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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:



| |  |  | our ability to generate future revenues;                                            
| | - |  | ------------------------------------------------------------------------------------
| |  |  | the potential commercialization of our products;                                    
| |  |  | the optimization of production costs; and                                           
| |  |  | 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 SIGNIFICANT OPERATING LOSSES EACH YEAR SINCE OUR INCEPTION
AND HAVE NOT YET GENERATED A SUSTAINED REVENUE STREAM TO BE A VIABLE BUSINESS
IN THE LONG TERM

We have experienced net operating losses in each annual period since our
inception. As of October 31, 2002, we have an accumulated deficit of
$127,560,000. Our balance of cash and cash equivalents at October 31, 2002 was
approximately $20 million and as of October 31, 2002, we had approximately $2
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 revenue 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. Experts generally
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 FROM US 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, KY manufacturing plant. We estimate the worldwide infant formula
market to be approximately $7.5 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 approximately
10% of the worldwide infant formula market. Our sales into the non-infant
nutritional supplement and food markets to date have been less then $10 million
annually. To the extent that demand increases beyond our current production capabilities, we may
be unable to provide the required quantities of oil cost effectively and may experience backlogs. Although
our licensees have a right to manufacture DHA and





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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 own process of making our oils. In addition, we do not believe
that any of our other customers have the capacity to manufacture our products
at this time. We believe that our initial fermentation expansion at our
Winchester, KY plant, which is currently in the start-up phase and should be up
to full production by the second quarter of 2003, should more than double our
production capacity at our plant. However, our ability to maintain commercial
production at these higher levels at our plant has not been successfully
tested. As a result of the acquisition of OmegaTech, we also have several
contractual agreements with third party manufacturers to produce our DHA for
use in nutritional supplements and foods, including an agreement with C.P.
Kelco. In addition, we have begun receiving DHA from FermPro Manufacturing
L.P., a contract fermentation company in South Carolina, under a 5-year
manufacturing agreement which was signed in March 2002. The output under
this agreement should increase our annual DHA production capacity by
approximately 10% of 2003 output. We believe that with our current expansion
and the output from FermPro, we will be able to produce enough DHA to supply
approximately 30% to 40% of the worldwide infant formula market. If we are: (a)
unable to cost effectively manufacture our DHA-containing oils at our
Winchester, KY plant; (b) unable to look to FermPro as a source of DHA
sufficient to meet increased demand beyond our own capacity; (c) unable to
enter into other satisfactory third-party manufacturing agreements; or (d) our
licensees are unable to find alternative sources for our DHA-containing oils,
then our licensees may not be able to meet demand and our future revenues may
be limited.

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. DSM is currently expanding its production capacity to
provide us with sufficient quantities of ARA oil to supply approximately 30% to
40% 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 COULD 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 start-up phase of our fermentation expansion at our plant may not
be completed in the timeframe that we have planned;
| | - |  | -------------------------------------------------------------------------------------------------------------------------
|
| |  |  | we may experience problems processing, handling and shipping the
higher quantities of oil produced from this expansion;  
|
| |  |  | the costs of expanding, 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
operations.

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.

Less than 10% of our current nutritional product revenues come from sales of
our nutritional oils to the food and 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. We are currently trying to establish what contribution, if any,
supplementation with our oils will make in addressing these problems. Although
clinical data are not required to market food ingredients or nutritional
supplements outside of the infant formula market, we believe that further
clinical studies are needed to validate the benefits of DHA supplementation.
Accordingly, we are sponsoring studies to further investigate the potential
benefit of DHA supplementation on cardiovascular health and breast cancer, and
we are aware of research being conducted regarding the impact of DHA
supplementation on 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 market opportunity.

WE MAY NEVER GAIN LARGE-SCALE ENTRY INTO THE FOOD AND BEVERAGE MARKET IF OUR
OILS CANNOT BE SUCCESSFULLY INCORPORATED INTO VARIOUS FOOD AND BEVERAGE
APPLICATIONS





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Although we believe that the food and beverage market could be a large market
for DHA fortification, the potential in this market could be limited if methods
are not developed that allow good compatibility of our DHA oil with various
foods and beverages. The flavor, texture and stability of our oils in finished
products such as cereals, milk and nutritional bars have not yet been
successfully established. Even if we can successfully incorporate our oils into
foods and beverages, manufacturers of these products will have to develop
methods to demonstrate feasibility in their production process. The timing and
extent of our sales into the food and beverage market, therefore, is dependent
not only on market demand, but also on manufacturing issues over which we have no
control.

