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 April 30, 1997
                         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 June 4, 1997

Common Stock,  par value $.01                                  8,632,699
           per share



<PAGE>

                          DALTEX MEDICAL SCIENCES, INC.

                                      INDEX

                                                                           Page

     PART  1 -    FINANCIAL INFORMATION

     Item 1 -     Financial Statements


                  (a)  Condensed  balance  sheets as of April 30, 1997
                       (Unaudited) and July 31, 1996.                      1-2

                  (b)  Condensed  statements of operations and deficit
                       accumulated  during the  development  stage for
                       the  three   months   ended   April  30,   1997
                       (Unaudited)  and  April 30,  1996  (Unaudited),
                       nine months  ended  April 30, 1997  (Unaudited)
                       and April  30,  1996  (Unaudited),  and for the
                       period July 28, 1983 (Date of Incorporation) to
                       April 30, 1997 (Unaudited)                            3

                  (c)  Condensed statements of cash flows for the nine
                       months  ended  April 30, 1997  (Unaudited)  and
                       April 30, 1996 (Unaudited),  and for the period
                       July 28, 1983 (Date of  Incorporation) to April
                       30, 1997 (Unaudited)                                  4

                  (d)  Notes   to   condensed   financial   statements
                       (Unaudited)                                         5-7

     Item 2 -     Management's Discussion and Analysis of Financial 
                  Condition and Results of Operations                     7-13


     PART II -    OTHER INFORMATION

     Item 5 -     Other Information                                       13-14

     Item 6 -     Exhibits and Reports on Form 8-K                           14

<PAGE>
PART 1 - FINANCIAL INFORMATION

Item 1 - Financial Statements

                         Daltex Medical Sciences, Inc.
                        (A Development Stage Enterprise)
                            Condensed Balance Sheets

                                                   April 30,
                                                      1997          July 31,
                                                  (Unaudited)       1996 (A)

Assets

Current assets:
           Cash and cash equivalents                $12,689         $49,926
           Other receivables                         20,319          15,319
           Prepaid royalty                           60,000          60,000
                                                   --------        --------
              Total current assets                   93,008         125,245

Net plant and equipment, at cost
Patents, net of accumulated amortization of
     $134,426 at April 30, 1997
     and $134,426 at July 31, 1996                       --              --
Other assets, net                                     3,375           3,375
Deferred royalty costs (note 2)                     140,000         185,000
                                                   --------        --------

                                                   $236,383        $313,620
                                                   ========        ========


See accompanying notes to condensed financial statements.

(A) Amounts at July 31, 1996 are from audited financial statements.

                                       1
<PAGE>
                         Daltex Medical Sciences, Inc.
                        (A Development Stage Enterprise)
                            Condensed Balance Sheets
<TABLE>
<CAPTION>
                                                             April 30,
                                                                1997             July 31,
                                                            (Unaudited)          1996 (A)
<S>                                                        <C>                 <C>      
Liabilities and Stockholders' Deficiency

Current liabilities:
        Accounts payable & accrued expenses (note 3)           $917,781            $885,942
        Advance royalty payments (note 2)                       120,000             120,000
                                                            -----------         -----------
        Total current liabilities                             1,037,781           1,005,942
                                                            -----------         -----------


Advance royalty payments (note 2)                               280,000             370,000
                                                            -----------         -----------

Stockholders' deficiency:
        Common Stock, par value $.01 per share 
        Authorized 20,000,000 shares; issued
         8,632,699 at April 30, 1997 and
        8,632,699 at July 31, 1996                               86,327              86,327
        Paid in capital                                       6,816,369           6,816,369
        Deficit accumulated during the                       (7,984,094)
             development stage                                                   (7,965,018)
                                                            -----------         -----------

        Total stockholders' deficiency                       (1,081,398)         (1,062,322)
                                                            -----------         -----------

                                                               $236,383            $313,620
                                                            ===========         ===========
</TABLE>

See accompanying notes to condensed financial statements

(A) Amounts at July 31, 1996 are from audited financial statements.

