10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2011

[   ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

For the transition period from __________ to __________

Commission File Number 000-24480

Sanguine Corporation

(Exact name of registrant as specified in its charter)

Nevada

95-4347608

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)

110 Founders Mill Ct., Roswell Georgia

  30075

 (Address of principal executive offices)  (Zip Code)

(678) 352-9060

 (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 past 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 by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes [X]  No  [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer  ¨ (Do not check if a smaller reporting company)

Smaller reporting

company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [  ]   No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

7,246,822 shares of $0.001 par value common stock on November 7, 2011

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Sanguine Corporation

FINANCIAL STATEMENTS

(UNAUDITED)

September 30, 2011

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted.  However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made.  These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.

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SANGUINE CORPORATION & SUBSIDIARY

 (A Development Stage Company)

 Consolidated Balance Sheets

		September 30, 2011 (Unaudited)		December 31, 2010
ASSETS
CURRENT ASSETS
Cash	$	934	$	1,195
Accounts receivable		-		28,000
Total Current Assets		934		29,195
PROPERTY AND EQUIPMENT, NET		328		463
TOTAL ASSETS	$	1,262	$	29,658
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	262,054	$	244,359
Accrued interest		7,947		2,330
Related party payable		308,141		182,675
Notes payable		166,200		29,700
Accrued compensation		-		6,075
Total Current Liabilities		744,342		465,139
Total Liabilities		744,342		465,139
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ DEFICIT
Preferred stock, 10,000,000 shares authorized of $0.001 par         value, 75,000 and 150,000 shares issued and outstanding,         respectively		75		150
Common stock, 200,000,000 shares authorized of  $0.001 par         value, 7,246,822 and 6,682,072 shares  issued and outstanding,         respectively		7,247		6,682
Additional paid in capital		9,727,714		8,697,935
Preferred stock subscribed		-		8,500
Deficit accumulated during the development stage		(10,478,116)		(9,148,748)
Total Shareholders’ Deficit		(743,080)		(435,481)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	1,262	$	29,658

The accompanying notes are an integral part of these consolidated financial statements.

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SANGUINE CORPORATION & SUBSIDIARY

 (A Development Stage Company)

 Consolidated Statements of Operations (Unaudited)

		For the Three Months Ended September 30, 2011		For the Three Months Ended September 30, 2010		For the Nine Months Ended September 30, 2011		For the Nine Months Ended September 30, 2010		From Inception of the Development Stage on January 18, 1990 to September 30, 2011
REVENUES	$	-	$	4,970	$	-	$	4,970	$	224,732
COST OF SALES		-		6,600		-		6,600		18,297
GROSS PROFIT		-		(1,630)		-		(1,630)		206,435
OPERATING EXPENSES
Professional fees		48,109		65,999		166,101		210,321		5,581,883
Research and development		-		-		10,870		-		1,984,028
Stock based compensation		-		-		984,975		-		984,975
Selling, general and administrative		47,627		14,658		148,870		29,063		3,028,086
Total Operating Expenses		95,736		80,657		1,310,816		239,384		11,578,972
LOSS FROM OPERATIONS		(95,736)		(82,287)		(1,310,816)		(241,014)		(11,372,537)
OTHER INCOME (EXPENSE)
Interest income		-		-		-		-		40,195
Interest expense		(7,300)		(3,144)		(16,690)		(8,996)		(704,627)
Gain (loss) on foreign currency             exchange		-		(9,603)		-		5,810		(9,099)
Loss on cash deposit		-		-		-		-		(10,020)
Gain (loss) on settlement of debt		(1,862)		-		(1,862)		-		1,577,972
Total Other Income (Expense)		(9,162)		(12,747)		(18,552)		(3,186)		894,421
NET LOSS BEFORE PROVISION FOR       INCOME TAX		(104,898)		(95,034)		(1,329,368)		(244,200)		(10,478,116)
PROVISION FOR INCOME TAX		-		-		-		-		-
NET LOSS	$	(104,898)	$	(95,034)	$	(1,329,368)	$	(244,200)	$	(10,478,116)
BASIC AND DILUTED LOSS PER      SHARE	$	(0.02)	$	(0.01)	$	(0.20)	$	(0.04)
WEIGHTED AVERAGE NUMBER OF      SHARES OUTSTANDING –BASIC      AND DILUTED		6,872,050		6,682,072		6,758,457		6,682,072

The accompanying notes are an integral part of these consolidated financial statements.

