UNITED  STATES
                   SECURITIES  AND  EXCHANGE  COMMISSION
                          WASHINGTON,  D.C.  20549
                   ---------------------------------------------


[X]   ANNUAL  REPORT  PURSUANT  TO  SECTION  13  OR  15(d)  OF  THE  SECURITIES
      EXCHANGE  ACT  OF  1934

      FOR  THE  FISCAL  YEAR  ENDED  June  30,  2000

                                   FORM  10-KSB

                                Annual  REPORT

     PURSUANT  TO  SECTION  13  OR  15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

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


                     Sangui  Biotech  International,  Inc.
      -------------------------------------------------------------------------
            (Exact  name  of  registrant  as  specified  in  its  charter)

                                    Colorado
      -------------------------------------------------------------------------
                  (State  or  other  jurisdiction  of  incorporation)


   0-29233                                         84-1330732
----------------------                      ------------------------------------
(Commission  File  Number)                  (IRS  Employer  Identification  No.)


            1508  Brookhollow  Drive,  Suite  354,  Santa  Ana,  CA  92705
--------------------------------------------------------------------------------
     (Address  of  principal  executive  offices)     (Zip  Code)

                                 (714)  429-7807
                    -------------------------------------------
              Registrant's  telephone  number,  including  area  code:




Securities  to  be  registered  under  Section  12(b)  of  the  Act:

      Title  of  each  class                   Name  of  each  exchange on which
      to  be  so  registered                   each  class  is  to be registered
      -------------------                   ------------------------------
              None                                        N/A


Securities  to  be  registered  under  Section  12(g)  of  the  Act:

                          Common  Stock,  no  par  value
--------------------------------------------------------------------------------
                                (Title  of  class)

Check  whether  the issuer (1) filed all reports required to be filed by Section
13  or  15(d) of the Exchange Act of 1934 during the past 12 months (or for such
shorter  period  that the registrant was required to file such reports), and (2)
As  been  subject  to  such  filing  requirements  for  the  past  90  days.

                          Yes  [X]    No  [  ]

Check  whether  there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B  in  this  Form,  and  no disclosure will be contained, to the
best  of  Registrant's  knowledge, in definitive proxy or information statements
incorporated  by  reference in Part III of this Form 10-KSB or any amendment  to
this  Form  10-KSB.

                          Yes  [X]    No  [  ]

The  issuer's  revenue  for  the  fiscal  year ended June 30, 2000 was $429,400.

The  market value of the voting stock held by non-affiliates of the issuer as of
October  9,  2000  was  approximately  $81,980,000.

The  number of shares of the common stock outstanding as of October, 9, 2000 was
40,514,363.

        Documents  incorporated  by  reference:   None.


Transitional  Small  Business  Disclosure  Format  (check  one)
                  Yes  [  ]    No  [x]

<PAGE>

FORWARD  LOOKING  STATEMENT

This  Annual  Report contains forward-looking statements concerning, among other
things,  the  Company's  prospects  affecting  our  potential  and  our business
strategies.

     These  forward  looking  statements involve risks and uncertainties. Actual
results  may  differ  materially  from  those  predicted  by the forward-looking
statements  because  of  various  factors  and  possible events, including those
discussed under "Risk Factors". Because these forward looking statements involve
risks  and  uncertainties,  actual  results  may differ significantly from those
predicted  in  these  forward  looking  statements.

PART  1

ITEM  1.  DESCRIPTION  OF  BUSINESS

HISTORY

     Sangui Biotech, Inc. ("SBT") was incorporated in Delaware on August 2, 1996
and  began  operations  in  October  1996. On  or around August 9, 1997, Citadel
Investment  Systems,  Inc.  a  publicly  held  company  ("Citadel") acquired one
hundred percent (100%) of the outstanding common shares of SBT, and as a result,
SBT  became a wholly-owned subsidiary  of  Citadel.  Thereafter, Citadel changed
its name to Sangui Biotech International, Inc. Sangui Biotech International Inc.
is  referred  in  this report  as the Company or SGBI. The Company also operates
through three other  subsidiaries:  GlukoMediTech AG ("Gluko"), SanguiBioTech AG
("Sangui AG") and  Sangui  Biotech  Singapore  Pte  Ltd.  ("SBTS").

