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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 March 31, 2000
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File No. 0-24480
SANGUINE CORPORATION
(Name of Small Business Issuer in its Charter)
NEVADA 95-4347608
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(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
101 East Green Street, #11
Pasadena, California 91105
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(Address of Principal Executive Offices)
Issuer's Telephone Number: (626) 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
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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:
March 31, 2000
24,559,323
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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.
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SANGUINE CORPORATION
FINANCIAL STATEMENTS
March 31, 2000 (Unaudited) &
December 31, 1999
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[Letterhead]
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, Suite #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
Board of Directors
Sanguine Corporation
(A Development Stage Company)
I have reviewed the accompanying balance sheets, of Sanguine Corporation, as
of March 31, 2000, and for the three months periods then ended. These
financial statements are the responsibility of the Company's management.
I conducted my review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
consists principally of applying analytical procedures to financial data and
making inquiries of persons responsible for financial and accounting matters.
It is substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, I do not express such an opinion.
Based on my review, I am not aware of any material modifications that should
be made to the accompanying financial statements for them to be in conformity
with generally accepted accounting principles.
/S/ Schvaneveldt & Company
Salt Lake City, Utah 84111
May 18, 2000
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SANGUINE CORPORATION
(A Development Stage Company)
Balance Sheets
March 31, 2000 (Unaudited) and December 31, 1999
<CAPTION>
2000 1999
Assets
<S> <C> <C>
Current Assets
Cash $ 6,363 $ 1,062
Total Assets $ 6,363 $ 1,062
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $ 81,676 $ 78,680
Accrued Salaries 524,000 524,000
Accrued Interest Payable 42,080 38,880
Notes Payable 172,271 168,306
Total Current Liabilities 820,027 809,866
Stockholders' Equity
Common Stock, Authorized:
100,000,000 Shares at $0.001 Par Value:
24,559,323 Shares & 23,162,994 Shares
Issued & Outstanding Respectively 24,559 23,163
Paid In Capital (Quasi-Reorganized
March 20, 1994 Deficit Retained
Earnings of $2,423,964 Eliminated) 1,227,448 877,444
Retained Earnings Deficit ( 2,065,671) ( 1,709,411)
Total Stockholders' Equity ( 813,664) ( 808,804)
Total Liabilities & Stockholders' Equity $ 6,363 $ 1,062
</TABLE>
<TABLE>
SANGUINE CORPORATION
(A Development Stage Company)
Statements of Operations (Unaudited)
For the Period January 1, 2000 to March 31, 2000 &
January 1, 1999 to March 31, 1999
<CAPTION>
2000 1999
<S> <C> <C>
Revenues $ -0- $ -0-
Expenses
Consulting Fees $ 233,500 $ -0-
Research & Development 19,500 19,500
Salaries 4,500 4,500
Office Expense 5,279 1,973
Auto Expenses 4,301 270
Legal & Professional Fees 64,036 7,867
Rent 3,204 4,799
Interest Expense 21,940 4,882
Stock Transfer -0- 300
Depreciation -0- 84
Total Expenses 356,260 44,175
Loss for Period ($ 356,260) ($ 44,175)
Profit (Loss) Per Share ( 0.02) ( 0.00)
Weighted Average Shares Outstanding 23,286,159 23,027,809
</TABLE>
<TABLE>
SANGUINE CORPORATION
(A Development Stage Company)
Statements of Cash Flows (Unaudited)
For the Periods January 1, 2000 to March 31, 2000 &
January 1, 1999 to March 31, 1999
<CAPTION>
March March
2000 31, 1999
<S> <C> <C>
Cash Flows from Operating Activities
Net (Loss) ($ 356,260) ($ 44,175)
Depreciation -0- 84
Non Cash Expenses 327,500 -0-
Rounding -0- 2
Changes in Operating Assets & Liabilities:
Increase (Decrease)Accounts Payable 2,996 7,788
Increase in Interest Payable 3,200 1,365
Increase in Accrued Salaries -0- 24,000
Net Cash Flows from
Operating Activities ( 22,564) ( 10,936)
Cash Flows from Investing Activities -0- -0-
Cash Flows from Financing Activities
Sale of Common Stock 23,900 9,500
Increase in Notes Payable 3,965 7,204
Net Cash Flows Provided by
Financing Activities 27,865 16,704
Increase (Decrease) in Cash 5,301 5,768
Cash at Beginning of Period 1,062 497
Cash at End of Period $ 6,363 $ 6,265
Disclosure for Cash Flows from:
Interest $ 21,940 $ 4,882
Taxes -0- -0-
</TABLE>
SANGUINE CORPORATION
Notes to Financial Statements
NOTE #1 - Corporate History
The Company was incorporated January 27, 1974, in the State of Utah, using the
name Sight and Sound Systems, Inc. On July 8, 1974, the Company changed its
name to International Health Resorts, Inc., and on June 25, 1993, the Company
filed a Certificate of Amendment changing the name to Sanguine Corporation.
