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                                  EXHIBIT 99.1
       CAUTIONARY STATEMENTS FOR PURPOSES OF THE "SAFE HARBOR" PROVISIONS
                  OF THE PRIVATE SECURITIES 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:

-   Our ability to generate future revenues;
-   The potential commercialization of our products; and
-   The optimization of production costs.

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.

       History of Operating Losses; Uncertainty of Future Financial Results. We
have experienced net operating losses since our inception. We expect such losses
to continue until significant sales of our nutritional oils occur and/or until
significant royalties from sales of infant formula products containing our oils
are recognized. We expect to have quarter-to-quarter and year-to-year
fluctuations in revenues, expenses and losses, some of which could be
significant. Future financial results will be affected by, among other things,
the following factors:

-   our ability to complete successfully the commercialization and cost 
    optimization of our products;
-   the willingness and ability of infant formula licensees to incorporate
    our product into their infant formula products;
-   the willingness of potential strategic partners to market our products;
-   growth in revenues from our nutritional oils;
-   growth in revenues from sales of our products for use in molecular 
    structure research and structure-based drug design;
-   the progress of our research and development programs;
-   the progress of our preclinical and clinical product studies;
-   the time, costs and ability of obtaining regulatory approvals for those 
    products subject to such approval;
-   our ability to protect our proprietary rights;
-   the costs of protecting our patent claims;
-   competing technological and market developments;
-   manufacturing costs associated with our various products and potential 
    products; and
-   the costs of commercializing and marketing our products.

       Early Stage of the Company and its Products. Martek was founded in 1985.
Certain of our products require substantial additional research and development.
Some require laboratory and clinical testing and regulatory approval. In
addition, although we anticipate the introduction of new products over the next
several years, some of our potential products, especially in the area of
pharmaceuticals, are not expected to become commercially available for many
years, if at all. There is no assurance that:

-   we will successfully complete our product development efforts;
-   we will obtain required regulatory approvals on a timely basis or at all;
-   we will be capable of manufacturing our products in commercial quantities 
    at a reasonable cost; or
-   any new products, if introduced, will achieve market acceptance.

We expect to receive most of our future revenues from direct sales of products,
royalty income and licensing fees. A portion of our revenues to date has come
from research and development contracts (primarily from the federal government)
and federal 



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government grants. We first realized revenues from our products for use in
molecular structure research and structure-based drug design in 1989. We
recognized revenues from license fees and sales of sample quantities of
nutritional and diagnostic products in 1992.

Need for Additional Capital.  Substantial expenditures will be required to:

-   enable us to continue our research and development activities;
-   conduct preclinical and clinical studies; and
-   manufacture and market our products.

The level of expenditures required for these activities will depend in part on
the extent to which we develop, manufacture and market our products
independently or with other companies through collaborative arrangements. Our
future capital requirements will also depend, among other things, on one or more
of the following factors:

-   growth in our infant formula and nutritional product sales;
-   the extent and progress of our research and development programs;
-   the progress of preclinical and clinical studies;
-   the time and costs of obtaining regulatory clearances for those products
    subject to such clearances;
-   the costs involved in filing, protecting and enforcing patent claims;
-   competing technological and market developments;
-   the cost of capital expenditures at our manufacturing facilities;
-   the cost of acquiring additional and/or operating existing manufacturing
    facilities for our various products and potential products (depending on
    which products we decide to manufacture and continue to manufacture
    ourselves); and
-   the costs of marketing and commercializing our products.

There is no assurance that funding to carry on these activities will be
available at all or on favorable terms to permit successful commercialization of
our products. We have only limited debt financing arrangements. These
arrangements require us to meet certain financial covenants related to our
outstanding term loans. There is no assurance that we will be able to:

-   continue such arrangements;
-   continue to comply with bank covenants; or
-   establish additional debt financing arrangements on satisfactory terms, if 
    at all.

If adequate funds are not available, we may be required to:

-   curtail one or more of our research and development programs;
-   curtail manufacturing and commercialization programs; and/or
-   obtain funds through arrangements with collaborative partners or others.

These arrangements may require us to relinquish certain technology or product
rights including patent and other intellectual property rights.

