SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

     (Mark One)
[ X ]  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15(d)  OF THE  SECURITIES
EXCHANGE  ACT OF 1934 FOR THE  QUARTERLY  PERIOD  ENDED  September  30, 2002 [ ]
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934

                         Commission file number 0-21271

                       SANGUI BIOTECH INTERNATIONAL, INC.
             (Exact Name of Registrant as Specified in its Charter)

               COLORADO                                    84-1330732
      (State  or  other  jurisdiction  of               (I.R.S.  Employer
      incorporation  or  organization)                 Identification  No.)

                            Alfred-Herrhausen-Str. 44
                                  58455 Witten
                                     Germany

               (Address of Principal Executive Offices) (Zip Code)
     Registrant's Telephone Number, Including Area Code: 011-49-2302-915-204


 Former Address: 1508 BROOKHOLLOW DRIVE, SUITE 354, SANTA ANA, CALIFORNIA 92705

   (Former name, former address and former fiscal year, if changed since last
                                     report)

                                   ___________

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 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.
     Yes  [  X  ]  No  [    ]

Indicate  the  number of shares  outstanding  of each of the  issuer's  class of
common stock, as of the latest practicable date:

Title  of  each  class  of  Common  Stock        Outstanding at November 7, 2002
-----------------------------------------        -----------------------------
  Common  Stock,  no par  value                      40,655,363


Transitional  Small  Business  Disclosure  Format
(Check  one);

Yes  [   ]  No  [ X  ]


                                                                       -1-
<PAGE>

INDEX

                       SANGUI BIOTECH INTERNATIONAL, INC.

                          PART I. FINANCIAL INFORMATION

Item  1. Financial  Statements

         Consolidated Balance Sheet at September 30, 2002 (Unaudited)......3

         Consolidated Statements of Operations and
         Comprehensive Loss (Unaudited) Three months ended
         September 30, 2002 and 2001.......................................4

         Consolidated Statements of Cash Flows (Unaudited)
         Three months ended September 30, 2002 and 2001....................5

         Notes to Consolidated Financial Statements (Unaudited)............6

Item 2.  Management's Discussion and Analysis of Financial
         Condition and Results of Operations..............................11

Item 3.  Controls and Procedures..........................................14

                           PART II. OTHER INFORMATION

Item 1.  Legal Proceedings................................................14

Item 2.  Change in Securities and Use of Proceeds.........................15

Item 3.  Defaults Upon Senior Securities..................................15

Item 4.  Submission of Matters to a Vote of Securities Holders............15

Item 5.  Other Information................................................15

Item 6.  Exhibits and Reports on Form 8-K.................................15









                                                                       -2-
<PAGE>

                       SANGUI BIOTECH INTERNATIONAL, INC.
                           CONSOLIDATED BALANCE SHEET


                                     ASSETS
                                     ------


                                                              September 30
                                                                  2002
                                                               (Unaudited)
                                                             ---------------

Current assets
   Cash and cash equivalents.................................$      612,841
   Available for sale securities.............................     2,100,270
   Accounts receivable.......................................        32,618
   Grant receivable..........................................       145,386
   Prepaid expenses and other assets.........................       298,694
                                                             ---------------
        Total current assets.................................     3,189,809

Property and equipment-net...................................       371,022

Patents and licenses-net.....................................        41,568

                                                             ---------------
Total assets.................................................$    3,602,399
                                                             ===============


                       LIABILITIES & STOCKHOLDERS' EQUITY
                       ----------------------------------

Current liabilities
   Accounts payable and accrued expenses.....................$      343,179
                                                             ---------------

Commitments and contingencies................................           -

Stockholders' equity
   Preferred stock, no par value, 5,000,000 shares
   authorized, no shares issued and outstanding..............           -
   Common stock,  no par value, 50,000,000 shares
   authorized, 40,655,363 shares issued and outstanding .....    18,345,491
   Additional paid-in capital................................     2,000,000
   Accumulated other comprehensive loss......................      (107,928)
   Accumulated deficit.......................................   (16,978,343)
                                                             ---------------

        Total stockholders' equity...........................     3,259,220

                                                             ---------------
Total liabilities and stockholders' equity...................$    3,602,399
                                                             ===============

                                                                       -3-
<PAGE>



                       SANGUI BIOTECH INTERNATIONAL, INC.
          CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

                                                           For The
                                                       Three Months Ended
                                                         September 30,
                                                          (Unaudited)
                                               ---------------   ---------------
                                                     2002              2001
                                               ---------------   ---------------


Revenues.......................................$          -      $          -
                                               ---------------   ---------------

Operating expenses
Research and development.......................       229,706           291,987
General and administrative.....................       274,602           381,653
Depreciation and amortization..................        45,595            34,532
Compensation expense related to
  stock options................................           -             250,000
Amortization of prepaid
  consulting fees..............................           -             110,000
                                               ---------------   ---------------

Total operating expenses.......................       549,903         1,068,172
                                               ---------------   ---------------

Other income
Interest income................................        15,141            43,992
Other income...................................        47,112            25,719
                                               ---------------   ---------------
Total other income.............................        62,253            69,711
                                               ---------------   ---------------

Loss from continuing operations................      (487,650)         (998,461)

Loss from discontinued operations..............       (47,059)         (110,562)

                                               ---------------   ---------------
Net loss.......................................      (534,709)       (1,109,023)

