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, 2001

[ ]  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:  (626) 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:

                            September 30, 2001

                                28,888,382
                                ----------

                      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)
                                                 Index to Financial Statements

                                                                 Page

          Balance sheet, September 30, 2001 (unaudited)           F-1

          Statement of operations for the three and nine
          months ended September 30, 2001 and 2000 (unaudited)
          and for the period from January 18, 1989 (date of
          inception) to September 30, 2001 (unaudited)            F-2

          Statement of cash flows for the nine months
          ended September 30, 2001 and 2000 (unaudited)
          and for the period from January 18, 1989
          (date of inception) to September 30, 2001 (unaudited)   F-3

          Notes to financial statements                           F-5
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                                                 Balance Sheet

                                                September 30, 2001 (Unaudited)

<S>                                                       <C>
                      Assets

          Current assets:
                 Cash                                          $121,947
                 Prepaid expense                                138,750
                                                               --------
                        Total assets                           $260,697
                                                               ========
                      Liabilities and Stockholders' Deficit

          Current liabilities:
                 Related party accounts payable                $182,664
                 Accrued expenses                               771,796
                 Notes payable                                1,101,879
                                                             ----------
                        Total current liabilities             2,056,339
                                                             ----------
          Stockholders' deficit:
                 Common stock - par value $.001 per share.
                    Authorized 100,000,000 shares; issued
                    and outstanding 28,888,382 shares            28,888
                 Additional paid-in capital                   2,042,040
                 Deficit accumulated during the
                    development stage                        (3,866,570)
                                                             ----------
                        Total stockholders' deficit          (1,795,642)
                                                             ----------
                        Total liabilities and stockholders'
                        deficit                              $  260,697
                                                             ==========
</TABLE>
See accompanying notes to financial statements.
                               F-1
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                           Statement of Operations (Unaudited)
<CAPTION>
                                                                    Cumulative
                               Three Months Ended Nine Months Ended  Amounts
                                 September 30,      September 30,     From
                                2001         2000   2001       2000 Inception
<S>                             <C>       <C>      <C>       <C>     <C>
Revenue                   $        -   $     - $       - $       - $  150,000

Research and development     (68,535)  (16,800) (176,322)  (55,800)(1,187,612)

Consulting                   (81,875)  (84,375) (187,250) (351,875)  (853,770)

General and Administrative
expenses                     (83,446)  (36,972) (265,261) (146,648)(1,981,266)
                            --------  --------  --------  -------- ----------
    Loss from operations     (20,856) (138,147) (628,832) (554,323)(3,872,648)

Other income (expense)
    Interest income            1,025         -    12,758         -     27,380
    Interest expense         (37,422)   (6,691)  (96,468)  (31,809)  (227,767)
                            --------  --------  --------  --------  ---------
    Loss before benefit for
    income taxes            (270,253) (144,838) (712,543) (586,132)(4,073,025)

Benefit for income taxes           -         -         -         -          -
                            --------  --------  --------  --------  ---------
    Net loss               $(270,253)$(144,838)$(712,543)$(586,132$(4,073,025)
                            ======== ========= ========= ========= ==========
Loss per share             $    (.01)$    (.01)$    (.02)$    (.02)
                            ======== ========= ========= =========
Weighted average number of
shares outstanding        28,879,000   25,256,000 28,522,000 24,106,000
                          =============================================
</TABLE>
See accompanying notes to financial statements.
                               F-2
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                           Statement of Cash Flows (Unaudited)
<CAPTION>
                                                                    Cumulative
                                                Nine Months Ended      Amounts
                                                 September 30,           From
                                                2001       2000      Inception
<S>                                         <C>         <C>       <C>
Cash flows from operating activities:
    Net loss                                $(712,543) $(586,132) $(3,866,570)
    Adjustments to reconcile net loss to
    net cash used in operating activities:
      Depreciation                                 -          -         4,609
      Common stock issued for services         62,876    419,500      929,677
      Note Payable issued for services             -          -       699,200
    Changes in operating asset & liabilities:
      Decrease in other Assets                124,375         -       124,375
      Increase in accounts payable
      and accrued expenses                    171,551    192,658      954,461
                                            ---------  ---------  -----------
            Net cash provided by (used in)
            operating activities             (353,741)    26,026   (1,154,248)
                                            ---------  ---------  -----------
Cash flows from investing activities -
    purchase of equipment                          -          -        (4,609)
                                            ---------  ---------  -----------
            Net cash used in
            investing activities                   -          -        (4,609)
                                            ---------  ---------  -----------
Cash flows from financing activities:
    Net (payment on) proceeds from
    notes payable                             (56,264)    (2,035)     182,679
    Sales of common stock                          -     635,321    1,097,375
    Contributed capital                            -          -           750
                                            ---------  ---------  -----------
            Net cash provided by
            financing activities              (56,264)   633,286    1,280,804
                                            ---------  ---------  -----------
            Net increase (decrease) in cash  (410,005)   659,312      121,947