                                       2
<PAGE>
                         Daltex Medical Sciences, Inc.
                        (A Development Stage Enterprise)
                      Statements of Operations and Deficit
                    Accumulated During the Development Stage
<TABLE>
<CAPTION>
                                                                                                                      For The Period
                                                                                                                        28-Jul-83
                                                    Three Months     Three Months     Nine Months     Nine Months       (Date of
                                                        Ended           Ended           Ended            Ended        Incorporation)
                                                      April 30,        April 30,       April 30,       April 30,       To April 30,
                                                        1997             1996            1997            1996             1997
                                                    (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 5)                            85             199             342          75,199       1,712,903
License fees and royalties                               158,653         104,706         284,790         214,310       2,654,886
                                                    ------------    ------------    ------------    ------------    ------------

Total revenues                                           158,738         104,905         285,132         289,509       4,876,229
                                                    ------------    ------------    ------------    ------------    ------------

Expenses incurred in the development stage:
Cost of sales                                                 --              --              --              --         313,243
Research & development                                        --              --              --           6,400       3,335,251
General & administrative                                 112,689         132,000         304,208         358,582       9,211,829
                                                    ------------    ------------    ------------    ------------    ------------

Total expenses incurred in the
development stage                                        112,689         132,000         304,208         364,982      12,860,323
                                                    ------------    ------------    ------------    ------------    ------------

Net income (loss)                                         46,049         (27,102)        (19,076)        (75,473)     (7,984,094)
                                                    ------------    ------------    ------------    ------------    ------------

Deficit accumulated during the development stage:

Beginning of period                                   (8,030,143)     (7,881,145)     (7,965,018)     (7,832,774)             --
                                                    ------------    ------------    ------------    ------------    ------------

End of period                                        $(7,984,094)    $(7,908,247)    $(7,984,094)    $(7,908,247)    $(7,984,094)
                                                    ============    ============    ============    ============    ============

Net income (loss) per common share                          0.01              --              --           (0.01)          (1.02)
                                                    ============    ============    ============    ============    ============

Weighted average number of
shares outstanding                                     8,633,000       8,633,000       8,633,000       8,633,000       7,810,000
                                                    ============    ============    ============    ============    ============
</TABLE>

See accompanying notes to condensed financial statements.
                                       3
<PAGE>
<TABLE>
                         Daltex Medical Sciences, Inc.
                        (A Development Stage Enterprise)
                       Condensed Statements of Cash Flows
<CAPTION>
                                                                                                      For the Period
                                                                                                      July 28, 1983
                                                                                                         (Date of
                                                                                                      Incorporation)
                                                                        April 30,        April 30,     to April 30,
                                                                          1997             1996            1997
                                                                      (Unaudited)       (Unaudited)    (Unaudited)
<S>                                                                  <C>              <C>              <C>    
Cash flows from operations
     Net loss:                                                          ($19,076)        ($75,473)     ($7,984,094)
     Non-cash expenses included in net loss:
          Depreciation and amortization                                       --           16,440          310,234
     Non-cash compensation charges                                            --               --          889,130
     Abandoned equipment                                                      --               --           53,386
     Write-off of patents                                                     --               --          105,221
     Write-off of inventory/advance payments                                  --               --          115,048
     Other                                                                    --               --            4,499
Changes in current assets & liabilities:
      (Increase) in inventory & advance payments                              --               --         (115,048)
      (Increase) decrease in grant & other receivables                    (5,000)          43,448          (20,319)
      (Increase) decrease in deferred royalty costs                       45,000         (260,000)        (200,000)
      Increase (decrease) in accounts payable & accrued expenses          31,839         (178,874)         920,103
      Increase (decrease) in advance development
          & royalty payments                                             (90,000)         520,000          400,000
                                                                     -----------      -----------      -----------
      Net cash flows of operations                                       (37,237)          65,541       (5,521,840)
                                                                     -----------      -----------      -----------

Cash flows from investing activities:
      Purchase of U.S. government obligations                                 --               --       (8,813,987)
      Redeemed U.S. government obligations
          and other short-term investments                                    --               --        8,810,987
      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                             --               --         (474,816)
                                                                     -----------      -----------      -----------

Cash flow from financing activities:
     Proceeds from sale of common stock & warrants -net                       --               --        6,009,344

Net increase (decrease) in cash                                          (37,237)          65,541           12,689
Cash, including certificates of deposit:
     Beginning of period                                                  49,926           10,862               --
                                                                     -----------      -----------      -----------
     End of period                                                       $12,689          $76,403          $12,689
                                                                     ===========      ===========      ===========
</TABLE>

See accompanying notes to condensed financial statements.

