe des Produits Nestle S.A., and Suntory Limited
have filed their grounds for opposing our ARA patent issued by the EPO with the Opposition Division of the EPO. The validity of the
patent is unaffected by these filings. The opposition process is not expected to be completed until sometime in 2005, at the earliest.

BASF A.G., F. Hoffman - LaRoche A.G., OmegaTech, Inc., Societe des Produits Nestle S.A., and Suntory Limited have filed their grounds
for opposing our blended-oil (blend of DHA and ARA oils) patent issued by the EPO, with the Opposition Division of the EPO.  The
validity of the patent is unaffected by these filings.  The opposition process is not expected to be completed until sometime in
2006, at the earliest.

OmegaTech has indicated to us orally that it may undertake an effort in Australia to challenge the validity of our DHA, ARA and
mixed-oil patents.

We expect that in the
future, as our nutritional oils continue to be commercialized, opposition to our
intellectual property by our competitors will continue and most likely increase.
We believe that challenges to our suite of U.S. patents may arise in
the future. We may incur substantial costs in the future defending our patents.

WE ARE AWARE OF SEVERAL
PRODUCTS THAT ARE CURRENTLY AVAILABLE, AND PRODUCTS UNDER DEVELOPMENT, THAT MAY
PRESENT A SERIOUS COMPETITIVE THREAT TO OUR PRODUCTS.

Our success depends upon achieving and maintaining a superior competitive position in infant formula and adult nutritional product
markets.  Many of our competitors, which include BASF, F. Hoffman-LaRoche Ltd., OmegaTech, Inc., Monsanto Corporation, Aventis S.A.
and Nagase & Co. Ltd., have substantially greater research and development capabilities, marketing, financial and managerial
resources and experience in the industry. If a competitor develops a better product or technology, our products or technologies may
be rendered obsolete.

We believe that, to date,
we have developed the purest forms of DHA and ARA oils; however, we are aware
that other sources of DHA and ARA are available. No infant formula using these
other sources of DHA and ARA is on the market in the United States.  Ross Products
Division of Abbott Laboratories has filed a Generally Recognized as Safe ("GRAS") notification on January 2, 2002 seeking
FDA concurrence that its fish oil source of DHA is GRAS when used as an ingredient in infant formula. Some infant
 formulas and other products now on the market outside the
United States use oils derived from other sources, such as fish or eggs. Although it is a
lower cost product relative to our DHA, fish oil has odor, stability and taste
characteristics that may limit its usefulness. Only a small percentage of
supplemented infant formulas currently marketed outside the United States contain DHA and ARA that have
not been produced by us. Currently, fish oil based products dominate the adult
DHA supplement market. We are aware of the development of microencapsulated fish
oil products by several large companies, including BASF and F. Hoffman-LaRoche
Ltd. Although microencapsulation of the oil resolves much of the odor, stability
and taste issues found with fish oil, a microencapsulated product is
significantly more costly than regular fish oil. Because fish oil is
significantly less costly than our DHA oil, fish oil presents a substantial
competitive threat to our Neuromins® DHA.

We are also aware that
OmegaTech, Inc., an early stage company, is able to produce DHA from a microbial
source and is presently marketing this product in animal feeds, certain food
products and adult nutritional supplements. OmegaTech, Inc., among others, is
currently challenging our European DHA, ARA, and blended oil patents and, if
their challenges are ultimately successful, their ability to compete with us
would be strengthened. Although, based on the strength of our intellectual
property, we do not believe that OmegaTechs source of DHA will present a
significant threat in infant formula supplementation, we are currently unable to
predict the future degree of competitive threat that OmegaTechs DHA may
present to us in the areas of adult nutrition.