     SBT  is  principally  engaged  in  the  development  and  manufacturing  of
Immunodiagnostic  kits,  which  are  sold  by SBT in niche markets in the United
States  and  Europe.  SBT  is  located  in Santa Ana, California. The California
laboratory  facility,  approximately  3,360  square  feet,  is  devoted  to
Immunodiagnostic research, development, manufacturing, and marketing, as well as
the  Company's  administrative  functions.

     Sangui AG was established and organized under the laws of Germany in Mainz,
Germany,  on  November  25,  1995.  Sangui  AG  is in the business of developing
hemoglobin  based  artificial  oxygen  carriers  as blood volume substitutes and
blood  additive  and  by  products thereof.  The officers of Sangui AG are Prof.
Wolfgang  Barnikol,  M.D.,  Ph.D.,  Oswald  Burkhard,  M.D.,  Ph.D.  and  Harald
Poetzschke,  M.D.  The  directors of Sangui AG are Axel Kutscher, Helmut Kappes,
and  Doris  Barnikol,  Ph.D.

     Gluko  was  established  and  organized under the laws of Germany in Mainz,
Germany,  on  July 15, 1996.  Gluko is in the business of developing a long term
implantable  glucose sensor, by-products thereof, three other sensors for use in
anesthesia  and  sleep diagnostics and a skin-oxy-meter for determination of the
oxygen  supply  and  conductivity  of the skin.  The officers of Gluko are Prof.
Wolfgang  Barnikol,  M.D.,  Ph.D.,  Oswald  Burkhard,  M.D.,  Ph.D.  and  Harald
Poetzschke,  M.D.  The  directors of Gluko are  Axel  Kutscher,  Helmut  Kappes,
and  Doris  Barnikol,  Ph.D.

     The facilities of Sangui AG and Gluko, about 800 square meters, are located
on  the  premises of the Forschungs- und Entwickungszentrum of the University of
Witten/Herdecke,  Witten,  Germany  since  April  1998.

     SBTS  was  incorporated  in  Singapore  on  May  15,  1999.  The  Singapore
subsidiary is  expected  to  be the Asian regional office for the Company and is
expected  to be engaged in the business of carrying out research and development
projects   as  well  as  animal  experiments  in  conjunction  with  the  German
subsidiaries.     The  Company  plans  to  intensify  its  development  work  on
biomedical  sensors  in the Singaporean facilities.  The premises of SBTS, about
350  square  meters,  are  located  in  the  Science  Park  II, Gemini Building,
Singapore.

     On March 30, 2000, the Company acquired all the outstanding common stock of
Felnam  Investments,  Inc.  ("Felnam").  The  transaction was funded through the
issuance  of 100,000 shares of the Company's stock valued at $0 per share due to
the  Company  treating the transaction as a recapitalization of the Company.  In
conjunction  with  the transaction, the Company incurred approximately $ 180,000
of  transaction  costs  which  were  charged  to  operations.

    The  Company  has  never  been  profitable  and,  through June 30, 2000, the
Company's accumulated deficit exceeded $7.6 million.   The  Company  expects  to
continue  to  incur  substantial  and  increasing  losses over at least the next
several years as it  expands  its  development  efforts,  testing activities and
manufacturing  operations.  All  of  the  Company's  potential products  are  in
development  except  for the immunodiagnostic test kits which are b eing sold or
marketed.  The Company  will need to obtain  substantial  additional capital  to
fulfill  its business  plan.

BUSINESS  OF  THE  COMPANY

     The  Company's  mission  is  the development of novel proprietary products.
Its  special  focus  is  on  providing  artificial extracellular oxygen carriers
capable  of  human organ support in cases of acute and chronic lack of oxygen or
blood loss due to surgery, accident, arterial occlusion, anemia or other causes.
The  Company  seeks to develop and commercialize such artificial oxygen carriers
with  blood  volume  substitute/blood  additive  technologies  by  reproducibly
synthesizing  polymers of defined molecular sizes, in special formulations, with
different  oxygen  affinities  (low,  normal  and  high)  and specially designed
half-lives.  The products, when circulating in the blood system, are designed to
meet  the  varying  clinical  needs arising from loss of blood or chronic oxygen
deficiency.  In  chronic  oxygen  deficiency,  a new or second generation oxygen
carrier  with  an  oncotic  pressure  lower than that of blood plasma is needed.
SGBI  believes  that  its  technologies  can  meet  this  need.  There can be no
assurance  that  the  Company  will be able to obtain these technologies to meet
this  need.

