UNITED STATES 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, 2007 [  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d)OF THE EXCHANGE ACT For the transition period from ____________ to____________ Commission File No. 000-24480 SANGUINE CORPORATION (Exact name of small business issuer as specified in its charter)   Nevada95-4347608(State or Other Jurisdiction of(I.R.S. Employer Identification No.)incorporation or organization)  101 East Green Street, #6 Pasadena, California 91105 (Address of Principal Executive Offices)  (626) 405-0079 (Issuers Telephone Number)  N/A (Former name, former address and former fiscal year, if changed since last report)  Check whether the Issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. 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]  APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS  Not applicable.  Check whether the Issuer filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court.  Yes [  ] No [  ]  1   Not applicable. APPLICABLE ONLY TO CORPORATE ISSUERS  Indicate the number of shares outstanding of each of the Issuers classes of common equity, as of the latest practicable date: May 9, 2007 - 84,092,825 shares of common stock.  Transitional Small Business Disclosure Format (Check one): Yes [  ] No [X]    PART I - FINANCIAL INFORMATION  Item 1. Financial Statements.  2                     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company)  CONSOLIDATED FINANCIAL STATEMENTS  March 31, 2007 and December 31, 2006  1     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company)  Consolidated Balance Sheets   ASSETS    March 31,
2007December 31,
2006(Unaudited)CURRENT ASSETSCash$19,878$30,288Total Current Assets19,87830,288PROPERTY AND EQUIPMENT, NET894968TOTAL ASSETS$20,772$31,256                             The accompanying notes are an integral part of these consolidated financial statements.  2     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company)  Consolidated Balance Sheets (Continued)   LIABILITIES AND SHAREHOLDERS EQUITY (DEFICIT)    March 31,
2007December 31,
2006(Unaudited)CURRENT LIABILITIESRelated party payables$-$4,000Accounts payable306,077323,370Warrant liability3,2542,123Accrued compensation17,18878,937Total Current Liabilities326,519408,430COMMITMENTS AND CONTINGENCIESSHAREHOLDERS EQUITY (DEFICIT)Common stock, 200,000,000 shares authorized   of $0.001 par value, 84,092,825 and 81,683,658 shares
issued and outstanding, respectively84,09381,684Common stock subscribed-27,800Additional paid in capital6,077,0215,873,443Accumulated other comprehensive income (loss)(4,162)(2,570)Deficit accumulated during the development stage(6,462,699)(6,357,531)Total Shareholders Equity (Deficit)(305,747)(377,174)TOTAL LIABILITIES AND SHAREHOLDERS
EQUITY (DEFICIT)$20,772$31,256           The accompanying notes are an integral part of these consolidated financial statements.   3     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Statements of Operations (Unaudited) For the Three Months Ended
March 31,From Inception of the Development Stage on January 18, 1990 through March 31200720062007REVENUES$-$5,064$181,762OPERATING EXPENSESProfessional fees21,10515,9312,917,283Research and development72,18334,9091,971,831Selling, general and administrative11,92223,7952,613,554Total Operating Expenses105,21074,6357,502,668LOSS FROM OPERATIONS(105,210)(69,571)(7,320,906)OTHER INCOME (EXPENSE)Interest income4296439,306Interest expense--(667,986)Loss on cash deposit--(10,020)Gain on settlement of debt--1,496,907Total Other Income (Expense)42964858,207NET INCOME (LOSS)(105,168)(68,607)(6,462,699)OTHER COMPREHENSIVE INCOME (LOSS)Loss on foreign currency exchange(1,592)-(4,162)TOTAL COMPREHENSIVE INCOME (LOSS)$(106,760)$(68,607)$(6,466,861)BASIC INCOME (LOSS) PER SHARE$(0.00)$(0.00)DILUTED INCOME (LOSS) PER SHARE$(0.00)$(0.00)WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING BASIC81,236,83480,708,658WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING-DILUTED81,236,83480,708,658  The accompanying notes are an integral part of these consolidated financial statements.  4     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Statements of Cash Flows (Unaudited) For the Three Months Ended
March 31,From Inception of the Development Stage on January 18, 1990 through March 31200720062007Net loss$(105,168)$(68,607)$(6,462,699)Adjustments to reconcile net loss to net cash used
