<PAGE>

                       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, 1998
                         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.)

                          7777 Glades Road - Suite 214
                              Boca Raton, FL 33434
                    (Address of Principal Executive Offices)
                                 (561) 470-6005
              (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 30, 1998

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 January 31, 1998
                (Unaudited) and July 31, 1997.                            1-2

           (b)  Condensed statements of operations and deficit
                accumulated during the development stage for
                the three and six month periods ended January 31, 1998
                (Unaudited) and January 31, 1997 (Unaudited), and
                for the period July 28, 1983 (Date of Incorporation)
                to January 31, 1998. (Unaudited)                            3

           (c)  Condensed statements of cash flows for the six months
                ended January 31, 1998 (Unaudited) and January 31,
                1997 (Unaudited), and for the period July 28, 1983
                (Date of Incorporation) to January 31, 1998 (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.
                                 BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         January 31,            July 31,
                                                           1998                  1997
                                                        ------------         ------------
                                                        (unaudited)               *
<S>                                                     <C>                  <C>
ASSETS

Current assets
  Cash and cash equivalents                             $     4,075          $    23,522
  Accounts receivable - other                                22,943               19,895
  Prepaid royalty                                            85,000               85,000
                                                        -----------          -----------

    Total current assets                                    112,018              128,417
                                                        -----------          -----------
Office equipment (net of accumulated
depreciation)                                                  --                   --
                                                        -----------          -----------
Patents, net of accumulated amortization                       --                   --
Prepaid royalty                                             101,250              143,750
Other assets                                                  3,375                3,375
                                                        -----------          -----------

                                                            104,625              147,125
                                                        -----------          -----------
                                                        $   216,643          $   275,542
                                                        ===========          ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
  Accounts payable and accrued expenses                 $   900,644          $   882,596
  Advanced royalty payments                                 170,000              170,000
                                                        -----------          -----------
                                                          1,070,644            1,052,596
                                                        -----------          -----------
Advanced royalty payments                                   202,500              287,500
                                                        -----------          -----------

Stockholders' deficit
  Common stock, $.01 par value;
    authorized 20,000,000 shares; 8,632,699,
    shares issued and outstanding, respectively              86,327               86,327
  Additional paid-in capital                              6,816,369            6,816,369
  Retained deficit                                       (7,959,197)          (7,967,250)
                                                        -----------          -----------

      Total stockholders' deficit                        (1,056,501)          (1,064,554)
                                                        -----------          -----------

                                                        $   216,643          $   275,542
                                                        ===========          ===========
</TABLE>

*  Condensed from audited financial statements
            See accompanying notes to condensed financial statements

                                        2
<PAGE>

                          DALTEX MEDICAL SCIENCES, INC.
                             STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
                                                                                                                  For the period 
                                                                                                                   July 28, 1983 
                                             For the Three Months Ended          For the Six Months Ended             (Date of    
                                                    January 31,                         January 31,                 Incorporation)
                                           -----------------------------       ----------------------------         to January 31,
                                              1998               1997             1998             1997                1998
                                           -----------       -----------       -----------      -----------         --------------
<S>                                        <C>               <C>               <C>              <C>                 <C>
Revenues
  License fees, grants and royalties       $    75,409       $    66,282       $   153,653      $   126,137         $ 2,841,460
  Interest and other income                          0                90             2,000              257           1,764,907
  Sale of technology                                                                                                    300,000
  Sales                                                                                                                 208,440
                                           -----------       -----------       -----------      -----------         -----------
                                                75,409            66,372           155,653          126,394           5,114,807
                                           -----------       -----------       -----------      -----------         -----------
Expenses incurred during the
  development stage
  Cost of sales                                   --                --                --               --               313,243
  Research and development                        --                --                --               --             3,335,251
  General and administrative expenses           68,230            96,814           147,601          191,519           9,425,511
                                           -----------       -----------       -----------      -----------         -----------
                                                68,230            96,814           147,601          191,519          13,074,005
                                           -----------       -----------       -----------      -----------         -----------
Net income (loss)                          $     7,179       $   (30,442)      $     8,052      $   (65,125)        $(7,959,198)
                                           ===========       ===========       ===========      ===========         ===========

