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, 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

            September 30, 2006 and December 31, 2005
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
                   Consolidated Balance Sheets



                              ASSETS

                                            September 30,       December 31,
                                                 2006             2005
                                              (Unaudited)
CURRENT ASSETS

 Cash                                           $      50,647  $  159,466
                                                -------------  ----------
                                                       50,647     159,466

PROPERTY AND EQUIPMENT, NET                             1,043       1,267
                                                -------------  ----------
  TOTAL ASSETS                                  $      51,690  $  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' EQUITY (DEFICIT)

                                            September 30,       December 31,
                                                  2006             2005
                                              (Unaudited)
CURRENT LIABILITIES

 Related party payable                            $     4,000  $     4,000
 Accounts payable                                     237,026       63,493
 Warrant liability                                      9,554       21,328
 Accrued compensation                                  66,562       21,313
                                                  -----------  -----------
 Total Current Liabilities                            317,142      110,134
                                                  -----------  -----------

STOCKHOLDERS' EQUITY (DEFICIT)

 Common stock: 200,000,000 shares authorized
  of $.001 par value, 81,683,658 and 80,708,658
  shares outstanding, respectively                     81,684       80,709
 Additional paid-in capital                         5,872,923    5,710,086
 Accumulated deficit during the development stage  (6,220,059)  (5,740,196)
                                                  -----------  -----------
  Total Stockholders' Equity (Deficit)               (265,452)      50,599
                                                  -----------  -----------
  TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
  (DEFICIT)                                       $    51,690  $   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
                                For the Three    For the Nine    January 18,
                                 Months Ended    Months Ended   1990 Through
                                 September 30,   September 30,  September 30,
                             2006        2005   2006     2005       2006

REVENUE                 $       -  $      -  $   5,563  $  1,019  $   181,763
                        ---------  --------  ---------  --------  -----------
OPERATING EXPENSES

 Professional Fees        115,156    59,194    145,054   150,604    2,886,508
 Research and Development 109,112         -    244,290         -    1,782,507
 Selling, general and
   administrative          (1,620)   36,854     98,011    99,712    2,591,492
                        ---------  --------  ---------  --------  -----------
Total Operating Expenses  222,648    96,048    487,355   250,316    7,260,507
                        ---------  --------  ---------  --------  -----------
LOSS FROM OPERATIONS     (222,648)  (96,048)  (481,792) (249,297)  (7,078,744)
                        ---------  --------  ---------  --------  -----------
OTHER INCOME (EXPENSES)

 Interest income              442     2,523      1,929     7,160       39,264
 Interest expense               -         -          -         -     (667,466)
 Loss on cash deposit           -         -          -         -      (10,020)
 Gain on
  settlement of debt            -         -          -         -    1,496,907
                        ---------  --------  ---------  --------  -----------
  Total Other Income
  (Expense)                   442     2,523      1,929     7,160      858,685
                        ---------  --------  ---------  --------  -----------
NET GAIN/(LOSS)         $(222,206) $(93,525) $(479,863)$(242,137) $(6,220,059)
                        =========  ========  =========  ========  ===========

BASIC EARNINGS (LOSS)
 PER SHARE              $   (0.00)$   (0.00) $   (0.00)$   (0.00)
                        =========  ========  =========  ========

WEIGHTED AVERAGE NUMBER
 OF SHARES OUTSTANDING 81,283,658 80,458,658 81,009,665 80,198,169
                       ========== ========== ========== ==========



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,
                                       2006             2005         2006
CASH FLOWS FROM OPERATING ACTIVITIES:
 Net loss                             $(479,863)  $ (242,137)  $(6,220,059)

 Adjustments to reconcile net loss
 to net cash used by operating
 activities:
  Depreciation and amortization             224           75         5,057
  Common stock issued for services      143,812       46,125     2,659,149
  Interest on beneficial conversion
  feature                                     -            -        25,000
  Stock warrants granted                                             8,650
  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                173,533       20,056       565,214
  Increase in accrued interest payable        -            -       547,279
  Increase in accrued liabilities             -            -        10,125
  Increase in customer deposits`              -            -        45,000
  Increase (decrease) warrant
    liability                           (11,774)           -         9,554
  Increase in accrued salaries           45,249       24,875       900,437
                                      ---------   ----------  ------------
   Net Cash Used by Operating
   Activities                          (128,819)    (151,006)   (1,753,617)

                                      ---------   ----------  ------------
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             -       95,410       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            20,000            -     1,142,175
                                      ---------   ----------  ------------
  Net Cash Provided by Financing
  Activities                             20,000       95,410     1,810,364
                                      ---------   ----------  ------------
NET INCREASE (DECREASE) IN CASH        (108,819)     (57,087)       50,647

CASH AT BEGINNING OF PERIOD             159,466      304,103             -
                                      ---------   ----------  ------------
CASH AT END OF PERIOD                 $  50,647   $  247,016  $     50,647
                                      =========   ==========  ============

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,
                                       2006             2005         2006
SUPPLEMENTAL SCHEDULE OF CASH FLOW
ACTIVITIES

CASH PAID FOR:

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

NON-CASH FINANCING AND INVESTING ACTIVITIES

  Conversion stock issued for debt
   conversion                       $        -      $    9,600     $    9,600
  Common Stock issued for
   services rendered                $  143,812      $   46,125     $2,659,149
  Legal related to beneficial
   conversion feature               $        -      $        -     $    3,750
  Notes payable issued for services $        -      $        -     $  727,950
  Common stock issued for prepaid
   services                         $        -      $        -     $  236,284
  Interest on beneficial conversion
   feature                          $        -      $        -     $   25,000

                               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
               September 30, 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 and nine months ended
     September 30, 2006 are not necessarily indicative of the results that may
     be expected for the year ending December 31, 2006.

