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, 2004

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

     For the transition period from                to
                                    --------------    ---------------


                       Commission File No. 000-24480

                           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:  (626) 405-0079

Indicate by check mark whether the Company (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
Company 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 Company's classes
of common stock, as of the latest practicable date:

                              September 30, 2004

                                38,636,976
                                ----------

                      PART I - FINANCIAL INFORMATION


Item 1.   Financial Statements.

          The Financial Statements of the Company 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
Company.
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)

                 CONSOLIDATED FINANCIAL STATEMENTS

             September 30, 2004 and December 31, 2003
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
                   Consolidated Balance Sheets

                              ASSETS

                                              September 30,    December 31,
                                                  2004            2003
                                              (Unaudited)

CURRENT ASSETS

 Cash                                           $  5,051     $  1,973
                                                --------     --------
  Total Current Assets                             5,051        1,973
                                                --------     --------
PROPERTY AND EQUIPMENT, NET (Note 1)                   -            -
                                                --------     --------
  TOTAL ASSETS                                  $  5,051     $  1,973
                                                ========     ========

The accompanying notes are an integral part of these consolidated financial
statements.
                               F-2
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
             Consolidated Balance Sheets (Continued)


              LIABILITIES AND STOCKHOLDERS' DEFICIT

                                              September 30,   December 31,
                                                  2004           2003
                                              (Unaudited)

CURRENT LIABILITIES

 Related party payables                           $   155,277   $  150,821
 Accounts payable                                      72,892       72,892
 Accrued interest                                      22,772       18,315
 Accrued interest   related party                     524,506      425,150
 Accrued salaries                                     889,000      844,000
 Other accrued expenses                                 2,369        2,369
 Convertible debentures                                28,750       28,750
 Notes payable and convertible notes payable           46,000       46,000
 Notes payable   related party                      1,111,483    1,097,177
                                                   ----------   ----------
  Total Current Liabilities                         2,853,049    2,685,474
                                                   ----------   ----------
STOCKHOLDERS' DEFICIT

 Common stock: 100,000,000 shares authorized
  of $.001 par value, 38,636,976 shares outstanding    38,637       38,637
 Additional paid-in capital                         3,586,634    3,586,634
 Expenses paid with common stock                            -      (62,943)
 Accumulated deficit during the development stage  (6,473,269)  (6,245,829)
                                                  -----------  -----------
  Total Stockholders' Deficit                      (2,847,998)  (2,683,501)
                                                  -----------  -----------
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT     $     5,051  $     1,973
                                                  ===========  ===========

The accompanying notes are an integral part of these consolidated financial
statements.
                               F-3
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
              Consolidated Statements of Operations
                           (Unaudited)

                                                                    From
                                                              Inception of the
                                                                 Development
                                                                  Stage on
                                For the Three    For the Nine    January 18,
                                 Months Ended    Months Ended   1990 Through
                                September 30,   September 30,   September 30,
                             2004        2003   2004     2003       2004

REVENUE                 $  10,041  $  3,648  $  14,904  $  4,166  $   174,660

OPERATING EXPENSES

 Consulting                     -    35,444          -   101,225    2,307,645
 Research and Development       -    15,600     19,500    47,400    1,361,647
 Selling, general and
   administrative          26,803    17,582    119,030    88,875    2,376,013
                        ---------  --------  ---------  --------  -----------
  Total Operating Expenses 26,803    68,626    138,530   237,500    6,045,305
                        ---------  --------  ---------  --------  -----------
LOSS FROM OPERATIONS      (16,762)  (64,978)  (123,626) (233,334)  (5,870,645)
                        ---------  --------  ---------  --------  -----------
OTHER INCOME (EXPENSES)