                                       4
<PAGE>

       NOTES TO CONDENSED FINANCIAL STATEMENTS-April 30, 1997 (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 and Development Phase Payments

               In  October  1995,  the  Company  and Arrow  International,  Inc.
               ("Arrow")  agreed  to  modify  the  terms of the  existing  Arrow
               License (the  "Modified  Arrow  License")  concerning  only those
               license fees payable to the Company by Arrow for  antimicrobially
               treated  multi-lumen  central venous catheters  (exclusive of the
               silicone  Hickman/Broviac type,  implantable port or peripherally
               inserted  central  venous  catheters).  During the quarter  ended
               October 31,  1995 and  pursuant to the  Modified  Arrow  License,
               Arrow paid the Company a one time royalty of $600,000 (in lieu of
               the periodic  royalty  paid to the Company  pursuant to the Arrow
               License  for such  catheters)  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 (the " 1987 University License").  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 April
               30, 1997.  After September 1, 2000, the periodic royalty payments
               provided  for in the existing  Arrow  License 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  Arrow  License  (including  Arrow's
               obligation to make quarterly  royalty  payments based on sales of
               percutaneous  sheath introducer ("PSI") units sold, and quarterly
               development phase payments for those products Arrow is developing
               or  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.
               The Modified  Arrow License 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.

               During the quarter  ended April 30,  1997,  the Company  received
               nominal royalty payments from Arrow based on limited sales of PSI
               units sold during this period,  and

                                       5
<PAGE>

               quarterly development phase payments for two other products which
               Arrow is developing or has developed  incorporating the Company's
               antimicrobial technology.

               Additionally,  in November 1996, the Company received an advanced
               annual payment (which was not scheduled to be paid until April 1,
               1997) from W.L. Gore & Associates,  Inc. ("Gore"), another of the
               Company's  sublicensees,  in the amount of  $45,000.  Included in
               this amount was $15,000  representing  an advance  against annual
               minimum  royalties  to be paid to the  Company  based on sales of
               antimicrobialy  treated  hernia  patches which have recently been
               introduced to the  marketplace by Gore, and $30,000  representing
               advanced annual  development phase payments for two other product
               segments  also  licensed to Gore pursuant to the terms of the May
               1992 License Agreement between the Company and Gore. Such $45,000
               was recognized as revenue in the quarter ended April 30, 1997.

          (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").

               As of April 30, 1997,  the Company owes the  University  $165,706
               for the  University's  past due share of sublicensing and royalty
               payments received by the Company through 1994. Additionally,  the
               Company owes the University $410  representing  the  University's
               50% share of  royalties  received by the Company from Arrow based
               on sales of PSI units,  and $2,500  representing the University's
               50% share of quarterly  development  fees received by the Company
               from Arrow in May 1997.  Moreover,  the  Company  has been billed
               $643,294 as of April 30, 1997 by the University's  patent counsel
               for patent  work  undertaken  in  connection  with the  Company's
               license  agreements with the University,  although the Company is
               currently  disputing a  substantial  portion of these legal fees.
               All of these  amounts are  included in accounts  payable at April
               30,  1997 on the  accompanying  condensed  balance  sheets.  This
               $643,294  includes:  (i)  approximately  $128,954,   representing
               charges  in  connection  with  the  Company's  protection  of its
               intellectual  property rights through domestic and foreign patent
               filings  and  related  matters;   (ii)  approximately   $108,560,
               representing  charges in connection with two AIDS-related patents
               and a patent  application  for  antimicrobially  treated  condoms
               which the Company and the University  have agreed in principle to
               reassign  to  the  University,   because  the  Company  has  been
               unsuccessful  in licensing  these  technologies to third parties;
               and  (iii)  approximately   $401,000,   representing  charges  in
               connection  with the  previously  disclosed  Patent  Interference
               Proceedings  and  subsequent  Patent  Settlement   Agreement. The
               Company disputes the Company's  responsibility for this $401,000,
               and the  Company and the  University  are  continuing  efforts to
               negotiate a  settlement.  Because  the  Company  has  proposed to
               reassign the two AIDS-related  patents and one patent application
               for  antimicrobially  treated  condoms  to  the  University,  the
               Company has requested that the University  credit the Company for
               the  $108,560  outstanding  amount  due the  University's  patent
               counsel related to these matters. The University has continued to
               work with the  Company  with  respect  to these  matters  and the
               Company's financial condition and its relation to the University.
               Although the Company is continuing  its attempts to resolve these
               matters,  there  can be no

                                       6
<PAGE>

               assurance  that the  Company  will be  successful  in  reaching a
               resolution with the University.

