UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 _______________________
 
 FORM
10-QSB/A (Amendment
No. 1)
 (Mark
One)
  [  X  ]   QUARTERLY
REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
  For
Quarterly period Ended: March
31, 2008; or
 
 [     
 ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE
ACT OF 1934
  For
the transition period __________ to __________
 
 Commission
File Number: 0-21271
 _________________________
 
 SANGUI
BIOTECH INTERNATIONAL, INC.
 ________________________________________________
 (Exact
name of Small Business Issuer as specified in its charter)
  Colorado
              84-1330732(State or other
      Jurisdiction of Incorporation or Organization)
              (I.R.S.
      Employer Identification
No.)
 
 Alfred-Herrhausen-Str.
44, 58455 Witten, Germany
 _____________________________
 (Address
of principal executive offices)
 
 011-49-2302-915-204
 ___________________________________
 (Issuer's
telephone number, including area code)
  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 a
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes  x   No 
o
  Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes  o   No 
x
  The
number of shares outstanding of the issuer's common stock, no par value, as of
October 14, 2008, was 50,000,000
  Transitional
Small Business Disclosure Format. Yes  o   No 
x





SANGUI
BIOTECH INTERNATIONAL, INC.
  Report on
Form 10-QSB/A
  For the
Quarter Ended March 31, 2008
   INDEX
 ----------
   PagePart
      I.  Financial InformationItem
      1.  Consolidated Financial
      Statements .........................................................................................................
              2Consolidated Balance
      Sheets.........................................................................................................
              2Consolidated Statements of Operations and
      Comprehensive
      Loss ........................................
              4Consolidated
      Statements of Cash
      Flows .....................................................................................
              5Notes to the
      Consolidated Financial
      Statements .......................................................................
              6Item
      2.  Management's Discussion and Analysis or Plan of
      Operation ..........................................................
              9Item
      3.  Controls and Procedures
      ..........................................................................................................................
              12Part II. Other InformationItem
      1.  Legal Proceedings
      .....................................................................................................................................
              12Item
      2.  Unregistered Sales of Equity Securities and Use of Proceeds
      ...........................................................
              12Item
      3.  Defaults Upon Senior
      Securities .............................................................................................................
              12Item
      4.  Submission of Matters to a Vote of Security Holders
      .........................................................................
              12Item
      5.  Other
      Information ......................................................................................................................................
              12Item
      6.  Exhibits ........................................................................................................................................................
              13Signatures............................................................................................................................................................................
              13






ii









PART I - FINANCIAL INFORMATION




ITEM 1– CONSOLIDATED
FINANCIAL STATEMENTS




The
accompanying unaudited consolidated financial statements have been prepared in
accordance with the instructions to Form 10-QSB pursuant to the rules and
regulations of the Securities and Exchange Commission and, therefore, do not
include all information and footnotes necessary for a complete presentation of
our financial position, results of operations, cash flows, and stockholders'
deficit in conformity with generally accepted accounting principles in the
United States of America. In the opinion of management, all adjustments
considered necessary for a fair presentation of the consolidated results of
operations and financial position have been included and all such adjustments
are of a normal recurring nature.




Our
unaudited consolidated balance sheet as of March 31, 2008 and our unaudited
consolidated statements of operations for the three month periods ended March
31, 2008 and 2007, and the unaudited consolidated statements of cash flows for
the three month periods ended March 31, 2008 and 2007, are attached hereto
and incorporated herein by this reference.








































1









SANGUI BIOTECH INTERNATIONAL, INC.Condensed
      Consolidated Balance SheetsASSETSMarch
      31,
              
              
              June
      30,2008
              
              
              2007CURRENT
      ASSETS
              (Unaudited)Cash
              
              $
              39,367
              
              
              $
              18,497Accounts
      receivable
              
              
              27,558
              
              
              
              36,387Inventory
              
              
              112,319
              
              
              
              88,353Prepaid
      expenses and other assets
              
              
              11,252
              
              
              
              16,890Total
      Current Assets
              
              
              190,496
              
              
              
              160,127FIXED
      ASSETS, NetProperty and
      equipment
              
              
              6,476
              
              
              
              4,530Total
      Fixed Assets
              
              
              6,476
              
              
              
              4,530OTHER
      ASSETSTax
      refunds receivable
              
              
              30,831
              
              
              
              6,218Other
      miscellaneous assets
              
              
              73,170
              
              
              
              93,871Total
      Other Assets
              
              
              104,001
              
              
              
              100,089TOTAL
      ASSETS
              
              $
              300,973
              
              
              $
              264,746


The
accompanying condensed notes are an integral part of these interim consolidated
financial statements.
  2










SANGUI
      BIOTECH INTERNATIONAL, INC.Condensed
      Consolidated Balance Sheets (Continued)LIABILITIES AND
      STOCKHOLDERS' EQUITY (DEFICIT)March
      31,
              
              
              June
      30,2008
              
              
              2007(Unaudited)CURRENT
      LIABILITIESAccounts
      payable and accrued expenses
              
              $
              501,450
              
              
              $
              427,688Notes payable
              
              
              1,761,646
              
              
              
              113,134Notes
      payable - related
              
              
              -
              
              
              
              134,742Total
      Current Liabilities
              
              
              2,263,096
              
              
              
              675,564TOTAL
      LIABILITIES
              
              
              2,263,096
              
              
              