Cash, beginning of period                     531,952      1,062            -
                                            ---------  ---------  -----------
Cash, end of period                          $121,947   $660,374     $121,947
                                            =========  =========  ===========
</TABLE>
See accompanying notes to financial statements.
                               F-3
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                           Statement of Cash Flows (Unaudited)
                                                                     Continued
<CAPTION>
                                                                    Cumulative
                                                Nine Months Ended      Amounts
                                                  September 30,          From
                                                2001       2000      Inception
<S>                                          <C>        <C>       <C>
   Supplemental disclosure of cash flow
   information:
      Interest paid                           $  15,736  $2,730    $87,340
      Income taxes paid                       $       -  $    -    $    -
</TABLE>
See accompanying notes to financial statements.
                               F-4
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                                 Notes to Financial Statements
                                                            September 30, 2001

1.  Statement Preparation

The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities and 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.

Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted.  It is suggested that these
condensed financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's December 31, 2000
Annual Report on Form 10-KSB.  The results of operations for the period ended
September 30, 2001 are not necessarily indicative of the operating results for
the full year.

2.  Earnings Per Share

The computation of basic earnings per common share is based on the weighted
average number of shares outstanding during the period.

The computation of diluted earnings per common share is based on the weighted
average number of shares outstanding during the period plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the period.  Common stock equivalents are not included in the
diluted earnings per share calculation when their effect is antidilutive.
                               F-5
<PAGE>

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

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

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

          Phase I (approximately one year): In the first six months, we
          plan to complete the development of perfluoro-decalin and
          the synthetic surfactants that make up PHER-O2, manufacture
          experimental doses and perform preliminary toxicity tests in
          accordance with FDA and overseas regulations.  In the second six
          months, we intend to continue developing the
          perfluorocarbon compounds in PHER-O2 in order to produce optimal
          qualities and to conduct toxicity safety and efficacy trials in
          accordance with FDA and overseas requirements. During the course of
          Phase I, we estimate that our increased technical,
          administrative, sales/marketing and manufacturing requirements will
          require us to the hire a few additional employees.  Estimated
          cost is $1,500,000, divided as follows: Completing the surfactant
          formulation and the manufacture of sufficient product for initial
          testing, $500,000; toxicity and efficacy trials through a sub-
          contractor, $600,000; and administrative, patent and proprietary
          right protection and marketing costs, $400,000.

          Phase II (approximately one year):  In the second year, we intend
          to prepare New Drug Applications for FDA and European approval,
          conduct trials for cardioplegia, cancer treatment and cardiology
          treatment in the United States and conduct transfusion trials
          offshore.  During this period, we also plan to submit license
          applications for transfusion with overseas authorities, begin
          production of PHER-O2 itself or with our subcontractors and submit
          a New Drug Application for PHER-O2 in the United States.
          During the course of Phase II, we estimate that we will need to hire
          a few additional employees. Estimated cost is $3,500,000, divided as
          follows: Prepare and file United States and European New Drug
          Applications, $300,000; conduct human safety and efficacy trials
          through a subcontractor in the United States and overseas,
          $2,000,000; 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.

          Phase III (approximately one year):  In the third year, we plan to
          complete overseas testing of PHER-O2, begin sales in Europe 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 Phase III, 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
          and Canadian sales for cancer treatment and angioplasty.  During
          this period, we also plan to complete construction of our
          manufacturing facility, unless we determine 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 Phase III is $15,000,000, divided as follows:
          Complete human safety and efficacy clinical trials and obtain
          United States and overseas agency approval of PHER-O2, $9,000,000;
          construct manufacturing facility or subcontract with major
          emulsifying firm, $3,000,000; recruit and train sales force of the
          United States and foreign markets, $1,500,000; and administrative,
          patent and proprietary right protection and marketing costs,
          $1,500,000.