          (4) License  Amendment  Agreement between the Company and W.L. Gore &
              Associates

              In February  1997,  the Company  and Gore  entered  into a License
              Amendment Agreement,  dated as of January 1, 1997,  clarifying the
              specific product and market application  segments set forth in the
              existing license agreement entered into by the Company and Gore in
              May 1992.  In  consideration  for the Company's  cooperation  with
              respect to such License  Amendment  Agreement and to help fund the
              payment  of legal and  filing  costs  incurred  by the  Company in
              connection  with such  Agreement,  the Company  received a payment
              from Gore in February 1997 in the amount of $50,000.  Such payment
              is included in revenues in the quarter  ended April 30, 1997.  The
              Company and Gore have also agreed to a royalty  rate of 5% for any
              product  sold by Gore that is not  otherwise  covered by any other
              categories set forth in the License Amendment Agreement, but which
              are covered by Licensed Products (as defined  therein).  All other
              terms  and  conditions  set  forth in the  existing  1992  license
              agreement remain in full force and effect.



     Item 2

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operation

               The following  discussion  contains  forward  looking  statements
     within the meaning of the Private Securities  Litigation Reform Act of 1995
     relating  to  the   Company's   plans  with  respect  to  its   continually
     deteriorating  financial condition.  Actual results could differ materially
     from management's plans and there can be no assurance that the Company will
     be  successful  in its plan (i) to sell or  license  the  rights to certain
     applications  of  its  antimicrobial  technology,   (ii)  to  sell  all  or
     substantially  all of its assets,  (iii) to negotiate  the  forgiveness  of
     certain debt owed to the University or (iv) to continue as a going concern.

               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 has engaged
     in extremely  limited  research and  development  efforts.  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 three  quarters of fiscal 1997,  as well as in fiscal  1996,  the
     Company  had no  sales  of any of  its  technologies  or its  antimicrobial
     medical  gloves.  See "Item 1. Business" of the Company's  Annual Report on
     Form 10-K for the fiscal year ended July 31, 1996 for a  discussion  of the
     dispute with the University  concerning  the license for the  antimicrobial
     glove  technology,  and a discussion of 

                                       7
<PAGE>

     the terms of the Patent  Settlement  Agreement  dated as of January 1, 1995
     among the Company, the University, Arrow and Becton Dickinson.

               Given the continually  deteriorating  financial  condition of the
     Company,  the  Board of  Directors  of the  Company  has  authorized  Bruce
     Hausman, President and Chief Executive Officer of the Company, to negotiate
     the  sale  of  the  Company's   rights  to  various   applications  of  the
     antimicrobial  technology  to certain  sublicensees  of the Company.  These
     applications constitute  substantially all of the assets of the Company. In
     the event that the Company is  successful in selling  substantially  all of
     its  assets,  the  Company  will  either  endeavor  to sell  the  remaining
     corporate shell to a third party or to liquidate any remaining assets.  The
     Company  has not  entered  into any  agreement  to date for the sale of its
     rights to the antimicrobial  technology or any other assets,  and there can
     be no assurance  that the Company will be  successful in entering into such
     agreement.

               In the event that the Company is  unsuccessful  in  negotiating a
     sale of its rights to the antimicrobial technology, the Company may seek to
     transfer  this  technology  back  to the  University  in  exchange  for the
     forgiveness by the University of all of the outstanding amounts owed by the
     Company to the University.

               During the first three quarters of fiscal 1997 and for the fiscal
     years  ended  July  31,  1996  and  1995,  the  Company  received  revenues
     principally  from royalty  payments and  development  fees  pursuant to two
     licenses with  sublicensees of applications of the Company's  antimicrobial
     medical technology, and the one-time royalty payment, both discussed below.
     Additionally,   in  June   1997,   the   Company   received   a   one-time,
     non-refundable, non-creditable fee of $100,000 from Arrow, of which $50,000
     was paid on June 5, 1997 to the  University  pursuant to the terms the 1987
     University License,  for those additional "Fields of Application" set forth
     in the Second  Modification  to License  Agreement  between the Company and
     Arrow dated as of May 30, 1997 (the "Second  Modified Arrow  License"),  as
     described under "Item 5 - Other Information."

               In October 1995, the Company  received a one-time royalty payment
     of  $600,000  from  Arrow,  of which 50% was paid in  November  1995 to the
     University  pursuant  to the  1987  University  License.  Additionally,  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.  See
     "-Results of Operations" and "-Liquidity and Capital Resources."