by operating activities:Depreciation and amortization74745,206Common stock issued for services61,188-2,720,337Contributed capital--520Stock warrants granted--8,650Interest on beneficial conversion feature--25,000Legal expense related to beneficial conversion feature--3,750Note payable issued for services--727,950Gain 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--456,184Changes in assets and liabilities:Increase in accounts payable and related party payables(22,885)(25,733)626,103Increase in accrued interest payable--547,279Increase in accrued liabilities--10,125Increase in customer deposits`--45,000Increase (decrease) in warrant liability1,131(9,953)3,254Increase in accrued salaries(61,749)22,500851,063Net Cash Used by Operating Activities(127,409)(81,719)(1,929,185)CASH FLOWS FROM INVESTING ACTIVITIESCash paid for fixed assets--(6,100)Net Cash Used by Investing Activities--(6,100)CASH FLOWS FROM FINANCING ACTIVITIESProceeds from warrant conversion100,000-524,700Proceeds from notes payable and notes payable-
related party--212,139Payments on notes payable and notes payable 
related party--(9,400)Proceeds from issuance of convertible debentures--40,000Contributed capital--750Common stock issued for cash16,999-1,186,974Net Cash Provided by Financing Activities116,999-1,955,163NET INCREASE (DECREASE) IN CASH(10,410)(81,719)19,878CASH AT BEGINNING OF PERIOD159,466 304,103 -30,288159,466-CASH AT END OF PERIOD$19,878$77,747$19,878  The accompanying notes are an integral part of these consolidated financial statements.   5       SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Consolidated Statements of Cash Flows (Continued) (Unaudited) For the Three Months Ended
March 31,From Inception of the Development Stage on January 18, 1990 through March 31200720062007  SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIESCASH PAID FOR:Interest$-$-$-Income taxes$-$-$-NON-CASH FINANCING ACTIVITIESCommon stock issued for debt conversion$-$-$9,600Equity instruments issued for services rendered$61,188$-$2,576,525Contributed capital for interest contributed$-$-$520Interest on beneficial conversion feature$-$-$25,000Legal related to beneficial conversion feature$-$-$3,750Notes payable issued for services$-$-$727,950Common stock issued for prepaid services$-$-$236,284Common stock issued for debt$-$-$2,822,067                    The accompanying notes are an integral part of these consolidated financial statements.    6     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Notes to Consolidated Financial Statements March 31, 2007 and December 31, 2006   NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION  The accompanying unaudited 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 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 financial statements be read in conjunction with the Companys most recent audited financial statements and notes thereto included in its December 31, 2006 Annual Report on Form 10-KSB.  Operating results for the three months ended March 31, 2007 are not necessarily indicative of the results that may be expected for the year ending December 31, 2007.  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.      7     SANGUINE CORPORATION & SUBSIDIARY (A Development Stage Company) Notes to Consolidated Financial Statements March 31, 2007 and December 31, 2006  NOTE 3 - STOCK WARRANTS  A summary of the status of the Companys outstanding stock options as of March 31, 2007, and December 31, 2006, and changes during the periods then ended is presented below:  20072006SharesWeighted Average Exercise PriceSharesWeighted Average Exercise PriceOutstanding, beginning of year2,123,115$0.082,843,757$0.15Granted----Expired/Cancelled(150,000)0.125(470,642)0.13Exercised(1,250,000)0.08(250,000)0.08Outstanding end of year723,115$0.082,123,115$0.08Exercisable723,115$0.082,123,115$0.08  OutstandingExercisableRange of Exercise PricesNumber outstanding at March 31, 2007Weighted Average Remaining Contractual LifeNumber Exercisable at March 31,2007$0.08693,1151.00693,1150.02830,0001.2030,000723,115723,115  NOTE 4 -  RELATED PARTY TRANSACTION  During the quarter ended March 31, 2007, the balance of $4,000 on related party notes payable to an officer of the Company was paid in full.  NOTE 5 - SUBSEQUENT EVENTS  In April 2007, pursuant to an Investor Relations/Consulting Agreement (the Agreement) with LKB Partners, LLC, the Company issued 4,000,000 restricted securities that are shares of common stock and the right to acquire 5,000,000 additional restricted securities that are shares of common stock at a price of $0.06 per share for a period of two years ending April 3, 2009.  