Other comprehensive income (loss)
Foreign currency translation adjustments.......      (209,224)          210,175
Unrealized (loss) gain
  on marketable securities.....................       (61,646)          157,750
                                               ---------------   ---------------

Comprehensive loss.............................$     (805,579)   $     (741,098)
                                               ===============   ===============

Net loss available to common
  shareholder per common share
Net loss from continuing operations............$        (0.01)   $        (0.02)
Net loss from discontinued operations..........         (0.00)            (0.00)
                                               ---------------   ---------------
Net loss.......................................$        (0.01)   $        (0.03)
                                               ===============   ===============

Basic and diluted weighted average
  number of common shares outstanding..........    40,655,363        40,514,303
                                               ===============   ===============


                                                                       -4-
<PAGE>

                       SANGUI BIOTECH INTERNATIONAL, INC.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                           For The
                                                        Three Months Ended
                                                         September 30,
                                                          (Unaudited)
                                               ---------------   ---------------
                                                     2002              2001
                                               ---------------   ---------------

CASH FLOWS FROM OPERATING ACTIVITIES:

Net loss.......................................$     (534,709)   $   (1,109,023)
Adjustments to reconcile net loss to
     cash used in operating activities
   Depreciation and amortization...............        45,595                -
   Realized gains on marketable securities.....       (34,263)               -
   Realized gain on sale of assets of
     discontinued operations...................       (16,980)               -
   Loss on impairment of assets................       106,927                -
   Compensation expense related
     to stock options..........................            -            250,000
   Amortization of prepaid consulting fees.....            -            110,000

Changes in operating assets and liabilities:
   Accounts receivable.........................        52,301            55,770
   Inventories.................................        16,362           (42,723)
   Grant receivable............................        68,935                -
   Prepaid expenses and other assets...........        95,678           (57,742)
   Accounts payable and accrued expenses.......      (224,052)           66,135
                                               ---------------   ---------------

Net cash used in operating activities..........      (424,206)         (727,583)
                                               ---------------   ---------------

CASH FLOWS FROM INVESTING ACTIVITIES:

   Increase in marketable securities...........      (682,607)       (3,226,969)
   Maturities of marketable securities.........     1,117,898         2,773,490
   Purchase of property and equipment..........       (21,150)          (31,450)
                                               ---------------   ---------------

Net cash provided by (used in)
   investing activities........................       414,141          (484,929)
                                               ---------------   ---------------


Effect of exchange rate changes................      (209,224)          210,175
                                               ---------------   ---------------

Net decrease in cash and cash equivalents......      (219,289)       (1,002,337)

Cash and cash equivalents,
   beginning of period.........................       832,130         2,354,584
                                               ---------------   ---------------

Cash and cash equivalents,
   ending of period............................$      612,841    $    1,352,247
                                               ===============   ===============


Supplemental disclosures:
   Cash paid during the period for:
   Interest....................................$           -     $           -
                                               ===============   ===============
   Income taxes................................$           -     $           -
                                               ===============   ===============

During the  quarter  ended  September  30,  2002,  the  Company  recorded a note
receivable  for $60,000 from the sale of inventory and equipment  related to its
discontinued operations, which is recorded in prepaid expenses and other assets.


                                                                       -5-
<PAGE>



                       SANGUI BIOTECH INTERNATIONAL, INC.
             Notes to Consolidated Financial Statements (Unaudited)

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 and with the instructions to
Form 10-QSB and Item 301 of Regulation  S-B.  Certain  information  and footnote
disclosures normally included in the 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, 2002.  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  September  30,  2002  are  not
necessarily  indicative  of the results that may be expected for the full fiscal
year ending June 30, 2003.


NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
---------------------------------------------------

Nature of Business
------------------

Sangui BioTech  International,  Inc.,  incorporated in Colorado in 1995, and its
subsidiaries  (collectively,  the "Company")  have been engaged in the research,
development, manufacture, and sales of medical products.

The Company's  wholly owned  subsidiary  Sangui  BioTech,  Inc.  ("Sangui USA"),
incorporated  in Delaware in 1996,  has been  located in Santa Ana,  California.
Sangui USA was engaged in the manufacturing of in vitro  immunodiagnostic  blood
test kits that have been  primarily  sold in the United  States and Europe.  The
Company decided to discontinue the in vitro immunodiagnostics  business and sell
its entire Sangui USA operation in September  2002 (see Note 5). The Company has
three subsidiaries located outside the United States:  SanguiBioTech AG ("Sangui
AG"),  GlukoMediTech  AG ("Gluko  AG"),  and Sangui  BioTech  PTE Ltd.  ("Sangui
Singapore").

Sangui AG, incorporated in Mainz, Germany in 1995, is engaged in the development
of artificial  oxygen  carriers  (blood  substitute  and  additives).  Gluko AG,
incorporated in Mainz, Germany in 1996, is engaged in the development of glucose
implant  sensors.  Sangui  Singapore,  incorporated  in Singapore in 1999, was a
regional  office for the Company  that  carried  out  research  and  development
projects in  conjunction  with  Sangui AG and Gluko AG. The  Company  decided to
discontinue the operations of Sangui Singapore in August 2002 (see Note 5).

Consolidation
-------------

The  consolidated  financial  statements  include the accounts of Sangui BioTech
International,  Inc. and its wholly owned domestic and foreign subsidiaries. All
significant  intercompany  accounts and  transactions  have been  eliminated  in
consolidation. Certain amounts in the three months ended September 30, 2001 have
been  reclassified  to conform to the three  months  ended  September  30,  2002
presentation.

