content: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
  
  
                                      Form 10-Q
  
                  Quarterly Report Pursuant to Section 13 or 15(d)
                       of the Securities Exchange Act of 1934
  
                         For quarter ended January 31, 1996
                           Commission File Number 0-14026
  
                            DALTEX MEDICAL SCIENCES, INC.
               (Exact Name of Registrant As Specified In Its Charter)
  
               Delaware                                   13-3174562
        (State of Incorporation)            (IRS Employer Identification No.)
  
                                   50 Kulick Road
                             Fairfield, New Jersey 07004
                      (Address of Principal Executive Offices)
  
                                   (201) 227-5066
                (Registrant's telephone number, including area code)
  
       Indicate  by check mark  whether the  registrant  (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934 during the  preceding  12 months,  and (2) has been  subject to such filing
  requirements for the past 90 days. Yes __X__   No____.
  
       Indicate  the  number of  shares  outstanding  of each of the  registrant's
  classes of Common Stock, as of the latest practicable date.
  
           Class                                Outstanding at March 5, 1996
  
           Common Stock par value $.01                  8,632,699
             per share
  
  <PAGE>
                            DALTEX MEDICAL SCIENCES, INC.
  
  
                                        INDEX
  
                                                                              Page
  
  
  PART I -       FINANCIAL INFORMATION
  
  Item 1 -       Financial Statements
  
                 (a)  Condensed balance sheets as of January
                      31, 1996 (Unaudited) and July 31, 1995                  3-4
  
                 (b)  Condensed statements of operations and
                      deficit accumulated during the
                      development stage for the three months
                      ended January 31, 1996 (Unaudited) and
                      January 31, 1995 (Unaudited), six months
                      ended January 31, 1996 (Unaudited) and
                      January 31, 1995 (Unaudited), and for
                      the period July 28, 1983 (Date of
                      Incorporation) to January 31, 1996
                      (Unaudited)                                               5
  
                 (c)  Condensed statements of cash flows for
                      the six months ended January 31, 1996
                      (Unaudited) and January 31, 1995
                      (Unaudited), and for the period July 28,
                      1983 (Date of Incorporation) to January
                      31, 1996 (Unaudited)                                      6
  
                 (d)  Notes to condensed financial statements
                      (Unaudited)                                             7-8
  
  Item 2 -       Management's Discussion and Analysis of
                 Financial Condition and Results of Operations               8-13
  
  PART II -      OTHER INFORMATION
  
  Item 5 -       Other Information                                             14
  
  Item 6 -       Exhibits and Reports on Form 8-K                              15
  
  
  <PAGE>
  
  PART I -       FINANCIAL INFORMATION
  
  Item 1 -       Financial Statements
  
  
                            Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                              Condensed Balance Sheets
  
  
  <TABLE>
  <CAPTION>
                                               January 31,
                                                  1996         July 31,
                                               (Unaudited)     1995 (A)
  <S>                                         <C>           <C>
       Assets
  
  Current assets:
       Cash and cash equivalents                $ 93,932      $ 10,862
       Other receivables                           7,500        43,448
                                                --------      --------
                                                 101,432        54,310
  
  Net plant and equipment, at cost                   422         2,568
  Patents, net of accumulated amortization
       of $124,925 at January 31, 1996
       and $115,677 at July 31, 1995               9,321        18,569
  Other assets, net                                3,375         3,375
  Deferred royalty costs (note 2)                275,000          --
                                                --------      --------
                                                $389,550      $ 78,822
                                                ========      ========
  </TABLE>
  
  See accompanying notes to condensed financial statements.
  
  (A) Amounts at July 31, 1995 are from audited financial statements.
  
  
                                          3
  <PAGE>
                            Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                              Condensed Balance Sheets
  
  <TABLE>
  <CAPTION>
                                                     January 31,
                                                        1996             July 31,
                                                     (Unaudited)         1995 (A)
  <S>                                               <C>               <C>
  Liabilities and Stockholders' Deficiency
  
  Current liabilities:
       Accounts payable (note 3)                     $   770,751       $   954,727
       Accrued expenses (note 3)                          47,248            54,173
                                                     -----------       -----------
            Total current liabilities                    817,999         1,008,900
                                                     -----------       -----------
  
  Advance royalty payments (note 2)                      550,000              --
                                                     -----------       -----------
  
  Stockholders' deficiency:
       Common stock, par value $.01 per share 
       Authorized 20,000,000 shares; issued
       8,632,699 shares at January 31, 1996 and
       8,632,699 at July 31, 1995                         86,327            86,327
       Paid in capital                                 6,816,369         6,816,369
       Deficit accumulated during the
            development stage                         (7,881,145)       (7,832,774)
  
            Total stockholders' deficiency              (978,449)         (930,078)
                                                     -----------       -----------
  
                                                     $   389,550       $    78,822
                                                     ===========       ===========
  </TABLE>
  
  
  See accompanying notes to condensed financial statements.
  
  (A) Amounts at July 31, 1995 are from audited financial statements.
  
  
                                          4
  
  <PAGE>
                            Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                         Statements of Operations & Deficit
                      Accumulated During the Development Stage
  
  <TABLE>
  <CAPTION>
                                                                                                                      For the Period
                                                                                                                       July 28, 1983
                                                      Three Months     Three Months     Six Months     Six Months        (Date of
                                                          Ended           Ended            Ended         Ended        Incorporation)
                                                       January 31,     January 31,      January 31,    January 31,    To January 31,
                                                          1996             1995            1996           1995              1996
                                                       (Unaudited)     (Unaudited)      (Unaudited)    (Unaudited)      (Unaudited)
  <S>                                                 <C>             <C>         <C>            <C>                  <C>          
  Revenues:
     Sales-Patents & related technology                       --              --              --              --      $    300,000
     Sales-Gloves                                             --              --              --              --           208,440
     Interest and other income (note 4)                     75,000            --            75,000            --         1,712,074
     License fees & royalties                               37,500          40,352          86,724          81,671       2,168,852
                                                      ------------    ------------    ------------    ------------    ------------
  
        Total revenues                                     112,500          40,352         161,724          81,671       4,389,366
                                                      ------------    ------------    ------------    ------------    ------------
  
  Expenses incurred in the development stage:
     Cost of sales                                            --              --              --              --           313,243
     Research & development                                  6,400            --             6,400            --         3,335,251
     General & administrative                               98,589          78,672         203,695         231,430       8,622,017
                                                      ------------    ------------    ------------    ------------    ------------
  
     Total expenses incurred in the
        development stage:                                 104,989          78,672         210,095         231,430      12,270,511
                                                      ------------    ------------    ------------    ------------    ------------
  
  Net income (loss)                                          7,511         (38,320)        (48,371)       (149,759)     (7,881,145)
                                                      ------------    ------------    ------------    ------------    ------------
  
  Deficit accumulated during the development stage:
  
     Beginning of period                                (7,888,656)     (7,431,730)     (7,832,774)     (7,320,291)           --
                                                      ------------    ------------    ------------    ------------    ------------
  
     End of period                                    $ (7,881,145)   $(7,470,050)$     (7,881,145)   $ (7,470,050)   $ (7,881,145)
                                                      ============    ============    ============    ============    ============
  
  Net loss per common share                                   --              (.01)           (.01)           (.02)          (1.03)
                                                      ============    ============    ============    ============    ============
  
  Weighted average number of
     shares outstanding                                  8,633,000       8,633,000       8,633,000       8,633,000       7,635,000
                                                      ============    ============    ============    ============    ============
  </TABLE>
  
  See accompanying notes to condensed financial statements.
  
                                         5
  
  <PAGE>
                            Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                         Condensed Statements of Cash Flows
  
  <TABLE>
  <CAPTION>
                                                                                               For the Period
                                                                                               July 28, 1983
                                                                                                  (Date of
                                                                                               Incorporation)
                                                                 January 31,     January 31,   to January 31,
                                                                     1996           1995           1996
                                                                 (Unaudited)    (Unaudited)    (Unaudited)
  <S>                                                           <C>            <C>            <C>         
  Cash flows from operations: ...............................   $   (48,371)   $  (149,759)   $(7,881,145)
      Net loss:
      Non-cash expenses included in net loss:
           Depreciation and amortization ....................        11,394         11,430        300,491
           Non-cash compensation charges ....................          --           60,601        889,130
           Abandoned equipment ..............................          --             --           53,386
           Write-off of patents .............................          --             --          105,221
           Write-off of inventory/advance payments ..........          --             --          115,048
           Provision for write-off/due from officer .........          --          (60,601)          --
           Other ............................................          --             --            6,821
  Changes in current assets & liabilities:
           (Increase) in inventory & advance payments .......          --             --         (115,048)
           Decrease in grant & other receivables ............        35,948           --           (7,500)
           (Increase) in deferred royalty costs .............      (275,000)          --         (275,000)
           Increase (decrease) in accounts payable ..........      (183,976)       113,512        770,751
           Increase (decrease) in accrued expenses ..........        (6,925)        (3,125)        47,248
           Increase in advance development & royalty payments       550,000         35,148        550,000
                                                                -----------    -----------    -----------
               Net cash flows of operations .................        83,070          7,206     (5,440,597)
                                                                -----------    -----------    -----------
  Cash flows from investing activities:
      Purchase of U.S. government obligations ...............          --             --       (8,813,987)
      Redeemed U.S. government obligations and
           other short-term investments .....................          --             --        8,810,988
      Purchase of equipment & furniture .....................          --             --         (159,370)
      Purchase of patent & trademark ........................          --             --         (171,750)
      (Increase) decrease in due from officer & stockholder .          --             --         (110,601)
      (Purchase) sale of other assets .......................          --             --          (30,095)
                                                                -----------    -----------    -----------
           Net cash flows of investing activities ...........          --             --         (474,815)
                                                                -----------    -----------    -----------
  Cash flows from financing activities:
      Proceeds from sale of common stock & warrants - net ...          --             --        6,009,344
                                                                -----------    -----------    -----------
  Net increase (decrease) in cash ...........................        83,070          7,206         93,932
  Cash, including certificates of deposit:
      Beginning of period ...................................        10,862         27,090           --
                                                                -----------    -----------    -----------
      End of period .........................................   $    93,932    $    34,296    $    93,932
                                                                ===========    ===========    ===========
  </TABLE>
  
  See accompanying notes to condensed financial statements.
  
