U. S. Securities and Exchange Commission
                         Washington, D. C.  20549


                                FORM 10-QSB/A-1


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

     For the quarterly period ended March 31, 2006

[ ]  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, #6
                        Pasadena, California  91105
                        ---------------------------
                 (Address of Principal Executive Offices)

                Issuer's Telephone Number:  (626) 405-0079

Indicate by check mark whether the Issuer (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 Issuer 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
         ---                               ---

Indicate by check mark whether the Issuer is a shell company (as defined in
Rule 12b-2 of the Exchange Act).  Yes     No X

<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 Issuer's classes
of common stock, as of the latest practicable date: October 4, 2006 -
81,683,658 shares of common stock.


Transitional small business disclosure format (check one):  Yes    No X
                                                               ---   ---

                      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

               March 31, 2006 and December 31, 2005
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
                   Consolidated Balance Sheets



                              ASSETS

                                               March 31,       December 31,
                                                 2006             2005
                                              (Unaudited)
                                           (Restated)        (Restated)
CURRENT ASSETS

 Cash                                           $      77,747  $  159,466
                                                -------------  ----------
                                                       77,747     159,466
PROPERTY AND EQUIPMENT, NET                             1,193       1,267
                                                -------------  ----------

  TOTAL ASSETS                                  $      78,940  $  160,733
                                                =============  ==========

The accompanying notes are an integral part of these consolidated financial
statements.
                               F-2

                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
             Consolidated Balance Sheets (Continued)


              LIABILITIES AND STOCKHOLDERS' DEFICIT

                                                March 31,      December 31,
                                                  2006             2005
                                              (Unaudited)
                                           (Restated)        (Restated)
CURRENT LIABILITIES

 Related party payable                            $     4,000  $     4,000
 Accounts payable                                      37,760       63,493
Warrant liability                                   11,375       21,328
 Accrued compensation                                  43,813       21,313
                                                  -----------  -----------
  Total Current Liabilities                         96,948      110,134
                                                  -----------  -----------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY (DEFICIT)

 Common stock: 200,000,000 shares authorized
  of $.001 par value, 80,708,658 shares issued
  and outstanding                                      80,709       80,709
 Additional paid-in capital                         5,710,086    5,710,086
Accumulated deficit during the development stage(5,808,803) (5,740,196)
                                                  -----------  -----------
  Total Stockholders' Deficit                      (18,008)      50,599
                                                  -----------  -----------
  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT     $    78,940  $   160,733
                                                  ===========  ===========


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
                                                                 January 18,
                               For the Three Months Ended        1990 Through
                                      March 31,                   March 31,
                                   2006            2005             2006
                               (Restated)     (Restated)     (Restated)

REVENUE                           $   5,064     $     1,019    $    181,263
                                  ---------     -----------    ------------
OPERATING EXPENSES

     Professional Fees               15,931          18,052       2,757,385
     Research and Development        34,909               -       1,573,125
  Selling, general and
     administrative                  23,795          13,420      2,517,276
                                  ---------     -----------    ------------
    Total Operating Expenses      74,635          31,472      6,847,786
                                  ---------     -----------    ------------
LOSS FROM OPERATIONS             (69,571)        (30,453)   (6,666,523)
                                  ---------     -----------    ------------
OTHER INCOME (EXPENSE)

     Interest income                    964           1,871          38,299
     Interest expense                     -               -        (667,466)
     Loss on cash deposit                 -               -         (10,020)
     Gain on settlement of debt           -               -       1,496,907
                                  ---------     -----------    ------------
          Total Other Income
          (Expense)                     964           1,871         857,720
                                  ---------     -----------    ------------
NET LOSS                       $ (68,607)    $   (28,582) $ (5,808,803)
                                  =========     ===========    ============
BASIC LOSS PER SHARE              $   (0.00)    $     (0.00)
                                  =========     ===========
WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING           80,708,658      78,826,113
                                 ==========     ===========

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 Three Months Ended  1990, Through
                                              March 31,            March 31,
                                       2006             2005         2006
                                 (Restated)     (Restated)   (Restated)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss                            $ (68,607)  $  (28,582)$(5,808,803)