Use of Estimates
----------------

The preparation of financial statements in conformity with accounting principles
generally  accepted in the United States of America requires  management to make
estimates  and  assumptions  that  affect  the  reported  amounts  of assets and
liabilities  and disclosure of contingent  assets and liabilities at the date of
the  financial  statements  and the  reported  amounts of revenues  and expenses
during the respective  reporting period.  Actual results could differ from those
estimates.  Significant  estimates  made by management  are,  among others,  the
realization  of  receivables,  long-lived  assets,  and  valuation  allowance on
deferred tax assets.


                                                                       -6-
<PAGE>

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 AG and Gluko AG, 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.

The Company's  management  believes,  based on its current  operating  plan, its
current cash and highly liquid marketable securities totaling approximately $2.7
million at September 30, 2002, are  sufficient to fund the Company's  operations
and working  capital  requirements  at least  through  September  30, 2003.  The
Company is also considering various debt or equity funding opportunities.

Foreign Currency Translation
----------------------------

Assets and  liabilities  of the Company's  German and Singapore  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.

Cash and Cash Equivalents
-------------------------

The Company maintains its cash in uninsured  accounts and not in bank depository
accounts  insured by the  Federal  Deposit  Insurance  Corporation  (FDIC).  The
Company has not  experienced any losses in these  uninsured  accounts.  Cash and
cash equivalents include time deposits for which the Company has no requirements
for compensating  balances.  The Company also maintains bank accounts in Germany
and Singapore.

Marketable  Securities
----------------------

Marketable securities are classified as available-for-sale. Unrealized gains and
losses are excluded  from net loss and are  reported as a separate  component of
other comprehensive loss in stockholders' equity.  Realized gains and losses are
included in other income and are determined based on the specific identification
of the securities bought and sold (see Note 3).

Revenue Recognition
-------------------

Revenues from product sales are recognized at the time of shipment.

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.

Stock Compensation
------------------

The Company accounts for stock-based  compensation issued to employees using the
intrinsic  value based  method as  prescribed  by  Accounting  Principles  Board
Opinion No. 25,  "Accounting  for Stock  Issued to  Employees"  ("APB  25"),  as
amended. Under the intrinsic value based method,  compensation is the excess, if
any, of the fair value of the stock at the grant date or other  measurement date
over the amount an employee must pay to acquire the stock. Compensation, if any,
is recognized over the applicable  service period,  which is usually the vesting
period. The Financial  Accounting  Standards Board ("FASB") has issued Statement
of Financial  Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation." This standard, if fully adopted, changes the method of accounting


                                                                       -7-
<PAGE>

for all  stock-based  compensation  to the fair value  based  method.  For stock
options and  warrants,  fair value is determined  using an option  pricing model
that takes into account the stock price at the grant date,  the exercise  price,
the  expected  life of the option or warrant  and the annual  rate of  quarterly
dividends.  Compensation  expense,  if any, is  recognized  over the  applicable
service period, which is usually the vesting period.

The  adoption of the  accounting  methodology  of SFAS No. 123 for  employees is
optional  and the Company has elected to  continue  accounting  for  stock-based
compensation  issued to employees using APB 25; however,  pro forma disclosures,
as if the Company adopted the cost recognition  requirements under SFAS No. 123,
are required to be presented (see Note 4).

Basic and Diluted Earnings (Loss) Per Common Share
--------------------------------------------------

Basic earnings (loss) per common share is computed based on the weighted average
number of shares  outstanding for the period.  Diluted earnings (loss) per share
is  computed  by  dividing  net income  (loss) by the  weighted  average  shares
outstanding  assuming  all  dilutive  potential  common  shares  were issued (at
September 30, 2002, there were no potential common shares).

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.  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 securities and are
recorded as components of stockholders' equity.

Segments of an Enterprise and Related Information
-------------------------------------------------

The Company applies SFAS No. 131,  "Disclosures  about Segments of an Enterprise
and Related Information".  SFAS No. 131 establishes standards for the way public
companies  report  information  about segments of their business in their annual
financial statements and requires them to report selected segment information in
their quarterly  reports issued to  shareholders.  It also requires  entity-wide
disclosures  about the products and  services an entity  provides,  the material
countries in which it holds assets and reports  revenues and its major customers
(see Note 7).

New Accounting Pronouncements
-----------------------------

In August 2001, the FASB issued SFAS No. 144,  "Accounting for the Impairment or
Disposal of Long-Lived Assets".  SFAS No. 144 addresses financial accounting and
reporting for the impairment of long-lived  assets and for long-lived  assets to
be disposed  of. The  provisions  of SFAS No. 144 are  effective  for  financial
statements  issued for fiscal years  beginning  after  December  15,  2001,  and
interim periods within these fiscal years, with early adoption  encouraged.  The
adoption  of SFAS  No.  144 did not  have a  material  effect  on the  Company's
financial statements.

In April 2002, the FASB issued SFAS No. 145,  "Rescission of FASB No. 4, 44, and
64, Amendment of FASB Statement No. 13, and Technical  Corrections",  to update,
clarify  and  simplify  existing  accounting  pronouncements.  SFAS No. 4, which
required all gains and losses from debt  extinguishment to be aggregated and, if
material,  classified as an extraordinary  item, net of related tax effect,  was
rescinded.  Consequently,  SFAS No. 64, which  amended SFAS No. 4, was rescinded
because it was no longer necessary.  The Company does not expect SFAS No. 145 to
have a material effect on its financial statements.