                                          6
  
  <PAGE>
  
  NOTES TO CONDENSED FINANCIAL STATEMENTS - January 31, 1996 (Unaudited)
  
  (1)  Basis of Presentation
  
            The unaudited condensed  financial  statements have been prepared from
       the books and records of Daltex Medical  Sciences,  Inc. (the "Company") in
       accordance  with  generally  accepted  accounting  principles  for  interim
       financial   information   pursuant  to  Rule  10-01  of   Regulation   S-X.
       Accordingly,  they do not  include  all of the  information  and  footnotes
       required by generally accepted accounting principles for complete financial
       statements.  In the opinion of management,  all adjustments  (consisting of
       normal recurring  accruals)  considered  necessary for a fair  presentation
       have been included.  Interim results are not necessarily  indicative of the
       results that may be expected for the fiscal year.
  
  (2)  Advance Royalty Payments
  
            In October 1995, the Company and Arrow  International,  Inc. ("Arrow")
       agreed to modify the terms of the existing  license  agreement  between the
       Company and Arrow concerning only those license fees payable to the Company
       by Arrow for  antimicrobially  treated multi-lumen central venous catheters
       (exclusive  of  silicone   Hickman/Broviac   type,   implantable   port  or
       peripherally  inserted central venous catheters).  During the quarter ended
       October 31, 1995 and pursuant to the modification to the license agreement,
       Arrow has paid to the Company a one-time  royalty of  $600,000  (in lieu of
       the periodic  royalty  paid to the Company) for the period  August 31, 1995
       through  September  1, 2000,  of which 50% was paid to Columbia  University
       (the "University") in November 1995 pursuant to the terms of a 1987 license
       agreement between the Company and the University.  Revenue,  as well as the
       expense for the amounts paid to the  University,  will be  recognized  each
       quarter  through  September  1,  2000 in equal  amounts,  and  accordingly,
       $30,000 of revenue and $15,000 of related  expense were  recognized  during
       the quarter ended January 31, 1996.  After  September 1, 2000, the periodic
       royalty  payments  provided  for in the  existing  license  agreement  with
       respect to the antimicrobially treated multi-lumen central venous catheters
       will resume and will be adjusted to reflect increases in the Consumer Price
       Index  through  September 1, 2000.  All other terms and  conditions  of the
       existing license agreement  (including Arrow's obligation to make quarterly
       development  phase payments for those products,  including the percutaneous
       sheath introducer system,  Arrow has developed  incorporating the Company's
       antimicrobial  technology),  except  those  terms  modified  by the  Patent
       Settlement  Agreement of January 1, 1995,  remain in full force and effect.
       In addition,  the modification to the license  agreement does not modify or
       alter the terms of the Patent Settlement Agreement. For a discussion of the
       Patent Settlement  Agreement and the resolution of the Patent  Interference
       Proceedings, see "Item 3. Legal Proceedings" of the Company's Annual Report
       on Form 10-K for the fiscal year ended July 31, 1995.
  
  (3)  License Agreement and Research Agreement
  
            The Company  currently  has various  license  agreements  and research
       agreements   with  the   University   related  to   certain   antimicrobial
       technologies  (see  "Management's  Discussion  and  Analysis  of  Financial
       Condition and Results of Operations").  In this capacity,  in November 1995
       the  Company  paid the  University  a total  amount of  $385,841:  $300,000
       (representing  the  University's  50%  share of the  one-time  royalty  the
       Company received from Arrow described in
  
                                          7
  
  <PAGE>
  
       note  2  above),  $34,289  (representing  the  remaining  balance  due  the
       University pursuant to a research  agreement,  based on an invoice received
       from the University),  $48,071  (representing the University's 50% share of
       sublicense  and royalty fees  received by the Company  between April 30 and
       October 12, 1995 from Arrow), and $3,481  (representing  royalties owed the
       University,  pursuant  to a 1987  license  agreement  and an  agreement  in
       principle,  based on net sales of the Company's  antimicrobial  examination
       gloves sold in 1991,  1992 and 1993 which the Company had been reserving in
       accrued  expenses).  In January 1996 the Company paid the University $6,400
       for the antimicrobial coating and evaluation of samples of tracheal suction
       catheters  for a leading  medical  device  manufacturer  who has  expressed
       interest in a possible licensing  arrangement with the Company.  The device
       manufacturer is currently evaluating such coated product samples.
  
            As of January 31, 1996, the Company still owes the University $165,706
       for the  University's  past due share of sublicensing  and royalty payments
       received by the Company through 1994. Further,  the Company has been billed
       $601,489  as of January  31, 1996 by the  University's  patent  counsel for
       patent work undertaken in connection with the Company's license  agreements
       with the  University  and costs  incurred  in  connection  with the  Patent
       Interference   Proceedings  and  subsequent  Patent  Settlement  Agreement,
       although the Company is currently  disputing a substantial portion of these
       legal  fees.  All of these  amounts are  included  in  accounts  payable at
       January 31, 1996 on the accompanying  condensed balance sheets. The Company
       is attempting to resolve these matters with the University but there can be
       no assurance that the Company will be successful in reaching a resolution.
  
  
  (4)  Other Income
  
            In November 1995, the Company received $75,000 from Arrow to help fund
       the payment of legal costs  incurred by the Company in connection  with the
       Patent Interference Proceedings and the Patent Settlement Agreement.
  
  
  
  Item 2 -             Management's Discussion and Analysis of
                    Financial Condition and Results of Operations
  
  
       The Company is in the development stage and has been principally engaged in
  research  and  development  activities  with the  objective  of  developing  and
  commercializing   certain   cost-reducing   medical  device  and  pharmaceutical
  technologies.  Since March 1, 1994,  the Company  engaged in  extremely  limited
  research  and  development   efforts.   The  Company  incurred  a  research  and
  development  expense during the quarter ended January 31, 1996, in the amount of
  $6,400,  for the  antimicrobial  coating and  evaluation  of samples of tracheal
  suction  catheters.  The Company  will  continue to restrict  its  research  and
  development  efforts unless and until the Company can develop positive cash flow
  from its more fully developed technologies or raise additional financing.  There
  can be no assurance  that the Company  will be able to develop or  commercialize
  any of its product  technologies  in the future.  Future revenues of the Company
  may be limited.  Such  commercialization  activities  may not result in sales of
  products on a profitable  basis,  and the Company may not have sufficient  funds
  available to
  
                                          8
  
  <PAGE>
  
  complete its research and development program, pursue applications for necessary
  regulatory clearances and approvals, prosecute its intellectual property rights,
  or remain  in  business  while any  products  which  may be  developed  from its
  technologies are marketed or are readied for the marketplace.
  
       In an effort to commercialize  its more fully developed  technologies,  the
  Company  had  focused  from 1990 to March  1994 its  research,  development  and
  commercialization  efforts principally on its infection-reducing,  antimicrobial
  technologies,  including the manufacture and marketing  through  distributors of
  the Company's  antimicrobial  gloves and the licensing of other  applications of
  the antimicrobial  technology to larger companies.  In the first two quarters of
  fiscal 1996,  as well as in fiscal 1995,  the Company had no sales of any of its
  technologies or its  antimicrobial  medical gloves.  During the first and second
  quarters of fiscal  1996 and for the fiscal  years ended July 31, 1995 and 1994,
  the Company  received  revenues  from  royalty  payments  and  development  fees
  pursuant to two licenses  with  sublicensees  of  applications  of the Company's
  antimicrobial  medical  technology in addition to the one-time  royalty  payment
  discussed below.
  
       In the first  quarter  of  fiscal  1996 the  Company  received  a  one-time
  prepayment of periodic royalty payments pursuant to an October 1995 modification
  to its  license  agreement  with Arrow.  Such  advance  essentially  represented
  royalty  payments due to the Company from Arrow for the period September 1, 1995
  through  September  1,  2000.  It is  expected  that  future  cash flows will be
  substantially  less than reported  revenues for such period due to this payment,
  as reflected in this quarter's  financial  statements and as discussed in note 2
  to the financial  statements.  The Company will continue to receive  development
  phase payments on the other products  incorporating the Company's  antimicrobial
  technology   which  Arrow  is   developing  or  has   developed,   including  an
  antimicrobially treated percutaneous sheath introducer system which has received
  regulatory  clearance  to be marketed  but has not yet reached the  marketplace.
  However,  there can be no assurance  that Arrow will be  successful in marketing
  such percutaneous sheath introducer system.
  