       Dependence on Third Parties; Reliance on Future Collaborations. Future
revenues from our nutritional oils are largely dependent on factors over which
we will have no control. To date, a portion of our revenues has consisted of
license fees and anniversary payments received from infant formula manufacturers
which have licensed our nutritional oils. Under these agreements, we are
entitled to receive royalty payments based on the licensees' sales of products
including our nutritional oils. These licensees will be responsible for
performing all clinical testing on, obtaining regulatory approvals for and
marketing products containing our nutritional oils. These licensees are not
required to use our nutritional oils in any of their products. They are also not
restricted under the licensing agreements from obtaining docosahexaenoic acid
("DHA") or arachidonic acid ("ARA") from other sources for use in their infant
formula products. Although some of our licensees have introduced infant formula
products containing our nutritional oils overseas, we cannot predict whether any
licensee will broaden its use of our oils or whether they will be used by any of
our other licensees in their infant formula products.

       Our strategy for the development, clinical testing, manufacturing and
commercialization of certain of our products includes entering into various
collaborations with corporate partners, licensors, licensees and others. In
1997, we entered into a supply agreement with a third party manufacturer for its
ARA-containing oil. Although we are able to produce ARA oil in our Kentucky
manufacturing plant, a halt in supply from this third party ARA oil manufacturer
could adversely impact our ability to 



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meet product demand in the short-run. It could also adversely impact our ability
to meet product demand in the long-run if this source of ARA oil could not be
replaced. There is no assurance that we will negotiate other collaborative
arrangements in the future on acceptable terms, if at all, or that such
collaborative arrangements will be beneficial to our operations. If we cannot
establish such arrangements, we may face increased capital requirements to
undertake such activities at our own expense. As a result, we could encounter
significant delays in introducing our products into certain markets. This could
also adversely affect the development, manufacture, marketing and sale of
products in such markets. In particular, our continuing ability to generate
nutritional oil-related revenues depends on our ability to enter into agreements
with additional licensees. Some of our nutritional oil licensing agreements
contain provisions which will not allow us to enter into future agreements
containing payment terms more favorable than those granted to current licensees.
Such provisions may restrict our ability to negotiate with potential infant
formula licensees.

       Dependence on Major Customers. Our dependence on sizable product orders
from infant formula licensees and other marketing partners will make the
relationship with each customer critically important to our business. While we
have detailed contracts with each of our major customers, changes to product
pricing, royalty rates and delivery timetables may be required to meet their
demands and expectations. There is no assurance that we will be able to manage
our licensees and other customer relationships successfully. Our major customers
are large and complex and the launch cycles of new products are typically long
and unpredictable. This requires us to make considerable early investments in
account management and other efforts without the assurance of future revenues.
There is no assurance that we will be able to convert these investments into
significant revenue generating relationships.

       Significant Technological Change and Competition. We operate in rapidly
evolving fields. Competition from larger, more experienced and better
capitalized companies has been and will continue to be intense. There is no
assurance that developments by others will not render our products or
technologies obsolete or noncompetitive, or that we will keep pace with new
technological developments. Currently, DHA-containing fish oils provide
alternative sources of DHA, and we are aware of another company which produces
DHA from fungal sources. In addition, DHA and ARA have been derived from egg
yolk lipids, and we are currently aware of several European infant formula
manufacturers that are adding DHA derived from egg yolk lipids and/or fish oil
to their infant formula. We have obtained seven U.S. patents and a number of
patents outside the U.S. covering certain aspects of our nutritional oils to
date. We have additional patent applications pending covering certain aspects of
these DHA- and ARA-containing oils. However, we have not been awarded any
European patents relating to our ARA-containing oil. Accordingly, competitors
may be able to produce, sell and use ARA in Europe until patents are issued or
have been invalidated using similar or identical processes to those used by us.
Generally, however, they are prohibited from manufacturing, using or selling
materials where patents have been issued. Competitors may be able to produce,
sell and use DHA- and/or ARA-containing oils in countries where we have not
applied for patent protection. In addition, competitors may produce certain DHA-
and ARA-containing oils that are not covered by our patents. We are aware of
several other companies offering ARA-containing oils for sale. In addition,
there is no assurance that other sources of DHA and ARA, the two primary
components of our nutritional oils, will not become commercially viable.