 Interest income                -         -          -         -       27,457
 Interest expense         (34,613)  (34,435)  (103,814) (101,996)    (667,465)
 Loss on cash deposit           -         -          -         -      (10,020)
 Gain (Loss) on settlement
 of debt                        -         -          -    25,972       47,404
                        ---------  --------  ---------  --------  -----------
  Total Other Income
  (Expense)               (34,613)  (34,435)  (103,814)  (76,024)    (602,624)
                        ---------  --------  ---------  --------  -----------
 NET LOSS               $ (51,375)$ (99,413) $(227,440)$(309,358) $(6,473,269)
                        =========  ========  =========  ========  ===========

BASIC LOSS PER SHARE    $   (0.00)$   (0.00) $   (0.01)$   (0.01)
                        =========  ========  =========  ========
WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING 38,636,976 38,561,976 38,636,976 37,090,636
                       ========== ========== ========== ==========
The accompanying notes are an integral part of these consolidated financial
statements.
                               F-4
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
              Consolidated Statements of Cash Flows
                           (Unaudited)

                                                                    From
                                                              Inception of the
                                                                 Development
                                                                  Stage on
                                                                 January 18,
                                    For the Nine Months Ended   1990 Through
                                        September 30,           September 30,
                                     2004             2003        2004
CASH FLOWS FROM OPERATING ACTIVITIES:

 Net loss                             $(227,440)  $(309,358)   $ (6,473,269)
 Adjustments to reconcile net loss
  to net cash used by operating
  activities:
  Depreciation and amortization               -           -           4,609
  Equity instruments issued for services      -      32,144       2,165,327
  Interest on beneficial conversion feature   -           -          25,000
  Legal expense related to beneficial
  conversion feature                          -           -           3,750
  Note payable issued for services            -           -         727,950
  Gain on extinguishments of debt             -     (25,972)        (47,404)
  Recognition of prepaid expenses and
  expenses prepaid with common stock     62,942      99,231         456,184
 Changes in assets and liabilities:
  Decrease in prepaid expenses                -           -               -
  Increase in accounts payable and
  related party payables                      -       3,681         343,202
  Increase in accrued interest payable  103,814     103,143         547,278
  Increase in accrued liabilities             -           -           2,369
  Increase in accrued salaries           45,000      72,000         889,000
                                       --------   ---------    ------------
   Net Cash Used by Operating Activities(15,684)    (25,131)     (1,356,004)
                                       --------   ---------    ------------
CASH FLOWS FROM INVESTING ACTIVITIES

 Cash paid for fixed assets                   -           -          (4,609)
                                       --------   ---------    ------------
   Net Cash Used by Investing Activities      -           -          (4,609)
                                       --------   ---------    ------------
CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from notes payable and
 notes payable-related party             18,762      21,000         212,139
 Payments on notes payable and notes
 payable related party                        -           -          (9,400)
 Proceeds from issuance of convertible
 debentures                                   -           -          40,000
 Contributed capital                          -           -             750
 Common stock issued for cash                 -           -       1,122,175
                                      ---------   ---------    ------------
  Net Cash Provided by Financing
  Activities                             18,762      21,000       1,365,664
                                      ---------   ---------    ------------
NET INCREASE IN CASH AND
  CASH EQUIVALENTS                        3,078         553           5,051

CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD                       1,973       1,393               -
                                      ---------   ---------    ------------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD                             $   5,051   $   1,946    $      5,051
                                      =========   =========    ============

The accompanying notes are an integral part of these consolidated financial
statements.
                               F-5
<PAGE>
               SANGUINE CORPORATION AND SUBSIDIARY
                  (A Development Stage Company)
        Consolidated Statements of Cash Flows (Continued)
                           (Unaudited)

                                                                    From
                                                              Inception of the
                                                                 Development
                                                                  Stage on
                                                                 January 18,
                                    For the Nine Months Ended   1990 Through
                                         September 30,           September 30,
                                     2004             2003        2004

SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES

CASH PAID FOR:
 Interest                          $       -     $        -        $    -
 Income taxes                      $       -     $        -        $    -