In May of 1992, the Company changed its domicile to the State of Nevada.
The stated purpose of the Company is to engage without qualification, in any
lawful acts, or activity for which a corporation may be organized under the
laws of the state of Nevada. Currently, the Company is engaged in developing
artificial blood to be used by the medical profession. The Company is
conducting research and development leading to F.D.A. clinical trials.
The Company forward split its outstanding shares 1.5 shares for 1 on July 14,
1993. As a consequence of this action, the Company had 1,431,000 shares
issued and outstanding prior to the Agreement and Plan of Reorganization in
which Sanguine Corporation (a California Corporation) was acquired.
On June 14, 1993, the Company entered into an Agreement and Plan of
Reorganization, wherein it was agreed that Sanguine Corporation (a Nevada
Corporation) would issue 14,589,775 shares of its common stock to acquire 94%
of the issued and outstanding shares of stock of Sanguine Corporation (a
California Corporation).
From 1974 to 1989, the Company engaged in several business ventures. These
business activities resulted in the loss of all Company assets. Because of
the search for a new business venture, the Company has entered into the
"development stage company" status again. Sanguine Corporation (California)
is a development stage company and these financial statements are presented as
those of a development stage company effective January 18, 1989, coinciding
with the incorporation date of Sanguine Corporation (California).
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period when
the goods are shipped to the customer.
C. The Company considers all short term, highly liquid investments that are
readily convertible, within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
SANGUINE CORPORATION
Notes to Financial Statements -Continued-
NOTE #2 - Significant Accounting Policies -Continued-
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length of
the related assets or the estimated lives of the assets. Depreciation
is computed on the straight line method for reporting purposes and for
tax purposes.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
NOTE #3 - Statement Preparation
The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities & 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 financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 1999 10-K
report.
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Item 2. Management's Discussion and Analysis or Plan of Operation.
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Plan of Operation.
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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.
Battelle is not conducting any research and development activities
pending receipt of further funding from the Company. 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 for the calendar year ended
December 31, 1999, 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.
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During the quarterly period ending March 31, 2000, 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 ($356,260).
Liquidity.
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During the quarterly period ended March 31, 2000, the Company
had total expenses of $356,260, while receiving $0 in revenues; compared to
the period ended March 31, 1999, the Company had total expenses of $44,175,
while receiving $0 in revenues.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
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None; not applicable.
Item 2. Changes in Securities and Use of Proceeds.
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None; not applicable.
Item 3. Defaults Upon Senior Securities.
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None; not applicable.
Item 4. Submission of Matters to a Vote of Security Holders.
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None; not applicable.
Item 5. Other Information.
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None; not applicable.
Item 6. Exhibits and Reports on Form 8-K.
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(a) Exhibits.
10-SB-A1 Registration Statement.*
Form 10-KSB Annual Report for the
Fiscal Year ended December 31, 1998.*
Form 10-KSB Annual Report for the
Fiscal Year ended December 31, 1999.*
(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: 5/22/2000 By:/s/Thomas C. Drees
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Thomas C. Drees, CEO, President and
Chairman of the Board of Directors
Date: 5/22/2000 By:/s/Anthony G. Hargreaves
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Anthony G. Hargreaves
Vice President, Secretary/Treasurer
and Director
Date: 5/22/2000 By:/s/David E. Nelson
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David E. Nelson
CFO and Director
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000926287
<NAME> SANGUINE CORPORATION
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
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<ALLOWANCES> 0
<INVENTORY> 0
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0
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