SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OF 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-21271
SANGUI BIOTECH INTERNATIONAL, INC.
(Exact Name of Registrant as Specified in its Charter)
COLORADO 84-1330732
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1508 BROOKHOLLOW DRIVE, SUITE 354
SANTA ANA, CALIFORNIA 92705
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (714) 429-7807
N/A
(Former name, former address and former fiscal year, if changed since last
report)
___________
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 (or for such shorter period that the registrant was
required to file such reports) 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 issuer's class of
common stock, as of the latest practicable date:
Title of each class of Common Stock Outstanding at September 30, 2000
----------------------------------------- -----------------------------
Common Stock, no par value 40,514,363
Transitional Small Business Disclosure Format
(Check one);
Yes [ ] No [ X ]
<PAGE>
INDEX
SANGUI BIOTECH INTERNATIONAL, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets at September 30,2000 (Unaudited) and June 30, 2000
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) for
the Three months ended September 30, 2000 and 1999
Consolidated Statements of Cash Flows (Unaudited) For the Three months ended
September 30, 2000 and 1999
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
<PAGE>
SANGUI BIOTECH INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
------
SEPTEMBER 30,
2000
(UNAUDITED)
-----------
CURRENT ASSETS
Cash and cash equivalents $ 7,670,265
Accounts receivable 88,753
Inventories 74,486
Prepaid expenses and other assets 172,995
----------------
Total Current Assets 8,006,499
PROPERTY AND EQUIPMENT - NET 368,814
PATENTS 41,162
----------------
TOTAL ASSETS $ 8,416,475
================
LIABILITIES & STOCKHOLDERS' EQUITY
----------------------------------
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 199,249
COMMITMENTS & CONTINGENCIES -
STOCKHOLDERS' EQUITY
Preferred stock, no par value; 5,000,000 shares
authorized; no shares issued and outstanding -
Common stock: no par value; 50,000,000 shares
authorized, 40,514,363 shares issued and outstanding 18,530,881
Stock subscriptions receivable (499,437)
Prepaid consulting fees (991,169)
Accumulated other comprehensive loss (256,011)
Accumulated deficit (8,567,038)
----------------
Total stockholders' equity 8,217,226
----------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 8,416,475
================
The accompanying notes are an integral part of these consolidated financial
statements
<PAGE>
SANGUI BIOTECH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
<TABLE>
<CAPTION>
<S> <C> <C>
FOR THE
THREE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED)
2000 1999
-------------------- ------------
SALES. . . . . . . . . . . . . . . . . . . . $ 122,789 $ 94,577
COST OF SALES. . . . . . . . . . . . . . . . 90,617 70,143
-------------------- ------------
GROSS PROFIT . . . . . . . . . . . . . . . . 32,172 24,434
-------------------- ------------
OPERATING EXPENSES
Research and development . . . . . . . . . . 184,736 146,829
General and administrative . . . . . . . . . 321,689 231,954
Depreciation and amortization. . . . . . . . 31,422 28,225
Amortization of prepaid consulting fees. . . 113,831 393,125
-------------------- ------------
Total Operating Expenses . . . . . . . . . . 651,678 800,133
-------------------- ------------
LOSS FROM OPERATIONS . . . . . . . . . . . . (619,506) (775,699)
OTHER INCOME
Interest income. . . . . . . . . . . . . . . 70,733 23,115
-------------------- ------------
Net Loss . . . . . . . . . . . . . . . . . . (548,773) (752,584)
OTHER COMPREHENSIVE (LOSS) INCOME
Foreign currency translation adjustments . . (145,197) 147,981
-------------------- ------------
COMPREHENSIVE LOSS . . . . . . . . . . . . . $ (693,970) $ (604,603)
==================== ============
BASIC AND DILUTED LOSS PER SHARE . . . . . . $ (0.02) $ (0.02)
==================== ============
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING. . . . . . . . . . 40,514,303 31,867,878
==================== ============
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
<PAGE>
SANGUI BIOTECH INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
<S> <C> <C>
FOR THE
THREE MONTHS ENDED
SEPTEMBER 30,
(UNAUDITED)
---------------------------------
2000 1999
-------------------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (548,773) $ (752,584)
Adjustments to reconcile net loss to cash used by operating activities
Depreciation and amortization. . . . . . . . . . . . . . . . . . . . 31,422 28,225
Amortization of prepaid consulting fees. . . . . . . . . . . . . . . 113,831 393,125
Changes in operating asset and liabilities:
Accounts receivable and grants receivable. . . . . . . . . . . . . . 143,809 55,734