       Uncertainty Regarding Patents and Proprietary Technology. Our success
depends on our ability to:

-   obtain patent protection for our products;
-   maintain trade secret protection; and
-   operate without infringing the proprietary rights of others.

Our policy is to aggressively protect our proprietary technology through patents
and, in some cases, trade secrets. Additionally, in certain cases we rely on the
licenses of patents and technology of third parties. We have obtained
approximately 25 U.S. patents covering various aspects of our technology. These
patents will expire on various dates between 2007 and 2015. We have filed, and
intend to continue to file, applications for additional patents covering both
products and processes as appropriate. There is no assurance that

-   the relevant authorities will grant any patent applications filed by,
    assigned to, or licensed to, us;
-   we will develop additional products that are patentable; or
-   any patents issued to or licensed by us will provide us with any 
    competitive advantages or adequate protection for inventions.

Moreover, there is no assurance that any patents issued to or licensed by us
will not be challenged, invalidated or circumvented by others.



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       There is no assurance that issued patents, or patents that may issue,
will provide protection against competitive products or otherwise be
commercially valuable. Furthermore, since patent laws relating to the scope of
claims in the fields of health care and biosciences are still evolving, our
patent rights are subject to this uncertainty. Our patent rights on our products
therefore might conflict with the patent rights of others, whether existing now
or in the future. Alternatively, the products of others could infringe our
patent rights. The defense and prosecution of patent claims is both costly and
time consuming, even if the outcome were favorable to us. An adverse outcome
could:

-   subject us to significant liabilities to third parties;
-   require disputed rights to be licensed from third parties; and/or
-   require us to cease selling our products.

       We have obtained seven U.S. patents covering certain aspects of our DHA
and/or ARA oils. We have applied for other patents in the United States covering
certain other aspects of our nutritional oils. We have also filed patent
applications on a selective basis in other industrialized countries, some of
which are pending and some of which have been granted. We are unable to predict,
however, whether these patents will be challenged, invalidated or circumvented
by others. Failure to obtain adequate patent protection for our nutritional oils
would have a material adverse affect on our results of operations. This could
particularly affect:

-   future sales of our nutritional oils;
-   future royalties on sales of infant formula containing our oils; and
-   future license fees related to our oils.

In particular, failure to maintain patent protection could permit our
competitors to produce products which could directly compete with our
nutritional oils using similar or identical processes. It is also possible that
the infant formula manufacturers currently under license by us or potential
future licensees may choose formula ingredients from these competitors if they
choose to include the ingredients in their formulas at all.

       Other patents that we have cover:

-   our photobioreactor system which is used for culturing microalgae and
    certain aspects of our breath test technology;
-   our Celtone and Celtone M technology; and
-   our combinatorial library technology.

       We also rely on trade secrets and proprietary know-how, which we protect
in part by confidentiality agreements with our collaborators, employees and
consultants. There is no assurance that:

-   other parties to these agreements will not breach them;
-   we will have adequate remedies for any such breach; or
-   competitors will not otherwise learn of or independently develop our trade 
    secrets.

       Risks Associated with Infant Formula and Nutritional Products Industries.
To the extent that our nutritional oils are included in infant formula or in
nutritional products for consumer use, we are subject to the risks generally
associated with these industries. These risks include, among others:

-   product tampering or production defects which may require a recall or may
    reduce the demand for such products;
-   the risk that authorities may ban an ingredient used in such products, 
    including our nutritional oils, limit its use or declare it unhealthful; or
-   sales of infant formula may decline or authorities may limit or discontinue 
    use of our nutritional oils due to perceived health concerns, adverse
    publicity or other reasons beyond our control.

       Potential Difficulty in Obtaining FDA and other Government Approvals. A
number of government authorities in the United States and other countries
regulate our products and our manufacturing and research activities. This
includes the FDA pursuant to the Federal Food, Drug and Cosmetic Act (the "FDC
Act"). The FDA regulates, to varying degrees and sometimes in very different
ways, infant formulas, dietary supplements, medical foods, enteral and
parenteral nutritional products and diagnostic and pharmaceutical products.
Their regulatory authority includes the manufacture and labeling of such
products. Generally, authorities regulate prescription pharmaceuticals and
certain types of diagnostic products more rigorously than foods, such as dietary
supplements. Infant formulas are special types of food that are regulated more
rigorously than most other types of foods. Federal and state laws, regulations
and policies are always subject to change and depend heavily on administrative



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policies and interpretations. There is no assurance that any changes to federal
and state laws will not have a material adverse effect on the company.