          These cost estimates are based upon the prior experience of
Thomas C. Drees, Ph.D., our President and CEO.  Dr. Drees has more than 25
years' experience in the blood industry, with Abbott Labs and others.

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

          begin Phase I and to complete the synthesis of the PHER-O2
          surfactant and its emulsion with perfluoro-decalin;

          manufacture experimental doses of  PHER-O2; and

          perform preliminary toxicity tests in accordance with FDA and
          comparable foreign overseas regulations.

          Our ability to begin and to carry out our plan depends entirely upon
our ability to obtain substantial equity or debt financing.  We can not assure
you that we will receive this financing.  If we do not receive it, we will not
be able to proceed with our business plans.

          For risks that may have an adverse effect on our proposed
operations, see the caption "Risk Factors" of our SB-2 Registration Statement,
as amended, which was filed with the Securities and Exchange Commission on or
about December 6, 2000, and which is incorporated herein by reference.

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

          During the quarterly period ending September 30, 2001, 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
($295,753), as compared with the quarterly period ended September 30, 2000,
when the Company received total revenue of $0 and sustained a net loss of
($144,838).  During this quarter, Sanguine California merged with and into the
Company.  See Item 5.

          For the nine months ended September 30, 2001, the Company received
total revenue of $0 and sustained a net loss of ($738,043), as compared with
the nine months ended September 30, 2000, when the Company received total
revenue of $0 and sustained a net loss of ($586,132).

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

         As of September 30, 2001, the Company had $121,947 in cash and
$138,750 in prepaid expenses, with $2,056,339 in current liabilities.

                        PART II - OTHER INFORMATION

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

          None; not applicable.

Item 2.   Changes in 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.
----------------------------

          Effective August 24, 2001, the Board of Directors of the Company,
and the Board of Directors and the majority stockholder of Sanguine
Corporation, a California corporation ("Sanguine California"), voted to adopt
an Agreement and Plan of Merger (the "Plan"), by which Sanguine California
would be merged with and into the Company, with the Company being the
surviving corporation.  Immediately prior to the merger, Sanguine California
was the Company's 94%-owned subsidiary.

          The Plan provided for the Company to issue a total of 910,225
"unregistered" and "restricted" shares of its common stock to the six minority
stockholders of Sanguine California, in exchange for all Sanguine California
shares held by such stockholders.  Four of the six minority stockholders, who
collectively held 357,040 shares of Sanguine California common stock, agreed
to the merger and the issuance of a total of 840,195 shares of the Company's
common stock in exchange for all of their Sanguine California shares.  The
remaining stockholders have not been located, but shares have been issued for
their benefit and are being held by the Company's transfer agent.  All of
these shares were issued subsequent to the quarter ended September 30, 2001,
and are not included in the computations contained in this report.  See the
Company's 8-K Current Report dated September 26, 2001, which has been
previously filed with the Securities and Exchange Commission and is
incorporated herein by reference.  See Item 7.

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

          (a)  Exhibits.

               10-SB-A1 Registration Statement.*

               Form 10-KSB Annual Report for the
               Year ended December 31, 2000.*

          (b)  Reports on Form 8-K.

               8-K Current Report dated January 19, 2001.*

               8-K Current Report dated September 26, 2001.*

               *  Incorporated herein by reference.

                               SIGNATURES

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

                                      SANGUINE CORPORATION

Date: 11/14/01                          By:/s/Thomas C. Drees
     ---------                          -------------------------------------
                                        Thomas C. Drees, CEO, President and
                                        Chairman of the Board of Directors


Date: 11/14/01                          By:/s/Anthony G. Hargreaves
     ---------                          -------------------------------------
                                        Anthony G. Hargreaves
                                        Vice President, Secretary/ Treasurer
                                        Director


Date: 11/14/01                          By:/s/David E. Nelson
     ---------                          -------------------------------------
                                        David E. Nelson
                                        CFO and Director