 Adjustments to reconcile net loss
 to net cash used by operating
 activities:
  Depreciation and amortization              74           25         4,907
  Common stock issued for services            -            -     2,515,337
  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 on extinguishments of debt             -            -       (98,826)
  Gain on conversions of debt to equity       -            -    (1,398,081)
  Recognition of prepaid expenses and
  expenses prepaid with common stock          -            -       456,184
 Changes in assets and liabilities:
  Increase in accounts payable and
  related party payables                (25,733)     (11,370)      365,948
  Increase in accrued interest payable        -            -       547,279
  Increase in accrued liabilities             -       10,125        10,125
  Increase in customer deposits`              -            -        45,000
Increase (decrease) in warrant
   liability                             (9,953)      (8,054)       11,375
  Increase in accrued salaries           22,500            -       877,688
                                      ---------   ----------  ------------
   Net Cash Used by Operating
   Activities                           (81,719)     (37,856)   (1,706,517)

                                      ---------   ----------  ------------
CASH FLOWS FROM INVESTING ACTIVITIES

 Cash paid for fixed assets                   -       (1,491)       (6,100)
                                      ---------   ----------  ------------
   Net Cash Used by Investing
   Activities                                 -       (1,491)       (6,100)
                                      ---------   ----------  ------------
CASH FLOWS FROM FINANCING ACTIVITIES

 Proceeds from warrant conversion             -       72,795       424,700
 Proceeds from notes payable and
  notes payable-related party                 -            -       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                                  -       72,795     1,790,364
                                      ---------   ----------  ------------
NET INCREASE (DECREASE) IN CASH         (81,719)      33,448        77,747

CASH AT BEGINNING OF PERIOD             159,466      304,103             -
                                      ---------   ----------  ------------
CASH AT END OF PERIOD                 $  77,747   $  337,551  $     77,747
                                      =========   ==========  ============

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 Three Months Ended  1990, Through
                                              March 31,            March 31,
                                       2006             2005         2006
                                  (Restated)     (Restated)  (Restated)
SUPPLEMENTAL SCHEDULE OF CASH FLOW
ACTIVITIES

CASH PAID FOR:

 Interest                           $        -      $        -     $        -
 Income taxes                       $        -      $        -     $        -

NON-CASH FINANCING ACTIVITIES

  Conversion stock issued for debt
   conversion                       $        -      $    9,600     $    9,600
  Equity instruments issued for
   services rendered                $        -      $        -     $2,515,337
  Interest on beneficial conversion
   feature                          $        -      $        -     $   25,000
  Legal related to beneficial
   conversion feature               $        -      $        -     $    3,750
  Notes payable issued for services $        -      $        -     $  727,950
  Common stock issued for prepaid
   services                         $        -      $        -     $  236,284
  Common stock issued for debt      $        -      $        -     $2,822,067

                               F-6
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
                March 31, 2006 and December 31, 2005

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, 2005 Annual Report on
     Form 10-KSB.  Operating results for the three months ended March 31,
     2006 are not necessarily indicative of the results that may be expected
     for the year ending December 31, 2006.

NOTE 2 -  NEWLY ADOPTED ACCOUNTING PRONOUNCEMENTS

     On January 1, 2006, the Company adopted Statement of Financial
     Accounting Standards No. 123 (revised 2004), "Share-Based Payment,"
     ("SFAS 123(R)") which requires the measurement and recognition of
     compensation expense for all share-based payments to employees and
     directors including employee stock options and stock purchases related
     to the Company's employee stock option and award plans based on
     estimated fair values.  SFAS 123(R) supersedes the Company's previous
     accounting under Accounting Principles Board Option No. 25, "Accounting
     for Stock Issued to Employees" ("APB25") for periods beginning in fiscal
     2006.  In March 2005, the Securities and Exchange Commission issued
     Staff Accounting Bulletin No. 107 ("SAB 107") relating to SFAS 123(R).
     The Company has applied the provisions of SAB 107 in its adoption of
     SFAS 123R.