In June 2002,  the FASB issued SFAS No. 146,  "Accounting  for Costs  Associated
with Exit or Disposal  Activities".  SFAS 146 addresses accounting and reporting
for costs  associated  with exit or disposal  activities and nullifies  Emerging
Issues Task Force Issue No. 94-3,  "Liability  Recognition for Certain  Employee
Termination  Benefits  and Other  Costs to Exit an Activity  (Including  Certain
Costs Incurred in a Restructuring)".  SFAS No. 146 requires that a liability for
a cost associated  with an exit or disposal  activity be recognized and measured
initially  at fair  value  when the  liability  is  incurred.  SFAS  No.  146 is
effective for exit or disposal  activities that are initiated after December 31,
2002, with early  application  encouraged.  The adoption of SFAS No. 146 did not
have a material effect on the Company's financial statements.

                                                                       -8-
<PAGE>

NOTE 3 - AVAILABLE FOR SALE SECURITIES

Available for sale securities consist of the following at September 30, 2002:


                                          Cost     Fair market  Unrealized
                                                      value     Gain Loss)

Mutual funds                           $  484,294  $   424,783  $  (59,511)
Corporate bonds due within one year       991,080      991,080         -
Corporate bonds due within five years     686,542      684,407      (2,135)

                                      -----------  -----------  -----------

                                       $2,161,916   $2,100,270  $  (61,646)

                                      ===========  ===========  ===========


NOTE 4 - COMPENSATION EXPENSE RELATED TO STOCK OPTIONS

Per APB No.  25,  "Accounting  for  Stock  Issued  to  Employees",  the  Company
recognized  compensation  expense for previously issued options in the amount of
$250,000 in the accompanying  statement of operations for the three months ended
September 30, 2001.  Effective  June 30, 2002,  these options were  cancelled by
mutual  agreement  between the Company and the option  holder.  As a result,  no
compensation  expense related to stock options was recorded for the three months
ended September 30, 2002.

NOTE 5  - DISCONTINUED OPERATIONS

Sangui USA manufactured in vitro immunodiagnostic blood test kits that have been
primarily  sold  in the  United  States  and  Europe.  The  Company  decided  to
discontinue the in vitro immunodiagnostics  business in August 2002, sold Sangui
USA's  inventory and property and  equipment to an unrelated  party for $60,000,
and closed the facility.  The sale resulted in a gain of $16,980.  In July 2002,
the Company received $100,000 as part of an agreement to cease manufacturing and
selling  certain  blood test  kits.  The  Company  decided  to  discontinue  the
operations  of Sangui  Singapore  in August  2002,  wrote off its  property  and
equipment of $106,927, and decided to close the facility.

Components of amounts  reflected in the accompanying  income  statements for the
three months ended September 30, 2002 and 2001 are presented below:

<TABLE>
<S>                      <C>            <C>               <C>             <C>             <C>             <C>

                                             2002                                             2001
                                             ----                                             ----
                            Sangui          Sangui                            Sangui         Sangui
                             USA           Singapore          Total            USA          Singapore          Total
                         ------------    --------------    ------------    ------------    ------------    -------------

Sales                      $ 138,542       $         -       $ 138,542       $ 101,241       $       -       $  101,241
Cost of sales                 94,747                 -          94,747          81,201               -           81,201
Operating expenses            76,060            24,847         100,907          61,321          69,281          130,602
                         ------------    --------------    ------------    ------------    ------------    -------------

Loss from operations         (32,265)          (24,847)        (57,112)        (41,281)        (69,281)        (110,562)
Other income                 116,980                 -         116,980               -               -                -
Impairment of assets               -          (106,927)       (106,927)              -               -                -
                         ------------    --------------    ------------    ------------    ------------    -------------
Income (loss) from
 discontinued
 operations                $  84,715       $  (131,774)      $ (47,059)      $ (41,281)      $ (69,281)      $ (110,562)
                         ============    ==============    ============    ============    ============    =============

</TABLE>


                                                                       -9-
<PAGE>


NOTE  6 - LITIGATION RELATED TO THE OPERATING BUSINESS

The Company may, from time to time, be involved in various litigation  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  and  results of
operations.

NOTE 7 - BUSINESS SEGMENTS

The Company reports it business segments based on geographic regions,  which are
as follows for the period ended September 30:


                                                2002             2001
                                                ----             ----
Revenues
--------
Sangui USA                                $      138,542    $      101,241
Sangui BioTech International, Inc.                     -                 -
Sangui BioTech AG                                      -                 -
GlukoMediTech,AG                                       -                 -
Sangui BioTech PTE Ltd, Singapore                      -                 -
                                          ---------------------------------
                                          $      138,542    $      101,241
                                          =================================


Net income (loss):
------------------
Sangui USA                                $       84,715    $      (41,281)
Sangui BioTech International, Inc.               (89,322)   $     (591,413)
Sangui BioTech AG                               (204,056)         (206,788)
GlukoMediTech,AG                                (194,272)         (200,260)
Sangui BioTech PTE Ltd, Singapore               (131,774)          (69,281)
                                          ---------------------------------
                                          $     (534,709)   $   (1,109,023)
                                          =================================

Depreciation and amortization
-----------------------------
Sangui USA                                $            -    $            -
Sangui BioTech International, Inc.                     -                 -
Sangui BioTech AG                                 33,491            24,686
GlukoMediTech,AG                                  12,104             9,846
Sangui BioTech PTE Ltd, Singapore                      -                 -
                                          ---------------------------------
                                          $       45,595    $       34,532
                                          =================================
Identifiable assets
-------------------
Sangui USA                                $            -
Sangui BioTech International, Inc.               527,102
Sangui BioTech AG                              1,068,742
GlukoMediTech,AG                               2,006,555
Sangui BioTech PTE Ltd, Singapore                     -
                                          ---------------
                                          $    3,602,399
                                          ===============

                                                                      -10-
<PAGE>

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 is  primarily  involved in the  development  of  artificial  oxygen
carriers and glucose sensors.