NON-CASH FINANCING ACTIVITIES

  Equity instruments issued for
  services rendered                $       -     $   32,144        $2,165,327
  Legal related to beneficial
  conversion feature               $       -     $        -        $    3,750
  Notes payable issued for
  services                         $       -     $        -        $  727,950
  Common stock issued for prepaid
  services                         $       -     $   82,175        $  236,284
  Interest on beneficial
  conversion feature               $       -     $        -        $   25,000

The accompanying notes are an integral part of these consolidated financial
statements.
                               F-6
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
             September 30, 2004 and December 31, 2003


NOTE 1 - BASIS OF  FINANCIAL STATEMENT PRESENTATION

 The accompanying unaudited condensed  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 condensed  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 condensed
 financial statements be read in conjunction with the Company's most recent
 audited financial statements and notes thereto included in its December 31,
 2003 Annual Report on Form 10-KSB.  Operating results for the three and nine
 months ended September 30, 2004 are not necessarily indicative of the results
 that may be expected for the year ending December 31, 2004.

NOTE 2 - 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 $300,000 - $500,000 that
 should enable the Company to complete the 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.
                               F-7
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
             September 30, 2004 and December 31, 2003


NOTE 3 - STOCK OPTIONS AND WARRANTS

 A summary of the status of the Company's outstanding stock options as of
 September 30, 2004 and December 31, 2003 and changes during the periods then
 ended is presented below:

                                   September 30, 2004      December 31, 2003
                                            Weighted              Weighted
                                             Average               Average
                                            Exercise              Exercise
                              Shares          Price     Shares      Price
   Outstanding, beginning of
   year                        10,997,709  $ 0.15    10,997,709   $ 0.30
   Granted                              -       -     1,625,000     0.04
   Expired/Cancelled                    -       -             -        -
   Exercised                            -       -    (1,625,000)    0.04
                               ----------  ------    ----------   ------
   Outstanding end of year     10,997,709  $ 0.15    10,997,709   $ 0.15
                               ==========  ======    ==========   ======
   Exercisable                 10,997,709  $ 0.15    10,997,709   $ 0.15
                               ==========  ======    ==========   ======

                              Outstanding                   Exercisable

                                Weighted
                     Number      Average   Weighted   Number    Weighted
                 Outstanding    Remaining  Average  Exercisable  Average
       Range of    at Sept    Contractual  Exercise   at Sept    Exercise
 Exercise Prices  30, 2004        Life     Price     30, 2004    Price

     $     0.13    470,642        2.23     $  0.13     470,642     $  0.13
           0.35  1,799,567         .16        0.35   1,799,567        0.35
      0.07-0.15  8,727,500        1.45        0.10   8,727,500        0.10
     ----------  ---------       -----     -------   ---------     -------
     $0.07-0.35 10,997,709         .69     $  0.15  10,997,709     $  0.15
                ==========       =====     =======  ==========     =======

NOTE 4 - RELATED PARTY TRANSACTION

       During the quarter ended September 30, 2004, there were additions of
       $2,600 on related party notes payable.
                               F-8
<PAGE>
Item 2.   Management's Discussion and Analysis or Plan of Operation.
--------------------------------------------------------------------

Plan of Operation.
------------------

     We have not commenced planned principal operations, but have made good
progress since the end of fiscal 2001, in formation and stability testing.

     Our proposed plan of operation is composed of three "stages," each of
which coincides with a specific milestone in the process of developing PHER-
O2.  Each of these stages will begin subject to available funding.  Each
stage, and the projected cost of each, is as follows:

          Stage A (approximately one year): In the first six months, we
          have completed the development of perfluoro-decalin and
          the synthetic surfactants that make up PHER-O2, manufactured
          experimental doses and have performed preliminary animal tests in
          accordance with FDA and overseas regulations.  In the second six
          months, we will  produce optimal quantities and conduct animal
          safety and efficacy trials in accordance with FDA and overseas
          requirements.  During the course of Stage A, we estimate that our
          increased technical, administrative, sales/marketing and
          manufacturing requirements will require us to the hire a few
          additional employees.  Estimated cost is $1,500,000, divided as
          follows: Completed surfactant formulation (done) and the manufacture
          of sufficient product for initial testing, $500,000 (done); animal
          safety  and efficacy trials through a sub-contractor, $600,000
          (done); and administrative, patent and proprietary right protection
          and marketing costs, $400,000.