     The Company adopted SFAS 123(R) using the modified prospective
     transition method, which requires the application of the accounting
     standard as of January 1, 2006, the first day of the Company's fiscal
     year 2006.  The Company's financial statements as of and for the three
     month period ended March 31, 2006 reflect the impact of SFAS 123(R).  In
     accordance with the modified prospective transition method, the
     Company's financial statements for the prior year have not been restated
     to reflect, and do not include, the impact of SFAS 123(R).  There was no
     stock-based compensation expense related to employee stock options and
     employee stock purchases recognized during the three month period ended
     March 31, 2006.

     SFAS 123(R) requires companies to estimate the fair value of share-based
     payment awards on the date of grant using an option-pricing model.  The
     value of the portion of the award that is ultimately expected to vest is
     recognized as expense over the requisite service periods in the
     Company's Statement of Operations.  Prior to the adoption of SFAS
     123(R), the Company accounted for stock-based awards to employees and
     directors using the intrinsic value method in accordance with APB 25 as
     allowed under Statement of Financial Accounting Standards No. 123,
     "Accounting for Stock-Based Compensation"

                               F-7
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
               March 31, 2006 and December 31, 2005


NOTE 2 -  NEWLY ADOPTED ACCOUNTING PRONOUNCEMENTS  (continued)

     ("SFAS 123").  Under the intrinsic value method, no stock-based
     compensation expense had been recognized in the Company's Statement of
     Operations, because the exercise price of the Company's stock options
     granted to employees and directors equaled the fair market value of the
     underlying stock at the date of grant.

     Stock-based compensation expense recognized during the period is based
     on the value of the portion of share-based payment awards that is
     ultimately expected to vest during the period using the Black Scholes
     method.  At December 31, 2005, the Company had no unvested share-based
     payment awards for which compensation expense should be recognized
     during the three month period ended March 31, 2006.  Stock-based
     compensation expense recognized in the Company's Statement of Operations
     for the three month period ended March 31, 2006 only includes
     compensation expense for share-based payment awards granted, but not yet
     vested after January 1, 2006, and is based on the grant date fair value
     estimated in accordance with SFAS 123(R).  Stock-based compensation
     expense recognized in the Company's Statement of Operation for the three
     month period ended March 31, 2006 assumes all awards will vest,
     therefore no reduction has been made for estimated forfeitures.

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 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-8
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
               March 31, 2006 and December 31, 2005

NOTE 4 -  STOCK WARRANTS

     A summary of the status of the Company's outstanding stock options as of
     March 31, 2006 and December 31, 2005 and changes during the periods then
     ended is presented below:



                                     Outstanding           Exercisable
                                            Weighted
                                 Number     Average           Number
                               Outstanding  Remaining      Exercisable
              Range of           at March   Contractual      at March
            Exercise Prices      31, 2006   Life             31, 2006
             $      0.1275        470,642       .40           470,642
                    0.08        2,193,115       .90         2,193,115
                    0.125         150,000       .70           150,000
                    0.28           30,000      1.90            30,000
                               ----------                  ----------
                                2,843,757                   2,843,757
                               ==========                  ==========

NOTE 5 -  RELATED PARTY TRANSACTION

     During the quarter ended March 31, 2006, there was a balance of $4,000
     on related party notes payable.

NOTE 6 - CORRECTION OF AN ERROR

     Subsequent to the filing of our Form 10QSB for the year ended March
     31, 2006, the Company determined it should have accounted for the
     potential risk of being unable to issue registered common stock for the
     warrants if they are exercised.  Under the Subscription Agreement, if
     the Company is unable to issue the common stock when the warrants are
     exercised, it is required to pay the holders of the warrants a sum equal
     to the closing price of the common stock on the trading date immediately
     preceding the date notice is given for exercise of the warrants, less
     the purchase price.  A substantial number of the original warrants have
     been exercised and the related shares issued.  The Company has determined
     the risk of this liability occurring relating to the remaining warrants
     outstanding to be 10 percent and has booked a liability accordingly.  The
     effect of the restatement is as follows:
                               F-9
<PAGE>
                     SANGUINE CORPORATION
                  (A Development Stage Company)
                Notes to the Financial Statements
                   March 31, 2006 and December 31, 2005

NOTE 6 - RESTATEMENT (continued)

Consolidated Statement of Operations for the quarter ended March 31, 2006

                          As  Reported      As  Adjusted      Effect of Change

     Revenues              $   5,064          $   5,064          $       -

     Expenses                 84,588             74,635             (9,953)
                           ---------          ---------          ---------
     Loss from operations  $ (79,524)         $ (69,571)         $  (9,953)
                           =========          =========          =========