              675,564STOCKHOLDERS'
      EQUITY (DEFICIT)Preferred
      stock, no par value; 5,000,000 sharesauthorized,
      -0- shares issued and outstanding
              
              
              -
              
              
              
              -Common
      stock, no par value; 50,000,000 sharesauthorized,
      50,000,000 sharesissued
      and outstanding
              
              
              18,969,358
              
              
              
              18,969,358Additional
      paid-in capital
              
              
              1,958,376
              
              
              
              1,958,376Treasury
      stock
              
              
              -
              
              
              
              -Accumulated
      other comprehensive income
              
              
              298,993
              
              
              
              1,147,882Accumulated
      deficit
              
              
              (23,188,850
              )
              
              
              (22,486,434
              )Total
      Stockholders' Equity (Deficit)
              
              
              (1,962,123
              )
              
              
              (410,818
              )TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
      (DEFICIT)
              
              $
              300,973
              
              
              $
              264,746


The
accompanying condensed notes are an integral part of these interim consolidated
financial statements.
 3










SANGUI BIOTECH INTERNATIONAL, INC.Condensed
      Consolidated Statements of Operations(Unaudited)For
      the Three
              
              
              For
      the NineMonths
      Ended
              
              
              Months
      EndedMarch
      31,
              
              
              March
      31,2008
              
              
              2007
              
              
              2008
              
              
              2007REVENUES
              
              $
              2,378
              
              
              $
              211,438
              
              
              $
              10,184
              
              
              $
              347,755COST
      OF SALES
              
              
              4,459
              
              
              
              135,031
              
              
              
              6,804
              
              
              
              254,900GROSS
      PROFIT
              
              
              (2,081
              )
              
              
              76,407
              
              
              
              3,380
              
              
              
              92,855OPERATING
      EXPENSESResearch
      and development
              
              
              50,547
              
              
              
              41,100
              
              
              
              185,415
              
              
              
              93,245Depreciation
      and amortization
              
              
              875
              
              
              
              6,333
              
              
              
              2,981
              
              
              
              20,340General
      and administrative
              
              
              172,649
              
              
              
              162,954
              
              
              
              472,102
              
              
              
              478,442Total
      Operating Expenses
              
              
              224,071
              
              
              
              210,387
              
              
              
              660,498
              
              
              
              592,027OPERATING
      LOSS
              
              
              (226,152
              )
              
              
              (133,980
              )
              
              
              (657,118
              )
              
              
              (499,172
              )OTHER
      INCOME (EXPENSE)Interest
      income
              
              
              102
              
              
              
              -
              
              
              
              102
              
              
              
              90Interest
      expense
              
              
              (17,770
              )
              
              
              (5,953
              )
              
              
              (45,400
              )
              
              
              (16,094
              )Other
      income (loss)
              
              
              -
              
              
              
              140
              
              
              
              -
              
              
              
              29,045Total
      Other Income (Expense)
              
              
              (17,668
              )
              
              
              (5,813
              )
              
              
              (45,298
              )
              
              
              13,041NET
      LOSS
              
              
              (243,820
              )
              
              
              (139,793
              )
              
              
              (702,416
              )
              
              
              (486,131
              )OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation adjustments
              
              
              (84,658
              )
              
              
              120,969
              
              
              
              848,889
              
              
              
              543,257Unrealized
      gain on marketable securities
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -Total
      Other Comprehensive Income
              
              
              (84,658
              )
              
              
              120,969
              
              
              
              848,889
              
              
              
              543,257COMPREHENSIVE
      INCOME (LOSS)
              
              $
              (328,478
              )
              
              $
              (18,824
              )
              
              $
              146,473
              
              
              $
              57,126BASIC
      AND DILUTED LOSSPER
      SHARE
              
              $
              (0.00
              )
              
              $
              (0.00
              )
              
              $
              (0.01
              )
              
              $
              (0.01
              )WEIGHTED
      AVERAGE NUMBEROF
      SHARES OUTSTANDING
              
              
              50,000,000
              
              
              
              50,000,000
              
              
              
              50,000,000
              
              
              
              50,000,000


The
accompanying condensed notes are an integral part of these interim consolidated
financial statements.




4









SANGUI BIOTECH INTERNATIONAL, INC.Consensed
      Statements of Cash Flows(Unaudited)For
      the NineMonths
      EndedMarch
      31,2008
              
              
              2007CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      loss
              
              $
              (702,416
              )
              
              $
              (486,131
              )Adjustments
      to reconcile net loss to net cashused
      by operating activities:Depreciation,
      depletion and amortization
              
              
              2,981
              
              
              
              28,351Common
      stock issued for services
              
              
              -
              
              
              
              -Changes
      in operating assets and liabilitiesDecrease
      in accounts receivable
              
              
              8,829
              
              
              
              (9,273
              )Decrease
      (Increase) in inventory
              
              
              (23,966
              )
              
              
              (7,022
              )Decrease
      in prepaid expenses and other assets
              
              
              5,638
              
              
              
              (33,513
              )(Increase)
      decrease in other assets
              
              
              (3,912
              )
              
              
              -Increase
      in accounts payable and accrued expenses
              
              
              73,762
              
              
              
              50,518Net
      Cash Used by Operating Activities
              
              
              (639,084
              )
              
              
              (457,070
              )CASH
      FLOWS FROM INVESTING ACTIVITIESPurchase
      of property and equipment
              
