<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 March 31, 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:

                              March 31, 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

                              March 31, 1997
                                     &
                             December 31, 1996

<TABLE>
                           SANGUINE CORPORATION
                       (A Development Stage Company)
                               Balance Sheet
             March 31, 1997 (Unaudited) and December 31, 1996
<CAPTION>
                                             Unaudited 
                                                1997        1996 
                                  ASSETS
<S>                                         <C>            <C>
Current Assets
     Cash                                   $    1,045     $      672 

Property & Equipment
     Furniture                                   1,694          1,924 

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

                    TOTAL ASSETS            $   12,739      $  12,596  

                    LIABILITIES & STOCKHOLDERS  EQUITY
Current Liabilities
     Accounts Payable                       $    49,523     $  25,373 
     Accrued Salaries                           260,000       236,000 
     Accrued Interest Payable                    23,865        22,500 
     Notes Payable                               79,350        69,800 

                    Total Current Liabilities   412,738       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 (Quasi-Reorganized 
          March 20, 1994 Deficit Retained 
          Earnings of $2,423,964 Eliminated)    596,942       596,942 
     Retained Earnings Deficit               (1,017,818)     (958,896)

                  Total Stockholders  Equity   (399,999)     (341,077)

                    TOTAL LIABILITIES & 
                    STOCKHOLDERS  EQUITY     $   12,739    $   12,596
</TABLE>
<TABLE>
                           SANGUINE CORPORATION
                       (A Development Stage Company)
                    Statements of Operations Unaudited
             For the Period January 1, 1997 to March 31, 1997
                   and January 1, 1996 to March 31, 1996
<CAPTION>
                                                March          March 
                                              31, 1997       31, 1996
<S>                                           <C>            <C> 
Revenues
     Interest Income                          $    -0-       $      1 

                    Total Revenues                 -0-              1 
Expenses
     Research & Development                   $ 31,500       $ 28,501 
     Salaries                                    4,500          4,500 
     Office Expense                              1,374          3,598 
     Auto Expenses                                 270          1,967 
     Legal & Professional Fees                   2,560          6,801 
     Rent                                        3,924          3,892 
     Interest Expense                            2,484          1,541 
     Travel                                        -0-            283 
     Stock Transfer                                 80            -0- 
     Consultant Fees                            12,000          5,800 
     Tax & License                                 -0-          1,175 
     Depreciation                                  230            230 

               Total Expenses                   58,922         58,288 

               Loss for Period            $    (58,922)  $    (58,287)

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

          Weighted Average Shares
          Outstanding                       20,877,723     20,877,723 
</TABLE>
<TABLE>
                            SANGUINE CORPORATION
                       (A Development Stage Company)
                    Statements of Cash Flows Unaudited
          For the Periods January 1, 1997 to March 31, 1997 and 
                    January 1, 1996 to March 31, 1996  
<CAPTION>
                                               March       March 
                                            31, 1997    31, 1996 
<S>                                        <C>         <C>
Cash Flows from Operating Activities
 Net (Loss)                                $ (58,922)  $ (58,287)
 Depreciation                                    230         230 
 Changes in Operating Assets & Liabilities:
  Increase (Decrease)Accounts Payable         24,150      26,895 
  Increase in Interest Payable                 1,365       1,365 
  Increase in Accrued Salaries                24,000      24,000 

      Net Cash Flows from 
      Operating Activities                    (9,177)     (5,797)

Cash Flows from Investing Activities             -0-         -0- 

Cash Flows from Financing Activities

 Increase in Notes Payable                     9,550       6,100 

      Net Cash Flows Provided by
      Financing Activities                     9,550       6,100 

      Increase (Decrease) in Cash                373         303 

      Cash at Beginning of Period                672         712 

      Cash at End of Period                $   1,045   $   1,015 

Disclosure for Cash Flows from:
 
 Interest                                  $   2,484   $   1,541 
 Taxes                                             -0-       -0- 
</TABLE>
                          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
1996 10-KSB Annual Report. 

<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 March 31, 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 $58,922.

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

          During the quarterly period ended March 31, 1997, the Company
had total expenses of $58,922, 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.
----------------------------

          None; not applicable.

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: 5/15/97                         By /s/ Thomas C. Drees
     --------------                     -------------------------------------
                                        Thomas C. Drees, CEO and Chairman of   
                                        the Board of Directors
                                  

Date: 5/14/97                         By /s/ A. G. Hargreaves
     --------------                     -------------------------------------
                                        Anthony G. Hargreaves
                                        Vice President, Secretary/Treasurer   
                                        and Director


Date: 5/14/97                         By /s/ Edward L. Kunkel
     --------------                     -------------------------------------
                                        Edward L. Kunkel, Esq.
                                        Director