  Results of Operations for the Three Months Ended January 31, 1996
  
       Revenues  for the quarter  ended  January 31, 1996  totalled  $112,500,  an
  increase of 178% over the $40,352 in revenues during the corresponding period in
  fiscal 1995. This increase in revenue is due to the Company's receipt of $75,000
  from Arrow,  to help fund the payment of legal costs  incurred by the Company in
  connection with the Patent  Interference  Proceedings and the Patent  Settlement
  Agreement as  discussed in note 4 to the  financial  statements.  Revenues  from
  licensing  fees in the second  quarter of fiscal 1996 were  $7,500,  the same as
  those recorded in the corresponding  period during the last year.  Revenues from
  royalties were $30,000,  a decrease of 8.7% from the $32,852 in royalty payments
  received  during the second quarter of fiscal 1995. The $30,000 in revenues from
  royalties  represents  royalties  earned for the quarter ended January 31, 1996,
  which is derived  from the  $600,000  advance  royalty  payment  received by the
  Company from Arrow.  The  unearned  portion of $550,000 is reflected as deferred
  revenue in the liability  section of the balance  sheets.  (See notes 2 and 3 to
  the   financial   statements.)   Although  the  Company  had  no  sales  of  its
  antimicrobial  gloves in the current  quarter,  there were no glove sales in the
  corresponding  period of fiscal 1995 either.  The Company  maintains  its belief
  that such lack of glove sales  continues to be due to the difficulty it faces as
  a small company with extremely  limited resources in introducing and marketing a
  new product  internationally  without  the  benefit of a domestic  sales base or
  regulatory  clearance  by the U.S.  Food and Drug  Administration  ("FDA").  See
  "Regulatory Proceedings."
  
  
                                          9
  <PAGE>
  
       Expenses  incurred  during the three months ended January 31, 1996 totalled
  $104,989,  an increase  of 33.5% over the  $78,672 of  expenses  incurred in the
  three months ended January 31, 1995 primarily due to $15,000 of  amortization of
  the deferred royalty costs paid to the University in November 1995.  Included in
  expenses was $6,400 paid to the  University  in research and  development  costs
  associated  with the  antimicrobial  coating and  evaluation of certain  product
  samples for a potential  licensee.  Expenses consisted  primarily of legal costs
  associated with the Company's  prosecution  and maintenance of its  intellectual
  property  rights and payments  due the  University  pursuant to certain  license
  agreements.  General  and  administrative  expenses  for  the  quarter  totalled
  $98,589,  an  increase  of 25.3% over the  $78,672 of  expenses  incurred in the
  corresponding period last year.
  
       The Company  recorded net income for the quarter of $7,511 due primarily to
  the  Company's  receipt of  $75,000  from  Arrow as  described  in note 4 to the
  financial statements.
  
  Results of Operations for the Six Months Ended January 31, 1996
  
       Revenues for the six months ended  January 31, 1996 totalled  $161,724,  an
  increase of 98% over revenue of $81,671 in the  corresponding  period last year.
  This  increase  was the result of the receipt of $75,000 from Arrow as described
  in note 4 to the financial statements.
  
       Expenses  incurred  during the six months ended  January 31, 1996  totalled
  $210,095,  a decrease of 9.2% from the $231,430 of expenses  incurred in the six
  months ended January 31, 1995.  This decrease was due primarily to the reduction
  in legal  costs  incurred  by the  Company  in  connection  with  the  Company's
  protection  of its  intellectual  property  rights due to the  settlement of the
  Patent  Interference  Proceedings  as a result of the  execution  of the  Patent
  Settlement Agreement, and to a lesser extent, the fixed royalties earned for the
  first and second quarters of fiscal 1996 as a result of the  modification to the
  license  agreement  between the Company and Arrow.  (See note 2 to the financial
  statements.)
  
       The  Company  sustained  a net loss of  $48,371  for the six  months  ended
  January  31,  1996,  a decrease  of 67.7% from the net loss of  $149,759  in the
  corresponding  period in 1995. The decrease in net loss for the six month period
  is due  primarily  to the  Company's  receipt in the first  quarter of 1996 of a
  one-time  advance  royalty  payment of  $600,000  from  Arrow and the  Company's
  receipt of $75,000 from Arrow,  as  discussed in notes 2 and 4 to the  financial
  statements, respectively.
  
  Liquidity and Capital Resources
  
       At  January  31,  1996,  the  Company  had a  working  capital  deficit  of
  approximately  $717,000,  which represented a decrease of approximately $237,000
  in such  deficit from July 31,  1995.  During the six months  ended  January 31,
  1996,  the  Company  had an  increase  of $83,070 in cash flows from  operations
  principally  due to the receipt  from Arrow in November  1995 of $75,000 to help
  fund the payment of legal costs  incurred by the Company in connection  with the
  Patent  Interference  Proceedings and the Patent Settlement  Agreement,  and the
  receipt in October 1995 of the one-time advance royalty payment of $600,000 from
  Arrow which enabled the Company to reduce its outstanding  accounts payable.  It
  is  expected  that future cash flows will be  substantially  less than  reported
  revenues  due to this  one-time  advance  royalty  payment.  As a result  of the
  aforementioned payments to the University,  payments to legal counsel associated
  with corporate and  intellectual  property  matters,  and costs  associated with
  general  operations,  at  January  31,  1996,  the  Company  had  cash  and cash
  equivalents of $93,932.
  
  
                                         10
  
  <PAGE>
  
       The Company  currently owes the  University  $165,706 (see notes 2 and 3 to
  the  financial  statements),  and as of January 31,  1996,  the Company has been
  billed $601,489 by the University's patent counsel for patent work undertaken in
  connection with the Company's  license  agreements with the University and costs
  incurred  in  connection  with the Patent  Interference  Proceedings  and Patent
  Settlement Agreement,  although the Company is currently disputing a substantial
  portion of these legal fees. As described in note 3 to the financial statements,
  the Company is continuing to have  discussions with the University to attempt to
  resolve  several  issues  including  the  license  for the  antimicrobial  glove
  technology and the aforementioned legal fees. There can be no assurance that the
  Company will be able to resolve these  matters.  For a discussion of the dispute
  with the University, see "Item 1 - Business Product Technologies - Licenses with
  the  University" in the Company's  Annual Report on Form 10-K for the year ended
  July 31,  1995.  The Company had been  reserving  royalties  due the  University
  consistent with the terms of the written license agreement for the antimicrobial
  glove  technology  which had been  negotiated  between the parties based upon an
  agreement in principle. In November 1995, the Company paid the University $3,481
  representing  such reserved  royalties  under this license based on net sales of
  the Company's  antimicrobial  examination gloves sold prior to February 1993. If
  the Company is unable to settle the dispute with the University over the license
  agreement,  the Company may not be  entitled to sell its  antimicrobial  medical
  gloves or sublicense the antimicrobial glove technology in the future.
  
       The Company is  exploring a number of ways to pay the  outstanding  amounts
  due the  University,  including  loans,  raising of additional  capital  through
  various   equity   offerings,   private   placements,   possible   mergers  with
  revenue-producing  entities, and further acceleration of royalty and development
  fee payments from sublicensees as well as from sales of antimicrobial gloves. In
  light  of the  recent  payments  to the  University  discussed  in note 3 to the
  financial statements, the University has agreed to work with the Company through
  July 1996 with respect to the Company's  financial condition and its relation to
  the University.
  
       The Company is still in the development stage, and its business  operations
  have only  generated a nominal  amount of  revenues  to date.  The report of the
  Company's  independent  auditors on the Company's  financial  statements for the
  fiscal  years ended July 31, 1995 and 1994  included  an  explanatory  paragraph
  which stated that the Company's  recurring  losses and working capital and total
  stockholders'  deficits raised  substantial doubt about the Company's ability to
  continue as a going concern and  precluded  the  expression of an opinion on the
  Company's  financial  statements as of and for the years ended July 31, 1995 and
  1994. The financial statements did not include any adjustments that might result
  from the outcome of that  uncertainty.  Because of the continued working capital
  deficit,  management's  plan is to continue attempts to resolve the dispute with
  the University over the license for the antimicrobial glove technology and legal
  fees  billed to the  Company by the  University's  patent  counsel,  in order to
  attempt to raise  additional  capital,  while  attempting  to  develop,  market,
  license and sell its products,  including its  antimicrobial  latex surgical and
  examination  gloves,  and to establish  positive cash flow for the Company.  The
  Company is exploring a number of ways of raising additional  capital,  including
  loans,   various   equity   offerings,   private   placements,    mergers   with
  revenue-producing  entities,  as well as from  sales  of  antimicrobial  gloves.
  Furthermore, the Company will continue to attempt to curtail expenditures.
  
       In an attempt to raise  additional  capital in order to  continue to pursue
  potential  acquisition  and/or  merger  possibilities,  including  a sale of the
  Company,  in November  1995, the Company  extended the  expiration  dates of its
  Class A and Class B  Warrants  and  reduced  the  exercise  price of its Class B
  Warrants.  The  expiration  date of the Company's  Class A Warrants was extended
  from December 31, 1995 to 5:00 p.m. (New York City time) on April 30, 1996;  the
  exercise price of the Class A Warrants
  
                                         11
  
  <PAGE>
  
  had been reduced from $3.25 to $0.25 in September  1995. The expiration  date of
  the Company's  Class B Warrants was extended from December 31, 1996 to 5:00 p.m.
  (New York City time) on April 30,  1997.  In  addition,  effective  November 28,
  1995, the exercise price of the Company's Class B Warrants was reduced to $1.00.
  The Company intends to use any proceeds  received from the exercise of its Class
  A and Class B Warrants for working capital,  general corporate  purposes and, if
  possible, the reinitiation of its research and development efforts.
  
       The Company does not have any commitments to raise  additional  capital and
  there can be no assurance that it will be able to obtain any such commitments or
  raise additional capital in the future. If (i) there are no antimicrobial  glove
  sales,  (ii) there is no significant  increase in license fees or royalties from
  sales of  sublicensed  products,  (iii) the Company is  unsuccessful  in raising
  additional  capital  during  the  remainder  of fiscal  year  1996,  or (iv) the
  University revokes licenses granted to the Company,  the Company may not be able
  to continue as a going concern, even with further cost-cutting measures. To meet
  its long-term liquidity requirements,  the Company must also generate sufficient
  income through  operations or obtain additional  financing as to which there can
  be no  assurance.  If the Company  raises  sufficient  additional  capital,  the
  Company plans to continue to (i) seek increased revenue-producing  opportunities
  through  the search  for  additional  license  and  patent  purchase  agreements
  involving corporate technology, (ii) attempt to obtain U.S. regulatory clearance
  to market certain products,  such as its antimicrobial latex gloves, directly or
  through  distributors to end users, (iii) investigate  merger,  joint venture or
  acquisition   possibilities  with  a  suitable  entity  whose  business  may  be
  complementary to that of the Company, and (iv) explore the possibility of a sale
  of the Company or a sale of some or all of its assets.
  