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SANGUINE CORPORATION & SUBSIDIARY

 (A Development Stage Company)

  Consolidated Statements of Cash Flows (Unaudited)

		For the Nine Months Ended September 30, 2011		For the Nine Months Ended September 30, 2010		From Inception of the Development Stage on January 18, 1990 to September 30, 2011
Statement of Cash Flow
Net loss	$	(1,329,368)	$	(244,200)	$	(10,478,116)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		135		209		6,668
Common stock issued for services		-		-		3,365,446
Contributed capital for operating activities		9,756		8,289		27,896
Stock options granted		1,002,258		-		1,002,258
Stock warrants granted		-		-		8,650
Interest on beneficial conversion feature		-		-		25,000
Legal expense related to beneficial conversion feature		-		-		3,750
Note payable issued for services		-		-		727,950
(Gain)/Loss on extinguishments of debt		1,862		-		(179,891)
Gain on conversions of debt to equity		-		-		(1,398,081)
Recognition of expenses prepaid with common stock		-		-		456,184
Warrant extension		-		-		34,493
Gain (loss) on exchange of foreign currency		-		(5,810)		9,099
Changes in assets and liabilities:
Decrease in accounts receivable		28,000		-		-
Decrease in prepaid expense		-		134,109		1,198,717
Increase in accounts payable and related party payables		143,161		44,177		933,750
Increase in accrued interest payable		6,935		706		556,545
Increase in accrued liabilities		-		-		10,125
Increase in customer deposits		-		-		45,000
Increase in accrued salaries		-		3,587		987,661
Net Cash Used by Operating Activities		(137,261)		(58,933)		(2,656,896)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets		-		-		(6,995)
Net Cash Used by Investing Activities		-		-		(6,995)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from warrant conversion		-		-		524,700
Proceeds from notes payable and notes payable-related party		137,000		27,500		396,800
Payments on notes payable and notes payable –related party		-		(7,500)		(22,900)
Proceeds from issuance of convertible debentures		-		-		40,000
Contributed capital		-		-		750
Preferred stock subscription		-		83,500		33,500
Preferred stock issued for cash		-		-		125,000
Common stock issued for cash		-		-		1,566,975
Net Cash Provided by Financing Activities		137,000		103,500		2,664,825
NET INCREASE (DECREASE) IN CASH		(261)		44,567		934
CASH AT BEGINNING OF PERIOD		1,195		1,928		-
CASH AT END OF PERIOD	$	934	$	46,495	$	934
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
CASH PAID FOR:
Interest	$	-	$	-	$	-
Income taxes	$	-	$	800	$	2,500
NON-CASH ACTIVITIES
Common stock issued for debt conversion	$	-	$	-	$	9,600
Contributed capital for interest contributed	$	9,756	$	8,289	$	27,896
Interest on beneficial conversion feature	$	-	$	-	$	25,000
Legal expense related to beneficial conversion feature	$	-	$	-	$	3,750
Common stock issued for prepaid services	$	-	$	-	$	585,019
Common stock issued for debt and accrued expenses	$	20,055	$	-	$	2,842,122

The accompanying notes are an integral part of these consolidated financial statements.

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SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

September 30, 2011 and December 31, 2010

NOTE 1 -

BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2010 Annual Report on Form 10-K.  Operating results for the nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

NOTE 2 -

ORGANIZATION AND DESCRIPTION OF BUSINESS

Sanguine Corporation, (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 Company is engaged in developing oxygen carriers to be used by the medical profession.  The Company is conducting research and development leading to F.D.A. clinical trials.

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).  During the year ended December 31, 2001, the Company acquired the remaining 6% of the California Corporation in exchange for the issuance of 840,195 shares of common stock.

From 1974 to 1980, the Company engaged in several business ventures. The Company is a development stage company and these financial statements are presented as those of a development stage company effective January 18, 1990, coinciding with the incorporation date of Sanguine Corporation.

On March 7, 2008, the Company formed a wholly owned subsidiary called Sanguine Lifescience Corporation.  As part of the formation of Sanguine Lifescience Corporation, the Company transferred $15,000 to a bank account for Sanguine Lifescience use.  At this time, Sanguine Lifescience Corporation is not engaged in any business other than normal corporate matters.

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SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

September 30, 2011 and December 31, 2010

NOTE 3 -

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.