EVEN IF OUR INFANT FORMULA PRODUCTS DO OBTAIN WIDESPREAD ACCEPTANCE, WE MAY NOT
BE ABLE TO PRICE THESE 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 not be able to sell supplemented products at prices
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 infant
formula 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 MARKET DEMAND FOR OUR PRODUCTS CONTINUES TO GROW, WE WILL NEED SIGNIFICANT
ADDITIONAL CAPITAL TO EXPAND OUR PRODUCTION CAPABILITY. WE MAY ALSO NEED
ADDITIONAL CAPITAL IN THE FUTURE TO CONTINUE OUR RESEARCH AND DEVELOPMENT
EFFORTS, CONDUCT PRODUCT TESTING, INCLUDING PRECLINICAL AND CLINICAL TRIALS,
AND MARKET OUR PRODUCTS.

Our nutritional oil sales are increasing, and meeting future demand will
require expanding our production capability for our nutritional oils. We have
just completed an initial fermentation expansion plan at our Winchester, KY
facility which cost approximately $15 million, and our office, warehouse and
packaging expansion at the site cost an additional $4 million. At October 31,
2002 we had approximately $22 million in cash and cash equivalents and short
term investments and marketable securities available to meet future capital
requirements. However, we believe that additional funds in excess of $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: (a) the timing and extent of future launches of infant
formula products containing our oils by our licensees; (b) the timing and
extent of introductions of DHA into foods and/or nutritional supplements for
children and adults; (c) whether or not we enter into collaborations with other
third parties to produce our nutritional oils; and (d) our ability to generate
profits from the sales of our nutritional products.

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. We are currently
securing a working capital credit line of approximately $8  $10 million. More
extensive debt financing arrangements may require us to comply with financial
covenants, which we may not be able to meet. 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. Future equity
issuances may be dilutive to our existing shareholders. 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 October 31, 2002, our common stock price traded between $34.25 and
$12.50. During the fifty-two week period ending October 31, 2001, our common
stock price traded between $28.50 and $12.00. The following are examples of
items that may significantly impact the market price for our common stock:



| |  |  | announcements of technical innovations, new commercial products and product launches;
| | - |  | -------------------------------------------------------------------------------------





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| |  |  | arrangements or strategic partnerships by us or our competitors;                                              
| | - |  | --------------------------------------------------------------------------------------------------------------
|
| |  |  | announcements of license agreements, acquisitions or strategic alliances;                                     
|
| |  |  | patent or other intellectual property achievements or disputes;                                               
|
| |  |  | quarterly fluctuations in our results of operations;                                                          
|
| |  |  | failure to scale-up our commercial manufacturing or enter into favorable third party manufacturing agreements;
|
| |  |  | announcements of product launches by competitors;                                                             
|
| |  |  | regulatory decisions (approvals or disapprovals) 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 October 31, 2002, we had
23,331,091 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 96,375
shares. The average trading volume in our common stock during the fifty-two
week period ending October 31, 2002 was 240,788 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 at a price which is satisfactory to you.

IF SIGNIFICANT SHARES ELIGIBLE FOR FUTURE SALE ARE SOLD, 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 and marketing of our products, we may need to raise
additional capital through the sale of equity securities. As of December 31,
2002, we had 23,345,331 shares of common stock outstanding, stock options
outstanding to purchase an aggregate of 4,283,594 shares of common stock, many
of which are exercisable at below current market prices, and warrants
outstanding to purchase up to 362,677 shares of common stock at exercise prices
between $14.55 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.

We have agreed to register for resale up to 2,290,533 additional shares,
subject to certain adjustments, that may be issued to former OmegaTech
stockholders, if certain operational milestones are achieved before October 31,
2004 and certain financial milestones are achieved before October 31, 2004. As
a result, a substantial number of our shares may become eligible for resale if
these milestones are achieved. The market price of our common stock could
decline as a result of sales of a large number of shares of our common stock in
the market or the perception that these sales could occur, which could limit
your ability to sell at a price satisfactory to you.

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 or may
limit the scope of our patents. If this happens, companies may be able to
produce products using our previously patented technology.

Aventis S.A. and Nagase & Co. Ltd. are challenging our European patent
covering our DHA-containing oils. At a hearing in October, 2000, the Opposition
Division of the EPO revoked our patent on the grounds that it is not novel. We
immediately appealed this ruling, and in July 2002 we received a positive
ruling from an Appeal Board of the EPO, setting aside the prior decision to
revoke this patent. Consistent with our request, the patent will now be
returned to the Opposition Division for a determination as to whether it has
met the legal requirement of inventive step. During this process the patent
will remain in full force and effect. The appeal process may not be completed
until some time in 2004, at the earliest.

BASF A.G., F. Hoffman  LaRoche A.G., Friesland Brands B.V., Societe des
Produits Nestle S.A., and Suntory Limited have filed in the EPO their grounds
for opposing our ARA patent issued by 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., Societe des Produits Nestle S.A., and
Suntory Limited have filed in the EPO their grounds





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for opposing our blended-oil (blend of DHA and ARA oils) patent issued by 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.