Consolidated Statement of Operations for the year ended December 31, 2005

                          As  Reported      As  Adjusted      Effect of Change

     Revenues              $   1,019          $   1,019          $       -

     Expenses                391,045            348,032            (43,013)
                           ---------          ---------          ---------
     Loss from operations  $(390,026)         $(347,013)         $ (43,013)
                           =========          =========          =========

Consolidated Statement of Operations for the quarter ended March 31, 2005

                          As  Reported      As  Adjusted      Effect of Change

     Revenues              $   1,019          $   1,019          $       -

     Expenses                 39,526             31,472             (8,054)
                           ---------          ---------          ---------
     Loss from operations  $ (38,507)         $ (30,453)         $  (8,054)
                           =========          =========          =========


     Consolidated Balance Sheet as of March 31, 2006

                          As  Reported      As  Adjusted      Effect of Change

     Current liabilities     $    85,573     $    96,948       $ 11,375

     Deficit accumulated
      during the development
      stage                  $(5,797,428)    $(5,808,803)      $(11,375)

     Consolidated Balance Sheet as of December 31, 2005

                          As  Reported      As  Adjusted      Effect of Change

     Current liabilities     $    88,806     $   110,134       $ 21,328

     Deficit accumulated
      during the development
      stage                  $(5,718,868)    $(5,740,196)      $(21,328)


Consolidated Statement of Cash Flows for the quarter ended March 31, 2006


                          As  Reported      As  Adjusted      Effect of Change

     Net loss               $ (78,560)        $ (68,607)        $   9,953

     Increase (decrease) in
       Warrant liability    $       -         $  (9,953)        $  (9,953)

Consolidated Statement of Cash Flows for the year ended December 31, 2005


                          As  Reported      As  Adjusted      Effect of Change

     Net income             $(380,764)       $(337,751)        $ (43,013)

     Increase (decrease) in
       Warrant liability    $       -        $ (43,013)        $ (43,013)

Consolidated Statement of Cash Flows for the quarter ended March 31, 2005


                          As  Reported      As  Adjusted      Effect of Change

     Net loss               $ (36,636)        $ (28,582)        $   8,054

     Increase (decrease) in
       Warrant liability    $       -         $  (8,054)        $  (8,054)


                               F-10
<PAGE>

Item 2.   Management's Discussion and Analysis or Plan of Operation.
--------------------------------------------------------------------

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

General.
--------

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

     In January, 2001, we were successful in developing improved
formulations of our surfactants for PHER-02.

     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 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 not to exceed $500,000,
          divided as follows: Completed surfactant formulation (done) and the
          manufacture of sufficient product for initial testing, (done);
          animal safety and efficacy trials through a sub-contractor, (done);
          and administrative, patent and proprietary right protection and
          marketing costs, $400,000 (in process).

          Stage B (approximately one year [in process): In the second year, we
          intend to prepare New Drug Applications for FDA and selected foreign
          governmental approvals.  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 33 years'
experience in the blood industry with Abbott Scientific, Alpha Therapeutics
and Sanguine Corporation.

     Our plan of operation for the next 12 months is to complete the
preparation and submission of the U.S. FDA Investigational New Drug
Application (IND) to support PHER-02 as a synthetic oxygen carrying product or
blood substitute; which will include:

     *    A Gap Analysis for the U.S. IND, meaning a Non-clinical Assessment,
a Clinical Assessment and a Chemistry, Manufacturing and Controls Assessment
(CMC), preparation for an attendance at a Pre-IND meeting with the FDA, and
preparation of a pre-IND briefing document to determine our progress towards
the U.S. IND, with the aid and assistance of Beckloff Associates, Inc., a
Cardinal Health company of Overland Park, Kansas ("Beckloff"); and

     *    A Clinical Program and Study Design(s), meaning clinical experts
will be utilized for assessment as well as attendance in the Pre-IND meeting,
(if requested, with the aid and assistance of Beckloff.