The Company’s management has taken certain steps to maintain its operating and financial requirements in an effort to continue as a going concern until such time as revenues are sufficient to cover expenses.  Future plans include a debt or equity offering for between $1,000,000 - $1,500,000 which is estimated to enable the Company to complete the initial animal testing stage for FDA approval of its product.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 4 -

STOCK WARRANTS AND OPTIONS

The Company had no outstanding stock warrants during the nine months ended September 30, 2011, and the year ended December 31, 2010.  During the nine months ended September 30, 2011, the Company granted 3,000,000 options to purchase the Company’s common stock for an exercise price of $0.20 per share for a period of 60 months beginning in February 2011, and 59,283 options to purchase the Company’s common stock for an exercise price of $0.10 per share for a period of 35 months beginning in February 2011.  The options were granted as part of an employment agreement with Frank Marra entered into during the quarter.  The Company valued the options using the Black-Scholes option-pricing model with the following assumptions: dividend yield of zero percent; expected volatility of 176.85%; risk-free interest rate of 2.39%; and expected life of 5 years.   A summary of the status of the Company’s outstanding stock options as of September 30, 2011 and December 31, 2010 and changes during the periods then ended is presented below:

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SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

September 30, 2011 and December 31, 2010

NOTE 4 -      STOCK WARRANTS AND OPTIONS (continued)

	2011			2010
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding, beginning of year	701,433	$	.10	701,433	$	.10
Granted	3,059,283		.20	-		-
Expired/Cancelled	-		-	-		-
Exercised	-		-	-		-
Outstanding end of year	3,760,716	$	.18	701,433	$	.10
Exercisable	3,760,716	$	.18	701,433	$	.10

		Outstanding				Exercisable
Range of Exercise Prices			Number outstanding at September 30, 2011	Weighted Average Remaining Contractual Life	Number Exercisable at September 30,2011
$	.10-.20		3,760,716	3.94	3,760,716
			3,760,716		3,760,716

NOTE 5 -

EQUITY TRANSACTIONS

During the current year, the Company executed an employment agreement with the President of the Company which provided 3,000,000 options to purchase the Company’s common stock for an exercise price of $0.20 per share for a 60 month period beginning in February 2011.  The options were valued using the Black-Scholes option pricing model, with the following assumptions: dividend yield of zero percent; expected volatility of 176.85%; risk-free interest rate of 2.39%; and expected life of 5 years.  The value of the options was $984,975 and was expensed.

The Company issued 42,000 shares of common stock during the nine months ended September 30, 2011.  The stock was issued as the result of the conversion of two notes payable valued at $9,000 and related accrued interests of $1,318.  The stock was issued at $0.29 per share for a total value of $12,180.  A loss of $1,862 was recognized in the transaction.

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SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

September 30, 2011 and December 31, 2010

NOTE 5 -

EQUITY TRANSACTIONS (continued)

The Company issued 22,500 shares of common stock during the nine months ended September 30, 2011, as compensation to the members of the Board of Directors.  The shares were valued at $0.35 per share for a total expense of $7,875.

During the nine months ended September 30, 2011, a holder of 75,000 shares of series A preferred stock exercised the conversion of that preferred stock.  As a result the Company issued 500,250 shares of common stock to this stockholder.  The number of common shares was determined at the conversion rate of 6 2/3 shares of common stock per share of preferred stock as specified in the conversion terms for the series A preferred shares.

NOTE 6 -

NOTES PAYABLE

During 2010, the Company entered into a loan agreement with an investor.  The note carried an interest rate of 7% per annum.  During the nine months ended September 30, 2011, the Company received $137,000 in proceeds from additional loans made under this agreement.  The balance of this loan at September 30, 2011 and December 31, 2010, was $166,200 and $20,700, respectively, along with accrued interest of $6,660 and $649, respectively.  Effective August 1, 2011, a new agreement was entered into converting the note to a senior convertible promissory note, with a term of 18 months and an interest rate of 10% per annum.   The principal balance at that date was $166,200.  Interest payments of $4,155 are due on a quarterly basis.  The principal and interest on the note may be converted into shares of common stock at the lower of $0.20 or a price equal to that of the thirty day moving average of the bid.  As of September 30, 2011, the Company has not paid the quarterly interest payment due.

During 2009, the Company entered into loan agreements with investors for $9,000.  The notes carried an interest rate of 7% and were due on demand.  During the quarter ended September 30, 2011, the investors signed a letter of agreement to convert the notes, including any accrued interest, into 42,000 shares of restricted common stock.  Interest expense on these notes for the quarter ended September 30, 2011 was $315.  

NOTE 7 -

RELATED PARTY TRANSACTION

Related party payables at September 30, 2011 and December 31, 2010 represent amounts owed to officers of the Company for consulting fees and reimbursement of expenses paid of $308,141 and $182,675, respectively.  Interest of 6% -15% was computed on the balance of the related party payable and recorded as $9,756 of additional paid in capital and $1,287 of accrued interest.