The Company's  development projects are primarily in the preliminary stages. The
Company  is  diligently   developing   several   applications  for  its  primary
development projects, but does not anticipate beginning any government protocols
or clinical trials in the near term.

In 2002, the Board of Directors  analyzed progress and outlook for all units and
current projects within the group and assessed the key cost factors. In order to
improve the  probability of successful  market entry for its key projects in the
haemoglobin area, the Board initiated a comprehensive  refocusing  program aimed
at cost reduction and fast market entry.

Group Structure
---------------

In the pursuit of this program,  the Company  plans to reduce the  complexity of
the group structure by closing the Singapore subsidiary, merging Sangui USA with
the parent company Sangui BioTech International, Inc. and merging the two German
subsidiaries,  GlukoMediTech AG and  SanguiBioTech  AG, into  SanguiBioTech  AG.
Management has initiated the necessary  measures to arrive at a group  structure
consisting of Sangui BioTech  International,  Inc. with Sangui BioTech AG as its
wholly owned  subsidiary  by the end of calendar year 2002.  The Company  should
benefit  from the clearer  focus of  management  attention  and the  decrease in
consolidation  efforts.  Management  expects  to save  approximately  50% of the
group's total accounting and auditing expenses,  which, in fiscal 2002, amounted
to more than $180,000.

Sangui Singapore's operations used to encompass mainly a test laboratory serving
the purpose of carrying out experiments on animals. As the most recent series of
tests, including the additional indication of pulmonary edema for the artificial
oxygen  carriers,  have yielded  encouraging  results so far, the Company is now
finishing its pertinent  experiments.  If additional  experiments on animals are
desirable in the future,  the Company will be able to use  alternative  sites in
Europe on a lease or rental basis. The closing of the operations in Singapore is

                                                                      -11-
<PAGE>

expected to result in annual savings of  approximately  $200,000 as the net loss
of Sangui  BioTech PTE Ltd.  was  $220,156 and $183,068 for the years ended June
30, 2002 and 2001, respectively.

After having sold the immunodiagnostic  test kit business to Axis/Shield ASA and
Biomerica,  Inc. in the first quarter of fiscal year 2003,  Sangui USA no longer
has  any  significant  operations  within  the  group.  It  has  been  resolved,
therefore,  that  Sangui USA will be merged with the parent  company  during the
second quarter of the fiscal year 2003. In accordance  with the Company's  goals
and plan of  restructuring,  Sangui  Singapore  and Sangui USA are  presented as
discontinued operations in the accompanying consolidated financial statements.

In the course of the merger of the two German subsidiaries,  all assets,  staff,
and  activities  of  GlukoMediTech  AG will be  integrated  in and  continued by
SanguiBioTech  AG.  The  initial  and  only  reason  for  separating  these  two
activities was to have distinct entities applying for government  funding of the
research  and  development  related to the  artificial  oxygen  carriers and the
glucose sensors. As this is not mandated by German regulations,  it was resolved
to abandon the separation at the earliest  possible date. Again, by this action,
management expects to considerably reduce administrative expenditures.

Cost Savings
------------

As will be  discussed  below,  the  ongoing  cost-cutting  exercise  has already
contributed to reducing the operating  expenditures  of the Company.  Management
has  begun to  implement  more  efficient  processes  and  shift to  alternative
suppliers and materials offering better price-performance ratios. Staff has been
shifted to work on the most  promising  projects,  while  expenses for long-term
development  projects have been reduced.  Long-term projects are currently being
continued by in-house scientists and technicians, while costly external projects
and orders have been terminated or delayed.  In the course of this process,  the
number of employees was reduced by 23% to 23 fulltime employees at September 30,
2002 from 30 employees at June 30, 2002.  Contracts  with 5 employees are due to
expire during or at the end of the second quarter of fiscal 2003.

On the other hand,  consulting and legal fees related to the restructuring  have
resulted in non-recurring  expenses of approximately  $80,000 in the first three
months of fiscal 2003.  Management believes,  that additional  opportunities for
significant cost savings will be identified.  Special attention is being paid to
the pending  lawsuits.  The current strategy related to pending lawsuits aims at
reinforcing Sangui's position while limiting additional expenses.

In total, management has been able to reduce the Company's operating expenses by
54% to $0.55  million in the first  quarter  of fiscal  2003,  compared  to $1.2
million in the respective  quarter of last fiscal year. This is partially due to
no amortization  expense  related to prepaid  consulting fees which were written
off at June 30, 2002,  and to the  cancellation  of stock  options at the end of
fiscal 2002.  Research and development  expenses and general and  administrative
expenses have been reduced by 21% and 46%, respectively, in the first quarter of
fiscal 2003 as  compared to the  respective  quarter of last fiscal  year.  This
effort is also  reflected  in the net cash used in  operating  activities  which
decreased  35% to $0.45  million  from last year's  $0.69  million.  Management,
therefore, assumes that the current planning is realistic and that the Company's
funds and  liquidity are  sufficient to finance its  activities at least through
the period ending September 30, 2003.