       By letter  dated  October  17,  1995,  Beiersdorf  AG of  Hamburg,  Germany
  ("Beiersdorf")  informed  the Company  that it was  abandoning  the projects for
  developing  products under the two German  patents  Beiersdorf had acquired from
  the Company pursuant to the previously disclosed 1992 Patent Purchase Agreement.
  Consequently,  the Company is not entitled to any further payment under the 1992
  agreement.  Further, under the terms of the 1992 agreement,  the Company has the
  right to repurchase the subject patents  together with certain subject matter as
  defined in the  agreement.  The  repurchase  price would consist of the $300,000
  non-refundable  cash payment the Company had received from Beiersdorf plus legal
  and  clinical   development   costs  of  approximately   $100,000   representing
  Beiersdorf's  out-of-pocket  expenses.  The  Company has until April 17, 1996 to
  exercise  its right to  repurchase.  At the present  time,  the Company does not
  anticipate exercising its right to repurchase the patents and related technology
  from Beiersdorf.
  
       On March 6, 1996, the Board of Directors of the Company granted Lieberman &
  Nowak,  LLP 50,000 shares of Common Stock in recognition of the valued  services
  provided by Lieberman & Nowak to the Company for several years. The Company will
  record an expense of $2,250 in the third quarter of fiscal 1996 representing the
  estimated fair market value of such shares on the date of grant.
  
  Regulatory Developments
  
       In May 1989,  the Company filed a pre-market  510(k)  notification  seeking
  consent to market its antimicrobial latex examination gloves. Since this initial
  510(k)  submission,  the Company has, from 1991 to 1993, amended and resubmitted
  the 510(k) several times in an effort to obtain a determination  of "substantial
  equivalence" to previously  marketed latex examination gloves. The FDA Office of
  Device Evaluation ("ODE") has notified the Company, in response to each of these
  submissions, that the
  
                                         12
  <PAGE>
  
  Company's   antimicrobial   latex  examination  gloves  are  not  "substantially
  equivalent"  since the gloves have a new  indication  for an  examination  glove
  which may affect the prophylactic  effect, thus constituting a new intended use.
  The ODE has further stated that no accepted  scientific  methods presently exist
  for  assessment  of  the   effectiveness  of  antiviral   activity  for  topical
  antimicrobials, particularly under glove-use conditions, among other grounds for
  denying market clearance.
  
       In its submissions,  the Company has proposed revised labeling claims to be
  consistent with what the Company believes is "substantially equivalent" labeling
  based on FDA  precedent.  Moreover,  the Company has submitted test results that
  the Company considers to demonstrate an appropriate  method for, and significant
  effectiveness at inactivating certain viruses and other fluid borne pathogens by
  the antimicrobial  latex examination  glove, under conditions of expected use of
  the product.  The Company's test results are also believed to  demonstrate  user
  safety  under  the  expected  conditions  of  use  of  the  antimicrobial  latex
  examination glove.
  
       From 1993 through  December  1994,  the Company had several  meetings  with
  various   representatives  at  the  FDA's  offices  and  continued  its  written
  correspondence  and  discussions  with the FDA and the ODE  regarding the issues
  raised by the ODE concerning the Company's antimicrobial gloves.
  
       On August  17,  1995,  Mr.  Timothy  Ulatowski  of the ODE sent to Dr.  Del
  Guercio, Chairman of the Company Board of Directors, a copy of a memorandum sent
  by Albert T.  Sheldon,  Jr.,  Ph.D.,  Supervisory  Microbiologist,  Division  of
  Anti-Infective Drug Products,  to Mr. Ulatowski concerning the Company's gloves.
  On September 13, 1995,  Dr. Del Guercio sent to Mr.  Ulatowski a response to Dr.
  Sheldon's  memorandum  prepared  on the  Company's  behalf by Dr.  Modak and Mr.
  Sampath with the  assistance of an FDA  consultant.  On September 26, 1995,  Mr.
  Ulatowski  informed Dr. Del Guercio that pursuant to this most recent submission
  of data,  the Company  would be invited to make a  presentation  concerning  the
  Company's glove before the FDA's independent General Hospital Panel.
  
       Dr.  Shanta M. Modak of the  Department  of Surgery,  Columbia  University,
  where the  antimicrobial  glove  technology was  developed,  and Dr. Del Guercio
  attended a meeting, on the Company's behalf, of the Advisory Committee,  General
  Hospital  and Personal Use Devices  Panel,  Center for Devices and  Radiological
  Health on March 11, 1996; Mr. Lester Sampath, also of the Department of Surgery,
  Columbia  University,  was there as an  observer.  The Panel acts in an advisory
  capacity and makes  recommendations  to the FDA regarding whether or not certain
  device submissions should receive FDA clearance to be marketed.
  
       Drs.  Del Guercio and Modak each made a  presentation  before the Panel and
  responded to certain  questions.  The Company  expects to receive  notice of the
  FDA's decision  regarding the Company's  examination  gloves within the next few
  weeks. While the Panel did not make any recommendation to the FDA at the meeting
  on March 11, 1996, the Panel voted to accept a previously distributed opinion of
  an independent  consultant  indicating that the Company's  examination gloves do
  not have a positive impact on disease control.
  
       At present,  the Company does not have  sufficient  financial  resources to
  fund additional clinical testing, if such clinical testing is required. However,
  should the Company's financial  condition improve,  the Company would spend some
  of these funds on additional testing. There can be no assurance that,
  
                                         13
  
  <PAGE>
  
  even with additional testing, if such testing is required, that the Company will
  obtain FDA clearance to market its antimicrobial latex gloves.
  
  
  
  PART II - OTHER INFORMATION
  
  
  Item 5 -  Other Information
  
  (a)       Granting  of  European  Patent for  "Treatment  of Aged Skin With Oral
            13-Cis-Retinoic  Acid" Survives Period of Possible  Opposition Without
            Challenge
  
                 On February 14, 1996, the Company received  written  notification
            from patent  counsel  that the  decision in March 1995 by the European
            Patent Office,  allowing the claims in the European Patent Application
            covering the "Treatment of Aged Skin With Oral  13-Cis-Retinoic  Acid"
            which was published in the European Patent Bulletin of March 22, 1995,
            survived the nine month period of possible opposition by third parties
            without any challenge.  Accordingly,  the grant of the above patent is
            now complete.  The Company  continues to seek  potential  licensees or
            purchasers of the aging-related skin disorder treatment  technology in
            Europe;  however,  there can be no assurance  that the Company will be
            successful in licensing or selling the technology to others.
  
  (b)       Research Gift
  
                 By letter dated  February 8, 1996, the Company has agreed that it
            will  support  the  research  efforts  directed by Dr.  Shanta  Modak,
            Department of Surgery of Columbia University. Accordingly, the Company
            has  made a  commitment  to make a  conditional  research  gift in the
            amount of $20,000 to Dr.  Modak's  laboratory  in  recognition  of the
            consultation service and assistance by Dr. Modak and her colleagues in
            support of the Company's  efforts in  continuing  to obtain  clearance
            from  the FDA to  market  the  Company's  antimicrobial  gloves.  This
            research  gift will be paid upon the first to occur of the  following:
            (i) the  Company's  receipt  of  clearance  from the FDA to market its
            antimicrobial  gloves; or (ii) the Company  successfully enters into a
            business  venture  with  a  revenue   producing   company  related  to
            production and sales of such  antimicrobial  gloves.  Such gift has no
            bearing  or  effect on prior  royalty  or other  payment  arrangements
            between the Company and the University.
  
  (c)       Grant of Stock Options
  
                 At a special  meeting of the Board of  Directors  of the  Company
            held on March 6, 1996, the Board of Directors  granted a non-qualified
            option to Bruce Hausman to purchase  250,000 shares of Common Stock at
            an  exercise  price of $0.09 per share,  based on the  current  market
            price,  in lieu of cash  compensation  for Mr.  Hausman's  services as
            President and Chief Executive Officer of the Company since May 1995.
  
  
                                         14
  <PAGE>
  
  (d)       Grant of Stock
  
                 On March 6, 1996,  the Board of Directors of the Company  granted
            Lieberman & Nowak, LLP 50,000 shares of Common Stock in recognition of
            the valued  services  provided by Lieberman & Nowak to the Company for
            several  years.  The  Company  will record an expense of $2,250 in the
            third quarter of fiscal 1996  representing  the estimated  fair market
            value of such shares on the date of grant.
  
  Item 6 -  Exhibits and Reports on Form 8-K
  
  (a)       Exhibits
  
                 None.
  
  (b)       Reports on Form 8-K
  
                 No  reports  on Form 8-K were  filed  during  the  quarter  ended
            January 31, 1996.
  
                                         15
  
  <PAGE>
  
                                     SIGNATURES
  
  
       Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
  amended,  the  registrant has duly caused this report to be signed on its behalf
  by the undersigned thereunto duly authorized.
  
  
  
                                                     DALTEX MEDICAL SCIENCES, INC.
  
