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 October 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 December 6, 1996
Common Stock par value $.01 8,632,699
per share
<PAGE>
DALTEX MEDICAL SCIENCES, INC.
INDEX
Page
PART 1 - FINANCIAL INFORMATION
Item l - Financial Statements
(a) Condensed balance sheets as of October 31,
1996 (Unaudited) and July 31, 1996 3-4
(b) Condensed statements of operations and
deficit accumulated during the development
stage for the three months ended October 31,
1996 (Unaudited) and October 31, 1995
(Unaudited), and for the period July 28, 1983
(Date of incorporation) to October 31, 1996
(Unaudited) 5
(c) Condensed statements of cash flows for the
three months ended October 31, 1996
(Unaudited) and October 31, 1995 (Unaudited),
and for the period July 28, 1983 (Date of
Incorporation) to October 31, 1996
(Unaudited) 6
(d) Notes to condensed financial statements
(Unaudited) 7-9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10-14
PART II - OTHER INFORMATION
Item 5 - Other Information 14
Item 6 - Exhibits and Reports on Form 8-K 14
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
Daltex Medical Sciences, Inc.
(A Development Stage Enterprise)
Condensed Balance Sheets
October 31, July 31,
1996 1996 (A)
Assets
Current assets:
Cash and cash equivalents $ 19,273 $ 49,926
Other receivables 15,319 15,319
Prepaid royalty 60,000 60,000
------- -------
Total current assets 94,592 125,245
Net plant and equipment, at cost __ __
Patents, net of accumulated amortization of
$134,246 at October 31, 1996
and $134,246 at July 31, 1996 -- __
Other assets, net 3,375 3,375
Deferred royalty costs (note 2) 170,000 185,000
------- -------
$267,967 $313,620
======== ========
See accompanying notes to condensed financial statements.
(A) Amounts at July 31, 1996, are from audited financial statements.
3
<PAGE>
Daltex Medical Sciences, Inc.
(A Development Stage Enterprise)
Condensed Balance Sheets
<TABLE>
<CAPTION>
October 31,
1996 July 31,
(Unaudited) 1996 (A)
<S> <C> <C>
Liabilities and Stockholders' Deficiency
Current Liabilities:
Accounts payable and accrued expenses (note 3) $ 904,972 $ 885,942
Advanced royalty payments (note 2) 120,000 120,000
------------- -------------
Total current liabilities $ 1,024,972 $ 1,005,942
------------- -------------
Advanced royalty payments (note 2) 340,000 370,000
------------- -------------
Stockholders' deficiency:
Common stock, par value $.01 per share
Authorized 20,000,000 shares; issued
8,632,699 shares at October 31, 1996 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
development stage (7,999,701) (7,965,018)
---------- ----------
Total stockholders' deficiency (1,097,005) (1,062,322)
------------- -------------
$ 267,967 $ 313,620
============= =============
</TABLE>
See accompanying notes to condensed financial statements
(A) Amounts at July 31, 1996, 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
(Date of
Incorporation)
October 31, October 31, To Oct. 31,
1996 1995 1996
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Revenues:
Sales - Patents and related technology -- -- $ 300,000
Sales - Gloves -- -- 208,440
Interest and other income 167 -- 1,712,728
License fees & royalties 59,855 49,224 2,429,951
------------ ------------ ------------
Total revenues 60,022 49,224 4,651,119
------------ ------------ ------------
Expenses incurred in the development stage:
Cost of sales -- -- 313,243
Research & development -- -- 3,335,251
General & administrative 94,705 105,106 9,002,326
------------ ------------ ------------
Total expenses incurred in the
development stage 94,705 105,106 12,650,820
------------ ------------ ------------
Net loss (34,683) (55,882) (7,999,701)
------------ ------------ ------------
Deficit accumulated during the development stage:
Beginning of period $ (7,965,018) $ (7,832,774) --
------------ ------------ ------------
End of period $ (7,999,701) $ (7,888,656) $ (7,999,701)
============ ============ ============
Net loss per common share (.01) (.01) (1.03)
============ ============ ============
Weighted average number of
shares outstanding 8,633,000 8,633,000 7,760,000
============ ============ ============
</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)
October 31, October 31, to October 31,
1996 1995 1996
(Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C>
Cash flows from operations:
Net loss $ (34,683) $ (55,882) $(7,999,701)
Non-cash expenses included in net loss:
Depreciation and amortization -- 5,697 310,234