FINANCIAL POSITION
------------------

The Company's current assets decreased approximately $887,000, or 22%, from June
30, 2002 to  approximately  $3.2 million at September 30, 2002.  The decrease is
primarily   attributable  to  a  decrease  in  cash  and  cash   equivalents  of
approximately   $219,000,  a  decrease  in  available  for  sale  securities  of
approximately $459,000, a decrease in grant receivable of approximately $69,000,
a decrease in accounts  receivable of approximately  $52,000,  and a decrease in
inventories of approximately  $52,000. The decrease in cash and cash equivalents
and available for sale  securities  results  primarily  from funding the current
year's  operations  of the Company.

The Company's net property and equipment decreased  approximately  $139,000,  or
27%, from June 30, 2002 to  approximately  $371,000 at September  30, 2002.  The
decrease is primarily  attributable to the Company's  write-off of approximately
$107,000 of leasehold improvements at Sangui Singapore.

The Company funded its operations  primarily through its existing cash reserves.
The Company's stockholders' equity decreased approximately $806,000. The primary

                                                                      -12-
<PAGE>

decrease is caused by the  Company's  current  period net loss of  approximately
$535,000,   and  an  increase  in  accumulated  other   comprehensive   loss  of
approximately  $271,000  due to foreign  currency  translation  adjustments  and
unrealized losses on marketable securities.

RESULTS OF OPERATIONS
---------------------

Three Months Ended September 30, 2002 and 2001:

Sangui USA
----------
GENERAL AND ADMINISTRATIVE. General and administrative expenses decreased 61% to
approximately $93,000 in 2002 from approximately $238,000 in 2001. This decrease
is related to legal costs incurred in 2001 by the Company in a lawsuit against a
former  director  of the  Company.  In  addition,  the  shift of  administrative
functions and activities from Sangui USA to SanguiBioTech  AG and  GlukoMediTech
AG results in a corresponding shift of expenditure.

COMPENSATION  EXPENSE RELATED TO STOCK OPTIONS.  Compensation expense related to
stock options was $250,000 in 2001,  which  represented the  amortization of the
fair value of stock  options  previously  issued to the chairman of the Company.
Effective  June  30,  2002,  these  options  were  cancelled  and  there  is  no
compensation  expense  related  to  stock  options  in the  three  months  ended
September 30, 2002.

AMORTIZATION OF PREPAID CONSULTING FEES. Amortization of prepaid consulting fees
was  $110,000 in 2001.  At June 30,  2002,  management  determined  that no more
benefit  would be  received  in  relation  to the  prepaid  consulting  fees and
accordingly the unamortized  balance was written off in fiscal 2002. Thus, there
was no amortization in the three months ended September 30, 2002.

Sangui AG
---------
RESEARCH AND  DEVELOPMENT.  Research and development  expenses  decreased 27% to
approximately $85,000 in 2002 from approximately  $116,000 in 2001. The decrease
is due to the refocusing of research and development activities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 10% to
approximately $109,000 in 2002 from approximately $99,000 in 2001. This increase
is mainly  attributed to  non-recurring  expenditure  for  consulting  and legal
counsel related to the ongoing refocusing  program.  In addition,  Sangui AG has
taken over a portion of the legal costs of the corporate counsel.

Gluko AG
--------
RESEARCH AND  DEVELOPMENT.  Research and development  expenses  decreased 18% to
approximately $145,000 in 2002 from approximately $176,000 in 2001. The decrease
is due to the refocusing of research and development activities.

GENERAL AND ADMINISTRATIVE. General and administrative expenses increased 64% to
approximately  $72,000 in 2002 from approximately $44,000 in 2001. This increase
is mainly  attributed to  non-recurring  expenditure  for  consulting  and legal
counsel related to the ongoing  refocusing  program.  In addition,  Gluko AG has
taken over a portion of the legal costs of the corporate counsel.

Sangui BioTech International, Inc.
----------------------------------
NET LOSS. The Company's  consolidated net loss was  approximately  $535,000,  or
$0.01 per common share,  in 2002,  compared to  approximately  $1.1 million,  or
$0.03 per common  share,  in 2001.  This decrease in net loss is a result of the
ongoing refocusing program.

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

For the three  months  ended  September  30,  2002,  net cash used in  operating
activities  decreased to approximately  $445,000 from approximately  $689,000 in
the  corresponding  period  in 2001,  primarily  related  to a  decrease  in the
Company's consolidated net loss.

For the three months ended  September  30, 2002,  net cash provided by investing
activities  was  approximately  $435,000  compared to net cash used in investing
activities of approximately  $485,000 in the  corresponding  period in 2001. The
principal  increase in cash is due to the maturity of marketable  securities and
decrease in purchases of marketable securities and property and equipment.

                                                                      -13-
<PAGE>


Working capital was approximately $2.8 million at September 30, 2002, a decrease
of  approximately  $700,000  from June 30,  2002. A  substantial  portion of the
Company's total assets consists of cash and highly liquid marketable  securities
classified as available for sale securities.  Marketable securities at September
30, 2002 include  approximately  $425,000 of  investments in money market mutual
funds,  which are  convertible to cash daily.  The highly liquid nature of these
assets  provides the Company  with  flexibility  in  financing  and managing its
business.  For the three-months ended September 30, 2002,  realized gains on the
Company's marketable  securities were approximately  $34,000, and unrealized net
losses were approximately $62,000.