LKB was granted customary piggy-back registration rights on the 4,000,000 shares issued and the shares underlying the option grant in any applicable registration statement filed by us within 12 months. The Company in conjunction with this Agreement, also issued 1,000,000 shares of common stock for future services to Mr. Frank Marra valued at $45,000.  3,000,000 of the 4,000,000 shares are being held in escrow pending completion of the services to be rendered, and the Option Agreement to cover the 5,000,000 share options will be prepared on completion of the services too.  The Company plans to fund our proposed stages of operations by an offer and sale of 33,333,334 shares of restricted securities for $0.06 per share.  8       Item 2. Managements Discussion and Analysis or Plan of Operation.  Forward-looking Statements  Statements made in this 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, future performance and business of the Company, including, without limitation, (i) the Companys ability to raise capital, 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 the Companys control) that could cause actual results to differ materially from those set forth in the forward-looking statements, including the following, general economic or industry conditions, nationally and/or in the communities in which the Company may conduct business, changes in the interest rate environment, legislation or regulatory requirements, conditions of the securities markets, the Companys 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 the Companys 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.  The Company does not undertake, and specifically disclaims, any obligation to update any forward-looking statements to reflect events or circumstances occurring after the date of such statements. Plan of Operation  We have not commenced planned principal operations, but have made good progress since the end of fiscal 2005, in formulation and stability testing.  In January, 2005, we were successful in developing improved formulations of our surfactants for PHER-02.  In December, 2006, we completed a pre-IND meeting with the FDA, where Company management presented data to determine an appropriate regulatory path related to PHER-O2.  Our plan of operation for the next 12 months is to complete the preparation and submission of the U.S. FDA New Device Application to support PHER-02 as a synthetic oxygen carrying product.  Our proposed plan of operation is composed of 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 three-six months): Complete the development of perfluoro-decalin and the synthetic surfactants that make up PHER-O2, manufactured experimental doses in accordance with FDA and overseas regulations and submit data to support a Master Drug Filing.  Estimated cost is not to exceed $500,000, divided as follows: Completed surfactant formulation (done) and the manufacture of sufficient product for testing, (on going); animal safety and efficacy trials through a sub-contractor, (done); and administrative, patent and proprietary right protection and marketing costs,(in process) Optimize stabilized product to support the Master Drug Filing (in process).  Stage B (approximately three-six months): In the second period, we will produce optimal quantities and conduct testing 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 contractors and/or employees.   9     Stage C (approximately three-six months): In the third period, we intend to prepare new 510(k) device application with the FDA.  Estimated cost is $1,000,000, to be used as follows: set-up pilot facility, or subcontractor, to manufacture small quantities of PHER-O2 for use in testing and in connection with the New Drug Applications [done], prepare and submit data for use of PHER-O2 as a whole organ transportation medium in support of FDA labeling, and administrative, patent and proprietary right protection and marketing costs, (in process).  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.  Managements Discussion and Analysis of Financial Condition and Results of Operations  Revenues for the quarters ending March 31, 2007, and 2006, were $0 and $5,064, 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 total comprehensive net loss of $106,760 for the quarter ended March 31, 2007, and a net loss of $68,607 for the quarter ended March 31, 2006.  Most of our expense related to research and development.  Our research and development expenses were $72,183 for the quarter ended March 31, 2007, compared to $34,909 in the same period of 2006.  Liquidity  As of March 31, 2007, we had $19,878 in cash, with $326,519 in current liabilities.  During the quarter ended March 31, 2007, we had net expenses of $105,168, while receiving $0 in revenues.  