              
              (4,927
              )
              
              
              (21,416
              )Net
      Cash Used by Investing Activities
              
              
              (4,927
              )
              
              
              (21,416
              )CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from notes payable
              
              
              1,648,512
              
              
              
              (58,988
              )Repayment
      of notes payable - related
              
              
              (134,742
              )
              
              
              -Sale
      of common stock for cash
              
              
              -
              
              
              
              -Net
      Cash Provided by Financing Activities
              
              
              1,513,770
              
              
              
              (58,988
              )EFFECT
      OF EXCHANGE RATE CHANGES
              
              
              (848,889
              )
              
              
              543,257NET
      DECREASE IN CASH
              
              
              20,870
              
              
              
              5,783CASH
      AT BEGINNING OF PERIOD
              
              
              18,497
              
              
              
              24,548CASH
      AT END OF PERIOD
              
              $
              39,367
              
              
              $
              30,331SUPPLIMENTAL
      DISCLOSURES OFCASH
      FLOW INFORMATIONCASH
      PAID FOR:Interest
              
              $
              -
              
              
              $
              -Income
      Taxes
              
              $
              -
              
              
              $
              -NON
      CASH FINANCING ACTIVITIES:Common
      stock issued for debt
              
              $
              -
              
              
              $
              -


The
accompanying condensed notes are an integral part of these interim consolidated
financial statements.
  5




SANGUI BIOTECH INTERNATIONAL, INC.
 Notes to
the Condensed Consolidated Financial Statements
 
 NOTE 1 -
BASIS OF PRESENTATION
 
 The
accompanying consolidated financial statements have been prepared without audit
in accordance with accounting principles generally accepted in the United States
of America for interim financial information. 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 pursuant to such rules and regulations. The
unaudited consolidated financial statements and notes should, therefore, be read
in conjunction with the consolidated financial statements and notes thereto in
the Company's Form 10-KSB for the year ended June 30, 2007. In the opinion of
management, all adjustments (consisting of normal and recurring adjustments)
considered necessary for a fair presentation, have been included. The results of
operations for the three-month period ended March 31, 2008 are not necessarily
indicative of the results that may be expected for the full fiscal year ending
June 30, 2008.
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
 Nature of
Business
 
 Sangui
Biotech International, Inc., incorporated in Colorado in 1995, and its wholly
owned subsidiaries, Sangui Biotech, Inc., SanguiBioTech AG, GlukoMediTech AG,
and Sangui BioTech PTE Ltd., (collectively, the "Company") have been engaged in
the research, development, manufacture, and sales of medical and cosmetic
products.
 
 On June 30,
2003, GlukoMediTech AG ("Gluko AG") was merged into Sangui BioTech AG ("Sangui
AG"). Effective November 4, 2003, Sangui AG was converted into Sangui BioTech
GmbH (Sangui GmbH). After completion of the restructuring, Sangui GmbH, which is
headquartered in Witten, Germany, is engaged in the development of artificial
oxygen carriers (external applications of hemoglobin, blood substitutes and
blood additives) as well as in the development of glucose implant
sensors.
 
 The
operations of Sangui BioTech, Inc. and Sangui BioTech PTE Ltd Singapore, two
former wholly-owned subsidiaries, were discontinued and dissolved during
2002.
  The
operations of Sangui BioTech, Inc. ("Sangui USA") were discontinued during 2002
upon the sale of its in vitro immunodiagnostics business and the subsequent
merger of Sangui USA with and into the parent company, Sangui BioTech
International, Inc., effective December 31, 2002. Sangui BioTech PTE Ltd
("Sangui Singapore") was a regional office for the Company that carried out
research and development projects in conjunction with Sangui GmbH and Sangui
Singapore. The Company discontinued the operations of Sangui Singapore in August
2002. The Singapore office was closed effective December 31, 2002.
 
 Consolidation
 
 The
consolidated financial statements include the accounts of Sangui BioTech
International, Inc. and its wholly owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated in
consolidation.
 
 
 SANGUI
BIOTECH INTERNATIONAL, INC.
 Notes to
the Condensed Consolidated Financial
Statements
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Foreign Currency
Translation
 
 Assets and
liabilities of the Company's foreign operations are translated into U.S. dollars
at period-end exchange rates. Net exchange gains or losses resulting from such
translation are excluded from net loss but are included in comprehensive income
(loss) and accumulated in a separate component of stockholders' equity. Income
and expenses are translated at weighted average exchange rates for the
period.
 
 Risk and
Uncertainties
 
 The Company's
line of future pharmaceutical products (artificial oxygen carriers or blood
substitute and additives) and in vivo biosensors (glucose implant sensor) being
developed by Sangui GmbH, are deemed as medical devices or biologics, and as
such are governed by the Federal Food and Drug and Cosmetics Act and by the
regulations of state agencies and various foreign government agencies. The
pharmaceutical and biosensor products, under development in Germany, will be
subject to more stringent regulatory requirements, because they are in vivo
products for humans. The Company and its subsidiaries have no experience in
obtaining regulatory clearance on these types of products. Therefore, the
Company will be subject to the risks of delays in obtaining or failing to obtain
regulatory clearance.
 