At September 30, 2002, the Company had cash and liquid marketable  securities of
approximately $2.7 million. The Company believes that its available cash will be
sufficient  to satisfy  its  requirements  at least  through  the period  ending
September  30,  2003.  However,  the Company  will need  substantial  additional
funding to fulfil 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.

ITEM 3 - CONTROLS AND PROCEDURES
--------------------------------

As of November 4, 2002, an evaluation was performed  under the  supervision  and
with the participation of the Company's  management,  including the CEO/CFO,  of
the  effectiveness  of the  design and  operation  of the  Company's  disclosure
controls and procedures.  Based on that  evaluation,  the Company's  management,
including  CEO/CFO,   concluded  that  the  Company's  disclosure  controls  and
procedures were effective as of November 4, 2002. There have been no significant
changes  in the  Company's  internal  controls  or in other  factors  that could
significantly affect internal controls subsequent to November 4, 2002.

ITEM 4 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
-------------------------------------------------------------------

The  Company  has no  derivative  financial  instruments.  Exposure  to  foreign
currency  exchange  rates is limited as the Company  plans to have no  operating
business nor staff outside Germany at year end.


PART II - OTHER INFORMATION
---------------------------

ITEM 1 - LEGAL PROCEEDINGS
--------------------------

On July 26,  2001,  the Company  filed a lawsuit in the United  States  District
Court for the  District of Colorado  against  Helmut  Kappes,  a director of the
Company.  In the  lawsuit,  the Company  alleges  that Mr.  Kappes is engaged in
conduct  related to the Company's  affairs that is  fraudulent,  dishonest and a
gross abuse of his  authority or  discretion  as a director and that his removal
from the  Company's  Board of  Directors  would be in the best  interest  of the
Company.  Among other  things,  the Company  alleges that Mr.  Kappes caused the
Company  to  enter  into a  contract  with  Axel  Kleinkorres  without  adequate
disclosure of Mr. Kappes'  conflicts of interest and that the remuneration  paid
to Mr.  Kleinkorres  was excessive.  The Company also alleges that Mr. Kappes is
engaged in an improper  exchange offer campaign  involving the Company's shares.
The Court issued a Temporary  Restraining  Order  suspending Mr. Kappes from the
Board of Directors of the Company and  restraining  Mr. Kappes from pursuing the
exchange offer.  The Temporary  Restraining  Order has expired.  The Company has
filed a Motion for  Preliminary  Injunction.  The  Company  seeks the  permanent
removal of Mr.  Kappes from the  Company's  Board of  Directors,  an  injunction
against Mr. Kappes and his affiliates from  exchanging the Company's  shares for
shares of an entity in which Mr. Kappes has a financial  interest,  compensatory
damages in an amount to be  determined  and costs of the action.  Mr. Kappes has
filed an answer denying the Company's claims. In October 2002, the Court granted
the motion of counsel  to Mr.  Kappes to  withdraw  from  representation  of Mr.
Kappes. The Court has scheduled a final trial preparation conference for January
13, 2003, and a trial commencement date of February 9, 2003.

In September 2002, Mr. Kappes' wife, Kerstin Kappes, and Petra  Schwab-Kutscher,
the  wife of Axel  Kutscher,  who is a former  director  of the  Company  and an
associate of Mr. Kappes, commenced an action in the United States District Court
for the District of Colorado  against the Company and its  attorneys for alleged
wrongful  refusal  to permit  Mrs.  Kappes and Mrs.  Kutscher  to  transfer  the
Company's stock. In November 2002, the Company finalized a settlement  agreement
with Mr. and Mrs. Kappes and Mrs. Kutscher  providing for the permitted transfer
by them of their Company stock under certain  conditions.  No money will be paid
by the Company in connection  with the  settlement  and the legal action will be
dismissed.

                                                                      -14-
<PAGE>

On August 10, 2002,  Sieglinde  Borchert,  a former director of Sangui BioTechAG
and Gluko  Meditech  AG,  filed a lawsuit  against  the two German  Corporations
alleging that she is still member of the Board of Management of these Companies.
The Motion is pending.  However, the Company believes that the lawsuit will have
no significant material affect on the results of operations and/or activities of
the Company.  The Company had accrued  amounts  necessary to cover the potential
risks from this lawsuit in the fourth quarter of fiscal 2002.

In December 2000, Axis/Shields ASA, a Norway corporation (Axis), filed a lawsuit
against Sangui USA alleging that Sangui USA's Carbohydrate-Deficient Transferrin
("CDT") test kit, which is used to detect chronic alcohol abuse,  constituted an
infringement  of patent  rights owned by Axis.  In March 2001, a settlement  was
reached and Sangui USA agreed to cease manufacture and sale of the CDT test kit.
Sangui USA subsequently designed a new test kit, which was then manufactured and
sold. In December 2001,  Axis filed another  lawsuit in the U.S.  District Court
for the Central District of California  against Sangui USA alleging that the new
test kit also  infringed  on Axis'  patent  rights.  Sangui  USA filed an answer
denying the claims of Axis and  counterclaimed  against  Axis for a  declaratory
judgment  of  invalidity  of the  patent of Axis and for  antitrust  violations.
Because of the  substantial  funds required to defend itself against the lawsuit
filed by Axis,  despite of a high  probability of not being found infringing the
patent held by Axis,  the Company  decided to offer its CDT business for sale to
Axis. In July, 2002, an agreement was entered into between Axis and the Company,
according  to which the  Company  agreed to cease to sell CDT kits  among  other
intangible  information for  consideration of U.S.  $100,000 paid by Axis to the
Company. As a result of this settlement,  Axis caused a dismissal with prejudice
of all its claims,  and the Company  caused a dismissal  with  prejudice  of the
Company's  counterclaim.  In summary,  this lawsuit from Axis has been resolved.
Further,  with the loss of sales from its CDT  business,  which was  expected to
negatively impact its  immunodiagnostics  business,  the Company also decided to
discontinue its small in vitro immunodiagnostic  operations in the United States
by the end of September  2002, so that it can focus its resources on the product
development projects in Germany.