The  second important project pertains to a long term implantable glucose sensor
for  day  and  night  monitoring  of  a patient's glucose level.  The project is
designed  to  obviate  the  need  for  persistent  blood sampling and to provide
required  information  on  a  continuous basis, which could minimize the harmful
effects  of peaks  and troughs in the patient's blood sugar level.  There can be
no  assurance  that  the  Company  will  be  able  to complete, nor provide this
implantable  glucose  sensor.

     The  development  of  the  above  mentioned  products  are led by Professor
Barnikol  and  his  staff  including  one deputy, four postdoctoral fellows, two
engineers and several technicians.  Oswald Burkhard, M.D., Ph.D., a director and
President of SGBI, is in charge of the necessary clinical trials for the glucose
sensor  and  the  artificial  oxygen  carrier.

     SGBI  has also completed the development of nine in vitro diagnostics kits.
Five  products  have  been  cleared  by  the  United  States  Food  and  Drug
Administration ("FDA").  The other four kits were sold overseas with Certificate
of  Exportability from the FDA.  There can be no assurance that the Company will
be able to continue the sale of these kits overseas or within the United States.

ARTIFICIAL  OXYGEN  CARRIER

     There  are  two  products  in  development  which  are  polymers of natural
hemoglobins with oxygen carrying abilities similar to native hemoglobin.  One is
a  substitute  product,  and  the  other is an additive product.  The substitute
product  ("blood  volume  substitute")  is  designed for use to replace red cell
transfusion  in  a range of applications, such as: (i) replacement of blood loss
due  to  trauma  and  surgery;  (ii)  perfusate  for  preserving  organs  for
transplantation;  and  (iii)  stockpile  of  the product for military  and other
emergencies.  The  cost  for  developing  this  product  cannot  be  determined
accurately  at this time but is expected to be substantial.  The oxygen carrying
blood  additive  ("blood  additive")  is  defined  for  use  in  chronic  oxygen
deficiency  like heart infarcation, stroke, peripheral perfusionary disorders or
for  the  supply of cancer tumors (tumor oxygenation) to enhance the efficacy of
radio-  and  chemo-therapy.

     The Company seeks to develop and commercialize proprietary artificial blood
volume  substitute/artificial  oxygen  carrier  technologies  by  synthesizing
reproducible  polymers  of  defined molecular sizes in special formulations with
different  oxygen  affinities  (low,  normal and high) and different half-lives,
when  in  circulation,  to  meet the varying clinical needs arising from loss of
blood.  The  Company  also  intends to develop a new or second generation oxygen
carrier with an oncotic pressure lower than that of blood plasma which is needed
to  address  a  potential  market in chronic oxygen deficiency.  The experiments
completed  in  the  Company's  laboratories  demonstrated that it is possible to
polymerize  native mammalian hemoglobins from humans, pigs and cattle, resulting
in  huge  soluble  molecules, the so-called hyperpolymers.  The Company plans to
polymerize  hemoglobins  from  pigs (porcine blood).  In August 2000 the Company
finalized  its  work on the pharmaceutical formulation of the oxygen carrier for
laboratory  scale.

Blood  Volume  Substitute
-------------------------

     The  need  for  blood volume substitutes is growing because of: (i) reduced
willingness  of  the  population to give blood; and (ii) rising contamination of
donors with HIV and hepatitis viruses.  The worldwide market for stored blood is
estimated  to  total  about  US  $  5  billion  per  year.

     Invasive  surgery,  resulting  from  such  causes  as  transplantation  or
accidents, can result in substantial loss of blood. In such circumstances, blood
volume  has  to  be  substituted to avoid shock. Blood substitution must be done
with  an isoncotic solution which has the same colloid-osmotic pressure as blood
plasma.  Such  blood  volume  substitutes  are  called "plasma expanders". These
expanders  use  macromolecules  like  polysaccharides or gelatin to generate the
oncotic  pressure.