 Going
Concern
 
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern, which contemplates, among other
things, the realization of assets and satisfaction of liabilities in the normal
course of business. The Company has accumulated deficit of $23,188,850 as of
March 31, 2008 and has been significantly reducing its working capital since
June 30, 2004. The Company incurred a net loss applicable to common stockholders
of $702,416 during the nine months ended March 31, 2008 and used cash in
operating activities of $639,084 for the nine months ended March 31, 2008. These
conditions raise substantial doubt about the Company's ability to continue as a
going concern. The Company expects to continue to incur significant capital
expenses in pursuing its business plan to market its products and expand its
product line, while obtaining additional financing through stock offerings or
other feasible financing alternatives. In order for the Company to continue its
operations at its existing levels, the Company will require significant
additional funds over the next twelve months. Therefore, the Company is
dependent on funds raised through equity or debt offerings. Additional financing
may not be available on terms favorable to the Company, or at all. If these
funds are not available the Company may not be able to execute its business plan
or take advantage of business opportunities. The ability of the Company to
obtain such additional financing and to achieve its operating goals is
uncertain. In the event that the Company does not obtain additional capital or
is not able to increase cash flow through the increase of sales, there is a
substantial doubt of its being able to continue as a going concern. The
accompanying condensed consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 Cash and Cash
Equivalents
 
 The Company
maintains its cash in bank accounts in Germany. Cash and cash equivalents
include time deposits for which the Company has no requirements for compensating
balances. The Company has not experienced any losses in its uninsured bank
accounts.  At March 31, 2008 the Company had no cash
equivalents.
 SANGUI
BIOTECH INTERNATIONAL, INC.
 Notes to
the Condensed Consolidated Financial
Statements
 
 NOTE 2 -
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Revenue
Recognition
 
 Revenue is
recognized when the sales amount is determined, shipment of goods to the
customer has occurred and collection is reasonably assured. Product is shipped
FOB origination.
 
 Research and
Development
 
 Research and
development costs are charged to operations as they are
incurred.  Legal fees and other direct costs incurred in obtaining and
protecting patents are expensed as incurred.
 
 Basic and Diluted Earnings
(Loss) Per Common Share
 
 Basic
earnings (loss) per common share is computed by dividing income (loss) available
to common stockholders by the weighted average number of common shares
outstanding during the period of computation. Diluted earnings (loss) per share
gives effect to all potential dilutive common shares outstanding during the
period of compensation. The computation of diluted earnings (loss) per share
does not assume conversion, exercise or contingent exercise of securities that
would have an antidilutive effect on earnings. As of March 31, 2008, the Company
had no potentially dilutive securities that would affect the loss per share if
they were to be dilutive.
 
 Comprehensive Income
(Loss)
 
 Total
comprehensive income (loss) represents the net change in stockholders' equity
during a period from sources other than transactions with stockholders and as
such, includes net earnings (loss). For the Company, the components of other
comprehensive income (loss) are the changes in the cumulative foreign currency
translation adjustments and unrealized gains (losses) on marketable securities
and are recorded as components of stockholders' equity.
 
 NOTE 3 -
COMMITMENTS AND CONTINGENCIES
 
 Litigation
 
 The Company
may, from time to time, be involved in various legal disputes resulting from the
ordinary course of operating its business. Management is currently not able to
predict the outcome of any such cases. However, management believes that the
amount of ultimate liability, if any, with respect to such actions will not have
a material effect on the Company's financial position or results of
operations.
 
 Indemnities and
Guarantees
 
 During the
normal course of business, the Company has made certain indemnities and
guarantees under which it may be required to make payments in relation to
certain transactions. These indemnities include certain agreements with the
Company's officers, under which the Company may be required to indemnify such
person for liabilities arising out of their employment relationship. The
duration of these indemnities and guarantees varies and, in certain cases, is
indefinite. The majority of these indemnities and guarantees do not provide for
any limitation of the maximum potential future payments the Company could be
obligated to make. Historically, the Company has not been obligated to make
significant payments for these obligations and no liabilities have been recorded
for these indemnities and guarantees in the accompanying consolidated balance
sheet.
 
 
 NOTE 3 –
PROMISSORY NOTES
 
 As of March
31, 2008, the Company had $1,621,197 in outstanding promissory notes
payable.  These notes are convertible into common stock at conversion
rates of 0.09 to 0.13 and bear interest at a rate of 5.0 percent per
annum.