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,204 36,760
Prepaid expenses and other assets. . . . . . . . . . . . . . . . . . 42,515 32,776
Accounts payable and accrued expenses. . . . . . . . . . . . . . . . (30,957) (111,974)
-------------------- -----------
Net cash used in operating activities. . . . . . . . . . . . . . . . . (242,949) (317,938)
-------------------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of equipment. . . . . . . . . . . . . . . . . . . 22,222 -
Purchase of equipment. . . . . . . . . . . . . . . . . . . . . . . . - (35,350)
Proceeds from the sale of marketable securities, net . . . . . . . . - 1,288,620
Proceeds from the sale of investment in AMDL, net. . . . . . . . . . - 8,984
-------------------- -----------
Net cash provided by investing activities. . . . . . . . . . . . . . . 22,222 1,262,254
-------------------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Change of stock subscription receivable. . . . . . . . . . . . . . . 46,931 -
Proceeds from related party payable. . . . . . . . . . . . . . . . . - 120,301
-------------------- -----------
Net cash provided by financing activities. . . . . . . . . . . . . . 46,931 120,301
-------------------- -----------
Effect of exchange rate changes on cash. . . . . . . . . . . . . . . . (145,197) 147,981
-------------------- -----------
Net (decrease) increase in cash and cash equivalents . . . . . . . . . (318,993) 1,212,598
Cash and cash equivalents, beginning of period . . . . . . . . . . . . 7,989,258 305,501
-------------------- -----------
Cash and cash equivalents, ending of period. . . . . . . . . . . . . . $ 7,670,265 $1,518,099
==================== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements
<PAGE>
SANGUI BIOTECH INTERNATIONAL, INC.
Notes to Consolidated Financial Statements
NOTE 1 - BASIS OF PRESENTATION
---------- -----------------------
The accompanying consolidated financial statements have been prepared without
audit in accordance with generally accepted accounting principles ("GAAP") for
interim information and with the instructions to Form 10-QSB and Item 301 of
Regulation S-B. Accordingly, the accompanying consolidated financial statements
do not include all the information and footnotes required by GAAP for complete
financial statements. The unaudited consolidated financial statements and notes
should, therefore, be read in conjunction with the financial statements and
notes thereto in Form 10-KSB for the year ended June 30, 2000. In the opinion
of management, all adjustments (consisting of normal and recurring adjustments)
considered necessary for a fair presentation, have been included. The results
of operations for the three month period ended September 30, 2000 are not
necessarily indicative of the results that may be expected for the entire fiscal
year.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
----------------------------------------------------------
Nature of Business
--------------------
Sangui BioTech International, Inc. (the "Company") ("SGBI") was incorporated
under the laws of the state of Colorado on July 14, 1995. The Company,
pursuant to the recapitalization of Sangui BioTech, Inc. ("SBT"), is engaged in
the development of Immunodiagnostic tests.
Since inception, the Company has primarily been engaged in the commercial
development and manufacturing of immunodiagnostic kits, which are sold by the
Company in niche markets in the United States and Europe, under the name of the
Company's wholly owned subsidiary Sangui BioTech, Inc. ("Sangui USA"). Sangui
USA's laboratory and headquarters are located in Santa Ana, California, and this
facility is devoted to immunodiagnostic research, development, manufacturing and
distributing, marketing, and administrative functions for the Company. Sangui
USA was incorporated in the state of Delaware on August 2, 1996. Sangui USA is
the parent company to two wholly owned subsidiaries, SanguiBioTech AG
("Sangui AG") and GlukoMediTech, AG ("Gluko") . Sangui AG and Gluko were
incorporated in Mainz, Germany on November 25, 1995 and July 15,
1996, respectively. Sangui AG and Gluko are engaged in Germany in the
development of artificial oxygen carriers and glucose implant sensors,
respectively.
On May 15, 1999, Sangui BioTech PTE Ltd. ("SBTS") was incorporated in
Singapore. SBTS is expected to become a regional office for SGBI and its
subsidiaries and to be engaged in the business of carrying out research and
development projects in conjunction with the German subsidiaries.
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------------
Consolidation
-------------
The consolidated financial statements include the accounts of the Company and
its wholly owned domestic and foreign subsidiaries. All significant
inter-company accounts and transactions have been eliminated upon consolidation.
