<PAGE>
U. S. Securities and Exchange Commission
Washington, D. C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------------- ---------------
Commission File No. 0-24480
SANGUINE CORPORATION
(Name of Small Business Issuer in its Charter)
NEVADA 95-4347608
------ ----------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
101 East Green Street, #11
Pasadena, California 91105
---------------------------
(Address of Principal Executive Offices)
Issuer's Telephone Number: (818) 405-0079
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Sections 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.
(1) Yes X No (2) Yes X No
--- --- --- ---
<PAGE>
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Not applicable.
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date:
December 11, 1996
20,877,723
----------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The Financial Statements of the Registrant required to be filed with
this 10-QSB Quarterly Report were prepared by management, and commence on the
following page, together with Related Notes. In the opinion of management,
the Financial Statements fairly present the financial condition of the
Registrant.
<PAGE>
Sanguine Corporation
(A Development Stage Company)
Balance Sheets
June 30, 1996 (Unaudited) and December 31, 1995
<TABLE>
<CAPTION>
Unaudited
June December
30, 1996 31, 1995
ASSETS
<S> <C> <C>
Current Assets
Cash $ 909 $ 712
Property & Equipment
Furniture - Net 2,384 2,844
Other Assets
Refundable Loan Commitment Fee 10,000 10,000
Total Assets $ 13,293 $ 13,556
LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 76,467 $ 27,626
Accrued Salaries 188,000 140,000
Accrued Interest Payable 20,730 18,000
Notes Payable 60,450 43,400
Total Current Liabilities $ 345,647 $ 229,026
Stockholders' Equity
Common Stock Authorized:
100,000,000 Shares at $0.001
Par Value: 19,562,859 Shares
Issued and Outstanding 19,562 19,562
Paid in Capital (Quasi-Reorganized
March 30, 1994 Deficit Retained
Earnings of $2,423,964 Eliminated) 513,847 513,847
Retained Earnings Deficit (865,763) (748,879)
Total Stockholders' Equity (332,354) (215,470)
TOTAL LIABILITIES &
STOCKHOLDERS' EQUITY $ 13,293 $ 13,556
</TABLE>
The accompanying notes are an integral part of this financial statement
<PAGE>
Sanguine Corporation
(A Development Stage Company)
Statements of Operations (Unaudited)
From April 1, 1996 to June 30, 1995 and
April 1, 1995 to June 30, 1995 and
January 1, 1996 to June 30, 1996 and
January 1, 1995 to June 30, 1995
<TABLE>
<CAPTION>
April April January January
1, 1996 1, 1995 1, 1996 1, 1995
to June to June to June to June
30, 1996 30, 1995 30, 1996 30, 1995
<S> <C> <C> <C> <C>
Revenues
Interest Income $ -0- $ 1 $ 1 $ 3
Total Revenues -0- 1 1 3
Expenses
Promotion 2,500 -0- 2,500 3,916
Depreciation 230 230 460 460
Research & Development 25,950 19,500 54,451 39,000
Office Expense 3,906 2,336 6,747 5,122
Auto Expense 270 270 540 540
Salaries 4,500 4,500 9,000 9,000
Legal & Professional Fees 10,772 6,300 17,573 10,539
Rent 3,979 3,950 6,671 7,940
Interest Expense 1,759 1,417 3,301 2,782
Travel 1,318 352 1,318 1,827
Stock Transfer 584 23 584 125
Consultant Fees 7,450 1,675 13,250 3,675
Tax & License 496 377 490 377
Total Expenses 63,714 40,930 (116,885) $(85,303)
Net (Loss) $ (63,714) $(40,929) $(116,884) $(85,300)
(Loss) Per Share (.00) (.00) (.00) (.00)
Weighted Average
Shares Outstanding 19,562,859 16,721,851 19,562,859 16,721,859
</TABLE>
The accompanying notes are an integral part of this financial statement
<PAGE>
Sanguine Corporation
(A Development Stage Company)
Statements of Cash Flows (Unaudited)
For the Period January 1, 1996 to June 30, 1996 and
January 1, 1995 to June 30, 1995
<TABLE>
<CAPTION>
1996 1995
<S> <C> <C>
Cash Flows from Operating Activities
Net (Loss) $(116,884) $ (85,303)
Adjustments to Reconcile Net Loss
to Net Cash Used by Operations:
Depreciation 460 460
Changes in Operating Assets & Liabilities:
Increase in Accounts Payable 48,841 27,814
Increase in Interest Payable 2,730 2,730