ITEM
2-
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
  Forward-looking
Statements
  The following
discussion of our financial condition and results of operations should be read
in conjunction with the consolidated financial statements and the related notes
thereto included elsewhere in this quarterly report. Some of the information in
this quarterly report contains forward-looking statements, including statements
related to anticipated operating results, margins, growth, financial resources,
capital requirements, adequacy of the Company's financial resources, trends in
spending on research and development, the development of new markets, the
development, regulatory approval, manufacture, distribution, and commercial
acceptance of new products, and future product development efforts. Investors
are cautioned that forward-looking statements involve risks and uncertainties,
which may affect our business and prospects, including but not limited to, the
Company's expected need for additional funding and the uncertainty of receiving
the additional funding, changes in economic and market conditions, acceptance of
our products by the health care and reimbursement communities, new development
of competitive products and treatments, administrative and regulatory approval
and related considerations, health care legislation and regulation, and other
factors discussed in our filings with the Securities and Exchange
Commission.
  GENERAL
  The Company's
mission is the development of novel and proprietary pharmaceutical, medical and
cosmetic products.  The Company develops its products through its
wholly owned German subsidiary Sangui GmbH.  The Company is seeking to
market and sell some or all of their products through partnerships with industry
partners.
  The focus of
Sangui GmbH has been the development of oxygen carriers capable of providing
oxygen transport in humans in the event of acute and/or chronic lack of oxygen
dueto arterial occlusion, anaemia or blood loss whether due to surgery, trauma,
or other causes.  Sangui GmbH has thus far focused its development and
commercialization efforts of such artificial oxygen carriers by reproducing and
synthesizing polymers out of native hemoglobin of defined molecular
sizes.  Sangui GmbH, has in addition developed external applications
of oxygen transporters in the medical and cosmetic fields in the form of gels
and emulsions for the regeneration of the skin
  Sangui GmbH
holds the exclusive distribution rights for Chitoskin wound pads in the European
Union and various other countries.  Sangui GmbH has filed a patent
cooperation treatment applications (“PCT”) for the production and use of
improved Chitoskin wound pads using gelatine instead of collagen as the carrier
substance.
  Artificial Oxygen
Carriers
  Sangui GmbH
develops several products based on polymers of purified natural porcine
hemoglobin with oxygen carrying abilities that are similar to native
hemoglobin.  These are (1) oxygen carrying blood additives and (2)
oxygen carrying blood volume substitutes.
  In December
1997, Sangui GmbH decided that porcine hemoglobin should be used as the basic
material for its artificial oxygen carriers.  In March 1999, Sangui
GmbH decided which hemoglobin hyperpolymer would go into preclinical
investigation and that glutaraldehyde would be utilized as a cross linker, and
further that the polymer hemoglobin be chemically masked to prevent protein
interaction in blood plasma.  The fine adjustment of the molecular
formula of the artificial oxygen carriers - optimized for laboratory scale
production - was finalized in the summer of 2000.
  The
experiments completed in Sangui GmbH’s laboratories demonstrated that it is
possible to polymerize hemoglobins isolated from porcine blood resulting in huge
soluble molecules, so-called hyperpolymers.  In August 2000, Sangui
GmbH finalized its work on the pharmaceutical formulation of the oxygen carrier
for laboratory scale.  In February 2001 a pilot production in a
laboratory scale was carried out in SGBI's clean room.  The resulting
product was applied in single volunteers in pilot self-experiments.
  The blood
additives and blood substitute projects were halted in 2003 due to the lack of
financing for the pre-clinical test phase of the blood additives.  In
October 2006, subsequent to the period covered by this report, a contract was
entered into between Sangui GmbH and ERC Nano Med S.A. de C.V. of Monterrey,
Mexico (“ERC”), which provides that ERC will establish a production facility in
Mexico to produce sufficient quantities of the blood additive.  In
cooperation with the medical faculty of Monterrey University and the Mexican
National Health Organizations, ERC will initiate all necessary steps to begin
the pre-clinical test phase for the products as soon as possible.  It
is anticipated that this will lead to the FDA authorization process in due
course.
  According to
regulatory requirements, all drugs must complete preclinical and clinical trials
before approval (e.g. Federal Drug Administration approval) and market
launch.  The Company’s management believes that the European and FDA
approval process will take at a minimum several years to complete.
 9
  Nano Formulations for the
Regeneration of the Skin
 
 Healthy skin
is supplied with oxygen both from the inside as well as through diffusion from
the outside.  A lack of oxygen will cause degenerative alterations,
ranging from premature aging, to surface damage, and even as extensive as
causing open wounds.  The cause for the lack of oxygen may be a part
of the normal aging process, but it may also be caused by burns, radiation,
trauma, or a medical condition.  Impairment of the blood flow, for
example caused by diabetes mellitus or by chronic venous insufficiency, can also
lead to insufficient oxygen supply and the resulting skin damage.
  The
nano-emulsion-based preparations now being sold by Sangui GmbH have been
designed to supporting the regeneration of the skin by improving its oxygen
supply.  The products Sangui GmbH are currently focusing on are an
anti-aging formulation and treatment and an anti-cellulite formulation for the
cosmetics market.  The products were thoroughly tested by an
independent research institute and received top marks for skin moisturization,
and enhanced skin elasticity, respectively.
  Sangui’s
cosmetic business model is reliant upon cooperation with its manufacturing and
distribution partners.  Sangui has its various formulations produced
by a contract manufacturer and sells quantities of the products either in bulk
or in customized private label packaging, as requested.  In addition,
Sangui started to sell its cosmetic products under its own brand “Pure
MO2isture” via an internet shop as of mid September, 2006 which generates
consitent sales, albeit at a low level.
  Sales of the
anti-cellulite products started in August 2005 via two German TV shop
programs.  Sales of the anti-cellulite products via the two German TV
shop programs have been flat thus far this fiscal year.  Additionally,
distribution partners in Argentina and Mexico have purchased launch quantities
in November 2005, and July 2006, respectively.
  Chitoskin Wound
Pads
  In March
2005, SanguiBioTech GmbH was awarded the CE mark for their Chitoskin Wound
Pad product.  The CE mark authorizes the company to distribute
and sell this medical product in the member countries of the European
Union.  At the same time Sangui GmbH successfully passed the ISO
9001:2000 (General Quality Management System) and ISO 13485:2003 (Quality
Management System Medical Products) audits, and obtained the respective
certifications.  The “Chitoskin” trademark was granted to the company
for the European countries effective November 1, 2004.
  Karl Beese
GmbH, a leading German vendor and distributor of hospital supplies began
marketing and distributing the wound pad product in August 2005, and has placed
several subsequent orders with the company.  In addition, Karl Beese
delivered large quantities of the wound pad product to a Czech distribution
partner through summer 2006.
 