Blood  additive
---------------

     In  cases  where  the  native  blood oxygen carrier system does not deliver
enough  oxygen  to  tissues  of the heart, brain, extremities, kidneys and other
organs  or  to  cancer  tumors,  a  critical clinical situation arises requiring
another  oxygen  carrier  strategy.  In  these cases, the patients do not have a
blood  volume  deficiency,  but suffer from an oxygen deficiency.  To compensate
for  this  oxygen  deficiency,  an  artificial oxygen carrier must be introduced
into  the  circulatory  system  and  this additive must have no influence on the
oncotic  pressure,  i.e., it must have a negligible oncotic pressure as compared
to normal, which is about 30hPa.  SBTAG has polymerized various hyperpolymers in
small  quantities,  as described above with characteristics such as sufficiently
low viscosity and a negligible oncotic pressure at the desired concentration and
desired  hematocrit  concentration.  Experiments  conducted in alert rats with a
magnetometric  method  appear  to  demonstrate that the hyperpolymer hemoglobins
irritate the reticulo-endothelial system of the liver far less than emulsions of
fluorocarbon  or  encapsulated  hemoglobins  solutions.

     The  management  of  SBTAG believes that the additive feature of the oxygen
carrier  under development, could potentially address a market possibly equal to
or  larger than that of blood volume substitutes.  It has been reported that the
oxygenation  of  solid  tumors  makes  them  more  sensitive  to radio and chemo
therapy.  Management  believes  that its blood additive  technologies, for which
there are no known competitive products, could be very attractive in the medical
field.  Nonetheless,  there  can be no assurances that such therapeutics will be
well  accepted  in  the  market, if developed.  Therefore, the development of an
artificial  oxygen  carrier  has  become  the primary focus of the management of
SGBI.  However,  such a market projection for plasma expanders and additives, as
therapeutics  for oxygen deficiency disorders, cannot be ascertained, since such
products  are not available in the marketplace.  There also cannot be assurances
that  such therapeutics, if developed, will be favorably accepted by the medical
community.

     If oxygen carriers can be used successfully in the cancer field, this could
be  expected  to  speed  the  approval  process  for  the  use  of  blood volume
substitutes  based on similar technologies.  However, there can be no assurances
that  these  applications  will be approved by the various government regulatory
agencies,  including but limited to the FDA in the United States and the similar
agencies  in  Germany  and  other  Western  European  countries.

     It  should  be  noted  that  this  specialized  or  niche  application,  if
successfully developed, would have a market potential substantially smaller than
the  overall  market  of  artificial  blood volume substitute or the therapeutic
market  (with  oxygen  carrier  as  an  additive  or therapeutic agent) for more
widespread oxygen deficiency disorders such as myocardial infarction and stroke.

     Small  animal exchange experiments with artificial oxygen carriers prepared
by  the  Company  have  demonstrated,  that these carriers are very effective in
oxygen  transport  already  in small concentrations within the blood plasma (0.5
gram  per  decilitre),  and  that  they  show  a  synergistic effect with native
transport  systems.  Also  it  was  possible to synthesize hyperpolymeric oxygen
carriers  which  exhibit  almost  no  immunogenicity  in  mice  sensitized  to
hemoglobin.

      Sangui  AG has received a grant from the government of the German state of
North-Rhine-Westphalia in an amount of more than US $ 2,000,000 which covers 40%
of  the  estimated  costs  of  the  research and pre-clinical development of the
Company's polymer hemoglobin based artificial oxygen carrier. SBTAG has received
installments of $962950 from the grant to reimburse 40% of its relevant expenses
in the period from April 1998 to June 30, 2000. The grant requires the Company's
economical  ability  to cover 60% of the project costs on its own as well as the
achievement  of  milestones.

GLUCOSE  SENSOR  AND  TECHNICAL  BETA-CELL

     Over  5%  of  the  inhabitants  of the industrialized countries suffer from
diabetes.  About  one  tenth  of  these  patients  are  afflicted  with diabetes
mellitus  Type  1,  which  means  they  are dependent for life on the parenteral
application  of  insulin.  In addition, about 10 % of the Type II diabetics also
get  insulin  dependent  during  the  course  of  their  illness.