Increase in Accrued Salary 48,000 48,000
Decrease in Receivable in Offshore Corp -0- 3,300
Cash Flows from Operating Activities (16,853) (2,999)
Cash Flows from Investing Activities
Purchase of Equipment -0- -0-
Cash Used by Investing Activities -0- -0-
Cash Flows from Financing Activities
Increase in Notes Payable 17,050 3,000
Contributed Capital -0- -0-
Cash Provided by Financing Activities 17,050 3,000
Increase (Decrease) in Cash 197 1
Cash at Beginning of Period 712 1,654
Cash at End of Period $ 909 $ 1,655
Disclosures for Cash Flows from:
Interest $ 3,301 $ 2,782
Taxes -0- -0-
</TABLE>
The accompanying notes are an integral part of this financial statement<PAGE>
<PAGE>
Sanguine Corporation
(A Development Stage Company)
Notes to Financial Statements
NOTE #1 - Statement of Preparation
The Company has prepared the accompanying financial statements with interim
financial reporting requirement promulgated by the Securities and Exchange
Commission. The information furnished reflects all adjustments which are, in
the opinion of management, necessary for a fair presentation of financial
position and results of operations.
The consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto included in the
Company's 1995 10-K report.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation.
- --------------------------------------------------------------------
Plan of Operation.
- ------------------
The Company has conducted all of its business operations through its
majority owned subsidiary, Sanguine Corporation, a California corporation
("Sanguine California"). Sanguine California is engaged in the development of
a synthetic red blood cell product called "PHER-O2." The development of this
product presently comprises its sole business operations. PHER-O2 is composed
of perfluoro-decalin molecules (i.e., synthetic red blood cells), purified
water and a proprietary, synthetic, fluorinated surfactant to hold the
emulsion together. Perfluoro-decalin has great oxygen-carrying capacity, yet
it can be as much as 900 times smaller than a red blood cell. Management
believes that PHER-O2 may carry three to four times the oxygen of human blood
per unit volume. This increased oxygen-carrying capacity may make PHER-O2
useful in the treatment of heart attacks, strokes, cancer and other diseases
for which increased oxygenation is beneficial. Furthermore, the Company
believes that perfluoro-decalin may be effective as an imaging agent in X-ray
imaging, nuclear magnetic resonance (NMR) imaging and CAT scans, without side
effects. Management also believes that PHER-O2 has several other advantages
over human blood: it can be sterilized to be free of disease; is believed to
have the quality of a universal match for all blood types; can be
mass-produced; and may be stored much longer than human blood.
Battelle Memorial Institute, through its Battelle Columbus
Operations ("Battelle"), was retained to assist the Company in completing the
emulsion of perfluoro-decalin and the synthetic surfactants that make up
PHER-O2; it is anticipated that on completion of the compounding of PHER-O2,
Battelle will perform initial gross animal tests, which do not require
regulatory approval prior to commencement; however, the data gathered from any
such tests will be subject to regulatory review in the future. The Company
anticipates that it will manufacture experimental doses of PHER-O2 required to
conduct gross animal testing.
It is anticipated that continued research and development of PHER-O2
will depend upon the Company's ability to obtain substantial additional equity
or debt funding, as to which no assurance can be given. See the captions
"Business Development," "Future Capital Requirements; Uncertainty of Future
Funding" and "Patents, Trademarks, Licenses, Franchises, Concessions, Royalty
Agreements or Labor Contracts" of the Company's Annual Report on Form
10-KSB-A1 for the fiscal year ended December 31, 1995, which has previously
been
filed with the Securities and Exchange Commission.