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 -- 43,448 (15,319)
(Increase) decrease in deferred royalty costs 15,000 (290,000) (230,000)
Increase in accounts payable & accrued expenses 19,030 213,825 907,294
Increase (decrease) in advance
development & royalty payments (30,000) 580,000 460,000
------------- -------------- --------------
Net cash flows of operations (30,653) 497,088 (5,515,256)
------------- -------------- --------------
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 patents -- -- (171,750)
(Increase) in due from officer & stockholder -- -- (110,601)
(Purchase) 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 (30,653) 497,088 19,273
Cash, including certificates of deposit:
Beginning of period 49,926 10,862 --
----------- ----------- ------------
End of period $ 19,273 $ 507,950 $ 19,273
============= ============= =============
</TABLE>
See accompanying notes to condensed financial statements.
6
<PAGE>
NOTES TO CONDENSED FINANCIAL STATEMENTS-October 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) Advanced Royalty Payment
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 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 to 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. 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 October 31, 1996. 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 license agreement (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 a certain Patent Settlement Agreement of
January 1, 1995, remain in full force and effect. In addition, 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.
7
<PAGE>
(3) License Agreement and Research Agreement
The Company currently has various license 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 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. On December 3, 1996 the Company paid the
University $2,691.88, representing the University's 50% share of
payments received by the Company from Arrow representing royalty
payments (based on sales of PSI units sold by Arrow during Arrow's
quarter ended August 31, 1996) and quarterly development phase payments
on those products which Arrow has developed or is developing
incorporating the Company's antimicrobial technology.
The Company currently owes the University $165,706 for the University's
past due share of sublicensing and royalty payments received by the
Company through December 1994, and $22,500 for the University's share
of the advance development and royalty payments received by a
sublicensee described in note 4 below.
Moreover, the Company has been billed $630,168 as of October 31, 1996
by the University's patent counsel for patent work undertaken under 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 October 31, 1996
on the accompanying condensed balance sheet. Included in this amount is
approximately $ 120,820, representing charges in connection with the
Company's protection of its intellectual property rights through
domestic and foreign patent filings and related matters. Also included
in this amount is approximately $108,560, representing charges in
connection with the two AIDS-related patents and the patent application
for antimicrobially treated condoms which the Company and the
University have agreed in principle to reassign to the University, due
to the fact that the Company has been unsuccessful in licensing these
technologies to third parties. Finally, approximately $401,000 is
included in this amount, 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 attempting 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 with the University, there can be
no assurance that the Company will be successful in reaching a
solution.
8
<PAGE>
(4) Subsequent Event
In November 1996, the Company received an advance payment of $45,000
from one of its sublicensees, of which $22,500 is due the University
pursuant to the terms of a 1987 license agreement between the Company
and the University. Such $45,000 payment to the Company consisted of
(i) $15,000 in advance royalty payments against minimum royalties due
the Company based on sales of one segment of antimicrobially treated
surgical patches recently introduced to the marketplace by such
sublicensee; and (ii) $30,000 in advance development phase payments for
two additional product segments incorporating the Company's
antimicrobial technology. Such advance essentially represented payments
due to the Company in the Company's third quarter in fiscal 1997. The
Company has no agreement with the sublicensee regarding future advance
payments.