     Diabetes Type I patients suffer from the irreversible destruction of the so
called  beta cells of the pancreas (absolute insulin deficiency); the beta cells
normally  produce  the  hormone,  insulin.

     Diabetes  Type  II  patients suffer from a relative insulin deficiency; the
insulin  receptors  are  insensitive  to  the  hormone.

     The  central  problem of the diabetic is to properly and constantly measure
the  blood  glucose  level,  ideally  24 hours a day, and thereby to know how to
adjust,  quantitatively,  the  glucose  level  in  the  tissues by administering
insulin,  for example, in order to stabilize the blood sugar level at its normal
value  of  1  g/L.  Only  a rough adjustment may be achieved during waking hours
when  the  patient  is  able  to  sample  a  drop  of  blood from the fingertips
periodically,  and  to determine the level of glucose with the aid of dipsticks.
Many  patients  have  developed  a  sixth sense in adjusting their blood glucose
level.

     Nevertheless,  the  permanent  sampling  of  blood  and  the need to inject
insulin  deteriorate  the  quality of life.  An enormous danger for the diabetic
patient  arises  when  he is asleep, i.e. one third of his life time, when he is
neither  able to sample the glucose level in his blood system, nor to adjust it,
if  necessary.

     Furthermore,  as  shown  by  measurements  using a short time (only 3 days)
glucose  monitoring system based on the enzymatic detection of glucose, (even in
patients who seem to be well adjusted) dramatic changes of the blood sugar occur
during  night  and  day.

     Infectious  diseases  and  vegetative  disorders  are  also  reasons  for
uncontrollable  disturbances  and  variations  of the glucose level, even during
waking  hours.  Those  are  very  dangerous  for  the patient as it is explained
below:

     A  glucose level which remains too low over long periods of time results in
damage to organs with high metabolism, such as the brain.  Brain cells which die
cannot  be replaced.  If a glucose level remains too high, the typical long term
sequelae  of  Type I diabetes occur, such as peripheral circulatory deficiencies
resulting in the need for amputation of extremities and detachment of the retina
resulting  in  blindness.

     For  the  reasons  given  above,  it  would  be  of  enormous  advantage to
constantly  and  automatically monitor the blood sugar level of the patient.  To
do  so,  the glucose monitor must stay at or in the patient for a long period of
time  making  the  procedure  cost  effective  and  efficacious.  Problems  of
infection,  comfort,  and  the  risk  of  detachment  all  favor  a  permanently
implantable  sensor.

     This device should communicate via radio signals with a control panel/modem
outside  the  body  and  supply  the patient with the necessary information.  In
combination  with a dosage pump for insulin (internal or external) an artificial
beta-cell  for  insulin  dependent  diabetics  could  be  realized.

     Until  now,  an implantable glucose sensor has been the missing link in the
development  of  a  beta  cell  for  the  automatic  dispensation  of  insulin.

     German  insurance  companies  have  estimated  the  possible  savings for a
patient  with  Type  I  diabetes  to  range from between approximately $6,000 to
$8,000  per  annum.  Based on a unit price of about $7,000, the market potential
for the developed countries could amount to several billion dollars per year, if
such  a  sensor  receives  favorable  market  acceptance.

     The  following  experimental  results  were  obtained in furtherance of the
Company's  objective of developing an implantable glucose sensor on the basis of
physical  measurement  systems:

*    polarimetric,  infrared  and  refraktrometric  measurements  of  glucose
     concentrations  in  the  physiological  range  resulted  in  electronic
     signals, sufficiently  high  for  further  processing
*    glucose  is  responsible  for  at  least  95%  of  the  optical rotation of
     ultrafiltered  blood  plasma
*    the  concentration of glucose in ultrafiltrated tissue fluid equals that of
     blood
*    the  level  of glucose in an implanted ultrafiltrating hollow fiber did not
     drift,  in  the  sense  of  decreasing,  over  a  period  of  three  weeks
*    the  adjusting  time  of the glucose level in the hollow fiber is about ten
     minutes  and  is  also  stable  over  a  period  of  three  weeks