We also had a loss on foreign currency exchange of $1,592 for a total comprehensive loss of $106,760.  We received $5,064 in revenues, and had total expenses of $68,607 during the quarter ended March 31, 2006.  Most of these expenses related to research and development.  Cash resources at March 31, 2007, were $19,878.  On October 18, 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 to accredited investors at $0.06 per share for aggregate gross proceeds of $400,000.  This offering was closed on February 12, 2007, with 746,667 shares having been sold for gross proceeds of approximately $44,800.  The Company plans to fund our proposed stages of operations by an offer and sale of 33,333,334 shares of restricted securities for $0.06 per share.  Off-balance sheet arrangements  We had no off balance sheet arrangements during the year ended December 31, 2006.    10       Item 3(a)T. Controls and Procedures.  Managements annual report on internal control over financial reporting  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.  Changes in internal control over financial reporting  We had no changes in internal control over financial reporting during the period covered by this Quarterly Report.   PART II - OTHER INFORMATION   Item 1. Legal Proceedings.  None; not applicable.   Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  Recent Sales of Unregistered Securities  During the last three months we issued the following unregistered securities:  Name                                                              Number of Shares       Issuance Date        Consideration Thomas C. Drees (1)37,5001/2007ServicesDavid E. Nelson (1)37,5001/2007ServicesEdward L. Kunkel (1)37,5001/2007ServicesMedical Advisory Board(1)150,0001/2007ServicesJames Shapiro(1)150,0001/2007ServicesPrivate Placement746,6673/8/07$0.06 per shareLeonard W. Burningham. Esq.650,0003/29/07Warrant exerciseKae Hudson100,0003/27/07Warrant exerciseYDI LLC300,0003/27/07Warrant exercise  11      Brock Hudson25,0003/27/07Warrant exerciseMegan Pollock175,0003/27/07Warrant exerciseLKB Partners, LLC4,000,0004/11/07Consulting servicesFrank Marra1,000,0004/11/07Managerial services  (1)  Issued for service as a member of the Board of Directors or the Medical Advisory Board.  We issued all of these securities to persons who were either accredited investors, or sophisticated investors who, by reason of education, business acumen, experience or other factors, were fully capable of evaluating the risks and merits of an investment in our company; and each had prior access to all material information about us.  We believe that the offer and sale of these securities were exempt from the registration requirements of the Securities Act, pursuant to Sections 4(2) and 4(6) thereof, and Rule 506 of Regulation D of the Securities and Exchange Commission and from various similar state exemptions.  Use of Proceeds of Registered Securities  Proceeds from the sale of registered securities received during the quarter ended March 31, 2007, totaled $100,000, from warrant exercises. These funds were primarily used for professional services and administrative expenses.  Purchases of Equity Securities by Us and Affiliated Purchasers  SMALL BUSINESS ISSUER PURCHASES OF EQUITY SECURITIES  Period(a) Total Number of Shares (or Units) Purchased(b) Average Price Paid per Share (or Unit)(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be Purchased Under the Plans or ProgramsMonth #1 January 1, 2007 through January 31, 2007NoneNoneNoneNoneMonth #2 February 1, 2007 through February 28, 2007NoneNoneNoneNoneMonth #3 March 1, 2007 through March 31, 2007NoneNoneNoneNoneTotalNoneNoneNoneNone   Item 3. Defaults Upon Senior Securities.  None; not applicable.    12     Item 4. Submission of Matters to a Vote of Security Holders.  None; not applicable.   Item 5. Other Information.  (a) None; not applicable.  (b)Nominating Committee  During the quarterly period ended March 31, 2007, there were no changes in the procedures by which security holders may recommend nominees to the Company's Board of Directors.   Item 6. Exhibits  (a) Exhibits and index of exhibits.  31.1 302 Certification of Thomas C. Drees, PH.D  31.2 302 Certification of David E. Nelson  32 Section 906 Certification.    SIGNATURES  In accordance with the requirements of the Exchange Act, the Registrant has caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.  SANGUINE CORPORATION  Date:5/15/07By:/s/Thomas C. DreesThomas C. DreesCEO, President and Chairman of the Board of DirectorDate:5/15/07By:/s/David E. NelsonDavid E. NelsonCFO and Director   13