Net income (loss) per share                $      0.00       $     (0.00)      $      0.00      $     (0.01)        $     (1.02)
                                           ===========       ===========       ===========      ===========         ===========

Weighted average shares outstanding          8,633,000         8,633,000         8,633,000        8,633,000           7,829,300
                                           ===========       ===========       ===========      ===========         ===========
</TABLE>

            See accompanying notes to condensed financial statements

                                        3
<PAGE>

                          DALTEX MEDICAL SCIENCES, INC.
                            STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                                      For the period  
                                                                                                       July 28, 1983  
                                                                  For the Six Months Ended                (Date of    
                                                                           January 31,                 Incorporation) 
                                                             ---------------------------------         to January 31,
                                                                 1998                 1997                 1998
                                                             -------------        ------------        ----------------
<S>                                                          <C>                  <C>                 <C>
Cash flows from operating activities:
  Net income (loss)                                          $     8,053          $   (65,125)         $(7,959,197)
  Adjustments to reconcile net income to
    net cash provided by operating activities:
      Noncash compensation charges                                                                         889,130
      Depreciation and amortization                                                                        310,234
    Write off patents                                                                                      105,221
    Write off inventory and advance
    payments on inventory                                                                                  115,048
    Recovery of bad debts - officer
    Loss on disposal of equipment                                                                           53,386
    Loss on disposal U.S. Government
    obligations & other investments                                                                          2,999
    Forgiveness of stock subscription
    receivable                                                                                               1,500

Changes in assets and liabilities:
  Accounts receivable                                             (3,048)                                  (22,943)
  Increase in inventory                                                                                    (54,435)
  Decrease in advance payments for inventory                                                               (60,613)
  (Increase) decrease in prepaid royalty                          42,500               30,000             (186,250)
  Accounts payable accrued expenses                               18,048               21,882              902,966
  Advance royalty payments                                       (85,000)             (15,000)             372,500
                                                             -----------          -----------          -----------
Net cash provided by (used in) operations                        (19,447)             (28,243)          (5,530,454)
                                                             -----------          -----------          -----------


Cash flows provided by investing activities:
  Purchase of short terms investments                                                                   (8,813,987)
  Maturities of short term investments                                                                   8,810,988
  Purchase of office equipment                                                                            (159,370)
  Purchase of patents                                                                                     (171,750)
  Increase in due from officer                                                                            (110,601)
  Increase in other assets                                                                                 (30,095)
                                                             -----------          -----------          -----------
Net cash provided by (used in) investing activities:                   0                    0             (474,815)
                                                             -----------          -----------          -----------

Cash flows provided by financing activities
Proceeds from sale of common stock
and warrants                                                                                             6,009,344
                                                             -----------          -----------          -----------
Net cash provided by financing activities                              0                    0            6,009,344
                                                             -----------          -----------          -----------

Net increase  (decrease) in cash and
cash equivalents                                                 (19,447)             (28,243)               4,075
Cash and cash equivalents, beginning of
period                                                            23,522               49,926
                                                             -----------          -----------          -----------
Cash and cash equivalents, end of period                     $     4,075          $    21,683          $     4,075
                                                             ===========          ===========          ===========

Supplemental disclosure of non-cash
investing and financing activities:

Common stock issued in exchange
for services                                                 $      --            $      --            $   889,130
                                                             ===========          ===========          ===========
</TABLE>

            See accompanying notes to condensed financial statements

                                        4
<PAGE>

      NOTES TO CONDENSED FINANCIAL STATEMENTS-January 31, 1998 (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. The preparation of
financial statements in conformity with generally accepted accounting principles
requires management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results could differ
from these estimates.

         The accompanying unaudited condensed financial statements, which are
for interim periods, do not include all disclosures provided in the
annual financial statements. These unaudited condensed financial statements
should be read in conjunction with the financial statements and the footnotes
thereto contained in the Annual Report on Form 10-KSB for the year ended July
31, 1997 as filed with the Securities and Exchange Commission. The July 31, 1997
consolidated balance sheet was derived from audited financial statements, but
does not include all disclosures required by generally accepted accounting
principles.