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 $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-7
<PAGE>
                SANGUINE CORPORATION & SUBSIDIARY
                  (A Development Stage Company)
            Notes to Consolidated Financial Statements
             September 30, 2006 and December 31, 2005


NOTE 3 -  STOCK OPTIONS AND WARRANTS

     A summary of the status of the Company's outstanding stock options as of
     September 30, 2006 and December 31, 2005 and changes during the periods
     then ended is presented below:

                                      2006                 2005
                                          Weighted                   Weighted
                                          Average                    Average
                                          Exercise                   Exercise
                               Shares     Price            Shares    Price

Outstanding, beginning of year 2,843,757 $  0.15     8,756,578         $0.15
Granted                                -     -          80,000          0.10
Expired/Cancelled               (470,642) 0.1275    (4,799,567)         0.21
Exercised                       (250,000)   0.08    (1,193,254)         0.08
                               --------- -------    ----------         -----
Outstanding end of year        2,123,115 $  0.15     2,843,757         $0.09
                               --------- -------    ----------         -----
Exercisable                    2,123,115 $  0.15     2,843,757         $0.09
                               --------- -------    ----------         -----


                                     Outstanding           Exercisable
                                            Weighted
                                 Number     Average           Number
                               Outstanding  Remaining      Exercisable
              Range of        at September  Contractual    at September
            Exercise Prices      30, 2006   Life             30, 2006

             $      0.08        1,943,115       .30         1,943,115
                    0.125         150,000       .10           150,000
                    0.28           30,000      1.30            30,000
                               ----------                  ----------
                                2,123,115                   2,123,115
                               ==========                  ==========

NOTE 4 -  RELATED PARTY TRANSACTION

     During the quarter ended September 30, 2006, there was a balance of
     $4,000 on related party notes payable.

                               F-8
<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 34 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.  We were not successful in raising these funds.
Effective October 17, 2006, our Board of Directors resolved to offer for sale
in a private placement 6,666,667 shares of our common stock that are
"restricted securities" for $0.06 per share to "accredited investors."  The
anticipated aggregate gross proceeds of $400,000 will be utilized by us to
partially 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.  No shares have been sold on
this private offering, and no assurance can be given that we will be
successful in raising these funds.  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 cannot
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
funding, we will not be able to proceed with our business plans.

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

Three Months Ended September 30, 2006 compared to the Three Months Ended
September 30, 2005.
-------------------

     Revenues for the quarters ending September 30, 2006, and 2005, were $0
and $0, 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 $222,206 for the quarter ended September 30,
2006, and $93,525 for the quarter ended September 30, 2005.  Most of our
expense related to the value of equity securities issued by us for services
rendered.

     Our research and development expenses were $109,112 in the three months
ended September 30, 2006, compared to $0 in the three months ended September
30, 2005.  The decrease in 2005 was principally the result of our limited
capital resources.

Nine Months Ended September 30, 2006 compared to the Nine Months Ended
September 30, 2005.
-------------------

     Revenues for the nine months ending September 30, 2006, and 2005, were
$5,563 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 $479,863 for the nine months ended September
30, 2006, and $242,137 for the nine months ended September 30, 2005.  Most of
our expense related to the value of equity securities issued by us for
services rendered.

     Our research and development expenses were $244,290 in the nine months
ended September 30, 2006, compared to $0 in the nine months ended September
30, 2005.  The decrease in 2005 was principally the result of our limited
capital resources.

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

     As of September 30, 2006, we had $50,647 in cash, with $317,142 in
current liabilities.

     During the quarter ended September 30, 2006, we had net expenses of
$222,648, while receiving $0 in revenues.  We received $0 in revenues, and had
total expenses of $96,048 during the quarter ended September 30, 2005.  Most
of these expenses related to the value of equity securities issued by us for
services rendered.

     Cash resources at September 30, 2006, and December 31, 2005, were $50,647
and $159,466, respectively.  A portion of our 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.

     Effective October 17, 2006, our Board of Directors resolved to offer for
sale in a private placement 6,666,667 shares of our common stock that are

"restricted securities" for $0.06 per share to "accredited investors."

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.
----------------------------------------------------------------------

Name                               Date                       Shares
----                               ----                       ------
M. E. Dancy Consulting Services   7/6/06                     400,000

     These shares were issued to this individual for services rendered.

     M. E. Dancy Consulting Services is an "accredited investors" as defined
in Rule 501 of the Securities and Exchange Commission; and had prior access to
all material information about us. We believe that the offer and sale of these
securities was exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), pursuant to Sections 4(2) and 4(6)
thereof, and Rule 506 of Regulation D of the Securities and  Exchange
Commission; state sales to "accredited investors" are preempted by Section 18
of the Securities Act.

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: 11/6/2006                      By:/s/Thomas C. Drees
     ----------                         -------------------------------------
                                        Thomas C. Drees, Ph.D., CEO, President
                                        and Chairman of the Board of Directors



Date: 11/6/2006                      By:/s/David E. Nelson
     ----------                         -------------------------------------
                                        David E. Nelson
                                        CFO and Director
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