During the current year, the Company executed an employment agreement with the President of the Company.  Under the terms of this agreement 3,000,000 options to purchase shares of common stock for $0.20 per share for a period of 60 months were granted to the President.  Also, the President’s annual salary was set at $150,000 per year.  The agreement expires in February 2013 unless it is extended by mutual agreement of the Company and the President.

NOTE 8 -    SUBSEQUENT EVENTS

The Company has evaluated subsequent events per the requirements of ASC Topic 855 and has determined that there are no reportable subsequent events.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Special Note Regarding Forward-Looking Statements

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Plan of Operations provided below, including information regarding the Company’s financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operations that are not historical facts are hereby identified as "forward-looking statements."

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes.  Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions.  The Company believes there have been no significant changes during the three and nine month periods ended September 30, 2011 and 2010, to the items disclosed as significant accounting policies since the Company’s last audited financial statements for the year ended December 31, 2010.

The Company’s accounting policies are more fully described in Note 1 of the consolidated financial statements.  As discussed in Note 1, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances.  Actual results could differ from these estimates under different assumptions or conditions.  The Company believes that the following addresses the Company’s most critical accounting policies.

We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”).  Under SAB 104, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured.  We recognize revenue as services are provided. Revenues are reflected net of coupon discounts.

We account for income taxes in accordance with ASC Topic 740.  Under ASC Topic 740, deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized.  A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.  

Plan of Operation.

We are moving forward with testing of our product and seeking industry partners to assist in defraying the costs of testing.  Additionally, we are looking to start selling some of our product for use in research by labs around the country.  These efforts will be dependent on additional financing.  We have had communications with several labs and are in the process of investigating potential material supply contracts with such labs.  These contracts will allow us to start receiving potential revenues which would then be applied to further development and testing of our proposed products.

Patents

Presently, we do not have any patents on our technology or processes.  Our prior patents have not been renewed

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and we are in the process of filing new patents on the new processes and formulas.  At this time, we cannot say if these applications will be successful.  Additionally, without additional funding, we will not be able to complete the patent process.

Results of Operations

The Company had no sales during the quarter ended September 30, 2011.  The Company continues to focus on the development of its products.  As such, the Company has not had substantial revenue in either the quarter ended September 30, 2011 or 2010.  We continue to focus on the research and development activities related to our PHER-O2 and are focusing more on its use in research labs around the world.

We realized a net loss of $104,898 and $1,329,368 for the three and nine months ended September 30, 2011, respectively compared to a net loss of $95,034 and $244,200 for the three and nine months ended September 30, 2010, respectively.  Most of our expense for the nine month period related to non-cash expenses related to employment contracts with our management.  In the nine months ended September 30, 2011, we entered into a new employment contract with our president and under the Black-Scholes model we recorded an expense related to the options of $984,975.  Without this non-cash expense, our loss would have been $344,393 for the nine months ended September 30, 2011.  Since we have limited revenues, we have had to rely on stock sales and loans to fund our operations and continue to increase our payables since we do not have the funds to pay all of our expenses.

As we move more to selling products to labs around the country, our selling, general and administrative expenses have been increasing.  For the three and nine months ended September 30, 2011, our selling, general and administrative expenses were $47,627 and $148,870, respectively compared to $14,658 and $29,063, respectively for the same periods in 2010.  We are hopeful these selling efforts are paying off and hope to be able to start shipping product to labs around the country in the upcoming quarters.

Liquidity and Capital Resources

As of September 30, 2011, we had $934 in cash and $744,342 in current liabilities. Our cash position is not sufficient to cover our accounts payable or other current liabilities with working capital at September 30, 2011, of negative $743,408.  As such we will be dependent on our ability to raise additional debt or equity capital to be able to cover current liabilities.  Without additional equity or debt financing, it will be difficult for the Company to remain in business.  In August 2011, we entered into a loan agreement with Wharton Capital, a company affiliated with our president, to provide additional financing which increased the outstanding balance payable to Wharton to $166,200 as of that time.  The note combined all prior notes and advances between the Company and Wharton Capital into this one note.  The term of the note is eighteen months and bears interest at ten percent (10%) per annum.  Interest payments of $4,155 are due on a quarterly basis on the last day of each of the Company’s fiscal quarters.  The note is convertible into shares of the Company’s common stock at the lower of twenty cents ($0.20) per share or a price equal to a thirty day moving average stock price as posted on Yahoo finance or other quotation mediums. Additionally, the note provides anti-dilution protection to Wharton Capital so that if the Company issued any equity, Wharton Capital will have the right, but not the obligation, to purchase additional shares of the Company’s common stock to maintain its current percentage of ownership in the Company.  Even with the Wharteon note, the Company still needs additional funding in order to continue developing its products and paying past and ongoing obligations. At this time, the Company has no commitments for additional funding.