Aventis Research and Technologies GmbH & Co. KG and Nagase Limited have filed
in the EPO their grounds for opposing our patent covering the DHA-containing
oils that we assumed in the OmegaTech purchase. At a hearing in December, 2000,
the Opposition Division of the EPO upheld some of the claims and revoked other
claims. OmegaTech immediately appealed this ruling, as did Aventis. During the
appeal process the patent will remain in full force and effect. The appeal
process may not be completed until some time in 2004, at the earliest.

Suntory, of Osaka, Japan has contacted us and asserted that the sale of certain
of our products may infringe on one or more of their patents in Japan and
Australia and that certain of our patents may be invalid. We have been
discussing with Suntory how this matter might be resolved amicably.

If any of the challenges described above 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. If our products are found to infringe on the intellectual property rights
of others, we may have to pay substantial damages. Although our revenues may
decrease under our license agreements, the revocation of our European DHA
patent, ARA patent and blended-oils patent would not terminate any of our
license agreements.

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
potential competitors, which include companies such as BASF, F. Hoffman-LaRoche
Ltd., Suntory Limited, Celanese Ventures 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 commercially available; however, we are aware that other sources of DHA
and ARA are available. Specifically:



| |  |  | the Ross Products Division of Abbott Laboratories filed a Generally
Recognized as Safe (GRAS) notification on January 2, 2002 seeking FDA
concurrence that its fish oil source of DHA and its fungal source of ARA
are GRAS when used as ingredients in infant formula. At this time, the
notification continues to be under consideration by the FDA;                                                                                                                                 
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | 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 fish oil DHA is a lower cost product relative to our DHA, it
has odor, stability and taste characteristics that may limit its
usefulness. Only a very small percentage of supplemented infant formulas
currently marketed outside the United States contain DHA and ARA that
have not been produced by us;                       
|
| |  |  | fish oil based products currently dominate the adult DHA supplement
market;                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  |  | we are aware that Celanese Ventures has recently announced that one
of its operating units, Nutrinova, plans to market a DHA-rich microalgal
oil to the food and beverage and dietary supplement markets in the United States. We are
currently unable to evaluate the competitive threat that may arise with
respect to this announcement; and                                                                                                                                          
|
| |  |  | 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.

To date no other sources of DHA and ARA have received clearance from the FDA to
be marketed in U.S. infant formulas.

THE INTEGRATION OF MARTEK AND OMEGATECH OPERATIONS MAY BE DIFFICULT, WHICH COULD HARM OUR RESULTS OF OPERATIONS.

On April 25, 2002, we completed the acquisition of OmegaTech. Upon the
closing of the merger, the name of OmegaTech was changed to Martek Biosciences
Boulder Corporation. We are still in the process of integrating our operations
with the operations of the





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former OmegaTechs business. This integration may be more expensive than
anticipated or take longer than planned. If there are delays or unexpected
costs involved with the integration, these could have a material adverse effect
on our business and financial results. The difficulties involved in integrating
the companies, which could be substantial, include the following:



| |  |  | management and key personnel could be distracted from the day-to-day
business of managing the new company;                                    
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | implementing uniform controls, systems and procedures, especially
information and accounting systems, could be costly and time-consuming;     
|
| |  |  | key officers and scientific, sales and customer support personnel may
not be satisfied or happy in the new company and may elect to leave; and
|
| |  |  | major customers, suppliers or strategic business partners may choose
not to do business with the merged companies.                            

IF THE FTC FINDS THAT OUR ADVERTISING CLAIMS RELATED TO OUR DHA AND ARA
PRODUCTS CANNOT BE ADEQUATELY SUBSTANTIATED, WE COULD BE REQUIRED TO ALTER OUR
ADVERTISING CLAIMS OR TAKE OTHER REMEDIAL STEPS.

The Federal Trade Commission (FTC) regulates certain aspects of the
advertising and marketing of our products. Under the Federal Trade Commission
Act (FTCA), a company must be able to substantiate both the express and implied
claims that are conveyed by an advertisement.

On May 30, 2002, we received a letter from the FTC notifying us that the
FTC is conducting a non-public inquiry into the advertising and promotional
activities relating to our DHA and ARA products. It is not uncommon for the
FTC to conduct an investigation of the claims that are made about products in
new and emerging areas of science that involve a potentially vulnerable
population such as infants. The FTC has not identified any specific
advertisement that raises any concerns. The agency has asked us to provide
copies of all advertisements and to provide copies of the literature that
support mental and visual function claims. The purpose of the inquiry is to
determine whether Martek has substantiation to support the express and implied
claims that are made for its DHA and ARA products. We intend to be fully
responsive to the FTCs inquiry. While we have no reason at this time to
believe that the inquiry will have an adverse effect on us, we could be
required to alter our advertising claims or take other remedial steps if the
FTC does not find our advertising claims to be adequately substantiated.