      In the opinion of the Company, the accompanying unaudited condensed
financial statements contain all adjustments (which are of a normal recurring
nature) necessary for a fair presentation of the financial statements. The
results of operations for the six months ended January 31, 1998 are not
necessarily indicative of the results to be expected for the full year.

      Going Concern - The report of the Company's independent accountants on
their audit of the Company's July 31, 1997 consolidated financial statements
contained uncertainties relating to the Company's ability to continue as a going
concern. The Company has incurred a loss in the six months ended January 31,
1998 and uncertainties exist with regard to the Company's ability to generate
sufficient cash flows from operations or other sources to meet existing
obligations, which gives rise to doubts about the Company's ability to continue
as a going concern. These financial statements do not include any adjustments
that might result from the outcome of this uncertainty.
<PAGE>

     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 developmental 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 inception in July 1983, the Company has derived a total of
approximately $3,349,900 in revenues to date from initial developmental phase
fees as part of licensing or cooperative development arrangements, royalty
payments on sales of licensed antimicrobial products from sublicensees, SBIR
grant revenue related to some of its pharmaceutical or device technologies,
initial sales of its antimicrobial latex examination gloves, and the sale of two
patents and know-how relating to the prevention and treatment of atopic
diseases. In 1984, the Company successfully completed an initial public offering
to raise working capital. Since that time, management of the Company had been
working on a number of development projects which involve experimental and
unproven technologies, some of which have and may require many years and
substantial expenditures to complete, and which may be unsuccessful. Since March
1, 1994 and continuing to date, research and development efforts have been
Substantially discontinued, or in most cases put on hold, 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 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 complete its research and
development program or its applications for necessary regulatory clearances and
approvals, or to 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. The Company did not have any
sales of its technologies or its antimicrobial medical gloves. 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.
<PAGE>

         The report of the Company's independent auditors on the Company's
financial statements includes an explanatory paragraph which states that the
Company's recurring losses and working capital and total stockholders' deficits
raise substantial doubt about the Company's ability to continue as a going
concern and precludes and has precluded the expression of an opinion on the
Company's financial statements as of and for the years ended July 31, 1997, 1996
and 1995. The financial statements do not include any adjustments that might
result from the outcome of this uncertainty. Because of the continued working
capital deficit, management's plan in order to continue in operation for the
next year is to continue to attempt to raise additional capital, while
attempting to develop, market, license and sell its products, including its
antimicrobial latex surgical and examination gloves, to establish positive cash
flow for the Company. Furthermore, the Company will attempt to continue to
curtail expenditures such as payroll, research and development projects and
other discretionary expenditures, to the extent possible. The Company does not
have any commitments to raise additional capital in the future, and there can be
no assurance that the Company will be successful in any of its capital-raising
efforts or that the Company can avoid liquidation.

         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 License Agreement. 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.

      In May 1997, the Company entered in to a second license modification
agreement with a manufacturer and marketer of catheters and cardiovascular
supplies. In connection with the modifications the Company received a one-time,
non-refundable, non-creditable fee of $100,000 of which $50,000 was paid to a
university. Revenue, as well as the expense for the amounts paid to the
university, are being recognized ratably over the term of the agreement. In
consideration for this fee the Company waived development fees and mininum
annual royalties due on products sold by the licensee for the specific products
added to the agreement under the second license modification for a period of
three years. After three years the licensee shall pay development fees of $2,500
per quarter payable in advance during the development phase. After such time as
a sale is made the licensee shall pay a running royalty as defined by the
agreement, and at a minimum $2,500 payable quarterly in advance.


      Results of Operations for the Three Months Ended January 31, 1998 as
compared to January 31, 1997.

From inception through January 31, 1998, the Company's principal sources of
revenue have consisted of interest earned on short-term investments purchased
with the proceeds from the 1984 public sale of Units, license fees, royalties,
sale of patents and grants. The Company plans to attempt to raise additional
capital while continuing to utilize cash, together with limited revenues from
license fees, royalties from sales of licensed products by sublicensees, to fund
operations in fiscal 1997.