  
  
  Date:  March 18, 1996                  By: /s/ Bruce Hausman, Esq.
                                             ------------------------
                                             BRUCE HAUSMAN, ESQ.
                                             President and Chief Executive Officer
  
  
  
  Date:  March 18, 1996                  By: /s/ Herbert J. Mitschele, Jr.
                                             ------------------------------
                                             HERBERT J. MITSCHELE, JR.
                                             Treasurer and Chief Financial Officer
  
  
                                         16
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 49535}]
metadata_filer: {"company-data": {"conformed-name": "DALTEX MEDICAL SCIENCES INC", "cik": "0000742686", "assigned-sic": "2834", "irs-number": "133174562", "state-of-incorporation": "DE", "fiscal-year-end": "0731"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "000-14026", "film-number": "96535933"}, "business-address": {"street1": "50 KULICK RD", "city": "FAIRFIELD", "state": "NJ", "zip": "07004", "phone": "2012275066"}}
text: SECURITIES AND EXCHANGE COMMISSION
  
                               Washington, D.C. 20549
  
                                      Form 10-Q
  
                  Quarterly Report Pursuant to Section 13 or 15(d)
                       of the Securities Exchange Act of 1934
  
                         For quarter ended January 31, 1996
                           Commission File Number 0-14026
  
                            DALTEX MEDICAL SCIENCES, INC.
               (Exact Name of Registrant As Specified In Its Charter)
  
               Delaware                                   13-3174562
        (State of Incorporation)            (IRS Employer Identification No.)
  
                                   50 Kulick Road
                             Fairfield, New Jersey 07004
                      (Address of Principal Executive Offices)
  
                                   (201) 227-5066
                (Registrant's telephone number, including area code)
  
       Indicate  by check mark  whether the  registrant  (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934 during the  preceding  12 months,  and (2) has been  subject to such filing
  requirements for the past 90 days. Yes __X__   No____.
  
       Indicate  the  number of  shares  outstanding  of each of the  registrant's
  classes of Common Stock, as of the latest practicable date.
  
           Class                                Outstanding at March 5, 1996
  
           Common Stock par value $.01                  8,632,699
             per share
  DALTEX MEDICAL SCIENCES, INC.
  
                                        INDEX
  
                                                                              Page
  
  PART I -       FINANCIAL INFORMATION
  
  Item 1 -       Financial Statements
  
                 (a)  Condensed balance sheets as of January
                      31, 1996 (Unaudited) and July 31, 1995                  3-4
  
                 (b)  Condensed statements of operations and
                      deficit accumulated during the
                      development stage for the three months
                      ended January 31, 1996 (Unaudited) and
                      January 31, 1995 (Unaudited), six months
                      ended January 31, 1996 (Unaudited) and
                      January 31, 1995 (Unaudited), and for
                      the period July 28, 1983 (Date of
                      Incorporation) to January 31, 1996
                      (Unaudited)                                               5
  
                 (c)  Condensed statements of cash flows for
                      the six months ended January 31, 1996
                      (Unaudited) and January 31, 1995
                      (Unaudited), and for the period July 28,
                      1983 (Date of Incorporation) to January
                      31, 1996 (Unaudited)                                      6
  
                 (d)  Notes to condensed financial statements
                      (Unaudited)                                             7-8
  
  Item 2 -       Management's Discussion and Analysis of
                 Financial Condition and Results of Operations               8-13
  
  PART II -      OTHER INFORMATION
  
  Item 5 -       Other Information                                             14
  
  Item 6 -       Exhibits and Reports on Form 8-K                              15
  PART I -       FINANCIAL INFORMATION
  
  Item 1 -       Financial Statements
  
                            Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                              Condensed Balance Sheets
  January 31,
                                                  1996         July 31,
                                               (Unaudited)     1995 (A)
  Assets
  
  Current assets:
       Cash and cash equivalents                $ 93,932      $ 10,862
       Other receivables                           7,500        43,448
                                                --------      --------
                                                 101,432        54,310
  
  Net plant and equipment, at cost                   422         2,568
  Patents, net of accumulated amortization
       of $124,925 at January 31, 1996
       and $115,677 at July 31, 1995               9,321        18,569
  Other assets, net                                3,375         3,375
  Deferred royalty costs (note 2)                275,000          --
                                                --------      --------
                                                $389,550      $ 78,822
                                                ========      ========
  See accompanying notes to condensed financial statements.
  
  (A) Amounts at July 31, 1995 are from audited financial statements.
  
                                          3
  Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                              Condensed Balance Sheets
  January 31,
                                                        1996             July 31,
                                                     (Unaudited)         1995 (A)
  Liabilities and Stockholders' Deficiency
  
  Current liabilities:
       Accounts payable (note 3)                     $   770,751       $   954,727
       Accrued expenses (note 3)                          47,248            54,173
                                                     -----------       -----------
            Total current liabilities                    817,999         1,008,900
                                                     -----------       -----------
  
  Advance royalty payments (note 2)                      550,000              --
                                                     -----------       -----------
  
  Stockholders' deficiency:
       Common stock, par value $.01 per share 
       Authorized 20,000,000 shares; issued
       8,632,699 shares at January 31, 1996 and
       8,632,699 at July 31, 1995                         86,327            86,327
       Paid in capital                                 6,816,369         6,816,369
       Deficit accumulated during the
            development stage                         (7,881,145)       (7,832,774)
  
            Total stockholders' deficiency              (978,449)         (930,078)
                                                     -----------       -----------
  
                                                     $   389,550       $    78,822
                                                     ===========       ===========
  See accompanying notes to condensed financial statements.
  
  (A) Amounts at July 31, 1995 are from audited financial statements.
  
                                          4
  Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                         Statements of Operations & Deficit
                      Accumulated During the Development Stage
  For the Period
                                                                                                                       July 28, 1983
                                                      Three Months     Three Months     Six Months     Six Months        (Date of
                                                          Ended           Ended            Ended         Ended        Incorporation)
                                                       January 31,     January 31,      January 31,    January 31,    To January 31,
                                                          1996             1995            1996           1995              1996
                                                       (Unaudited)     (Unaudited)      (Unaudited)    (Unaudited)      (Unaudited)
  Revenues:
     Sales-Patents & related technology                       --              --              --              --      $    300,000
     Sales-Gloves                                             --              --              --              --           208,440
     Interest and other income (note 4)                     75,000            --            75,000            --         1,712,074
     License fees & royalties                               37,500          40,352          86,724          81,671       2,168,852
                                                      ------------    ------------    ------------    ------------    ------------
  
        Total revenues                                     112,500          40,352         161,724          81,671       4,389,366
                                                      ------------    ------------    ------------    ------------    ------------
  
  Expenses incurred in the development stage:
     Cost of sales                                            --              --              --              --           313,243
     Research & development                                  6,400            --             6,400            --         3,335,251
     General & administrative                               98,589          78,672         203,695         231,430       8,622,017
                                                      ------------    ------------    ------------    ------------    ------------
  
     Total expenses incurred in the
        development stage:                                 104,989          78,672         210,095         231,430      12,270,511
                                                      ------------    ------------    ------------    ------------    ------------
  
  Net income (loss)                                          7,511         (38,320)        (48,371)       (149,759)     (7,881,145)
                                                      ------------    ------------    ------------    ------------    ------------
  
  Deficit accumulated during the development stage:
  
     Beginning of period                                (7,888,656)     (7,431,730)     (7,832,774)     (7,320,291)           --
                                                      ------------    ------------    ------------    ------------    ------------
  
     End of period                                    $ (7,881,145)   $(7,470,050)$     (7,881,145)   $ (7,470,050)   $ (7,881,145)
                                                      ============    ============    ============    ============    ============
  
  Net loss per common share                                   --              (.01)           (.01)           (.02)          (1.03)
                                                      ============    ============    ============    ============    ============
  
  Weighted average number of
     shares outstanding                                  8,633,000       8,633,000       8,633,000       8,633,000       7,635,000
                                                      ============    ============    ============    ============    ============
  See accompanying notes to condensed financial statements.
  
                                         5
  Daltex Medical Sciences, Inc.
                          (A Development Stage Enterprise)
                         Condensed Statements of Cash Flows
  For the Period
                                                                                               July 28, 1983
                                                                                                  (Date of
                                                                                               Incorporation)
                                                                 January 31,     January 31,   to January 31,
                                                                     1996           1995           1996
                                                                 (Unaudited)    (Unaudited)    (Unaudited)
  Cash flows from operations: ...............................   $   (48,371)   $  (149,759)   $(7,881,145)
      Net loss:
      Non-cash expenses included in net loss:
           Depreciation and amortization ....................        11,394         11,430        300,491
           Non-cash compensation charges ....................          --           60,601        889,130
           Abandoned equipment ..............................          --             --           53,386
           Write-off of patents .............................          --             --          105,221
           Write-off of inventory/advance payments ..........          --             --          115,048
           Provision for write-off/due from officer .........          --          (60,601)          --
           Other ............................................          --             --            6,821
  Changes in current assets & liabilities:
           (Increase) in inventory & advance payments .......          --             --         (115,048)
           Decrease in grant & other receivables ............        35,948           --           (7,500)
           (Increase) in deferred royalty costs .............      (275,000)          --         (275,000)
           Increase (decrease) in accounts payable ..........      (183,976)       113,512        770,751
           Increase (decrease) in accrued expenses ..........        (6,925)        (3,125)        47,248
           Increase in advance development & royalty payments       550,000         35,148        550,000
                                                                -----------    -----------    -----------
               Net cash flows of operations .................        83,070          7,206     (5,440,597)
                                                                -----------    -----------    -----------
  Cash flows from investing activities:
      Purchase of U.S. government obligations ...............          --             --       (8,813,987)
      Redeemed U.S. government obligations and
           other short-term investments .....................          --             --        8,810,988
      Purchase of equipment & furniture .....................          --             --         (159,370)
      Purchase of patent & trademark ........................          --             --         (171,750)
      (Increase) decrease in due from officer & stockholder .          --             --         (110,601)
      (Purchase) sale of other assets .......................          --             --          (30,095)
                                                                -----------    -----------    -----------
           Net cash flows of investing activities ...........          --             --         (474,815)
                                                                -----------    -----------    -----------
  Cash flows from financing activities:
      Proceeds from sale of common stock & warrants - net ...          --             --        6,009,344
                                                                -----------    -----------    -----------
  Net increase (decrease) in cash ...........................        83,070          7,206         93,932
  Cash, including certificates of deposit:
      Beginning of period ...................................        10,862         27,090           --
                                                                -----------    -----------    -----------
      End of period .........................................   $    93,932    $    34,296    $    93,932
                                                                ===========    ===========    ===========
  See accompanying notes to condensed financial statements.
  