       Our infant formula licensees are responsible for obtaining the requisite
regulatory clearances to market their products containing our oils. To date,
none of our infant formula licensees have obtained the necessary approval to
sell an infant formula product containing our oils in the United States. Sales
of our products outside the United States are subject to foreign regulatory
requirements that may vary widely from country to country. Term infant formula
products containing our nutritional oils are currently being marketed outside
the U.S. in seven countries. Pre-term infant formula products containing our
oils are currently being marketed outside the U.S. in over 50 countries. We
understand that our licensees have received appropriate regulatory clearances as
needed to market products containing our oils in those countries.

       The time required to obtain clearances from additional foreign countries
may vary. It may be longer or shorter than that required by the FDA. There is no
assurance that additional foreign clearances can be obtained or met on a timely
basis, if at all.

       We are preparing, with the help of our licensees, to respond to certain
questions raised by the FDA in connection with evaluating our oils for inclusion
in U.S. infant formula. There is no assurance that:

-   we will be able to, with the assistance of our licensees, adequately
    respond to the FDA's questions;
-   our licensees will continue to press forward;
-   the FDA will in fact grant clearances the process will not involve 
    significant delays;
-   potential delays will not materially and adversely affect the timing and 
    extent of potential future introductions of our products; or
-   once and if approval is obtained, a licensee will actually market a U.S. 
    infant formula product containing our oils.

       There is no assurance that the FDC Act will not impose food additive
regulation on DHA and ARA used in medical foods, infant formulas or enteral
nutritional products. Use of DHA and ARA in medical foods may also require
additional supportive data.

       The process of obtaining FDA clearances can be time-consuming and
expensive. There is no assurance that the FDA will grant such clearances. The
FDA review process may involve delays that may materially and adversely affect
the testing, marketing and sale of our products. Moreover, regulatory clearances
for products such as medical devices, new drugs, or new food additives, even if
granted, may include significant limitations on their uses. Additionally, the
FDA could withdraw product clearances for failure to comply with regulatory
standards. There is no assurance that any clearances that are required, once
obtained, will not be withdrawn or that compliance with other regulatory
requirements can be maintained.

       Many of our products are in research and development phases. We cannot
predict all regulatory requirements or issues that may apply to or arise in
connection with our products. Changes in existing laws, regulations or policies
or the adoption of new laws, regulations or policies could prevent us or our
licensees or collaborators from achieving compliance with regulatory
requirements. Such changes could also affect the timing of achieving such 
clearances.

       Since the FDA regulatory process may be costly and time consuming, we
will decide on a product-by-product basis whether to handle their requirements
independently or to assign such responsibilities to our licensees or future
collaborative partners. There is no assurance that we will be able to obtain
such regulatory clearances, if required, on a timely basis or at all. If such
clearances are delayed or not achieved at all, it may adversely effect our
business, financial condition and results of operations. If we lose previously
received approvals or clearances, or fail to comply with existing or future
regulatory requirements, it would have a similar adverse effect.

       We are currently required to meet FDA Good Manufacturing Practices
("GMP") requirements as applicable to infant formula and dietary supplements.
GMP regulations specify component and product testing standards, control quality
assurance requirements, and records and other documentation controls. Depending
upon the type of FDA application that is submitted, compliance with relevant GMP
requirements can be difficult and time consuming. If we continue to manufacture
our own products we will continue to fall under the GMP requirements of the FDA.
It may even be necessary in the future to meet more stringent drug GMP
requirements. There is no assurance that we can meet relevant FDA manufacturing
requirements, particularly for scale-up operations involving product marketing
applications. Further, we have only limited experience in the area of regulatory
compliance with respect to our products. There is no assurance that we will be
able to continue to 



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manufacture our nutritional oils in accordance with relevant infant formula and
dietary supplement requirements for commercial use. State and federal agencies,
including the FDA and comparable agencies in other countries, conduct periodic
inspections to monitor ongoing compliance with GMP and other applicable
regulatory requirements. A determination that we are in violation of such GMP
and other regulations could lead to the imposition of civil penalties, including
fines, product recalls or product seizures. In situations where serious
violations are noted, criminal sanctions may be imposed.