9
<PAGE>
Item 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The Company is in the development stage with the objective of
developing and commercializing certain cost-reducing medical device and
pharmaceutical technologies. Since March 1, 1994 and continuing to date,
research and development efforts have been extremely limited, or in most cases
put on hold. 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
quarter 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 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 recently authorized Bruce Hausman, the
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 any antimicrobial technology or any other assets, and there can be no
assurance that the Company will be successful in entering into any 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 quarter of fiscal 1997 and for the fiscal years ended
July 31, 1996 and 1995, 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 an advance payment
from one of its sublicensees and the one-time royalty payment, both discussed
below.
10
<PAGE>
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 between the Company and the University.
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."
The Company will continue to receive 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 FDA clearance or have not yet reached the marketplace as well as
quarterly royalty payments from Arrow based on sales of PSI systems, and
quarterly royalty payments from the Company's other sublicensee based on sales
of one product segment which has received FDA clearance and has very recently
been introduced to the marketplace. As a result of the Company's receipt in
November 1996 of an advance, annual minimum royalty payment of $15,000
(described in note 4 above), pursuant to the terms of a definitive license
agreement between the Company and such sublicensee entered into in May 1992,
annual development phase payments from such sublicensee for one product segment
application have been replaced by royalty payments. 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 October 31, 1996
Revenues for the quarter ended October 31, 1996 totalled $60,022, an
increase of 21.9% over the $49,224 in revenues during the corresponding period
in the previous fiscal year. Revenues from licensing fees in the first quarter
of fiscal 1997 were $5,000, a decrease from the $7,500 in revenues from
licensing fees in the first quarter of fiscal 1996 due to the replacement of one
development phase payment with nominal royalty payments. Revenues from royalties
were $54,855, an increase of 31.4% over the $41,722 in royalty payments received
during the first quarter of fiscal 1996 as the result of a $24,471 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, and a slight increase in royalty payments from Arrow (of $384, of
which 50% was paid to the University on December 3, 1996) based on limited sales
by Arrow of PSI systems. Included in revenues from royalties is $30,000
representing royalties earned for the quarter ended October 31, 1996 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 $460,000 is
reflected as deferred revenue in the liability section and the remaining
$230,000 of the $300,000 paid to the University in November 1995 is reflected as
deferred royalty costs in the asset 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
11
<PAGE>
the benefit of a domestic sales base or regulatory clearance by the U.S. Food
and Drug Administration ("FDA").
Expenses incurred during the three months ended October 31, 1996
totalled $94,705, a decrease of 9.9% from the $105,106 of expenses incurred in
the three months ended October 31, 1995. This decrease was due to the reduction
of legal costs incurred by the Company in connection with the protection of its
intellectual property rights.
The Company sustained a net loss of $34,683 in the quarter ended
October 31, 1996, a decrease of 37.9% from the net loss of $55,882 in the first
quarter of fiscal 1995, primarily due to the aforementioned factors.
Liquidity and Capital Resources
At October 31, 1996, the Company had a working capital deficit of
approximately $930,000, which represented an increase of approximately $50,000
in such deficit from July 31, 1996. During the three months ended October 31,
1996, the Company had a decrease of $30,653 in cash flows from operations
principally due to the receipt of a one time, five year advance royalty payment
of $600,000 from Arrow in 1995, as described above. It is expected that future
cash flows will be substantially less than reported revenues due to the one time
advance royalty payment from Arrow. This one-time payment from Arrow had enabled
the Company to satisfy certain 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. All remaining funds have been, and will
continue to be, used for working capital. At October 31, 1996, the Company had
cash and cash equivalents of approximately $19,273.
In November 1996, the Company received advance royalty and development
phase payments from another of its sublicensees as described in note 4 above.
The Company currently owes the University $188,206. (See notes 2, 3 and
4 to the financial statements.) It is expected that future cash flows will be
substantially less than reported revenues due to the one time advance royalty
payment from Arrow. The Company is currently negotiating with certain of its
sublicensees for the sale of the Company's rights 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 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.