                                          6
  NOTES TO CONDENSED FINANCIAL STATEMENTS - January 31, 1996 (Unaudited)
  
  (1)  Basis of Presentation
  
            The unaudited condensed  financial  statements have been prepared from
       the books and records of Daltex Medical  Sciences,  Inc. (the "Company") in
       accordance  with  generally  accepted  accounting  principles  for  interim
       financial   information   pursuant  to  Rule  10-01  of   Regulation   S-X.
       Accordingly,  they do not  include  all of the  information  and  footnotes
       required by generally accepted accounting principles for complete financial
       statements.  In the opinion of management,  all adjustments  (consisting of
       normal recurring  accruals)  considered  necessary for a fair  presentation
       have been included.  Interim results are not necessarily  indicative of the
       results that may be expected for the fiscal year.
  
  (2)  Advance Royalty Payments
  
            In October 1995, the Company and Arrow  International,  Inc. ("Arrow")
       agreed to modify the terms of the existing  license  agreement  between the
       Company and Arrow concerning only those license fees payable to the Company
       by Arrow for  antimicrobially  treated multi-lumen central venous catheters
       (exclusive  of  silicone   Hickman/Broviac   type,   implantable   port  or
       peripherally  inserted central venous catheters).  During the quarter ended
       October 31, 1995 and pursuant to the modification to the license agreement,
       Arrow has paid to the Company a one-time  royalty of  $600,000  (in lieu of
       the periodic  royalty  paid to the Company) for the period  August 31, 1995
       through  September  1, 2000,  of which 50% was paid to Columbia  University
       (the "University") in November 1995 pursuant to the terms of a 1987 license
       agreement between the Company and the University.  Revenue,  as well as the
       expense for the amounts paid to the  University,  will be  recognized  each
       quarter  through  September  1,  2000 in equal  amounts,  and  accordingly,
       $30,000 of revenue and $15,000 of related  expense were  recognized  during
       the quarter ended January 31, 1996.  After  September 1, 2000, the periodic
       royalty  payments  provided  for in the  existing  license  agreement  with
       respect to the antimicrobially treated multi-lumen central venous catheters
       will resume and will be adjusted to reflect increases in the Consumer Price
       Index  through  September 1, 2000.  All other terms and  conditions  of the
       existing license agreement  (including Arrow's obligation to make quarterly
       development  phase payments for those products,  including the percutaneous
       sheath introducer system,  Arrow has developed  incorporating the Company's
       antimicrobial  technology),  except  those  terms  modified  by the  Patent
       Settlement  Agreement of January 1, 1995,  remain in full force and effect.
       In addition,  the modification to the license  agreement does not modify or
       alter the terms of the Patent Settlement Agreement. For a discussion of the
       Patent Settlement  Agreement and the resolution of the Patent  Interference
       Proceedings, see "Item 3. Legal Proceedings" of the Company's Annual Report
       on Form 10-K for the fiscal year ended July 31, 1995.
  
  (3)  License Agreement and Research Agreement
  
            The Company  currently  has various  license  agreements  and research
       agreements   with  the   University   related  to   certain   antimicrobial
       technologies  (see  "Management's  Discussion  and  Analysis  of  Financial
       Condition and Results of Operations").  In this capacity,  in November 1995
       the  Company  paid the  University  a total  amount of  $385,841:  $300,000
       (representing  the  University's  50%  share of the  one-time  royalty  the
       Company received from Arrow described in
  
                                          7
  note  2  above),  $34,289  (representing  the  remaining  balance  due  the
       University pursuant to a research  agreement,  based on an invoice received
       from the University),  $48,071  (representing the University's 50% share of
       sublicense  and royalty fees  received by the Company  between April 30 and
       October 12, 1995 from Arrow), and $3,481  (representing  royalties owed the
       University,  pursuant  to a 1987  license  agreement  and an  agreement  in
       principle,  based on net sales of the Company's  antimicrobial  examination
       gloves sold in 1991,  1992 and 1993 which the Company had been reserving in
       accrued  expenses).  In January 1996 the Company paid the University $6,400
       for the antimicrobial coating and evaluation of samples of tracheal suction
       catheters  for a leading  medical  device  manufacturer  who has  expressed
       interest in a possible licensing  arrangement with the Company.  The device
       manufacturer is currently evaluating such coated product samples.
  
            As of January 31, 1996, the Company still owes the University $165,706
       for the  University's  past due share of sublicensing  and royalty payments
       received by the Company through 1994. Further,  the Company has been billed
       $601,489  as of January  31, 1996 by the  University's  patent  counsel for
       patent work undertaken in connection with the Company's license  agreements
       with the  University  and costs  incurred  in  connection  with the  Patent
       Interference   Proceedings  and  subsequent  Patent  Settlement  Agreement,
       although the Company is currently  disputing a substantial portion of these
       legal  fees.  All of these  amounts are  included  in  accounts  payable at
       January 31, 1996 on the accompanying  condensed balance sheets. The Company
       is attempting to resolve these matters with the University but there can be
       no assurance that the Company will be successful in reaching a resolution.
  
  (4)  Other Income
  
            In November 1995, the Company received $75,000 from Arrow to help fund
       the payment of legal costs  incurred by the Company in connection  with the
       Patent Interference Proceedings and the Patent Settlement Agreement.
  
  Item 2 -             Management's Discussion and Analysis of
                    Financial Condition and Results of Operations
  
       The Company is in the development stage and has been principally engaged in
  research  and  development  activities  with the  objective  of  developing  and
  commercializing   certain   cost-reducing   medical  device  and  pharmaceutical
  technologies.  Since March 1, 1994,  the Company  engaged in  extremely  limited
  research  and  development   efforts.   The  Company  incurred  a  research  and
  development  expense during the quarter ended January 31, 1996, in the amount of
  $6,400,  for the  antimicrobial  coating and  evaluation  of samples of tracheal
  suction  catheters.  The Company  will  continue to restrict  its  research  and
  development  efforts unless and until the Company can develop positive cash flow
  from its more fully developed technologies or raise additional financing.  There
  can be no assurance  that the Company  will be able to develop or  commercialize
  any of its product  technologies  in the future.  Future revenues of the Company
  may be limited.  Such  commercialization  activities  may not result in sales of
  products on a profitable  basis,  and the Company may not have sufficient  funds
  available to
  
                                          8
  complete its research and development program, pursue applications for necessary
  regulatory clearances and approvals, prosecute its intellectual property rights,
  or remain  in  business  while any  products  which  may be  developed  from its
  technologies are marketed or are readied for the marketplace.
  
       In an effort to commercialize  its more fully developed  technologies,  the
  Company  had  focused  from 1990 to March  1994 its  research,  development  and
  commercialization  efforts principally on its infection-reducing,  antimicrobial
  technologies,  including the manufacture and marketing  through  distributors of
  the Company's  antimicrobial  gloves and the licensing of other  applications of
  the antimicrobial  technology to larger companies.  In the first two quarters of
  fiscal 1996,  as well as in fiscal 1995,  the Company had no sales of any of its
  technologies or its  antimicrobial  medical gloves.  During the first and second
  quarters of fiscal  1996 and for the fiscal  years ended July 31, 1995 and 1994,
  the Company  received  revenues  from  royalty  payments  and  development  fees
  pursuant to two licenses  with  sublicensees  of  applications  of the Company's
  antimicrobial  medical  technology in addition to the one-time  royalty  payment
  discussed below.
  
       In the first  quarter  of  fiscal  1996 the  Company  received  a  one-time
  prepayment of periodic royalty payments pursuant to an October 1995 modification
  to its  license  agreement  with Arrow.  Such  advance  essentially  represented
  royalty  payments due to the Company from Arrow for the period September 1, 1995
  through  September  1,  2000.  It is  expected  that  future  cash flows will be
  substantially  less than reported  revenues for such period due to this payment,
  as reflected in this quarter's  financial  statements and as discussed in note 2
  to the financial  statements.  The Company will continue to receive  development
  phase payments on the other products  incorporating the Company's  antimicrobial
  technology   which  Arrow  is   developing  or  has   developed,   including  an
  antimicrobially treated percutaneous sheath introducer system which has received
  regulatory  clearance  to be marketed  but has not yet reached the  marketplace.
  However,  there can be no assurance  that Arrow will be  successful in marketing
  such percutaneous sheath introducer system.
  