Off-balance sheet arrangements

We had no off-balance sheet arrangements during the quarter ended September 30, 2011.

Forward-looking Statements

Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Annual Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express

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expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

NA-Small Reporting Company

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.  Management believes, however, that our controls do provide reasonable assurances.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the President and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2011.  Based on this evaluation, our

13

management, with the participation of the President and Principal Financial Officer, concluded that, as of September 30, 2011, our internal control over financial reporting was effective.

Changes in internal control over financial reporting

During the nine months ended September 30, 2011, the Company made changes in internal controls to addressed prior weaknesses.  These changes focused on additional controls to improve the communication, control activities and monitoring components of the Company’s internal controls.  These changes aimed at making the system of internal controls stronger for supporting on time reporting obligations and providing adequate time for the review processes.  Except as indicated, there have been no changes in internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  

PART II - OTHER INFORMATION

ITEM 1.  Legal Proceedings

None

ITEM 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

No additional sales of unregistered securities occurred during the September 30, 2011 quarter.  In August 2011, we did issue a convertible promissory note to with a company affiliated with our CEO.  The note is for a period of 18 months and bears interest at 10% per annum.  The principal balance at the time of issuance was $166,200 with interest payments due and payable quarterly. The note is convertible into shares of the Company’s common stock at the lower of twenty cents ($0.20) per share or a price equal to a thirty day moving average stock price as posted on Yahoo finance or other quotation mediums.  Please see our annual report on Form 10K for the year ended December 31, 2010 for all sales during the prior two years.

Use of Proceeds of Registered Securities

None; not applicable.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the three months ended September 30, 2011, we have not purchased any equity securities nor have any officers or directors of the Company.

ITEM 3.  Defaults Upon Senior Securities

We are not aware of any defaults upon senior securities.

ITEM 4.  Removed and Reserved

ITEM 5.  Other Information.

None

ITEM 6.  Exhibits

(a)

Exhibits.

14

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.

Exhibit

Number               Description

Location

10.1

Loan Agreement – Wharton Capital, LC August 1, 2011

Incorporated by Reference

From June 30, 2011 10Q

31.1

302 Certification of CEO

This Filing

31.2

302 Certification of Principal Financial Officer

This Filing

32

906 Certification

This Filing

101.INS

 XBRL Instance

101.XSD 

XBRL Schema

101.CAL

 XBRL Calculation

101.DEF

 XBRL Definition

101.LAB

XBRL Label

101.PRE

XBRL Presentation

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

(Registrant)

Date: November 9, 2011

By: /s/ Frank Marra

Frank Marra

CEO and Chairman of the

Board of Directors

Date: November 9, 2011

By: /s/ Frank Marra

Frank Marra

Principal Financial Officer and Director

15

EX-31

Exhibit 31.1

Certification of Principal Executive Officer
Pursuant to 18 U.S.C. 1350
(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Frank Marra, certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Sanguine, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2011

/s/ Frank Marra

Frank Marra, Chief Executive Officer

EX-31

Exhibit 31.2

Certification of Principal Financial Officer
Pursuant to 18 U.S.C. 1350
(Section 302 of the Sarbanes-Oxley Act of 2002)

I, Frank Marra certify that:

1.

I have reviewed this quarterly report on Form 10-Q of Sanguine, Inc.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.

Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5.

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a.

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b.

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: November 9, 2011

 /s/ Frank Marra

Frank Marra, Principal Financial Officer/CFO

EX-32

                                                                                                   EXHIBIT 32.1.

Certification of Principal Executive Officer

Pursuant to 18 U.S.C. 1350

(Section 906 of the Sarbanes-Oxley Act of 2002)

I, Frank Marra, Chief Executive Officer, and Frank Marra, Principal Financial Officer, of Sanguine Corporation (the "Registrant") do hereby certify, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of our knowledge, based upon a review of the Quarterly Report on Form 10-Q for the period September 30, 2011 of the Registrant, as filed with the Securities and Exchange Commission on the date hereof (the "Report"):

 (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

 (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.

Dated:  November 9, 2011

By:  /s/ Frank Marra

 Frank Marra

 Chief Executive Officer

By:  /s/  Frank Marra

    Frank Marra, Chief Financial Officer/

   Principal Financial Officer

 * A signed original of this written statement required by Section 906 has been provided to Sanguine Corporation and will be retained by Sanguine Corporation and furnished to the Securities Exchange Commission or its staff upon request.