          Stage B (approximately one year): In the second year, we intend
          to prepare New Drug Applications for FDA, European, Chinese and
          South American approval, conducted in the United States and
          overseas.  During this period, we also plan to submit license
          applications for transfusion with overseas authorities, begin
          production of PHER-O2 itself or with our subcontractors and submit a
          New Drug Application for PHER-O2 in the United States. During the
          course of Stage B, we estimate that we will need to hire a few
          additional employees.  Estimated cost is $5,000,000, divided as
          follows: Prepare and file United States, European, Chinese and South
          American New Drug Applications, $600,000; conduct human safety and
          efficacy trials through a subcontractor in the United States and
          overseas, $3,200,000; set-up pilot facility, or subcontract, to
          manufacture small quantities of PHER-O2 for use in testing and in
          connection with the New Drug Applications, $500,000; submit license
          applications for use of PHER-O2 in transfusions overseas, $200,000;
          and administrative, patent and proprietary right protection and
          marketing costs, $500,000.

          Stage C (approximately one year): In the third year, we plan to
          complete overseas testing of PHER-O2, begin sales in Europe, China,
          and South America and other overseas areas that may have approved
          PHER-O2 by this time and may begin construction of facility for
          manufacturing, storing, inspecting and shipping PHER-O2. During the
          course of Stage C, we estimate that we will need to hire additional
          employees.  During the third year, we plan to complete testing of
          PHER-O2 in the United States and receive all necessary FDA approvals
          and begin American, South American, Chinese and Canadian sales for
          cancer treatment and angioplasty.  During this period, we also plan
          to subcontract this process, and continue trials of other PHER-O2
          applications, including transplant organ preservation and treatment
          of carbon monoxide poisoning, sickle cell anemia, stroke and heart
          attack.  The estimated cost for Stage C is $25,000,000, divided as
          follows:  Complete human safety and efficacy clinical trials and
          obtain United States and overseas agency approval of PHER-O2,
          $13,000,000; subcontract with major emulsifying firm, $5,000,000;
          recruit and train sales force of the United States and foreign
          markets, $5,000,000; and administrative, patent and proprietary
          right protection and marketing costs, $2,000,000.

     These cost estimates are based upon the prior experience of Thomas C.
Drees, Ph.D., our President and CEO.  Dr. Drees has more than 30 years'
experience in the blood industry.

     Our plan of operation for the next 12 months is having:

     *     manufactured experimental doses of  PHER-O2 (done);

     *     performed preliminary animal tests in accordance with FDA
regulations (done); and

     *     performed preliminary animal tests in accordance with comparable
foreign overseas regulations (done).

     In January, 2001, we engaged IriSys, Inc. ("IriSys") to provide us with
expertise in preformulation development, analytical chemistry and stability
protocol design and testing, including preparation of regulatory standards
required to achieve regulatory compliance for our principal product, PHER-O2,
to produce bottled PHER-02 for animal trials, and to conduct stability
trials.  We were successful in developing improved formulations of our
surfactants under this engagement.

     In March, 2002, we granted an Exclusive License Agreement for parts of
Asia regarding PHER-02 and related technology and patents to Ascendiant-Asia
and Ascendiant-South America.  We have terminated these Exclusive License
Agreements as we have received no revenues or sublicenses from them.

     Our ability to carry out our plan depends entirely upon our ability to
obtain additional substantial equity, debt financing or royalties.  We can not
assure you that we will receive this financing, and except for the possibility
of receiving funds from the exercise of our outstanding warrants, we do not
have any arrangements that would ensure us any funding.  If we do not receive
it, we will not be able to proceed with our business plan.