       Each line of products that is or may be marketed by us or our
collaborators can present unique regulatory problems and risks, depending on the
product type, uses and method of manufacture.

       The Federal Dietary Supplement Health and Education Act of 1994 ("DSHEA")
regulates the use and marketing of dietary supplements. The DSHEA:

-   sets forth standards for adulteration of dietary supplements or ingredients;
-   prescribes detailed requirements for labeling dietary supplements; and
-   establishes GMP requirements for dietary supplements.

We are currently marketing a line of DHA dietary supplements, Neuromins(TM) and
Neuromins(TM)PL. In addition, we are researching and developing new applications
for our DHA and ARA oils. There is no assurance that we will be able to comply
with the requirements of the DSHEA or any other regulations that the FDA may
promulgate regarding DHA or ARA use as a dietary supplement.

       Our fluorescent pigments and other products derived from microalgae are
subject to potential regulation by the FDA as either medical devices or as a
combination medical device/drug product to the extent that they are used in the
diagnosis, mitigation, treatment, cure or prevention of diseases. This
classification subjects these products to premarket clearances and/or regulatory
approvals. There is no assurances that:

-   we or our collaborators will be able to develop the extensive safety and
    efficacy data needed to support FDA premarket clearances and/or regulatory
    approvals for these products; or
-   the FDA ultimately would authorize the marketing of such products on a 
    timely basis, if at all.

       For pharmaceutical uses of products derived from microalgae, there is no
assurance that required clinical testing of our products will be completed
successfully within any specified time period, if at all. Additionally, there is
no assurance that:

-   we will be able to develop the extensive data needed to establish the 
    safety and efficacy of our products for approval for drug uses; or
-   authorities will not begin to regulate these drug products as biological
    products or as controlled substances, which would affect marketing and
    other requirements.

       Limited Manufacturing and Sales and Marketing Experience and
Capabilities. We have limited experience operating our manufacturing facility.
In 1995, we acquired a fermentation plant in Winchester, Kentucky to manufacture
our nutritional oils. During 1996, we completed the construction of an oil
extraction and refining facility in this plant. There is no assurance that we
will be able to scale-up or successfully optimize production of our nutritional
oils. There is also no assurance that these production facilities will be
sufficient to meet future demand for our products. If we do not develop adequate
manufacturing capability or contract for manufacturing on acceptable terms, we
may not be able to commercialize some of our current or planned products. Or, if
we are able to adequately manufacture them, commercialization of the products
may be significantly delayed. In addition, we have only limited experience
managing operations at a remote geographic location. Managing a remote
manufacturing plant may place a substantial strain on our managerial resources.

       We believe that our Winchester, Kentucky plant will be able to produce
our nutritional DHA oil in sufficient quantity to meet near-term demand.
Nevertheless, because demand for our nutritional DHA oil is based on factors
beyond our control, we are unable to predict whether we have sufficient
manufacturing capacity to meet any such future demand. During 1997, we entered
into a supply agreement with one of the world's largest fermentation companies
to provide ARA oil. In addition, we have conducted DHA production trials with
third-party manufacturers to prepare for future DHA oil demand in excess of our
current plant capacity. Although we believe that we will be able to use third
party manufacturing for our DHA oil if demand requires, there is no assurance
that we will be able to do so successfully. The failure to meet demand for our
nutritional oils could encourage our infant formula licensees and other
nutritional product customers to look for alternative manufacturing sources.



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       We currently do not have the capability to manufacture therapeutic and
diagnostic products in accordance with GMP requirements. Should we decide to
manufacture and scale-up the production of future diagnostic and pharmaceutical
products, we would incur substantial start-up expenses, we would need to expand
our facilities, and we would have to hire additional personnel.