XML

Sanguine Corporation Balance Sheet (Parenthetical) (USD $)	Sep. 30, 2011	Dec. 31, 2010
Preferred stock authorized	10,000,000	10,000,000
Preferred stock par value	$ 0.001	$ 0.001
Preferred stock outstanding	75,000	150,000
Common stock authorized	200,000,000	200,000,000
Common stock par value	$ 0.001	$ 0.001
Common stock outstanding	7,246,822	6,682,072

XML

SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Statements of Operations (Unaudited) (USD $)	3 Months Ended		9 Months Ended		264 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
REVENUES	$ 0	$ 4,970	$ 0	$ 4,970	$ 224,732
COST OF SALES	0	6,600	0	6,600	18,297
GROSS PROFIT	0	(1,630)	0	(1,630)	206,435
OPERATING EXPENSES
Professional fees	48,109	65,999	166,101	210,321	5,581,883
Research and development	0	0	10,870	0	1,984,028
Stock based compensation	0	0	984,975	0	984,975
Selling, general and administrative	47,627	14,658	148,870	29,063	3,028,086
Total Operating Expenses	95,736	80,657	1,310,816	239,384	11,578,972
LOSS FROM OPERATIONS	(95,736)	(82,287)	(1,310,816)	(241,014)	(11,372,537)
OTHER INCOME (EXPENSE)
Interest income	0	0	0	0	40,195
Interest expense	(7,300)	(3,144)	(16,690)	(8,996)	(704,627)
Gain (loss) on foreign currency exchange	0	(9,603)	0	5,810	(9,099)
Loss on cash deposit	0	0	0	0	(10,020)
Gain (loss) on settlement of debt	(1,862)	0	(1,862)	0	1,577,972
Total Other Income (Expense)	(9,162)	(12,747)	(18,552)	(3,186)	894,421
NET LOSS BEFORE PROVISION FOR INCOME TAX	(104,898)	(95,034)	(1,329,368)	(244,200)	(10,478,116)
PROVISION FOR INCOME TAX	0	0	0	0	0
NET LOSS	$ (104,898)	$ (95,034)	$ (1,329,368)	$ (244,200)	$ (10,478,116)
BASIC AND DILUTED LOSS PER SHARE	$ (0.02)	$ (0.01)	$ (0.20)	$ (0.04)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING -BASIC AND DILUTED	6,872,050	6,682,072	6,758,457	6,682,072

XML

Document and Entity Information	3 Months Ended
	Sep. 30, 2011	Nov. 07, 2011
Document and Entity Information
Entity Registrant Name	SANGUINE CORP
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Entity Central Index Key	0000926287
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		7,246,822
Entity Filer Category	Smaller Reporting Company
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q3

XML

Equity

3 Months Ended

Sep. 30, 2011

Equity

Stockholders' Equity Note Disclosure [Text Block]

NOTE 4 -       STOCK WARRANTS AND OPTIONS

The Company had no outstanding stock warrants during the nine months ended September 30, 2011, and the year ended December 31, 2010.  During the nine months ended September 30, 2011, the Company granted 3,000,000 options to purchase the Company’s common stock for an exercise price of $0.20 per share for a period of 60 months beginning in February 2011, and 59,283 options to purchase the Company’s common stock for an exercise price of $0.10 per share for a period of 35 months beginning in February 2011.  The options were granted as part of an employment agreement with Frank Marra entered into during the quarter.  The Company valued the options using the Black-Scholes option-pricing model with the following assumptions: dividend yield of zero percent; expected volatility of 176.85%; risk-free interest rate of 2.39%; and expected life of 5 years.   A summary of the status of the Company’s outstanding stock options as of September 30, 2011 and December 31, 2010 and changes during the periods then ended is presented below:

	2011			2010
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding, beginning of year	701,433	$	.10	701,433	$	.10
Granted	3,059,283		.20	-		-
Expired/Cancelled	-		-	-		-
Exercised	-		-	-		-
Outstanding end of year	3,760,716	$	.18	701,433	$	.10
Exercisable	3,760,716	$	.18	701,433	$	.10

		Outstanding				Exercisable
Range of Exercise Prices			Number outstanding at September 30, 2011	Weighted Average Remaining Contractual Life	Number Exercisable at September 30,2011
$	.10-.20		3,760,716	3.94	3,760,716
			3,760,716		3,760,716

NOTE 5 -       EQUITY TRANSACTIONS

During the current year, the Company executed an employment agreement with the President of the Company which provided 3,000,000 options to purchase the Company’s common stock for an exercise price of $0.20 per share for a 60 month period beginning in February 2011.  The options were valued using the Black-Scholes option pricing model, with the following assumptions: dividend yield of zero percent; expected volatility of 176.85%; risk-free interest rate of 2.39%; and expected life of 5 years.  The value of the options was $984,975 and was expensed.