         During the three months ended January 31, 1998 and 1997, revenues from
license fees and royalties were $75,409 and $66,282, respectively. All of the
Company's revenues for the three months ended January 31, 1998 and 1997 were
derived from license fees and royalties received from its two sublicensees.
<PAGE>

         Operating expenses for the three months ended January 31, 1998
consisted principally of general and administrative expenses. General and
administrative expenses in the three months ended January 31, 1998 and 1997 were
$68,230, and $96,814, respectively. General and administrative expenses have
decreased by $28,584 from the three months ended January 31, 1997 to the three
months ended January 31, 1998 due to continuing inactivity of the Company. The
Company expects this trend to continue thru 1998.

         The Company had net income of $7,179 for the three months ended January
31, 1998, an increase from the net losses of $30,442 for the three months ended
January 31, 1997.

Results of Operations for the Six Months Ended January 31, 1998 as compared to
January 31, 1997.

         During the six months ended January 31, 1998 and 1997, revenues from
license fees and royalties were $153,653 and $126,137, respectively. All of the
Company's revenues for the six months ended January 31, 1998 and 1997 were
derived from license fees and royalties received from its two sublicensees.

         Operating expenses for the six months ended January 31, 1998 consisted
principally of general and administrative expenses. General and administrative
expenses in the six months ended January 31, 1998 and 1997 were $147,601, and
$191,519, respectively. General and administrative expenses have decreased by
$43,918 from 1997 to 1998 due to continuing inactivity of the Company. The
Company expects this trend to continue thru 1998.

         The Company had net income of $8,052 for the six months ended January
31, 1998, a decrease from the net losses of $65,125 for the six months ended
January 31, 1997.

LIQUIDITY AND CAPITAL RESOURCES

         At January 31, 1998, the Company had cash and cash equivalents of
approximately $4,075, representing a decrease of approximately $19,447 over the
July 31, 1997 balance of cash and cash equivalents. This decrease was
principally due to the Company's reduction of liabilities. During the six months
ended January 31, 1998, the Company used net cash for operations of $19,447 as
compared to $28,243 in cash generated by operations for the six months ended
January 31, 1997. This change in cash flows from operations was primarily due to
a net reduction in advance royalty payments. In addition, the Company had a
working capital deficit of $958,626 as of January 31, 1998. The Company is still
in the developmental stage, and its business operations have only generated a
nominal amount of revenues to date. The payment received from Arrow described
above has enabled the Company to satisfy certain current and past due
obligations to its creditors and to make substantial payments to the University
as required under various licenses with the University. Although the Company has
not satisfied all of its obligations to the University or the University's
patent counsel, the Company is continuing its efforts to resolve such matters.
The remaining funds have been, and will continue to be, used for working
capital.
<PAGE>

         Management has continued to curtail expenditures in many areas,
including research and development projects and discretionary expenditures, in
order to stay in business and to focus the Company's extremely limited resources
in what it believes are the most promising areas of the Company's business in
the near term. However, there can be no assurance that the Company will have
sufficient funds to carry out these plans or to remain in business. In addition,
further cost saving measures may be impossible and cost savings measures in the
areas of research and development, regulatory clearances and marketing and sales
may have an adverse effect on the Company's future operations. If the Company is
unsuccessful in raising additional capital during fiscal year 1998, if there is
no significant increase in license fees or royalties from sales of sublicensed
products or if the University revokes licenses granted to the Company, the
Company may be unable 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 required, as to which there can be no assurance. However, there can
be no assurance that the Company will be successful in meeting its immediate or
long-term liquidity requirements or that the Company can continue as a
going-concern.
<PAGE>

     PART II - OTHER INFORMATION

     Item 5 - Other Information




     Item 6 - Exhibits and Reports on Form 8-K

     (a)      Exhibits



     (b)      Reports on Form 8-K

              No reports on Form 8-K were filed during the quarter ended
January 31, 1998.



                                   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:  July 29, 1998             By: /s/ Bruce Hausman, Esq.
                                         -----------------------------
                                         BRUCE HAUSMAN, ESQ.
                                         President and Chief Executive
                                         Officer