     In March, 2006, our Board of Directors resolved to offer for sale in a
private placement 20,000,000 shares of our common stock that are "restricted
securities" as defined in Rule 144 of the Securities and Exchange Commission
for $0.07 per share to "accredited investors" only, as that term is defined in
Rule 501 of Regulation D.  The anticipated aggregate gross proceeds of
$1,400,000 will be utilized by us to fund the FDA required animal studies of
our synthetic red cell blood product, PHER-02, for use in the transportation
of pancreas islet cells in the treatment of diabetes and for other purposes.
We are in the process of preparing the necessary documentation to commence
this offering.  No assurance can be given that we will be successful in
raising these funds; and if we are unable to complete this funding, our
continuing process to obtain FDA approval for the use of our product will be
severely reduced and delayed.

     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 plans.

Results of Operations.
----------------------

     Revenues for the quarters ending March 31, 2006, and 2005, were $5,064
and $1,019, respectively.  We had no material operations, except the research
and development activities related to our subcontracted research and
development of our product, PHER-O2.

     We realized a net loss of $68,607 for the quarter ended March 31, 2006,
and $36,636 for the quarter ended March 31, 2005.  Most of our expense related
to the value of equity securities issued by us for services rendered.

     Our research and development expenses were $34,909 in the three months
ended March 31, 2006, compared to $0 in the three months ended March 31, 2005.
The decrease in 2005 was principally the result of our limited capital
resources.

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

     As of March 31, 2006, we had $77,747 in cash, with $96,948 in current
liabilities.

     During the quarter ended March 31, 2006, we had net expenses of $74,635,
while receiving $5,064 in revenues.  We received $1,019 in revenues, and had
total expenses of $39,526 during the quarter ended March 31, 2005.  Most of
these expenses related to the value of equity securities issued by us for
services rendered.

     Cash resources at March 31, 2006, and December 31, 2005, were $77,747
and $159,466, respectively.  A portion of out liquidity during 2005 was
provided by warrant exercises that resulted in the issuance of 1,193,254
shares for aggregate gross proceeds of $95,410.

     In March, 2006, our Board of Directors resolved to offer for sale in a
private placement 20,000,000 shares of our common stock that are "restricted
securities" as defined in Rule 144 of the Securities and Exchange Commission
for $0.07 per share to "accredited investors" only, as that term is defined in
Rule 501 of Regulation D.  The anticipated aggregate gross proceeds of
$1,400,000 will be utilized by us to fund the FDA required animal studies of
our synthetic red cell blood product, PHER-02, for use in the transportation
of pancreas islet cells in the treatment of diabetes and for other purposes.
We are in the process of preparing the necessary documentation to commence
this offering.  No assurance can be given that we will be successful in
raising these funds; and if we are unable to complete this funding, our
continuing process to obtain FDA approval for the use of our product will be
severely reduced and delayed.

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

     Statements made in this Form 10-OSB Quarterly Report 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 Secretary, of the effectiveness of the design and operation of
our disclosure controls and procedures. Based on this evaluation, our
President and Secretary concluded that information required to be disclosed is
recorded, processed, summarized and reported within the specified periods and
is accumulated and communicated to management, including our President and
Secretary, to allow for timely decisions regarding required disclosure of
material information required to be included in our periodic Securities and
Exchange Commission reports. Our disclosure controls and procedures are
designed to provide reasonable assurance of achieving their objectives and our
President and Secretary have concluded that our disclosure controls and
procedures are effective to a reasonable assurance level of achieving such
objectives. However, 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 our internal
controls 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.
----------------------------

     None; not applicable.

Item 6.   Exhibits.
-------------------

     Exhibits.

               Form 10-KSB Annual Report for the
               Year ended December 31, 2005.*

               31.1  302 Certification of Thomas C. Drees

               31.2  302 Certification of David E. Nelson

               32    Section 906 Certification.

               *  Incorporated herein by reference.

                               SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned there unto duly authorized.

                                      SANGUINE CORPORATION

Date: 10/17/2006                     By:/s/Thomas C. Drees
     -----------                        -------------------------------------
                                        Thomas C. Drees, Ph.D., CEO, President
                                        and Chairman of the Board of Directors



Date: 10/17/2006                     By:/s/David E. Nelson
     -----------                        -------------------------------------
                                        David E. Nelson
                                        CFO and Director
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