Risk and Uncertainties
------------------------
Both the Company's small line of in vitro immunodiagnostic products, as well as
the future pharmaceutical (artificial oxygen carriers or blood substitute and
additives) and in vivo biosensors (glucose implant sensor) being developed by
its German subsidiaries, are deemed as medical devices or biologics, and as such
are governed by the Federal Food and Drug and Cosmetics Act and by the
regulations of state agencies and various foreign government agencies.
Currently, most of the Company's immunodiagnostic tests for use with humans
have been cleared by the above regulatory agencies. There can be no assurance
that the Company will maintain the regulatory approvals required
to market its products elsewhere. The pharmaceutical and biosensor products,
under development in Germany and Singapore (in the future), will be subject to
stringent regulatory requirements, because they are in vivo products for humans.
The Company and its subsidiaries have no experience in obtaining regulatory
clearance on these types of products. Therefore, the Company will be subject to
the risks of failure in obtaining regulatory clearance as well as the timely
receipt of the said clearance, if obtained.
The Company's revenues from product sales derived from its immunodiagnostic
operations in the U.S. are small. However, management believes its current cash
position is sufficient to fund the Company's operations and working capital
Requirements through June 30, 2001.
Foreign Currency Translation
------------------------------
Assets and liabilities of the Company's German operations are translated into
U.S. dollars at period-end exchange rates. Net exchange gains or losses
resulting from such translation are excluded from net earnings but are included
in comprehensive income and accumulated in a separate component of stockholders'
equity. Income and expenses are translated at weighted average exchange rates
for the period. During the quarters ended September 30, 2000 and 1999, the
Company had foreign exchange transaction (losses) gains included in other income
of approximately $(145,000) and $148,000, respectively.
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------------
Revenue Recognition
--------------------
Revenues from product sales are recognized at the time of shipment.
Research and Development
--------------------------
Research and development are charged to operations as they are incurred. Legal
fees and other direct costs incurred in obtaining and protecting patents are
expensed as incurred.
Basic and Diluted Earnings (Loss) Per Common Share
---------------------------------------------------------
The Company has adopted SFAS No. 128 "Earnings Per Share." SFAS No. 128 changes
the methodology of calculating earnings per common share. The adoption of
SFAS No. 128 has not materially impacted the Company's financial position or
results of operations.
Basic earnings (loss) per common share is computed based on the weighted average
number of shares outstanding for the period. Diluted earnings (loss) per share
is computed by dividing net income (loss) by the weighted average shares
outstanding assuming all dilutive potential common shares were issued. Basic
and diluted loss per share are the same as the effect of stock options on loss
per share are anti-dilutive and thus not included in the diluted loss per share
calculation.
Comprehensive Income
---------------------
The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No.
130 establishes standards for reporting and display of comprehensive income and
its components in a full set of general-purpose financial statements. Total
comprehensive income represents the net change in stockholders' equity during a
period from sources other than transactions with stockholders and as such,
includes net earnings. For the Company, the components of other comprehensive
income are the changes in the cumulative foreign currency translation
adjustments and unrealized gains (losses) on marketable securities recorded as
components of stockholders' equity.
Segments of an Enterprise and Related Information
-------------------------------------------------------
The Company has adopted SFAS No. 131, "Disclosures about Segments of an
Enterprise and Related Information." SFAS No. 131 changes the way public
companies report information about segments of their business in their annual
financial statements
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
-------------------------------------------------------------------
and requires them to report selected segment information in their quarterly
reports issued to shareholders. It also requires entity-wide disclosures about
the products and
services an entity provides, the material countries in which it holds assets and
reports revenues and its major customers. (See note 4).
Web Site Development Costs
-----------------------------
The Company has adopted the Emerging Issues Task Force Issue No. 00-2,
"Accounting for Web Site Development Costs," ("EITF 00-2"). The consensus
states that for specific web site development costs, the accounting for such
costs should be accounted for under
Statement on Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." The adoption of EITF 00-2 did
not have a material effect on its financial statements.
Stock Compensation
-------------------
The Company adopted the FASB Interpretation No. 44 ("FIN 44"), "Accounting for
Certain Transactions involving Stock Compensation, an interpretation of APB 25."
FIN 44 clarifies the application of APB 25 for (a) the definition of employee
for purposes of applying APB 25, (b) the criteria for determining whether a plan
qualifies as a noncompensatory plan, (c) the accounting consequence for various
modifications to the terms of a previously fixed stock option or award, and (d)
the accounting for an exchange of stock compensation awards in a business
combination. The adoption of FIN 44 did not have a material effect on the
financial statements.