               Except for those  products  covered by the Second  Modified Arrow
     License,  the Company will continue to receive quarterly  development phase
     payments on the other products  incorporating  the Company's  antimicrobial
     technology  which  the  Company's   sublicensees  are  developing  or  have
     developed which have not yet received clearance from the U.S. Food and Drug
     Administration ("FDA"), or have not yet reached the marketplace, as well as
     quarterly  royalty  payments  from Arrow based on sales of PSI units.  As a
     result  of the  introduction  of the  PSI  to  the  marketplace,  quarterly
     development  phase  payments  from Arrow have been  reduced  from $7,500 to
     $5,000,  which will be partially offset by royalty payments related to such
     product.  The Company will also continue to receive annual minimum  royalty
     payments  in the amount of $15,000  for the first three years of sales from
     Gore based on sales of one product segment which has received FDA clearance
     and has recently been  introduced to the  marketplace.  The minimum  annual
     royalty payment is equal to the annual development 

                                       8
<PAGE>

     payment  the Company  had been  receiving  for such  product  segment.  The
     Company is unable to assess at this time  whether  and to what  extent such
     royalty payments will increase in the future.

     Results of Operations for the Three Months Ended April 30, 1997

               Revenues for the quarter  ended April 30, 1997 totaled  $158,738,
     an increase of 51.3% over the $104,905 in revenues during the corresponding
     period in fiscal 1996 primarily due to factors  described  below.  Revenues
     from  licensing  fees in the third quarter of fiscal 1997 were $85,000,  an
     increase  of 70%  over  the  $50,000  in  licensing  fees  recorded  in the
     corresponding period in fiscal 1996 as a result of the Company's receipt in
     February 1997 of $50,000 from Gore described in note 4 above. Revenues from
     royalties  were  $73,653,  an  increase  of 34% over the $54,706 in royalty
     payments  received during the third quarter of fiscal 1996 as a result of a
     $27,834  payment  made by  Arrow  to the  Company  pursuant  to the  Patent
     Settlement  Agreement  which  provides for certain  royalties to be paid by
     Arrow to the  Company and for such  royalties  to be paid by the Company to
     another party to such Patent  Settlement  Agreement,  a slight  increase in
     royalty  payments  from  Arrow,  of  $820,  of  which  50% is  owed  to the
     University,  related  to sales of PSI  units,  and the  replacement  of one
     annual  development  phase payment with minimum annual royalty  payments of
     $15,000 received from Gore.  Included in revenues from royalties is $30,000
     representing  royalties  earned for the quarter ended April 30, 1997, which
     is derived  from the  $600,000  advance  royalty  payment  received  by the
     Company from Arrow in October 1995. (See notes 2 and 3 above.) The unearned
     portion of  $400,000 is  reflected  as  deferred  revenue in the  liability
     section and the remaining  $200,000 of the $300,000 paid to the  University
     is reflected as deferred royalty costs in the assets section of the balance
     sheets.

               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 1996 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 FDA.

               Expenses  incurred  during the three  months ended April 30, 1997
     totaled  $112,689,  a  decrease  of 14.6%  from the  $132,008  of  expenses
     incurred in the three  months  ended April 30,  1996  primarily  due to the
     reduction  of legal costs  incurred by the Company in  connection  with the
     protection of its intellectual property rights.

               The Company  had a net income of $46,049  for the  quarter  ended
     April 30,  1997,  as  compared  to a  recorded  net loss of  $27,102 in the
     corresponding  period in fiscal 1996 due primarily to the Company's receipt
     in February  1997 of $50,000 from Gore  described in note 4 above,  and the
     reduced legal costs described above.

     Results of Operations for the Nine Months Ended April 30, 1997

               Revenues  for the  nine  months  ended  April  30,  1997  totaled
     $285,132, a decrease of 1.5% from revenues of $289,509 in the corresponding
     period  last year.  This  decrease  in  revenues  was due to the  Company's
     receipt  from Arrow in fiscal  1996 of the  one-time  payment 

                                       9
<PAGE>

     of $75,000 to help fund the payment of legal costs  incurred by the Company
     in  connection  with  the  Patent   Interference   Proceedings  and  Patent
     Settlement  Agreement,  the fixed  royalties  recognized for the first nine
     months  of  fiscal  1997 as a result  of the  modification  to the  license
     agreement  between  the  Company  and Arrow  (see  note 2 to the  financial
     statements),   and  to  a  lesser  extent,  the  replacement  of  quarterly
     development  payments  with nominal  royalty  payments  from Arrow based on
     sales of PSI units.  This  reduction  was  partially  offset by the $50,000
     received from Gore. In addition,  revenues in fiscal 1997 included  $82,905
     as a result of the Patent  Settlement  Agreement which provides for certain
     royalties  to be paid by Arrow to the  Company  and,  in turn,  paid by the
     Company to another party to such agreement, as discussed above.