Forward Looking Statements.
---------------------------

     Statements made in this Form 10-QSB which are not purely historical are
forward-looking statements with respect to the goals, plan objectives,
intentions, expectations, financial condition, results of operations, and
future performance of our business, including, without limitation, (i) our
ability to gain a larger share of the synthetic blood industry, our ability to
continue to develop products acceptable to the industry, our ability to retain
relationships with suppliers and distributors, our ability to raise capital,
and the growth of the synthetic blood industry, and (ii) statements preceded
by, followed by or that include the words "may", "would", "could", "should",
"expects", "projects", "anticipates", "believes", "estimates", "plans",
"intends", "targets" or similar expressions.

     Forward-looking statements involve inherent risks and uncertainties, and
important factors (many of which are beyond our control) that could cause
actual results to differ materially from those set forth in the
forward-looking statements, including the following, in addition to those
contained in our reports on file with the Securities and Exchange Commission;
general economic or industry conditions, nationally and/or in the communities
in which we conduct business, changes in the interest rate environment,
legislation or regulatory requirements, conditions of the securities markets,
changes in the synthetic blood industry, the development of products and that
may be superior to the products and services offered by us, demand for
synthetic blood products, competition, changes in the quality or composition
of our products and services, our ability to develop new products and
services, our ability to raise capital, changes in accounting principles,
policies or guidelines, financial or political instability, acts of war or
terrorism, other economic, competitive, governmental, regulatory and technical
factors affecting our operations, products, services and prices.

     Accordingly, results actually achieved may differ materially from
expected results in these statements.  Forward-looking statements speak only
as of the date they are made.  We do not undertake, and specifically disclaim,
any obligation to update any forward-looking statements to reflect events or
circumstances occurring after the date of such statements.

Item 3. Controls and Procedures.
--------------------------------

     As of the end of the period covered by this Quarterly Report, we carried
out an evaluation, under the supervision and with the participation of our
President and Chief Financial Officer, of the effectiveness of our disclosure
controls and procedures.  Based on this evaluation, our President and Chief
Financial Officer concluded that our disclosure controls and procedures are
effective in timely alerting them to material information required to be
included in our periodic Securities and Exchange Commission reports.  It
should be noted that the design of any system of controls is based in part
upon certain assumptions about the likelihood of future events, and there can
be no assurance that any design will succeed in achieving its stated goals
under all potential future conditions, regardless of how remote.  In addition,
we reviewed our internal controls over financial reporting, and there have
been no changes in our internal controls or in other factors in the last
fiscal quarter that has materially affected or is reasonably likely to
materially affect our internal control over financial reporting.

                        PART II - OTHER INFORMATION

Item 1.   Legal Proceedings.
----------------------------

          None; not applicable.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds.
----------------------------------------------------------------------

          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 to the date of this Report, we filed an 8-K Current
Report dated November 17, 2004, regarding  the successfully completion of
PHER-02 animal toxicity & efficacy trials at the University of Alberta in
Edmonton, Canada.  For more information see the 8-K Current Report filed with
the Securities and Exchange Commission on November 18, 2004.  See Item 6.

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

          (a)  Exhibits.

               Form 10-KSB Annual Report for the
               Year ended December 31, 2003.*

               31.1  302 Certification of Thomas C. Drees

               31.2  302 Certification of David E. Nelson

               32    Section 906 Certification.

          (b)  Reports on Form 8-K.

               8-K Current Report dated November 17, 2004 and filed with the
Securities and Exchange Commission on November 18, 2004.

               *  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 there unto duly authorized.

                                      SANGUINE CORPORATION

Date: 11/22/2004                     By:/s/Thomas C. Drees, Ph.D.
     -----------                        -------------------------------------
                                        Thomas C. Drees, CEO, President and
                                        Chairman of the Board of Directors



Date: 11/22/2004                        By:/s/David E. Nelson
     -----------                        -------------------------------------
                                        David E. Nelson
                                        CFO and Director
<PAGE>