New Accounting Pronouncements
-------------------------------
The FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities." SFAS No. 133 establishes accounting and reporting standards for
derivative instruments, including certain derivative instruments embedded in
other contracts, and for hedging activities. It requires that an entity
recognize all derivatives as either assets or liabilities on the balance sheet
at their fair value. This statement is effective for financial statements for
all fiscal quarters of all fiscal years beginning after June 15, 2000 (as
amended by SFAS No. 137). The Company does not expect the adoption of this
standard to have a material impact on its results of operations, financial
position or cash flows as it currently does not engage in any derivative or
hedging activities.
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin 101 ("SAB 101"), "Revenue Recognition," which outlines the basic
criteria that must be met to recognize revenue and provides guidance for
presentation of revenue and
<PAGE>
------
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, CONTINUED
----------------------------------------------------------------------
for disclosure related to revenue recognition policies in financial statements
filed with the Securities and Exchange Commission. The effective date of this
pronouncement is the fourth quarter of the fiscal year beginning after December
15, 1999. The Company believes that adopting SAB 101 will not have a material
impact on its financial position and results of operations.
Reclassifications
-----------------
Certain prior period amounts have been reclassified to conform to the current
period presentation.
NOTE 3-RETIREMENT OF PREFERRED STOCK
----------------------------------------
The Company retired all the outstanding shares of its preferred stock. As
a result, preferred stock decreased by $5,050 and common stock increased
by $5,050.
<PAGE>
------
NOTE 4 - BUSINESS SEGMENTS
------------------------------
The Company reports its business segments based on geographic regions, which are
as follows for the period ended September 30:
<TABLE>
<CAPTION>
<S> <C> <C>
2000 1999
---------- -------------------
Net sales:
Sangui USA. . . . . . . . . . . . $ 122,789 $ 94,577
Sangui Bio Tech AG. . . . . . . . - -
GlukoMediTech, AG . . . . . . . . - -
---------- -------------------
$ 122,789 $ 94,577
========== ===================
Net loss:
Sangui USA. . . . . . . . . . . . $ 244,575 $ 525,049
Sangui Bio Tech AG. . . . . . . . 172,492 137,968
GlukoMediTech, AG . . . . . . . . 107,592 89,567
Sangui BioTech PTE Ltd, Singapore 24,114 -
---------- -------------------
$ 548,773 $ 752,584
========== ===================
Depreciation and amortization:
Sangui USA. . . . . . . . . . . . $ 2,959 $ 1,560
Sangui Bio Tech AG. . . . . . . . 20,904 23,333
GlukoMediTech, AG . . . . . . . . 7,559 3,332
---------- -------------------
$ 31,422 $ 28,225
========== ===================
2000
----------
Identifiable assets:
Sangui USA. . . . . . . . . . . . . $1,495,632
Sangui Bio Tech AG 3,438,270
GlukoMediTech, AG 3,460,833
Sangui BioTech PTE Ltd, Singapore 21,740
-----------
$8,416,475
==========
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
--------
RESULTS OPERATIONS
----
Forward looking statements
----------------------------
The following discussion of our financial condition and results of operations
should be read in conjunction with the consolidated financial statements and the
related notes thereto included elsewhere in this quarterly report. Some of the
information in this quarterly report contains forward-looking statements,
including statements related to anticipated operating results, margins, growth,
financial resources, capital requirements, adequacy of the Company's financial
resources, trends in spending on research and development, the development of
new markets, the development, regulatory approval, manufacture, distribution,
and commercial acceptance of new products, and future product development
efforts, which are made pursuant to the Safe Harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that
forward-looking statements involve risks and uncertainties, which may affect our
business and prospects, including but not limited to, the Company's expected
need for additional funding and the uncertainty of receiving the additional
funding, changes in economic and market conditions, acceptance of our products
by the health care and reimbursement communities, new development of competitive
products and treatments, administrative and regulatory approval and related
considerations, health care legislation and regulation, and other factors
discussed in our filings with the Securities and Exchange Commission.
GENERAL
The Company is primarily involved in the development of artificial oxygen
carriers and glucose sensors, and in the manufacturing, marketing and
distribution of in vitro immunodiagnostic test kits.
In 1999, the Company established a subsidiary in Singapore. This subsidiary is
expected to become the Company's Pacific Rim headquarters. In the near term,
the Company expects to perform research and development activities in this
facility. Future activities at this location are expected to include clinical
trials as well as being the center of the Pacific Rim sales, marketing and
distribution divisions.