               Expenses  incurred  during the nine  months  ended April 30, 1997
     totaled  $304,208,  a  decrease  of 16.6%  from the  $364,982  of  expenses
     incurred in the nine months  ended April 30,  1996.  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,  and to a lesser  extent,  the fixed  royalties  recognized for the
     first nine  months of fiscal  1997 as a result of the  modification  to the
     license  agreement  between the  Company  and Arrow,  a portion of which is
     recorded  in expenses  as a payment to the  University.  (See note 2 to the
     financial  statements.)  This  decrease  was  partially  offset by payments
     totaling  $82,905  made by the  Company  to  another  party  to the  Patent
     Settlement Agreement, as discussed above.

               The  Company  sustained a net loss of $19,076 for the nine months
     ended April 30, 1997, a substantial  reduction from the net loss of $75,473
     in the  corresponding  period in 1996. The decrease in the net loss for the
     nine month period is due primarily to the aforementioned reduced expenses.

     Liquidity and Capital Resources

               At April 30, 1997, the Company had a working  capital  deficit of
     approximately  $944,000,  which  represented  an increase of  approximately
     $63,000 in such deficit  from July 31,  1996.  During the nine months ended
     April 30,  1997,  the  Company had a decrease of $37,237 in cash flows from
     operations  principally  due to 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,  and the one-time  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. It is expected that future
     cash flows will be substantially less than reported revenues due to the one
     time  advance  royalty  payment from Arrow  described in note 2 above,  the
     one-time  payment  from Gore  described  in note 4 above  and the  one-time
     payment received from Arrow described below in Part II - Other  Information
     - Item 5. 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 April
     30, 1997, the Company had cash and cash equivalents of $12,689. The Company
     and Arrow entered into a Second Modification to the Arrow License to modify
     certain  terms of the existing  Arrow  License to include  four  additional
     Fields of Application.  In  consideration of the additions to the Fields of
     Application  under the existing Arrow License,  Arrow paid to the Company a
     one-time, non-refundable,  non-creditable fee of $100,000, of which $50,000
     was paid on June 5,  1997 to the  University  pursuant  to the terms of the
     1987 University License.

                                       10
<PAGE>

               The Company  currently owes the University  $168,616 (see notes 2
     and 3 to the financial  statements).  The Company has recently negotiated a
     sublicense,  which is awaiting  approval by the University  pursuant to the
     terms of the 1987 University  License,  with a glove  manufacturer  for the
     right to sublicense the Company's antimicrobial glove technology. The terms
     of the sublicense will include  negotiated  royalty rates based upon future
     sales,  if any,  of  gloves  incorporating  the  antimicrobial  technology.
     Additionally,  the Company is  currently  negotiating  with  certain of its
     sublicensees  for the sale of the  certain  other  rights of the Company to
     various applications of the antimicrobial technology. In the event that the
     Company is successful in selling its rights to this technology, the Company
     would use the funds  received  from such sale to  satisfy  its  outstanding
     financial obligations,  including undisputed amounts owed to the University
     and the University's  patent counsel.  There can be no assurance,  however,
     that  the  Company  will  be  successful  in  selling  its  rights  to  the
     antimicrobial technology to a third party or sublicensing its rights to the
     antimicrobial glove technology.

               In the event that the Company  does not receive  approval for the
     negotiated  sublicense for the rights to its antimicrobial glove technology
     from the  University or is  unsuccessful  in  negotiating a sale of certain
     other rights of the Company to various  applications  of the  antimicrobial
     technology,  the Company may seek to transfer this  technology  back to the
     University in exchange for the  forgiveness by the University of all of the
     outstanding amounts owed by the Company 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.  There
     can be no  assurance  that  the  Company  will  be  successful  in  raising
     additional funds or that the Company will continue as a going concern.  The
     report of the Company's  independent  auditors on the  Company's  financial
     statements for the fiscal years ended July 31, 1996, 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, 1996,  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,   the  Company  is  attempting  to  sell  its  rights  to  various
     applications of the  antimicrobial  technology,  as discussed above. In any
     event,  the Company is continuing  its 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.
     Furthermore,   the  Company   will   continue   its   attempts  to  curtail
     expenditures. There can be no assurance that the Company will be successful
     in any of the foregoing.