 FINANCIAL
POSITION
  The Company's
current assets increased approximately $30,369, or 19%, from June 30, 2007 to
approximately $190,496 at March 31, 2008.  The increase is primarily
attributable to small increase in cash and inventory.
  The Company's
net property and equipment increased approximately $1,946, or 43% from June 30,
2007 to approximately $6,476 at March 31, 2008.  The increase is primarily
attributable to purchases of small office equipment items, partially offset by
current period depreciation.
  The Company
funded its operations primarily through its existing cash reserves and cash
received from the issuance of promissory notes.  The Company's
stockholders' deficit increased approximately $1,551,305.  The primary
factor behind this increase was the Company’s issuance of $1,648,512 in
promissory notes.
  RESULTS OF
OPERATIONS
  Three months ended March 31,
2008 and 2007:
  REVENUES -
The Company’s revenues decreased 99% to $2,378 during the three months ended
March 31, 2008, as compared to the comparable period in 2007.  Cost of
sales decreased 97% to $4,459 as compared to the comparable period in
2007.  These decreases were primarily the result of an increased
emphasis on research and development, coupled with a decreased emphasis on
generating new sales markets.
  RESEARCH AND
DEVELOPMENT - Research and development expenses increased $9,447 to
approximately $50,547 in 2008 from approximately $41,100 in 2007.  The
increase is mainly attributed to the Company seeking to expand its product base
to meet the demands of new and emerging markets.  The Company is seeking
additional sources to provide financing for additional research and
development.
  GENERAL AND
ADMINISTRATIVE - General and administrative expenses increased 6% to
approximately $172,649 in 2008 from approximately $162,954 in 2007.  This
increase is mainly attributed to the ongoing refocusing program, and an
expansion into new emerging sales markets.
  DEPRECIATION
AND AMORTIZATION - Depreciation decreased $5,458 to approximately $875 in 2008
from approximately $6,333 in 2007.  This decrease is mainly attributed to
the ongoing restructuring of Sangui GmbH.
  NET
LOSS.  As a result of the above factors, the Company's consolidated net
loss was approximately $243,820, or approximately $(0.00) per common share, for
the three months ended March 31, 2008, compared to approximately $139,793, or
$0.00 per common share, during the comparable period in 2007.
  10
 
 Nine months ended March 31,
2008 and 2007:
  REVENUES - The
Company’s revenues decreased 97% to $10,184 during the nine months ended March
31, 2008, as compared to the comparable period in 2006.  Cost of sales
decreased 97% to $6,804 as compared to the comparable period in
2007.  These decreases were primarily the result an increased emphasis
on research and development.
  RESEARCH AND
DEVELOPMENT - Research and development expenses increased $92,170 to
approximately $185,415 in 2008 from approximately $93,245 in 2007.  The
increase is mainly attributed to the Company seeking to expand its product base
to meet the demands of new and emerging markets.  The Company is seeking
additional sources to provide financing for additional research and
development.
  GENERAL AND
ADMINISTRATIVE - General and administrative expenses decreased 1% to
approximately $472,102 in 2008 from approximately $478,442 in 2007.  This
insignificant decrease is primarily attributable to the fact that the Company
continues to progress toward planned principal operations.
  DEPRECIATION
AND AMORTIZATION - Depreciation decreased $17,359 to approximately $2,981 in
2008 from approximately $20,340 in 2007.  This decrease is mainly
attributed to the ongoing restructuring of Sangui GmbH.
  NET LOSS.
 As a result of the above factors, the Company's consolidated net loss was
approximately $702,416, or approximately $0.01 per common share, for the nine
months ended March 31, 2008, compared to approximately $486,131, or $0.01 per
common share, during the comparable period in 2007.
  LIQUIDITY AND CAPITAL
RESOURCES
  For the nine
months ended March 31, 2008, net cash used in operating activities increased to
approximately $639,084, from approximately $457,070 in the corresponding period
in 2007, primarily related to an increase in the Company's consolidated net loss
as a result of the ongoing refocusing program.
  The Company
had a working capital deficit of approximately $2,072,600 at March 31, 2008, an
increase of approximately $1,557,163 from June 30, 2007 due primarily to the
Company's net loss for the nine-month period, as well as a significant increase
in promissory notes payable.  At March 31, 2008, the Company had cash
of approximately $39,367.  The Company will need substantial additional
funding to fulfill its business plan and the Company intends to explore
financing sources for its future development activities.  No assurance can
be given that these efforts will be successful.
 