       We market infant formula oils and nutritional supplements primarily
through distributors, and to a lesser extent, directly to consumers. We market
our products for use in molecular structure research and structure-based drug
design, and fluorescent pigments both directly to end users and through
distributors. Other nutritional products and products that we develop in the
diagnostic and pharmaceutical areas will require us to form corporate alliances
with companies capable of marketing such products and/or develop our own sales
and marketing force. There is no assurance that we will be able to establish an
effective sales or marketing force or establish additional third-party sales and
marketing arrangements. Even if we are able to achieve the above, the cost may
be prohibitive.

       No Clinical and Limited Regulatory Compliance Capabilities. We have
limited experience and capabilities in the area of product testing. We have no
experience and limited capabilities in the area of regulatory compliance with
respect to our products. We will have to expend significant sums of money to
acquire and expand such capabilities. We may need to reach collaborative
arrangements with third parties to provide these capabilities or contract with
third parties to provide these capabilities. These capabilities will be
important to us for the successful commercialization of our existing and
potential future nutritional, human diagnostic and pharmaceutical products.

       We will depend on our current licensees to obtain any required regulatory
clearances for our nutritional oils which they will use as infant formula
ingredients. Although we believe that our infant formula licensees will perform
required testing and obtain any required regulatory clearances, we cannot
control the timing or the resources that they will devote to these activities.
We may, in the future, decide to seek FDA clearances ourselves for our
nutritional oils or other nutritional products, if such clearances are required.
In the area of human diagnostics, we have not yet decided whether to develop
in-house capability, contract with third parties, seek collaborative
arrangements with partners or use a combination of the three to test our product
candidates and obtain any required regulatory clearances. If we were to
manufacture these diagnostic products for certain uses, it would be subject to
applicable regulatory requirements. For potential pharmaceutical products, we
will likely contract with third parties and seek collaborative arrangements. In
any case, these activities may require the devotion of substantial resources and
a significant portion of our time. There is no assurance that we can effectively
test and obtain regulatory clearances for our products. Delays in testing or
obtaining such regulatory clearances may result in delay in or the inability to
commercialize the affected product. See "--Dependence on Third Parties; Reliance
on Future Collaborations."

       Exposure to Product Liability Claims. We face an inherent business risk
of exposure to product liability claims alleging that the use of our technology
or products resulted in adverse effects. Such risk exists in the conduct of
clinical studies and even with respect to those products, if any, that receive
regulatory clearances for commercial sale. There is no assurance that our
current level of product and clinical study liability insurance together with
indemnification rights under our infant formula license agreements and other
collaborative arrangements will be adequate to protect us from this exposure. It
is uncertain whether we will be able to obtain increased levels of insurance as
we grow. There is no assurance that this level of insurance would be
economically practical or that we would be able to renew our current or future
policies. A product liability claim or recall in excess of insured amounts or
amounts recoverable under applicable contractual arrangements could adversely
affect our business, financial condition and future prospects.

       Dependence Upon Key Personnel. We are highly dependent on the principal
members of our management, production, sales and marketing and scientific staff.
The loss of certain key management and scientific employees could have a
material adverse effect on our operations. In addition, we believe that our
future success will depend in large part upon our ability to attract and retain
highly skilled scientific, managerial and marketing personnel. We face
competition for such personnel from other companies, research and academic
institutions, government entities and other organizations. There is no assurance
that we will be successful in hiring or retaining the personnel we require for
continued growth.

       Limited Availability of Certain Supplies. The availability of carbon-13
and nitrogen-15 is critical for production of our products for use in drug
design. Although the current supplies of these items are adequate for our
near-term needs, they may not be adequate if the demand for our products for use
in drug design and/or breath test diagnosis were to grow significantly.



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       Possible Volatility of Stock Price; Limited Liquidity; Absence of
Dividends. The market price of our common stock may experience a high level of
volatility, as frequently occurs with publicly traded emerging growth companies
and biosciences companies. The market price of our stock may be significantly
impacted by:

-   announcements of technological innovations or new commercial products by
    us or our competitors;
-   developments or disputes concerning patent or proprietary rights;
-   publicity regarding actual or potential medical results relating to 
    products under development by us or our competitors;
-   general regulatory developments affecting our products in both the United
    States and foreign countries;
-   market conditions for emerging growth companies and biosciences companies
       and economic and other internal and external factors; and
-   period-to-period fluctuations in financial results.