               In the event that the Company is  unsuccessful  in its attempt to
     sell its rights to the antimicrobial  technology,  sublicense its rights to
     the  antimicrobial  glove  technology or to transfer such technology to the
     University,  the Company does not have any other plans to raise  additional
     capital and there can be no assurance that it will be able to continue as a
     going  concern  or  avoid  liquidation,   even  with  further  cost-cutting
     measures.

               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 April 1997, the Company extended the expiration dates of
     its Class A and Class B  Warrants.  The  expiration  date of the  Company's
     Class A Warrants  was extended  from April 30, 1997 to 5:00 p.m.  (New York
     City time) on December 31, 1997;  the exerise price of the Class A Warrants
     remains $0.25.  The expiration 

                                       11
<PAGE>

     date of the  Company's  Class B Warrants was extended from October 31, 1997
     to 5:00 p.m.  (New York City time) on December 31, 1997;  the exerise price
     of the Company's Class B Warrants remains $1.00.  Under Federal  securities
     laws,  the Company is unable to accept the exercise of any Class A or Class
     B Warrants until such time, if any, as the Company's  independent  auditors
     may express an opinion on the Company's financial statements,  as discussed
     above.  At such time, if any, as the Company may accept such exercise,  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.

     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 had, 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")  had
     notified the Company,  in response to each of these  submissions,  that the
     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  had  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.

               On March 11,  1996,  Dr.  Shanta M.  Modak of the  Department  of
     Surgery, Columbia University,  where the antimicrobial glove technology was
     developed,  and Dr. Louis R.M. Del Guercio, the Company's Chairman,  made a
     presentation,  on the Company's  behalf,  concerning  the Company's  gloves
     before the FDA's  Independent  Advisory  Committee,  General  Hospital  and
     Personal Use Devices Panel, Center for Devices and Radiological Health. 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.  While the Panel
     did not make any  recommendation  to the FDA at the March 11, 1996 meeting,
     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.  Since the March 11,  1996
     meeting,  the Company and Dr. Modak have  remained in contact with the ODE,
     particularly with Mr. Terrell Cunningham, Nurse Consultant of the ODE.

               By letter dated  February  27, 1997,  the Company was informed by
     Mr. Ulatowski of the ODE that, should the Company wish to continue with its
     efforts to bring its  antimicrobial  gloves to market,  the ODE  recommends
     that the  Company  submit a new  510(k),  with the focus of the  submission
     directed at the recommendations outlined in Mr. Ulatowski's letter relating
     to certain labeling claims and additional testing.

                  At present,  the Company  does not have  sufficient  financial
     resources to fund additional clinical testing and to prepare the new 510(k)
     submission necessary to ready its

                                       12
<PAGE>

     antimicrobial  gloves  for the  marketplace.  In April  1997,  the  Company
     entered into a letter of intent agreement,  as described below, relating to
     a sublicense agreement with a glove manufacturer concerning the patents for
     the antimicroibial  glove technology  currently owned by the University and
     licensed to the Company.  The Company and the glove  manufacturer  recently
     executed such sublicense agreement, subject to appproval by the University.
     However,  there can be no assurance that the Company will receive  approval
     from the University for such sublicense.


     PART II - OTHER INFORMATION

     Item 5 - Other Information

          (a)  Nalpak  Industries,  Inc,  and the  Company  Executed a Letter of
               Intent  Agreement  Concerning the Company's  Antimicrobial  Glove
               Technology

              In April 1997, the Company and Nalpak Industries, Inc. ("Nalpak"),
              a  medical  glove  manufacturer,  entered  into a letter of intent
              agreement concerning the patents which are licensed to the Company
              from the University  relating to antimicrobial  latex  examination
              and  surgeons'  gloves used to prevent or reduce  infection and to
              inhibit the transmission of infectious diseases.