In its second phase of operations, management intends to continue
developing the perfluorocarbon compounds in PHER-O2 in order to optimize its
quality, and expects to begin animal safety and efficacy trials in accordance
with guidelines of the United States Food and Drug Administration ("FDA") and
comparable foreign regulatory requirements.
In the final phase of the Company's proposed business operations, it
intends to complete its United States testing of PHER-O2, receive all
necessary FDA approvals and begin American and Canadian sales for cancer
treatment and angioplasty; and complete overseas testing, begin overseas sales
and begin the construction of manufacturing facilities. Sanguine California
has previously licensed BioLogix Development Partners, an unaffiliated
California limited partnership, to manufacture and market PHER-O2 in Canada,
including any future Canadian patent rights, and the exclusive right to market
PHER-O2 in U.S. military pre-hospital markets. In this final phase, the
Company also intends to continue trials to test PHER-O2 for other
applications, including transplant organ preservation and the treatment of
carbon monoxide poisoning, sickle cell anemia, heart attack and stroke. The
Company will be required to conduct similar rigorous testing and clinical
trials of PHER-O2 for each desired application for which it is sought to be
used.
PHER-O2 is still in the research and development stage. It has not
been tested on animals or humans; nor has any application been submitted to
any federal, state or foreign agency to seek authority for such testing. This
development process will be time consuming, costly, subject to extreme
governmental regulation and must prove that this product is safe and
efficacious for human use. Until then, the Company will have no potential for
revenues from operations. No assurance can be given that the Company will be
able to raise the capital it will need to develop PHER-O2, or that if
sufficient funds are raised, the Company will ever receive requisite federal,
state or foreign agency approval to manufacture or market this product. See
the captions "Business Development," "Special Risk Factors," "Principal
Products or Services and their Markets," "Competition," "Patents, Trademarks,
Licenses, Franchises, Concessions, Royalty Agreements or Labor Contracts" and
"Governmental Approval of Principal Products or Services" of the Company's
Registration Statement on Form 10-SB-A1, which has previously been filed
with the Securities and Exchange Commission, and which is incorporated herein
by reference.
Results of Operations.
- ----------------------
During the quarterly period ending June 30, 1996, the Company's
only business operations were those of Sanguine California. During this
period, the Company received total revenues of $0 and sustained a net loss of
$63,714.
Liquidity.
- ----------
During the quarterly period ended June 30, 1996, the Company had
total expenses of $63,714, while receiving no revenues.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
- ----------------------------
None; not applicable.
Item 2. Changes in Securities.
- --------------------------------
None; not applicable.
Item 3. Defaults Upon Senior Securities.
- ------------------------------------------
None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
- --------------------------------------------------------------
None; not applicable.
Item 5. Other Information.
- ----------------------------
None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
- -------------------------------------------
(a) Exhibits.
10-SB-A1 Registration Statement.*
Form 10-KSB-A1 Annual Report for the
Fiscal Year ended December 31, 1995.*
(b) Reports on Form 8-K.
None.
* Incorporated herein by reference.
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.
SANGUINE CORPORATION
Date: 12/13/96 By /s/ Thomas C. Drees
-------------- -------------------------------------
Thomas C. Drees, CEO and Chairman of
the Board of Directors
Date: 12/13/96 By /s/ A.G. Hargreaves
-------------- -------------------------------------
Anthony G. Hargreaves
Vice President, Secretary/Treasurer
and Director
Date: 12/13/96 By /s/ Edward L. Kunkel
-------------- -------------------------------------
Edward L. Kunkel, Esq.
Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000926287
<NAME> SANGUINE CORPORATION
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 909
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 909
<PP&E> 2,384
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,293
<CURRENT-LIABILITIES> 345,647
<BONDS> 0
0
0
<COMMON> 19,562
<OTHER-SE> (351,916)
<TOTAL-LIABILITY-AND-EQUITY> 13,293
<SALES> 0
<TOTAL-REVENUES> 1
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 113,584
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,301
<INCOME-PRETAX> (116,884)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (116,884)
<EPS-PRIMARY> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
