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:

o        our ability to generate future revenues;
o        the potential commercialization of our products;
o        the optimization of production costs; and
o        our ability to enter into future business collaborations and marketing
         partnerships.

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,  ARE LIKELY TO
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,
2001,  we  have  an  accumulated  deficit  of  $93,201,000.   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, 2001 was  $1,428,000  and as of January 31, 2001, we
had $11,791,000 in short term  investments and marketable  securities.  With the
funds raised on March 2, 2001, our balance of cash,  cash  equivalents and short
term  investments  and  marketable  securities  is currently  approximately  $31
million,  which  should  meet our cash  needs for at least  the next two  years.
However, 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 OUR  INFANT  FORMULA  LICENSEES  DO NOT  INTRODUCE  PRODUCTS  CONTAINING  OUR
NUTRITIONAL  OILS IN THE UNITED STATES OR BROADEN  THEIR USE OF OUR  NUTRITIONAL
OILS IN THEIR PRODUCTS OVERSEAS, WE MAY NOT BE ABLE TO REACH REVENUE LEVELS THAT
WOULD MAKE US PROFITABLE.

Nutritional  product  sales and  royalties  are likely to be our main  source of
revenues in the future.  Although we sell some of our nutritional  oils into the
adult nutritional products market,  approximately 80% of our current nutritional
product   revenues  come  from  our  license   agreements  with  infant  formula
manufacturers.  As such,  we depend on the  licensees'  sales of  products  that
include our nutritional  oils.  Although some of our licensees have included our
nutritional oils in some of their products outside the United States,  we cannot
predict whether any licensee will introduce infant formula  products  containing
our nutritional oils in the United States,  broaden their use of our nutritional
oils  overseas,  or whether  any of our other  licensees  will  incorporate  our
nutritional oils into their products.  Until these events occur and we recognize
significant revenues as a result of increased product  introductions,  we do not
expect to be profitable from the sale of nutritional oils to our licensees.

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. Many of these 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 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 20% 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 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 visual and neurological disorders.
Until these  studies,  which are more  extensive  than  earlier  pilot  studies,
establish 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.  We are currently  negotiating  all-inclusive pricing with our
infant  formula  licensees  and have  agreed  to  accept  all-inclusive  pricing
purchase  orders from our licensees in the interim until formal  agreements  are
finalized.  We do not believe  that this change is material to  investors as the
economics of  all-inclusive  pricing  will be similar to our current  economics,
with the  current  transfer  price and  royalty  combined  into one price with a
slight  discount.   Although  either  our  current  pricing   structure  or  the
all-inclusive  pricing structure 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.

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 world-wide  infant
formula  market  to be  approximately  $6  billion.  If our  licensees  were  to
penetrate  100% of this  market  with  DHA and  ARA  supplemented  formulas,  we
estimate that we would receive  approximately  $300 million in revenues annually
from these sales.  To date,  our licensees have  penetrated  less than 4% of the
world-wide  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 we can increase  production to
supply  approximately  20% to 30% of the  world-wide  infant formula market with
additional  capital  expenditures. However,  our ability to maintain  commercial
production at those levels at our plant has not been successfully tested. As a
precaution, we have developed plans to expand our existing facilities to
accommodate increased production.  In order to double our  capacity  at our
current facility, it would cost as much as $20 million, which would require us
to raise significant amounts of capital. We have also conducted DHA production
trials with third party manufacturers. 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 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  Food
Specialties,  to supply our ARA-containing oil. If DSM Food Specialties fails to
supply us with required amounts under the contract, we would not be able to meet
our customers'  demands.  In this case, 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.

BECAUSE WE ARE STILL IN THE EARLY  STAGES OF PRODUCT  DEVELOPMENT,  WE WILL NEED
SIGNIFICANT ADDITIONAL CAPITAL TO CONTINUE OUR RESEARCH AND DEVELOPMENT EFFORTS,
CONDUCT  PRODUCT  TESTING,   INCLUDING  PRECLINICAL  AND  CLINICAL  TRIALS,  AND
MANUFACTURE 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.  Although we receive
revenues from sales of infant  formula  containing  our  nutritional  oils,  our
dietary  supplement  Neuromins(R),  our stable isotope products,  and some other
products, the aggregate revenue from these products is currently insufficient to
internally  fund our product  development,  manufacturing  and marketing  needs.
Therefore, we will continue to require additional outside sources of funding. We
estimate that we will need approximately $10-20 million in additional funds over
the next several years to fund our research and  development,  product  testing,
manufacturing,  and marketing at budgeted levels. Additionally,  if our business
grows, these needs will increase.