  11







ITEM
3-
CONTROLS AND PROCEDURES
 (a)
Evaluation of disclosure controls and procedures.  Our principal executive
officer and principal financial officer have evaluated the effectiveness of our
disclosure controls and procedures (as defined in Rules 13a-14(c) and 15d-14(c)
under the Exchange Act), as of a date within 90 days of the filing date of this
Quarterly Report on Form 10-QSB.  Based on such evaluation, they have
concluded that as of such date, our disclosure controls and procedures were not
efficient enough to ensure that information required to be disclosed by us in
reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in applicable SEC
rules and forms.  Our principal executive officer and principal
financial officer are currently working to streamline our disclosure controls
and procedures, so as to adequately comply with such SEC rules and
forms.
  (b)
Changes in internal controls.  There were no significant changes in our
internal controls or in other factors that could significantly affect these
controls subsequent to the date of evaluation by our principal executive officer
and principal financial officer.
  PART
II-
OTHER INFORMATION
  ITEM
1-
LEGAL PROCEEDINGS
  On February
14, 2007, Dr. Rainer Felfe, filed a claim (4 Ca 431/07) against the Company and
its subsidiary, SanguiBioTech GmbH, with the Industrial Relations Court in
Bochum, Germany (Arbeitsgericht Bochum). Dr. Felfe's claim states that he is
entitled to receive outstanding wages and salaries owed to Prof. Dr. Dr.
Wolfgang Barnikol by the Company, or its subsidiary, in the amount of
approximately 370,000 euros (approximately US $503,200) as partial relief of a
judgment rendered in a civil case against Dr. Barnikol (Oberlandesgericht
Düsseldorf I 6 U 96/06). Dr. Barnikol has never made a claim against the
Company, or its subsidiary, for outstanding wages with any governmental agency
and acknowledges there are no outstanding wages are due to him by either the
Company or its subsidiary. The claim by Dr. Felfe has been declared pending by
the Industrial Relations Court until a final judgment is rendered by the Federal
Supreme Court in the appeal to the above civil case. The Company believes the
claim lacks merit and plans to vigorously defend this claim.
  Except as
stated above, the Company is not aware of pending claims or assessments which
may have a material adverse impact on the Company’s financial position or
results of operations.
  ITEM
2-
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
  None.
 
 ITEM
3-
DEFAULTS UPON SENIOR SECURITIES
  None.
  ITEM
4-
SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
  None.
  ITEM
5-
OTHER INFORMATION
 Civil
Lawsuit Involving Prof. Dr. Dr. Wolfgang Barnikol
 On September
13, 2007, the District Appeal Court of Dusseldorf, Germany (Oberlandesgericht
Düsseldorf I 6 U 96/06) found Prof. Dr. Dr. Wolfgang Barnikol jointly and
severally liable in a civil suit to Dr. Rainer Felfe, a shareholder of the
Company, in the amount of approximately 700,000 euros (approximately US
$952,000, which amount includes interest and costs) for supporting the unethical
selling of the Company's shares. This judgment is enforceable, but has not yet
become final and absolute as Dr. Barnikol has submitted a petition of appeal to
the Federal Supreme Court of Germany (Bundesgerichtshof). The Company was not
and is not a party to these proceedings.
 Resignation
of Dr. Wolfgang Barnikol from positions of Chief Executive Officer and Chief
Financial Officer
  On
March 30, 2008, Dr. Wolfgang Barnikol amicably resigned as the Company’s
Chief Executive Officer and Chief Financial Officer effective subsequent to the
period covered by this report on April 3, 2008.  Dr. Barnikol's resignation
was not due to any disagreement with the Company.  Dr. Barnikol remains a
Director.
  Appointment
of Thomas Striepe as Chief Executive Officer
  Subsequent
to the period covered by this report, on April 8, 2008, the Board of
Directors appointed Thomas Striepe to serve as Chief Executive Officer of the
Company.  He is a current Director of the Company.  Mr.
Striepe is the Vice President of Accounting and Controlling at Feedback AG,
Hamburg, Germany, a financial services company. Prior to joining in 2004, he
held management positions in the accounting departments of several German and
international corporations. He holds an MBA from Hamburg University.Mr. Striepe does not
have an employment agreement with the Company nor have the terms of a severance
agreement with the Company been finalized.
  Mr.
Striepe has no family relationships with any other director or executive officer
of the Company or any person nominated to become a director or executive officer
of the Company.  There are no arrangements or understandings between any of
the directors or executive officers, or any other person or person pursuant to
which they were selected as directors and/or
officers.
 Appointment
of Joachim Fleing as Chief Financial Officer
  Subsequent
to the period covered by this report, on April 8, 2008, the Board of
Directors appointed Joachim Fleing to serve as Chief Financial Officer of the
Company.  He is a current Director of the Company.  Mr. Fleing is a
communications specialist.  His professional experience includes the
position of a communications officer and the position as an account director at
an international PR agency.  Mr. Fleing holds a PhD from Wuppertal
University.  Mr. Fleingdoes
not have an employment agreement with the Company, nor have the terms of any
severance agreement with the Company beenfinalized
and are thus not yet available.
  Mr.
Fleing has no family relationships with any other director or executive officer
of the Company or any person nominated to become a director or executive officer
of the Company.  There are no arrangements or understandings between any of
the directors or executive officers, or any other person or person pursuant to
which they were selected as directors and/or officers.
  