  Results of Operations for the Three Months Ended January 31, 1996
  
       Revenues  for the quarter  ended  January 31, 1996  totalled  $112,500,  an
  increase of 178% over the $40,352 in revenues during the corresponding period in
  fiscal 1995. This increase in revenue is due to the Company's receipt of $75,000
  from Arrow,  to help fund the payment of legal costs  incurred by the Company in
  connection with the Patent  Interference  Proceedings and the Patent  Settlement
  Agreement as  discussed in note 4 to the  financial  statements.  Revenues  from
  licensing  fees in the second  quarter of fiscal 1996 were  $7,500,  the same as
  those recorded in the corresponding  period during the last year.  Revenues from
  royalties were $30,000,  a decrease of 8.7% from the $32,852 in royalty payments
  received  during the second quarter of fiscal 1995. The $30,000 in revenues from
  royalties  represents  royalties  earned for the quarter ended January 31, 1996,
  which is derived  from the  $600,000  advance  royalty  payment  received by the
  Company from Arrow.  The  unearned  portion of $550,000 is reflected as deferred
  revenue in the liability  section of the balance  sheets.  (See notes 2 and 3 to
  the   financial   statements.)   Although  the  Company  had  no  sales  of  its
  antimicrobial  gloves in the current  quarter,  there were no glove sales in the
  corresponding  period of fiscal 1995 either.  The Company  maintains  its belief
  that such lack of glove sales  continues to be due to the difficulty it faces as
  a small company with extremely  limited resources in introducing and marketing a
  new product  internationally  without  the  benefit of a domestic  sales base or
  regulatory  clearance  by the U.S.  Food and Drug  Administration  ("FDA").  See
  "Regulatory Proceedings."
  
                                          9
  Expenses  incurred  during the three months ended January 31, 1996 totalled
  $104,989,  an increase  of 33.5% over the  $78,672 of  expenses  incurred in the
  three months ended January 31, 1995 primarily due to $15,000 of  amortization of
  the deferred royalty costs paid to the University in November 1995.  Included in
  expenses was $6,400 paid to the  University  in research and  development  costs
  associated  with the  antimicrobial  coating and  evaluation of certain  product
  samples for a potential  licensee.  Expenses consisted  primarily of legal costs
  associated with the Company's  prosecution  and maintenance of its  intellectual
  property  rights and payments  due the  University  pursuant to certain  license
  agreements.  General  and  administrative  expenses  for  the  quarter  totalled
  $98,589,  an  increase  of 25.3% over the  $78,672 of  expenses  incurred in the
  corresponding period last year.
  
       The Company  recorded net income for the quarter of $7,511 due primarily to
  the  Company's  receipt of  $75,000  from  Arrow as  described  in note 4 to the
  financial statements.
  
  Results of Operations for the Six Months Ended January 31, 1996
  
       Revenues for the six months ended  January 31, 1996 totalled  $161,724,  an
  increase of 98% over revenue of $81,671 in the  corresponding  period last year.
  This  increase  was the result of the receipt of $75,000 from Arrow as described
  in note 4 to the financial statements.
  
       Expenses  incurred  during the six months ended  January 31, 1996  totalled
  $210,095,  a decrease of 9.2% from the $231,430 of expenses  incurred in the six
  months ended January 31, 1995.  This decrease was due primarily to the reduction
  in legal  costs  incurred  by the  Company  in  connection  with  the  Company's
  protection  of its  intellectual  property  rights due to the  settlement of the
  Patent  Interference  Proceedings  as a result of the  execution  of the  Patent
  Settlement Agreement, and to a lesser extent, the fixed royalties earned for the
  first and second quarters of fiscal 1996 as a result of the  modification to the
  license  agreement  between the Company and Arrow.  (See note 2 to the financial
  statements.)
  
       The  Company  sustained  a net loss of  $48,371  for the six  months  ended
  January  31,  1996,  a decrease  of 67.7% from the net loss of  $149,759  in the
  corresponding  period in 1995. The decrease in net loss for the six month period
  is due  primarily  to the  Company's  receipt in the first  quarter of 1996 of a
  one-time  advance  royalty  payment of  $600,000  from  Arrow and the  Company's
  receipt of $75,000 from Arrow,  as  discussed in notes 2 and 4 to the  financial
  statements, respectively.
  
  Liquidity and Capital Resources
  
       At  January  31,  1996,  the  Company  had a  working  capital  deficit  of
  approximately  $717,000,  which represented a decrease of approximately $237,000
  in such  deficit from July 31,  1995.  During the six months  ended  January 31,
  1996,  the  Company  had an  increase  of $83,070 in cash flows from  operations
  principally  due to the receipt  from Arrow in November  1995 of $75,000 to help
  fund the payment of legal costs  incurred by the Company in connection  with the
  Patent  Interference  Proceedings and the Patent Settlement  Agreement,  and the
  receipt in October 1995 of the one-time advance royalty payment of $600,000 from
  Arrow which enabled the Company to reduce its outstanding  accounts payable.  It
  is  expected  that future cash flows will be  substantially  less than  reported
  revenues  due to this  one-time  advance  royalty  payment.  As a result  of the
  aforementioned payments to the University,  payments to legal counsel associated
  with corporate and  intellectual  property  matters,  and costs  associated with
  general  operations,  at  January  31,  1996,  the  Company  had  cash  and cash
  equivalents of $93,932.
  
                                         10
  The Company  currently owes the  University  $165,706 (see notes 2 and 3 to
  the  financial  statements),  and as of January 31,  1996,  the Company has been
  billed $601,489 by the University's patent counsel for patent work undertaken in
  connection with the Company's  license  agreements with the University and costs
  incurred  in  connection  with the Patent  Interference  Proceedings  and Patent
  Settlement Agreement,  although the Company is currently disputing a substantial
  portion of these legal fees. As described in note 3 to the financial statements,
  the Company is continuing to have  discussions with the University to attempt to
  resolve  several  issues  including  the  license  for the  antimicrobial  glove
  technology and the aforementioned legal fees. There can be no assurance that the
  Company will be able to resolve these  matters.  For a discussion of the dispute
  with the University, see "Item 1 - Business Product Technologies - Licenses with
  the  University" in the Company's  Annual Report on Form 10-K for the year ended
  July 31,  1995.  The Company had been  reserving  royalties  due the  University
  consistent with the terms of the written license agreement for the antimicrobial
  glove  technology  which had been  negotiated  between the parties based upon an
  agreement in principle. In November 1995, the Company paid the University $3,481
  representing  such reserved  royalties  under this license based on net sales of
  the Company's  antimicrobial  examination gloves sold prior to February 1993. If
  the Company is unable to settle the dispute with the University over the license
  agreement,  the Company may not be  entitled to sell its  antimicrobial  medical
  gloves or sublicense the antimicrobial glove technology in the future.
  
       The Company is  exploring a number of ways to pay the  outstanding  amounts
  due the  University,  including  loans,  raising of additional  capital  through
  various   equity   offerings,   private   placements,   possible   mergers  with
  revenue-producing  entities, and further acceleration of royalty and development
  fee payments from sublicensees as well as from sales of antimicrobial gloves. In
  light  of the  recent  payments  to the  University  discussed  in note 3 to the
  financial statements, the University has agreed to work with the Company through
  July 1996 with respect to the Company's  financial condition and its relation to
  the University.
  
       The Company is still in the development stage, and its business  operations
  have only  generated a nominal  amount of  revenues  to date.  The report of the
  Company's  independent  auditors on the Company's  financial  statements for the
  fiscal  years ended July 31, 1995 and 1994  included  an  explanatory  paragraph
  which stated that the Company's  recurring  losses and working capital and total
  stockholders'  deficits raised  substantial doubt about the Company's ability to
  continue as a going concern and  precluded  the  expression of an opinion on the
  Company's  financial  statements as of and for the years ended July 31, 1995 and
  1994. The financial statements did not include any adjustments that might result
  from the outcome of that  uncertainty.  Because of the continued working capital
  deficit,  management's  plan is to continue attempts to resolve the dispute with
  the University over the license for the antimicrobial glove technology and legal
  fees  billed to the  Company by the  University's  patent  counsel,  in order to
  attempt to raise  additional  capital,  while  attempting  to  develop,  market,
  license and sell its products,  including its  antimicrobial  latex surgical and
  examination  gloves,  and to establish  positive cash flow for the Company.  The
  Company is exploring a number of ways of raising additional  capital,  including
  loans,   various   equity   offerings,   private   placements,    mergers   with
  revenue-producing  entities,  as well as from  sales  of  antimicrobial  gloves.
  Furthermore, the Company will continue to attempt to curtail expenditures.
  
       In an attempt to raise  additional  capital in order to  continue to pursue
  potential  acquisition  and/or  merger  possibilities,  including  a sale of the
  Company,  in November  1995, the Company  extended the  expiration  dates of its
  Class A and Class B  Warrants  and  reduced  the  exercise  price of its Class B
  Warrants.  The  expiration  date of the Company's  Class A Warrants was extended
  from December 31, 1995 to 5:00 p.m. (New York City time) on April 30, 1996;  the
  exercise price of the Class A Warrants
  
                                         11
  had been reduced from $3.25 to $0.25 in September  1995. The expiration  date of
  the Company's  Class B Warrants was extended from December 31, 1996 to 5:00 p.m.
  (New York City time) on April 30,  1997.  In  addition,  effective  November 28,
  1995, the exercise price of the Company's Class B Warrants was reduced to $1.00.
  The Company intends to use any proceeds  received from the exercise of its Class
  A and Class B Warrants for working capital,  general corporate  purposes and, if
  possible, the reinitiation of its research and development efforts.
  
       The Company does not have any commitments to raise  additional  capital and
  there can be no assurance that it will be able to obtain any such commitments or
  raise additional capital in the future. If (i) there are no antimicrobial  glove
  sales,  (ii) there is no significant  increase in license fees or royalties from
  sales of  sublicensed  products,  (iii) the Company is  unsuccessful  in raising
  additional  capital  during  the  remainder  of fiscal  year  1996,  or (iv) the
  University revokes licenses granted to the Company,  the Company may not be able
  to continue as a going concern, even with further cost-cutting measures. To meet
  its long-term liquidity requirements,  the Company must also generate sufficient
  income through  operations or obtain additional  financing as to which there can
  be no  assurance.  If the Company  raises  sufficient  additional  capital,  the
  Company plans to continue to (i) seek increased revenue-producing  opportunities
  through  the search  for  additional  license  and  patent  purchase  agreements
  involving corporate technology, (ii) attempt to obtain U.S. regulatory clearance
  to market certain products,  such as its antimicrobial latex gloves, directly or
  through  distributors to end users, (iii) investigate  merger,  joint venture or
  acquisition   possibilities  with  a  suitable  entity  whose  business  may  be
  complementary to that of the Company, and (iv) explore the possibility of a sale
  of the Company or a sale of some or all of its assets.
  