The Company is actively building its management and support team. The Company
has recently retained a chief scientific officer and biomedical scientist for
its Singapore operation and a biomedical scientist and project coordinator for
its German operations. The Company is currently looking to attract several key
positions in its German, Singapore and United States operations, including a
chief financial officer, controller, quality control manager, biomedical
scientist and engineers. Management plans to fill these positions as qualified
personnel are identified and retained.
The Company's research and development projects are primarily in the preliminary
stages. The Company is diligently developing several applications for its
primary research and development projects, but does not anticipate beginning any
government protocols or clinical trials in the near term.
Efforts to expand the distribution channels for the Company's diagnostic
products have attracted interest both domestically and internationally. The
Company is currently in discussion with several entities and expects to
establish a distribution relationship with at least one of these entities in the
near term.
FINANCIAL POSITION
The current assets of the Company decreased approximately $511,000, or 6% from
June 30, 2000 to $8,006,499 as of September 30, 2000. The decrease is primarily
attributable to a decrease in cash of approximately $319,000 and a decrease in
grants receivable of approximately $177,000. The decrease in cash was caused by
the normal day to day operations of the Company. The change in grants
receivable was a result of the Company receiving grant payments from sponsoring
governmental agencies.
The Company's fixed assets decreased $48,498 to $368,814 as of September 30,
2000. The decrease in fixed assets was from depreciation and the disposal of
certain equipment.
The Company funded its operation primarily through its existing cash reserves.
The change in stockholders' equity and liabilities of approximately $564,000 is
primarily caused by the Company's current period net loss of $548,773.
RESULTS OF OPERATIONS
Three Months Ended September 30, 2000 and 1999:
Sales for the three-months ended September 30, 2000 were $122,789, compared to
$94,577 for the same period in the prior year. This is an increase of $28,212,
or 30%. The increase is primarily attributable to increased marketing efforts.
Cost of sales for the three-months ended September 30, 2000 were $90,617,
compared to $70,143 for the same period in the prior year. This is an increase
of $20,474, or 29%, and is directly related to the increase in the sales of the
Company's immunodiagnostic test kits.
Research and development expenses for the three-months ended September 30, 2000
were $184,736, compared to $146,829 in the same period in the prior year. This
increase of $37,907, or 26% is attributed to the Company expanding both the
number of developmental projects in process and the number of employees in the
research and development area. The Company anticipates that the research and
development costs of the Company will continue to increase in the near term.
General and administrative expenses for the three-months ended September 30,
2000 were $321,689, compared to $231,954 for the same period in the prior year.
This increase of $89,735, or 39%, is attributed to the expansion of the
management team and an increase in professional fees.
Amortization of prepaid consulting fee for the three-months ended September 30,
2000 was $113,831, compared to $393,125 in the same period in the prior year.
The decrease of $279,294, or 71%, results from an extension in the consulting
agreement for an additional 24 months effective at the beginning of July, 2000.
Interest income for the three-months ended September 30, 2000 was $70,733,
compared to $23,115 in the same period in the prior year. The increase in
interest income of $47,618, or 206%, is caused by the Company investing the
unused portion of the cash raised during previous fund raisings.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2000, the Company had total stockholders' equity of
$8,217,226 as compared to $8,750,435 at June 30, 2000. The decrease in
stockholders equity in the current quarter is primarily caused by the Company's
net loss of $548,773.
The Company had cash and cash equivalents of $7,670,265 at September 30, 2000 as
compared to $7,989,258 at June 30, 2000. The decrease in the cash and cash
equivalents of $318,993 for the quarter ended September 30, 2000, was primarily
due to the Company financing all research and development projects through
existing cash reserves and government grants.
The Company intends to intensify its development efforts during the current
fiscal year ending June 30, 2001. The Company believes that its available cash
will be sufficient to satisfy its requirements through June 30, 2001. However,
the Company will need substantial additional funding to fulfill its business
plan and the Company intends to explore financing sources for its future
development activities during the current year. No assurance can be given that
these efforts will be successful.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
--------
The Company has no derivative financial instruments and no exposure to foreign
currency exchange rates or interest rate risk
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
--------
None
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS
--------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
--------
Not applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
--------
Not applicable
ITEM 5. OTHER INFORMATION
--------
Not applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------
During the quarter ended September 30, 2000, the Company filed a Report on Form
8-K and 8-K/A reporting, under Item 4, a change in the Company's certifying
accountant.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934. The
registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SANGUI BIOTECH INTERNATIONAL, INC.
By /s/ Wolfgang Barnikol
----------------------------------
Wolfgang Barnikol
President & CEO
Dated: November 17, 2000