The Company issued 42,000 shares of common stock during the nine months ended September 30, 2011.  The stock was issued as the result of the conversion of two notes payable valued at $9,000 and related accrued interests of $1,318.  The stock was issued at $0.29 per share for a total value of $12,180.  A loss of $1,862 was recognized in the transaction.

                        The Company issued 22,500 shares of common stock during the nine months ended September 30, 2011, as compensation to the members of the Board of Directors.  The shares were valued at $0.35 per share for a total expense of $7,875.

                        During the nine months ended September 30, 2011, a holder of 75,000 shares of series A preferred stock exercised the conversion of that preferred stock.  As a result the Company issued 500,250 shares of common stock to this stockholder.  The number of common shares was determined at the conversion rate of 6 2/3 shares of common stock per share of preferred stock as specified in the conversion terms for the series A preferred shares.

XML

Organization, Consolidation and Presentation of Financial Statements

3 Months Ended

Sep. 30, 2011

Organization, Consolidation and Presentation of Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

NOTE 1 -       BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations.  The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements.  Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, 2010 Annual Report on Form 10-K.  Operating results for the nine months ended September 30, 2011 are not necessarily indicative of the results that may be expected for the year ending December 31, 2011.

NOTE 2 -       ORGANIZATION AND DESCRIPTION OF BUSINESS

Sanguine Corporation, (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 Company is engaged in developing oxygen carriers to be used by the medical profession.  The Company is conducting research and development leading to F.D.A. clinical trials.

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).  During the year ended December 31, 2001, the Company acquired the remaining 6% of the California Corporation in exchange for the issuance of 840,195 shares of common stock.

From 1974 to 1980, the Company engaged in several business ventures. The Company is a development stage company and these financial statements are presented as those of a development stage company effective January 18, 1990, coinciding with the incorporation date of Sanguine Corporation.

On March 7, 2008, the Company formed a wholly owned subsidiary called Sanguine Lifescience Corporation.  As part of the formation of Sanguine Lifescience Corporation, the Company transferred $15,000 to a bank account for Sanguine Lifescience use.  At this time, Sanguine Lifescience Corporation is not engaged in any business other than normal corporate matters.

NOTE 3 -       GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business.  The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern.  The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.  If the Company is unable to obtain adequate capital, it could be forced to cease operations.

The Company’s management has taken certain steps to maintain its operating and financial requirements in an effort to continue as a going concern until such time as revenues are sufficient to cover expenses.  Future plans include a debt or equity offering for between $1,000,000 - $1,500,000 which is estimated to enable the Company to complete the initial animal testing stage for FDA approval of its product.  However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations.  The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

XML

Related Party Disclosures

3 Months Ended

Sep. 30, 2011

Related Party Disclosures

Related Party Transactions Disclosure [Text Block]

NOTE 7 -       RELATED PARTY TRANSACTION

Related party payables at September 30, 2011 and December 31, 2010 represent amounts owed to officers of the Company for consulting fees and reimbursement of expenses paid of $308,141 and $182,675, respectively.  Interest of 6% -15% was computed on the balance of the related party payable and recorded as $9,756 of additional paid in capital and $1,287 of accrued interest.

During the current year, the Company executed an employment agreement with the President of the Company.  Under the terms of this agreement 3,000,000 options to purchase shares of common stock for $0.20 per share for a period of 60 months were granted to the President.  Also, the President’s annual salary was set at $150,000 per year.  The agreement expires in February 2013 unless it is extended by mutual agreement of the Company and the President.

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Subsequent Events

3 Months Ended

Sep. 30, 2011

Subsequent Events

Subsequent Events [Text Block]

NOTE 8 -    SUBSEQUENT EVENTS

The Company has evaluated subsequent events per the requirements of ASC Topic 855 and has determined that there are no reportable subsequent events.