              Nalpak has  received an  expression  of interest  from a financing
              partner (collectively,  the "Medpac Group") to sublicense from the
              Company  the  exclusive  worldwide  rights  to  the  antimicrobial
              patents for use with  medical  examination  and  surgeons'  gloves
              currently  owned by the  University  and  licensed to the Company.
              (Due to the Company's extremely limited financial  resources,  the
              Company is unable at this time to cover the costs  associated with
              obtaining  FDA  clearance  to  market  its   antimicrobial   latex
              examination  and  surgeons'  gloves  in the  United  States.)  The
              execution  of such Letter of Intent  Agreement  by the Company and
              Nalpak does not create any legally binding obligations on the part
              of either party, but is intended solely as an outline of the major
              terms upon which the Medpac  Group  intends to  proceed,  and as a
              guideline   for  the   preparation   of   documentation   for  the
              transaction. There can be no assurance that the Company and Nalpak
              will  be  successful  in  entering  into a  definitive  sublicense
              agreement.

          (b)  Subsequent  Event -  Second  Modification  to  License  Agreement
               between the Company and Arrow International, Inc.

              The Company and Arrow  entered into a Second  Modification  to the
              Arrow  License  to  modify  certain  terms of the  existing  Arrow
              License to  include  four  additional  Fields of  Application.  In
              consideration for the additions to the Fields of Application under
              the existing Arrow License,  Arrow paid to the Company a one-time,
              non-refundable,  non-creditable fee of $100,000,  of which $50,000
              was paid on June 5, 1997 to the  University  pursuant to the terms
              of the 1987 University License. Further to the terms of the Second
              Modified Arrow License,  the Company will be entitled to receive a
              running  royalty  rate of 5% percent of unit net sales of products
              sold by Arrow  which  are  included  in the  additional  Fields of
              Application.  For  a  licensed  product  or  products  within  the
              additional  Fields of Application that is sold together with other

                                       13
<PAGE>

              non-licensed  products  in a single  package  to a  customer,  the
              running royalty rate will apply only to the  established  unit net
              sales price of the  licensed  product or products.  Moreover,  the
              Company  has  agreed to waive,  for the first  three  years of the
              Second Modified Arrow License, development fees and minimum annual
              royalties  due  for  products  sold by  Arrow  falling  under  the
              additional  Fields of  Application.  After the third full year the
              Second  Modified  Arrow  License  is  effective,   Arrow  will  be
              obligated to pay the Company  development fees of $2,500,  payable
              quarterly  in  advance,  for  each  of the  additional  Fields  of
              Application,  during their  development phase and prior to Arrow's
              sales of product in each of the additional  Fields of Application.
              Arrow's  obligation  to pay  development  fees  will  cease in the
              quarter  following  Arrow's  sale  of a  product  in  each  of the
              additional  Fields of  Application.  After  such time as a sale is
              made, Arrow will pay the Company the running royalty rate of 5% of
              net sales, and at a minimum, shall pay a minimum royalty of $2,500
              payable quarterly in advance, for each of the additional Fields of
              Application.  Except as expressly  modified in the Second Modified
              Arrow  License,  all terms and  conditions  of the existing  Arrow
              License and the terms of the first Modified Arrow License,  remain
              in full force and effect.  In addition,  the Second Modified Arrow
              License  does  not  modify  or  allter  the  terms  of the  Patent
              Settlement  Agreement  dated as of  January  1,  1995,  among  the
              University, the Company and Becton Dickinson and Company.


     Item 6 - Exhibits and Reports on Form 8-K

     (a)      Exhibits

               10.1 Letter of  Intent  dated as of April 15,  1997  between  the
                    Company and Nalpak Industries, Inc.

               10.2 Amendment No. 9 to Warrant  Agreement  dated as of April 22,
                    1997 between the Company and Continental  Stock Transfer and
                    Trust Company.

               10.3 Sixth  Lease  Extension  Agreement  dated as of May 8,  1997
                    between the Company and I.C.E. Associates.

               10.4 Second Modification to License Agreement dated as of May 30,
                    1997 between the Company and Arrow International, Inc.

     (b)      Reports on Form 8-K

               No reports on Form 8-K were filed during the quarter  ended April
               30 1997.

                                       14

<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:  June 16, 1997             By:/s/Bruce Hausman, Esq.
                                         ----------------------
                                         BRUCE HAUSMAN, ESQ.
                                         President and Chief Executive
                                         Officer



     Date:  June 16, 1997             By:/s/Herbert J. Mitschele, Jr.
                                         ----------------------------
                                         HERBERT J. MITSCHELE, JR.
                                         Treasurer, Secretary
                                         and Chief Financial Officer