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
12
<PAGE>
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 developmental 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 attempting 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 to attempt 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 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 raise additional
capital in the future or continue as a going concern. The Company may not be
able to continue as a going concern or avoid liquidation, even with further
cost-cutting measures.
Regulatory Proceedings
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 date, amended and resubmitted
the 510(k) several times and otherwise contacted, in writing and in person, the
FDA Office of Device Evaluation ("ODE") in an effort to obtain a determination
of "substantial equivalence" to previously marketed latex examination gloves.
The ODE has 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 has further stated, in denying market clearance, that no accepted
scientific methods presently exist for assessment of the effectiveness of
antiviral activity for topical antimicrobials, particularly under glove-use
conditions.
On September 26, 1995, Mr. Ulatowski of the ODE informed Dr. Del
Guercio that pursuant to the Company's most recent submission of data, the
Company was invited to make
13
<PAGE>
a presentation concerning the Company's gloves before the FDA's independent
General Hospital Panel.
On March 11, 1996, Dr. Shanta M. Modak of the Department of Surgery,
Columbia University, where the antimicrobial technology was developed, and Dr.
Louis R.M. Del Guercio, the Company's Chairman, attended the meeting on the
Company's behalf. Each made a presentation before the 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. To date, the Company has not yet received
written notice from the FDA of its decision regarding the Company's
antimicrobial gloves following the March 11, 1996 meeting, nor has the Company
received a written response from the FDA concerning the Company's previously
disclosed response to Dr. Sheldon's memorandum to Mr. Ulatowski submitted on
September 13, 1995. However, Dr. Modak has been contacted by Mr. Terrell
Cunningham, Nurse Consultant of the ODE, who has informed Dr. Modak that Mr.
Ulatowski of the ODE has sent a written request to Dr. Sheldon asking for a
response to the Company's September 1995 submission. According to Mr.
Cunningham, Dr. Modak or the Company was to have received a response by the end
of October 1996. To date, neither the Company nor Dr. Modak has received such
response.
At present, the Company does not have sufficient financial resources to
fund additional clinical testing, if such testing is required. However, should
the Company's financial condition improve, the Company would spend some of these
funds on additional testing that may be required. There can be no assurance
that, even with additional testing, if such testing is required, that the
Company will obtain FDA clearance to market its antimicrobial latex gloves.
The Company has received clearance from the Canadian Bureau of
Radiation and Medical Devices of the Environmental Health Directorate, Health
Protection Branch, to market its Antimicrobial Latex Examination Gloves and its
sterile hypoallergenic antimicrobial surgeons' gloves in Canada under the Daltex
A/M(TM) trademark.
Based upon advice of its regulatory counsel and its independent former
medical products distributor in Germany, the Company believes it may offer its
antimicrobial latex examination gloves and sterile surgical gloves for sale in
Germany, through distributors, without seeking special regulatory clearance in
the event that the Company obtains the financial resources necessary to
manufacture and market such gloves.
14
<PAGE>
PART II- OTHER INFORMATION
Item 5 - Other Information
None.
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
October 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: December 19, 1996 By: /s/ Bruce Hausman, Esq.
------------------------------------
BRUCE HAUSMAN, ESQ.
President and Chief
Executive Officer
Date: December 19, 1996 By: /s/ Herbert J. Mitschele, Jr.
------------------------------------
HERBERT J. MITSCHELE, JR.
Secretary, Treasurer and
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 19,273
<SECURITIES> 0
<RECEIVABLES> 15,319
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 94,592
<PP&E> 0
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<TOTAL-ASSETS> 267,967
<CURRENT-LIABILITIES> 1,024,972
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0
0
<COMMON> 86,327
<OTHER-SE> (1,183,332)
<TOTAL-LIABILITY-AND-EQUITY> 267,967
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<CGS> 0
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<OTHER-EXPENSES> 0
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<INCOME-PRETAX> (34,683)
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<CHANGES> 0
<NET-INCOME> (34,683)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