ITEM 2 - CHANGE IN SECURITIES AND USE OF PROCEEDS
-------------------------------------------------

None

ITEM 3 - DEFAULTS UPON SENIOR SECURITIES
----------------------------------------

Not applicable

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
--------------------------------------------------------------

Not applicable

ITEM 5 - OTHER INFORMATION
--------------------------

As of October 29, 2002, Edgar Fritschi, VM.D., has resigned from his position as
a Director of Sangui BioTech International, Inc. and from all other positions he
previously held in the Company.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
-----------------------------------------

99.1   Certification of Chief Executive Officer/Chief Financial Officer pursuant
       to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the
       Sarbanes-Oxley Act of 2002.


                                                                      -15-
<PAGE>


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.

SANGUI BIOTECH INTERNATIONAL, INC.


By:      /s/ Wolfgang Barnikol
         --------------------------------------
         Wolfgang Barnikol
         President, Chief Executive Officer and
         Chief Financial Officer
Date:    November 14, 2002


                                  CERTIFICATION

The undersigned, Prof. Dr. Wolfgang Barnikol, Chief Executive Officer and Chief
Financial Officer, certifies that:

                               CERTIFICATION UNDER
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly  Report of Sangui BioTech  International,  Inc.
(the "Company") on Form 10-QSB for the period ended September 30, 2002, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
the  undersigned  certifies,  pursuant  to 18 U.S.C.  Section  1350,  as adopted
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, that:

         1. I have  reviewed  this  quarterly  report  on Form  10-QSB of Sangui
Biotech International, Inc. (the "Company");

         2. Based on my knowledge,  this  quarterly  report does not contain any
untrue  statement of a material fact or omit to state a material fact  necessary
to make the  statements  made,  in  light  of  circumstances  under  which  such
statements  were made, not misleading with respect to the period covered by this
quarterly report;

         3. Based on my knowledge, the financial statements, and other financial
information  included in this quarterly  report,  fairly present in all material
respects the financial  condition,  results of operations  and cash flows of the
Company as of, and for, the periods presented in this quarterly report;

         4. The Company's  other  certifying  officers and I are responsible for
establishing and maintaining  disclosure  controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

                  a) designed such disclosure  controls and procedures to ensure
that material  information  relating to the Company,  including its consolidated
subsidiaries, is made known to us by others within those entities,  particularly
during the period in which this quarterly report is being prepared;

                  b) evaluated the  effectiveness  of the  Company's  disclosure
controls and  procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and

                  c) presented in this quarterly  report our  conclusions  about
the  effectiveness  of the  disclosure  controls  and  procedures  based  on our
evaluation as of the Evaluation Date;

         5. The Company's other certifying officers and I have disclosed,  based
on our most recent evaluation, to the Company's auditors and the audit committee
of  Company's   board  of  directors  (or  persons   performing  the  equivalent
functions):

                                                                      -16-
<PAGE>

                  a) all significant  deficiencies in the design or operation of
internal  controls which could adversely affect the Company's ability to record,
process,  summarize  and  report  financial  data  and have  identified  for the
Company's auditors any material weaknesses in internal controls; and

                  b)  any  fraud,   whether  or  not  material,   that  involves
management  or other  employees  who have a  significant  role in the  Company's
internal controls; and

         6. The Company's other certifying officers and I have indicated in this
quarterly report whether there were significant  changes in internal controls or
in other factors that could significantly affect internal controls subsequent to
the date of our most recent  evaluation,  including any corrective  actions with
regard to significant deficiencies and material weaknesses.


Date:    November 14, 2002        By: /s/ Wolfgang. Barnikol
                                      --------------------------------------
                                          Wolfgang Barnikol, Chief Executive
                                          Officer and Chief Financial Officer



Exhibit 99.1

                                  CERTIFICATION

The undersigned, Prof. Dr. W. Barnikol, Chief Executive Officer and Chief
Financial Officer, certifies that:

                CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly  Report of Sangui BioTech  International,  Inc.
(the "Company") on Form 10-QSB for the period ended September 30, 2002, as filed
with the Securities and Exchange  Commission on the date hereof (the  "Report"),
the  undersigned  certifies,  pursuant  to 18 U.S.C.  Section  1350,  as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of
the Securities Exchange Act of 1934; and

(2)The  information  contained in the Report  fairly  presents,  in all material
respects, the financial condition and results of operations of the Company.


Date:    November 14, 2002            /s/ Wolfgang Barnikol
                                      --------------------------------------
                                          Wolfgang Barnikol
                                          President, Chief Executive Officer and
                                          Chief Financial Officer



                                                                      -17-