To continue to fund our growth, we will pursue various sources of funding, which
may include  equity  issuances,  asset based  borrowing,  lease  financing,  and
collaborative  arrangements  with partners.  Our existing term loan, which has a
current balance at February 22, 2001 of  approximately  $96,000,  requires us to
meet certain debt covenants,  which include maintaining a cash, cash equivalents
and marketable  securities  balance of at least $12 million and meeting  certain
debt/equity and other ratios.  Because  additional  debt financing  arrangements
would  have to comply  with  these  financial  covenants,  we may not be able to
secure  additional  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 to expand 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, 2001,  our common stock price has traded  between $32.00 and $11.00.
During the fifty-two week period ending January 31, 2000, our common stock price
ranged  from $5.00 to  $15.375.  The  following  are  examples of items that may
significantly impact the market price for our common stock:

-announcements of technical innovations, new commercial products, new license
 arrangements or strategic partnerships by us or our competitors;

-patent or other intellectual property disputes;

-quarterly fluctuations in our results of operations;

-regulatory developments concerning our products and our competitors' products;
 and

-general market conditions for emerging growth companies and bioscience
 companies.

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 February 22, 2001, we had
17,852,762 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 72,582 shares.
The average  trading volume in our common stock during the fifty-two week period
ending January 31, 2001 was 84,566 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 February 22, 2001, we had
17,852,762  shares of common stock  outstanding,  stock options  outstanding  to
purchase an aggregate of  2,908,470  shares of common stock at various  exercise
prices  ranging  from $6.25 to $34.25 per share,  and  warrants  outstanding  to
purchase up to 691,198  shares of common stock at exercise  prices between $7.51
and $18.76. We completed a Private Placement on March 2, 2001 in which we issued
1,279,237 shares and warrants to purchase an additional  319,811 shares.  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.

IF OUR LICENSEES DO NOT RECEIVE  NECESSARY  REGULATORY  APPROVALS FOR THE USE OF
OUR NUTRITIONAL  SUPPLEMENTS IN INFANT FORMULAS, THEY WILL NOT BE ABLE TO MARKET
FORMULA CONTAINING OUR PRODUCTS.

Many of our products and the  manufacturing  and marketing of these products are
subject to extensive regulation by the FDA and similar regulatory authorities in
other  countries  depending on the product type and method of  manufacture.  For
example,  the FDA regulates,  to varying degrees and sometimes in very different
ways, infant formulas,  dietary  supplements,  foods, medical foods, animal feed
and pharmaceutical products.

To date,  infant  formula  containing  our  nutritional  oils  has not  received
regulatory  approval in the United States. As a result of prior filings for this
approval  by our  licensees,  the FDA has  raised  questions  pertaining  to the
results  of animal  studies  relating  to DHA and ARA  concerning  the  slightly
enlarged livers and spleens of the laboratory rats who consumed large quantities
of these oils in the studies.  We, along with our licensees,  are in the process
of responding to the FDA to address  these  questions.  As part of this process,
during  February  2000,  we  filed  a  generally  recognized  as  safe  ("GRAS")
notification with the FDA for the use of our DHA and ARA nutritional oils in our
licensees'  infant  formula.  If the FDA review results in a favorable  outcome,
each of our  infant  formula  licensees  will  need to  obtain  a  separate  FDA
authorization  before  marketing  an infant  formula with our sources of DHA and
ARA.

There can be no assurance that our GRAS notification, the final determination of
which may take a minimum of three to six  additional  months from the  effective
date of this registration statement,  will have a favorable outcome, and even if
it does, there can be no assurance that our licensees will be able to obtain the
FDA approval to market an infant  formula  containing our products in the United
States. If we are unable to obtain these approvals, or if approvals are delayed,
our ability to successfully  market products directly and through our licensees,
and to generate  revenues from infant formula product sales or royalties,  would
be impaired.

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 U.S.  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. We may also incur substantial
costs in the future in defending our patents.

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 revoked our patent on
the grounds that it is too broad. We immediately  appealed this ruling, and as a
result,  our patent was  reinstated  and it will remain in effect  during the
appeal process, which may take up to two years. If the revocation is upheld upon
our  appeal,  or  any  other  challenges  to our  patents  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 will not terminate
any of our license agreements.

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 including 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 most efficient production method
and purest forms of DHA and ARA oils;  however,  we are aware that other methods
of  producing  DHA and ARA are  available.  Although no company has yet received
approval to market these products in infant  formula in the United States,  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. We are aware of the
development  of a  DHA-containing  fish oil which provides an alternative to our
DHA oil for infant  formula  applications.  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 very small  percentage of currently  marketed
supplemented infant formulas contains 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(R)  DHA. None of these companies has yet received  approval to include
DHA derived from fish oil or eggs in infant  formula  within the United  States;
however,  some of these companies have received  approval to include DHA derived
from fish oil in infant  formula  in Asia and DHA and ARA  derived  from eggs in
infant formula in Europe.

We are also aware that  OmegaTech,  Inc.,  an early  stage  company,  is able to
produce DHA from a strain of algae and is presently marketing this product as an
adult  nutritional  supplement.  OmegaTech,  Inc. is currently  challenging  our
European DHA patent and, if their  challenge  is upheld on appeal,  a barrier to
their ability to compete with us would be eliminated. We are currently unable to
evaluate the degree of  competitive  threat that this fungal  source of DHA will
present to our DHA oil in the future.