 Entry
into Letter of Intent with HemCon
  Subsequent
to the period covered by this report, on April 15, 2008 the Company signed
a letter of intent with HemCon Medical Techolologies, Inc. to develop technology
relating to Chitosan wound care products.  The Company will license
exclusive worldwide sales and marketing rights in exchange for HemCon managing
the submission of the Chitosan wound care products to the United States Food and
Drug Administration.
  Sale
of Capital Securities in Wholly Owned Subsidiary
  Subsequent
to the period covered by this report, on April 25, 2008 the Company entered into
letters of intent with various European investors to sell 10% of the capital
securities of its wholly owned subsidiary, Sangui BioTech GmbH, for
approximately 722,000 Euros.  Payments for the purchase were received in
their entirety by the Company by May 16, 2008.  The closing of this
transaction is subject to German Law and is anticipated to be complete
within eight weeks of filing with the German Register of Commercial
Companies scheduled for June 11, 2008 in Witten Germany.
  One
of the investors in this transaction is the current Managing Director of the
wholly owned subsidiary; he is receiving his ownership interest in
consideration of past services rendered for the Company in the amount
of 50,000 Euros.
 2nd
Civil Lawsuit Involving Prof. Dr. Dr. Wolfgang Barnikol
  Subsequent to
the period covered by this report, on September 2, 2008, the District Court of
Dusseldorf (Landgericht Düsseldorf 7 O 299/04) found Prof. Dr. Dr. Wolfgang
Barnikol jointly and severally liable in a civil suit to a shareholder of the
Company in the amount of approximately 150,000 euros (approximately US $204,000,
which amount includes interest and costs) for supporting the unethical selling
of the Company's shares. This judgment is enforceable, but has not yet become
final and absolute. The Company was not and is not a party to these
proceedings.
  Resignation
of Director
  Subsequent to
the period covered by this report, on September 30, 2008, Prof. Dr. Dr. Wolfgang
Barnikol submitted his resignation as a Director, effective as of September 30,
2008. There were no disagreements between the Company and Dr. Barnikol that led
to his resignation.
 ITEM
6-
EXHIBITS
 2.1
                          Exchange Agreement
      between MRC Legal Services LLC and SanguiBioTech International, Inc.,
      dated of March 31, 2000 (1)3.1
                          Articles of
      Incorporation of the Company (1)3.2
                          Bylaws of the
      Company (1)4.1
                          Stock Option
      Agreement between Professor Wolfgang Barnikol and Sangui Biotech
      International, Inc. dated November 3, 1999 (2)10.1
                          Office Lease between
      Brookhollow Office Park and Sangui Biotech International, Inc. dated
      September 4, 1996 and as amended 2000 (2)10.2
                          Fee Agreement
      between GlukoMeditech AG and Dr. Sieglinde Borchert dated June 15,
      1998 (2)10.3
                          Fee Agreement
      between SanguiBiotech AG and Dr. Sieglinde Borchert dated June 15,
      1998 (2)10.4
                          Service Contract
      between GlukoMeditech AG and Dr. Wolfgang Barnikol dated June 30,
      1998 (2)10.5
                          Service Contract
      between SanguiBiotech AG and Dr. Wolfgang Barnikol dated June 30,
      1998 (2)10.6
                          Service Agreement
      between Axel Kleinkorres Promotionsagentur and Sangui Biotech
      International, Inc. dated April 26, 1999 (2)10.7
                          Amendment to Service
      Agreement between Axel Kleinkorres Promotionsagentur and Sangui Biotech
      International, Inc. dated August 18, 2000 (2)10.8
                          Appropriation Notice
      from North-Rhine-Westphalia to GlukoMediTech AG dated November 30,
      1998 (2)10.9
                          Appropriation Notice
      from North-Rhine-Westphalia SanguiBiotech AG dated November 30,
      1998 (2)10.10
                          Lease Contract for
      Business Rooms between Research and Development Centre, Witten, Germany
      and GlukoMeditech AG dated June 6, 2000 (2)10.11
                          Additional Agreement
      to Lease Contract between Research and Development Centre, Witten, Germany
      and GlukoMeditech AG dated June 7, 2000 (2)10.12
                          Additional Agreement
      to Lease Contract between Research and Development Centre, Witten, Germany
      and SanguiBiotech AG dated June 7, 2000 (2)10.13
                          Assignment of
      Patents and
      Royalty Agreement with Dr. Wolfgang Barnikol
      (3)10.14
                          Prolongation Letter
      for SanguiBiotech AG Grants (4)16.1
                          Auditor Letter from
      HJ & Associates, LLC (5)21.1
                          Subsidiaries of the
      Company (6)31.01
                          Certification of CEO
      Pursuant to Rule 13a-14(a) and 15d-14(a), filed herewith31.02
                          Certification of
      CFO Pursuant to Rule 13a-14(a) and 15d-14(a), filed
  herewith32.01
                          Certification
      Pursuant to Section 1350 of Title 18 of the United States Code, filed
      herewith
 _____________________________________________________________________________________________________________________
 (1) Filed as an
exhibit to the report on Form 8-K, filed on or about April 4, 2000
 (2)
Filed as an exhibit to the report on Form 10-KSB for period ended June 30,
2000, filed on
October 13, 2000 (3)Filed as
an exhibit to the amended report on Form 10-KSB/A for the period ended June 30,
2000, filed on November 20, 2000
 (4)
Filed as an exhibit to the report on Form 10-KSB for the period ended June
30, 2001, filed on
September 28, 2001
 (5)
Filed as an exhibit to the report on Form 8-K/A filed on October 9,
2007
 (6)
Filed as an exhibit to the report on Form 10-QSB for the period ended September
30, 2006, filed on June 10, 2008
 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.
     Dated:
October 15, 2008  /s/ Thomas
Striepe
 __________________________________________
 By: Thomas
Striepe
 Chief Executive
Officer
     Dated:
October 15, 2008  /s/ Joachim Fleing
 __________________________________________
 By: Joachim
Fleing
 Chief Financial
Officer


13