XML

SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) (USD $)	9 Months Ended		264 Months Ended
	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Net loss	$ (1,329,368)	$ (244,200)	$ (10,478,116)
Depreciation and amortization	135	209	6,668
Common stock issued for services	0	0	3,365,446
Contributed capital for operating activities	9,756	8,289	27,896
Stock options granted	1,002,258	0	1,002,258
Stock warrants granted	0	0	8,650
Interest on beneficial conversion feature	0	0	25,000
Legal expense related to beneficial conversion feature	0	0	3,750
Note payable issued for services	0	0	727,950
(Gain)/Loss on extinguishments of debt	1,862	0	(179,891)
Gain on conversions of debt to equity	0	0	(1,398,081)
Recognition of expenses prepaid with common stock	0	0	456,184
Warrant extension	0	0	34,493
Gain (loss) on exchange of foreign currency	0	(5,810)	9,099
Decrease in accounts receivable	28,000	0	0
Decrease in prepaid expense	0	134,109	1,198,717
Increase in accounts payable and related party payables	143,161	44,177	933,750
Increase in accrued interest payable	6,935	706	556,545
Increase in accrued liabilities	0	0	10,125
Increase in customer deposits	0	0	45,000
Increase in accrued salaries	0	3,587	987,661
Net Cash Used by Operating Activities	(137,261)	(58,933)	(2,656,896)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets	0	0	(6,995)
Net Cash Used by Investing Activities	0	0	(6,995)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from warrant conversion	0	0	524,700
Proceeds from notes payable and notes payable-related party	137,000	27,500	396,800
Payments on notes payable and notes payable -related party	0	(7,500)	(22,900)
Proceeds from issuance of convertible debentures	0	0	40,000
Contributed capital	0	0	750
Preferred stock subscription	0	83,500	33,500
Preferred stock issued for cash	0	0	125,000
Common stock issued for cash	0	0	1,566,975
Net Cash Provided by Financing Activities	137,000	103,500	2,664,825
NET INCREASE (DECREASE) IN CASH	(261)	44,567	934
CASH AT BEGINNING OF PERIOD	1,195	1,928	0
CASH AT END OF PERIOD	934	46,495	934
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
Interest	0	0	0
Income taxes	0	800	2,500
NON-CASH ACTIVITIES
Common stock issued for debt conversion	0	0	9,600
Contributed capital for interest contributed	9,756	8,289	27,896
Interest on beneficial conversion feature	0	0	25,000
Legal expense related to beneficial conversion feature	0	0	3,750
Common stock issued for prepaid services	0	0	585,019
Common stock issued for debt and accrued expenses	$ 20,055	$ 0	$ 2,842,122

XML

Payables and Accruals

3 Months Ended

Sep. 30, 2011

Payables and Accruals

Accounts Payable and Accrued Liabilities Disclosure [Text Block]

NOTE 6 -       NOTES PAYABLE

During 2010, the Company entered into a loan agreement with an investor.  The note carried an interest rate of 7% per annum.  During the nine months ended September 30, 2011, the Company received $137,000 in proceeds from additional loans made under this agreement.  The balance of this loan at September 30, 2011 and December 31, 2010, was $166,200 and $20,700, respectively, along with accrued interest of $6,660 and $649, respectively.  Effective August 1, 2011, a new agreement was entered into converting the note to a senior convertible promissory note, with a term of 18 months and an interest rate of 10% per annum.   The principal balance at that date was $166,200.  Interest payments of $4,155 are due on a quarterly basis.  The principal and interest on the note may be converted into shares of common stock at the lower of $0.20 or a price equal to that of the thirty day moving average of the bid.  As of September 30, 2011, the Company has not paid the quarterly interest payment due.

During 2009, the Company entered into loan agreements with investors for $9,000.  The notes carried an interest rate of 7% and were due on demand.  During the quarter ended September 30, 2011, the investors signed a letter of agreement to convert the notes, including any accrued interest, into 42,000 shares of restricted common stock.  Interest expense on these notes for the quarter ended September 30, 2011 was $315.  

XML

SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Balance Sheets (USD $)	Sep. 30, 2011	Dec. 31, 2010
CURRENT ASSETS
Cash	$ 934	$ 1,195
Accounts receivable	0	28,000
Total Current Assets	934	29,195
PROPERTY AND EQUIPMENT, NET	328	463
TOTAL ASSETS	1,262	29,658
CURRENT LIABILITIES
Accounts payable	262,054	244,359
Accrued interest	7,947	2,330
Related party payable	308,141	182,675
Notes payable	166,200	29,700
Accrued compensation	0	6,075
Total Current Liabilities	744,342	465,139
Total Liabilities	744,342	465,139
SHAREHOLDERS' DEFICIT
Preferred stock, 10,000,000 shares authorized of $0.001 par value, 75,000 and 150,000 shares issued and outstanding, respectively	75	150
Common stock, 200,000,000 shares authorized of $0.001 par value, 7,246,822 and 6,682,072 shares issued and outstanding, respectively	7,247	6,682
Additional paid in capital	9,727,714	8,697,935
Preferred stock subscribed	0	8,500
Deficit accumulated during the development stage	(10,478,116)	(9,148,748)
Total Shareholders' Deficit	(743,080)	(435,481)
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT	$ 1,262	$ 29,658