<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 September 30, 1997

[ ]  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:

                              September 30, 1997

                                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)

                       FINANCIAL STATEMENTS

                        September 30, 1997
                                &
                        December 31, 1996
<TABLE>
                       SANGUINE CORPORATION
                  (A Development Stage Company)
                          Balance Sheet
       September 30, 1997 (Unaudited) and December 31, 1996
<CAPTION>
                                       Unaudited 
                                       1997           1996 
                              ASSETS
<S>                                <C>               <C>
Current Assets
     Cash                          $   1,685         $    672 

Property & Equipment
     Furniture                         1,234            1,924 

Other Assets
     Refundable Loan 
      Commitment Fee
      (See Note #10)                  10,000           10,000 

         TOTAL ASSETS               $ 12,919        $  12,596  

                LIABILITIES & STOCKHOLDERS' EQUITY
Current Liabilities
     Accounts Payable               $ 33,538        $  25,373 
     Accrued Salaries                308,000          236,000 
     Accrued Interest Payable         26,595           22,500 
     Notes Payable                    96,950           69,800 

       Total Current Liabilities     465,083          353,673 

Stockholders' Equity
     Common Stock, Authorized:
      100,000,000 Shares at $0.001 Par 
      Value: 20,877,723 Shares Issued
      & Outstanding                   20,877           20,877 
     Paid In Capital                 596,942          596,942 
     Retained Earnings Deficit    (1,069,983)        (958,896)

      Total Stockholders' Equity    (452,164)        (341,077)

         TOTAL LIABILITIES & 
         STOCKHOLDERS' EQUITY    $    12,919      $    12,596
</TABLE>
The accompanying notes are an integral part of these financial statements

<TABLE> 
                      SANGUINE CORPORATION
                  (A Development Stage Company)
                     Statements of Operations
   For the Period July 1, 1997 to September 30, 1997 Unaudited
   and the Period July 1, 1996 to September 30, 1996 Unaudited
  and the Period January 1, 1997 to September 30, 1997 Unaudited
  and the Period January 1, 1996 to September 30, 1996 Unaudited
<CAPTION>
                              July 1,     July 1,   January 1,  January 1,
                              1997 to     1996 to    1997 to     1996 to
                             September   September  September   September
                              30, 1997    30, 1996   30, 1997    30, 1996 
<S>                       <C>            <C>        <C>          <C>
Revenues
  Interest Income         $       -0-    $       2   $    -0-    $      3 

      Total Revenues              -0-            2        -0-           3 

Expenses
  Promotion               $       -0-    $     -0-   $    -0-     $ 2,500 
  Depreciation                    230          230        690         690 
  Salaries                      4,500        4,500      13,500     13,500 
  Research & Development       19,500       19,500      59,500     73,951 
  Office Expense                2,133        1,552       6,126     13,127 
  Auto Expense                    270          270         810        810 
  Legal & Professional Fees     6,877        1,204      10,315     13,777 
  Rent                          3,207        3,979      11,201     10,650 
  Interest Expense              2,479        1,992       6,837      5,293 
  Travel                          -0-          -0-         -0-      1,318 
  Stock Transfer                   48          297         392        882 
  Consultant Fees                 -0-       14,816         -0-     28,066 
  Tax & License                   -0-          -0-       1,184        381 
  Insurance                       200          130         532        411 

      Total Expenses           39,444       48,470     111,087    165,356 

      Loss for Period     $   (39,444)   $ (48,468)   $(111,087)$(165,353)

      Profit (Loss) Per Share    (.00)        (.00)        (.01)     (.00)

   Weighted Average Shares
   Outstanding             20,877,723   19,562,859   20,877,723 19,562,859 
</TABLE>
The accompanying notes are an integral part of these financial statements

<TABLE>
                       SANGUINE CORPORATION
                  (A Development Stage Company)
                Statements of Cash Flows Unaudited
    For the Periods January 1, 1997 to September 30, 1997 and 
             January 1, 1996 to September 30, 1996  
<CAPTION>
                                           September             September 
                                            30, 1997              30, 1996 
<S>                                       <C>                 <C>
Cash Flows from Operating Activities
 Net (Loss)                               $ (111,087)         $   (165,353)
 Adjustments to Reconcile Net Loss to Net 
  Cash Used by Operations:
   Depreciation                                  690                   690 
   Non Cash Expenses                             -0-                14,616 
 Changes in Operating Assets & Liabilities:
  Increase in Accounts Payable                 8,165                49,795 
  Increase in Interest Payable                 4,095                 4,095 
  Increase in Accrued Salaries                72,000                72,000 

      Net Cash Flows from 
      Operating Activities                   (26,137)              (24,157)

Cash Flows from Investing Activities             -0-                   -0- 
      Net Cash Used by 
      Investing Activities                       -0-                   -0- 

Cash Flows from Financing Activities
 Increase in Notes Payable                    27,150                23,750 
 Contributed Capital                             -0-                 2,500 

      Net Cash Flows Provided by
      Financing Activities                    27,150                26,250 

      Increase (Decrease) in Cash              1,013                 2,093 

      Cash at Beginning of Period                672                   712 

      Cash at End of Period               $    1,685          $      2,805 

Disclosure for Cash Flows from:
 Interest                                 $    6,837          $      5,293 
 Taxes                                            -0-                  -0- 

Non Cash Events:
 Issued 200,000 Shares in Lieu of 
  Cash for Accounts Payable                       -0-               35,917 
</TABLE>
The accompanying notes are an integral part of these financial statements

                       SANGUINE CORPORATION
                  Notes to Financial Statements

NOTE #1 - 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
1997 10-K report. 

NOTE #2 - Subsequent Events

     The Company has authorized the issuance of 1,200,000 shares of its common
stock at $0.40 per share.  The offered shares are to be issued as a private
placement to "Accredited Investors" only and the proceeds of the offerings
($480,000) are to be used to fund the initial protocol with Battelle Memorial
Research Institute of Columbus, Ohio.  As of the date of this report none of
the shares have been sold.

<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 for the fiscal year ended December 31, 1996, 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 September 30, 1997, 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 $33,229.

Liquidity.
----------

          During the quarterly period ended September 30, 1997, the Company
had total expenses of $33,229, while receiving $0 in 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.
----------------------------

          Subsequent Events.

         On November 11, 1997 through Unanimous Consent of the Board of
Directors, the Company authorized the issuance of 1,200,000 shares of its
common stock at $0.40 per share.  The offered shares are to be issued as a
private placement to "Accredited Investors" only and the proceeds of the
offerings ($480,000) are to be used to fund the initial protocol with Battelle
Memorial Research Institute of Columbus, Ohio.  As of the date of this report
none of the shares have been sold.

Item 6.   Exhibits and Reports on Form 8-K.
-------------------------------------------

          (a)  Exhibits.

               10-SB-A1 Registration Statement.*

               Form 10-KSB Annual Report for the 
               Fiscal Year ended December 31, 1996.*

          (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: 11/11/97                          By:/s/Thomas C. Drees
     --------------                     -------------------------------------
                                         Thomas C. Drees, CEO and Chairman of  
                                        the Board of Directors
                                  

Date: 11/11/97                          By:/s/Anthony G. Hargreaves
     --------------                     -------------------------------------
                                        Anthony G. Hargreaves
                                        Vice President, Secretary/Treasurer   
                                        and Director


Date: 11/11/97                          By:/s/Edward L. Kunkel
     --------------                     -------------------------------------
                                        Edward L. Kunkel, Esq.
                                        Director