       By letter  dated  October  17,  1995,  Beiersdorf  AG of  Hamburg,  Germany
  ("Beiersdorf")  informed  the Company  that it was  abandoning  the projects for
  developing  products under the two German  patents  Beiersdorf had acquired from
  the Company pursuant to the previously disclosed 1992 Patent Purchase Agreement.
  Consequently,  the Company is not entitled to any further payment under the 1992
  agreement.  Further, under the terms of the 1992 agreement,  the Company has the
  right to repurchase the subject patents  together with certain subject matter as
  defined in the  agreement.  The  repurchase  price would consist of the $300,000
  non-refundable  cash payment the Company had received from Beiersdorf plus legal
  and  clinical   development   costs  of  approximately   $100,000   representing
  Beiersdorf's  out-of-pocket  expenses.  The  Company has until April 17, 1996 to
  exercise  its right to  repurchase.  At the present  time,  the Company does not
  anticipate exercising its right to repurchase the patents and related technology
  from Beiersdorf.
  
       On March 6, 1996, the Board of Directors of the Company granted Lieberman &
  Nowak,  LLP 50,000 shares of Common Stock in recognition of the valued  services
  provided by Lieberman & Nowak to the Company for several years. The Company will
  record an expense of $2,250 in the third quarter of fiscal 1996 representing the
  estimated fair market value of such shares on the date of grant.
  
  Regulatory Developments
  
       In May 1989,  the Company filed a pre-market  510(k)  notification  seeking
  consent to market its antimicrobial latex examination gloves. Since this initial
  510(k)  submission,  the Company has, from 1991 to 1993, amended and resubmitted
  the 510(k) several times in an effort to obtain a determination  of "substantial
  equivalence" to previously  marketed latex examination gloves. The FDA Office of
  Device Evaluation ("ODE") has notified the Company, in response to each of these
  submissions, that the
  
                                         12
  Company's   antimicrobial   latex  examination  gloves  are  not  "substantially
  equivalent"  since the gloves have a new  indication  for an  examination  glove
  which may affect the prophylactic  effect, thus constituting a new intended use.
  The ODE has further stated that no accepted  scientific  methods presently exist
  for  assessment  of  the   effectiveness  of  antiviral   activity  for  topical
  antimicrobials, particularly under glove-use conditions, among other grounds for
  denying market clearance.
  
       In its submissions,  the Company has proposed revised labeling claims to be
  consistent with what the Company believes is "substantially equivalent" labeling
  based on FDA  precedent.  Moreover,  the Company has submitted test results that
  the Company considers to demonstrate an appropriate  method for, and significant
  effectiveness at inactivating certain viruses and other fluid borne pathogens by
  the antimicrobial  latex examination  glove, under conditions of expected use of
  the product.  The Company's test results are also believed to  demonstrate  user
  safety  under  the  expected  conditions  of  use  of  the  antimicrobial  latex
  examination glove.
  
       From 1993 through  December  1994,  the Company had several  meetings  with
  various   representatives  at  the  FDA's  offices  and  continued  its  written
  correspondence  and  discussions  with the FDA and the ODE  regarding the issues
  raised by the ODE concerning the Company's antimicrobial gloves.
  
       On August  17,  1995,  Mr.  Timothy  Ulatowski  of the ODE sent to Dr.  Del
  Guercio, Chairman of the Company Board of Directors, a copy of a memorandum sent
  by Albert T.  Sheldon,  Jr.,  Ph.D.,  Supervisory  Microbiologist,  Division  of
  Anti-Infective Drug Products,  to Mr. Ulatowski concerning the Company's gloves.
  On September 13, 1995,  Dr. Del Guercio sent to Mr.  Ulatowski a response to Dr.
  Sheldon's  memorandum  prepared  on the  Company's  behalf by Dr.  Modak and Mr.
  Sampath with the  assistance of an FDA  consultant.  On September 26, 1995,  Mr.
  Ulatowski  informed Dr. Del Guercio that pursuant to this most recent submission
  of data,  the Company  would be invited to make a  presentation  concerning  the
  Company's glove before the FDA's independent General Hospital Panel.
  
       Dr.  Shanta M. Modak of the  Department  of Surgery,  Columbia  University,
  where the  antimicrobial  glove  technology was  developed,  and Dr. Del Guercio
  attended a meeting, on the Company's behalf, of the Advisory Committee,  General
  Hospital  and Personal Use Devices  Panel,  Center for Devices and  Radiological
  Health on March 11, 1996; Mr. Lester Sampath, also of the Department of Surgery,
  Columbia  University,  was there as an  observer.  The Panel acts in an advisory
  capacity and makes  recommendations  to the FDA regarding whether or not certain
  device submissions should receive FDA clearance to be marketed.
  
       Drs.  Del Guercio and Modak each made a  presentation  before the Panel and
  responded to certain  questions.  The Company  expects to receive  notice of the
  FDA's decision  regarding the Company's  examination  gloves within the next few
  weeks. While the Panel did not make any recommendation to the FDA at the meeting
  on March 11, 1996, the Panel voted to accept a previously distributed opinion of
  an independent  consultant  indicating that the Company's  examination gloves do
  not have a positive impact on disease control.
  
       At present,  the Company does not have  sufficient  financial  resources to
  fund additional clinical testing, if such clinical testing is required. However,
  should the Company's financial  condition improve,  the Company would spend some
  of these funds on additional testing. There can be no assurance that,
  
                                         13
  even with additional testing, if such testing is required, that the Company will
  obtain FDA clearance to market its antimicrobial latex gloves.
  
  PART II - OTHER INFORMATION
  
  Item 5 -  Other Information
  
  (a)       Granting  of  European  Patent for  "Treatment  of Aged Skin With Oral
            13-Cis-Retinoic  Acid" Survives Period of Possible  Opposition Without
            Challenge
  
                 On February 14, 1996, the Company received  written  notification
            from patent  counsel  that the  decision in March 1995 by the European
            Patent Office,  allowing the claims in the European Patent Application
            covering the "Treatment of Aged Skin With Oral  13-Cis-Retinoic  Acid"
            which was published in the European Patent Bulletin of March 22, 1995,
            survived the nine month period of possible opposition by third parties
            without any challenge.  Accordingly,  the grant of the above patent is
            now complete.  The Company  continues to seek  potential  licensees or
            purchasers of the aging-related skin disorder treatment  technology in
            Europe;  however,  there can be no assurance  that the Company will be
            successful in licensing or selling the technology to others.
  
  (b)       Research Gift
  
                 By letter dated  February 8, 1996, the Company has agreed that it
            will  support  the  research  efforts  directed by Dr.  Shanta  Modak,
            Department of Surgery of Columbia University. Accordingly, the Company
            has  made a  commitment  to make a  conditional  research  gift in the
            amount of $20,000 to Dr.  Modak's  laboratory  in  recognition  of the
            consultation service and assistance by Dr. Modak and her colleagues in
            support of the Company's  efforts in  continuing  to obtain  clearance
            from  the FDA to  market  the  Company's  antimicrobial  gloves.  This
            research  gift will be paid upon the first to occur of the  following:
            (i) the  Company's  receipt  of  clearance  from the FDA to market its
            antimicrobial  gloves; or (ii) the Company  successfully enters into a
            business  venture  with  a  revenue   producing   company  related  to
            production and sales of such  antimicrobial  gloves.  Such gift has no
            bearing  or  effect on prior  royalty  or other  payment  arrangements
            between the Company and the University.
  
  (c)       Grant of Stock Options
  
                 At a special  meeting of the Board of  Directors  of the  Company
            held on March 6, 1996, the Board of Directors  granted a non-qualified
            option to Bruce Hausman to purchase  250,000 shares of Common Stock at
            an  exercise  price of $0.09 per share,  based on the  current  market
            price,  in lieu of cash  compensation  for Mr.  Hausman's  services as
            President and Chief Executive Officer of the Company since May 1995.
  
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  (d)       Grant of Stock
  
                 On March 6, 1996,  the Board of Directors of the Company  granted
            Lieberman & Nowak, LLP 50,000 shares of Common Stock in recognition of
            the valued  services  provided by Lieberman & Nowak to the Company for
            several  years.  The  Company  will record an expense of $2,250 in the
            third quarter of fiscal 1996  representing  the estimated  fair market
            value of such shares on the date of grant.
  
  Item 6 -  Exhibits and Reports on Form 8-K
  
  (a)       Exhibits
  
                 None.
  
  (b)       Reports on Form 8-K
  
                 No  reports  on Form 8-K were  filed  during  the  quarter  ended
            January 31, 1996.
  
                                         15
  SIGNATURES
  
       Pursuant to the  requirements  of the  Securities  Exchange Act of 1934, as
  amended,  the  registrant has duly caused this report to be signed on its behalf
  by the undersigned thereunto duly authorized.
  
                                                     DALTEX MEDICAL SCIENCES, INC.
  
  Date:  March 18, 1996                  By: /s/ Bruce Hausman, Esq.
                                             ------------------------
                                             BRUCE HAUSMAN, ESQ.
                                             President and Chief Executive Officer
  
  Date:  March 18, 1996                  By: /s/ Herbert J. Mitschele, Jr.
                                             ------------------------------
                                             HERBERT J. MITSCHELE, JR.
                                             Treasurer and Chief Financial Officer
  
                                         16