Since our initial public offering of common stock on November 23, 1993, the
average daily trading volume in the common stock as reported on the Nasdaq
National Market has been relatively low. There is no assurance that a more
active trading market will develop in the future. We have never declared or paid
any cash dividends on our common stock and do not intend to do so for the
foreseeable future.

       Risks Relative to Anti-Takeover Devices. Our Board of Directors is
divided into three classes with each class of directors being elected to
three-year terms on a rotating basis. As such, only one-third of the members of
the Board of Directors stand for election every year. We have adopted a
stockholder rights plan which may have the effect of deterring hostile or
coercive attempts to acquire the company. The plan does this through the
distribution of rights to stockholders enabling those stockholders to acquire
shares of our common stock, or that of an acquiror, at a substantial discount to
the public market price should any person or group acquire more than 20% of the
common stock without approval of the Board of Directors under certain
circumstances. We have reserved 300,000 shares of Series A Junior Participating
Preferred Stock for issuance in connection with the Stockholder Rights Plan. We
are authorized to issue an additional 4,700,000 shares of preferred stock in one
or more series, having terms fixed by the Board of Directors, without a
stockholder vote. While the Board of Directors has no current intentions or
plans to issue any preferred stock, issuance of these shares could also be used
as an anti-takeover device.

       Shares Eligible for Future Sale; Registration Rights.  To the extent
that these outstanding stock options and warrants are exercised, the percentage
ownership of certain of our stockholders will be diluted. As of January 15,
1999, we had 14,909,954 outstanding shares of common stock, substantially all of
which are available for sale in the public marketplace. As of January 15, 1999,
there were also outstanding stock options to purchase an aggregate of 1,763,650
shares of common stock at various exercise prices ranging from $8.00 to $34.25
per share. There were also warrants issued in connection with the Common Stock
Warrant and Purchase Agreement dated April 27, 1998 to purchase 196,670 shares
of common stock at an exercise price of $18.76 per share. If we elect to sell
all the shares of common stock and warrants which have not been sold pursuant to
the purchase agreement but which, under certain circumstances, the selling
stockholders are irrevocably obligated to purchase, there would be up to an
additional outstanding 819,454 shares of common stock and 245,836 warrants, with
exercise prices ranging from $15.01 to $18.76 per share. Shares of common stock
which may be issued under outstanding options and warrants will be available for
sale in the public markets. In addition, certain holders of the common stock
have certain demand and piggyback registration rights pursuant to a registration
rights agreement between Martek and these holders. No prediction can be made as
to the effect, if any, that sales of shares of common stock or the availability
of such shares for sale will have on the market prices of the common stock
prevailing from time to time. The possibility that substantial amounts of common
stock may be sold in the public market may adversely affect prevailing market
prices for the common stock. This could impair our ability to raise capital
through the sale of equity securities. Further, if we were required to include
shares, through exercise of the outstanding piggyback registration rights, in a
company-initiated registration, the sale of such shares could have a material
adverse effect on our ability to raise additional capital.

       Risks Relating to Year 2000 Compliance. We use a number of computer
software programs and operating systems in our internal operations. These
include applications used in financial business systems and various
administrative functions. We believe that the business risk associated with
these internal information systems is minimal. We have completed more than 90%
of our "Year 2000" compliance implementation work on them. We are also
evaluating our non-information technology systems, including the various
equipment in operation at our oil production facilities in Winchester, Kentucky.
We have completed more than 75% of this evaluation and subsequent
implementation, and believe that the business risk associated with this
equipment is minimal. Additionally, our third party relationships are being
reviewed to assess their Year 2000 status and potential impact on our
operations. We have completed approximately 75% of this review and, where
potential business risk has been identified, are requesting additional
information from certain third parties to obtain assurance that they are Year
2000 compliant.



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<PAGE>   9

       Based on currently available information, we believe that total costs
associated with Year 2000 issues will be less than $200,000, and that we will be
able manage the Year 2000 transition without any material adverse effect on our
operations, liquidity or capital resources. However, there is no assurance that
Year 2000 issues will not require a significant commitment of resources to
resolve potential problems.






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