     For  insulin dependent diabetics, the implantable glucose sensor is planned
to  be  equipped  with  an  insulin reservoir and pump which will be designed to
function  as an artificial endocrine pancreas.  The device will be in telemetric
contact  with  a  matchbox-sized  monitor,  which  must  be  placed close to the
patient.  It  will  have  the  following  functions:

*     receive  a  signal  every  5  to  10  minutes,  and
*     show  the  glucose  level  on  a  LCD  display
*     warn  the  patient:
*     optically  and  acoustically  in  case  of  danger
*     if  there  is  no  signal  from  the  sensor

     The  need for a reliable, cost-effective and continuous glucose monitor for
diabetes  patients  is  to prevent irreversible damage to the kidney and retina,
and to avoid amputations of extremities.  The management of the Company believes
that  such  a  sensor  could  be  the  missing  link  to construct an artificial
pancreatic beta-cell for insulin dependent diabetics.  There can be no assurance
that  such  a  sensor,  if  developed, will be favorably accepted by the medical
community.

     Gluko presented its pre-prototype of a long-term implantable glucose sensor
at  the  Duesseldorf  MEDICA Show in November 1998.  The Company demonstrated an
improved  pre-prototype  comprised  of  a  miniaturized  optical  system  (which
includes  the  light  source,  diodes,  light detectors and an integrated sensor
electronics  which  has not been finally miniaturized) at the Duesseldorf MEDICA
Show in November 1999.  In August 2000, the Company stated a further development
of  its  concept  for  the long term implantable glucose sensor which offers the
Company an additional possibility to also develop an "insertable" sensor for the
initial  clinical  adjustment  of diabetics.  In contrast to an implanted sensor
this  is completely under the skin and has no connection at all through the skin
to  the  outside, an inserted sensor is "pierced" through the skin.  In contrast
to the implantable sensor, the functional capacity does not depend on a complete
miniaturizing  of  the  electronic  system.  Gluko's engineers have advanced the
construction  of  the  sensor in such a way that in future all moveable mechanic
parts can be completely dispensed.  Since the final mechanically moveable sensor
component  -  a  micro  pump  with  a  relatively  high energy demand - has been
omitted,  the  sensor  might become safer in operation.  The change might have a
positive  effect  on  the  sensor's  energy  supply.

     In  September  1999,  Gluko  received  a  grant  from  the  German state of
North-Rhine-Westphalia  in  the  amount of approximately $2,000,000 for the long
term implantable glucose sensor.  The grant will cover 40% of the budget project
cost  from  December  1998  to  November  2001.  Gluko  has  already  received
installments  of  $279,610  from  the  grant  to  reimburse  40% of its relevant
expenses  in the period from December 1998 to June 30, 2000.  The grant requires
the  Company's  economical ability to cover 60% of the project costs on its own.
An  additional  condition of the grant is that the product must be developed and
produced  in  the  German  state of North-Rhine-Westfalia, if developed by 2003.

DIAGNOSTICS

     The  Company's  current  strategy  is  to  develop  niche  immunodiagnostic
products with only few competitors, like the CDT test kit.  The Company plans to
attempt to increase the sales of its products by (1) introducing its products to
additional distributors covering geographic markets, which the Company currently
has  no  coverage, and (2) offering the products to established distributors and
larger  companies  who  have  established  distribution  and worldwide marketing
network  at  significant discounts.  However, there can be no assurance that any
of  these  attempts  will  succeed.

     SGBI  has  completed  the  research  and development of certain health care
products  which  are  intended  to  be  produced,  promoted,  marketed, and used
world-wide.  SGBI's  products  consist  of:  (i)  a  Carbohydrate-Deficient
Transferrin  test  kit,  which  is  used to detect chronic alcohol abuse; (ii) a
urinary  micro-albumin  test, which is a diagnostic test to detect small amounts
of  proteinuria  in  diabetes  mellitus; (iii) a C-Reactive Protein, which is an
acute  phase protein and sensitive indicator of inflammation; (iv) two different
kits  for the measurement of Parathyroid Hormone, which is a diagnostics adjunct
to  the  differential  diagnosis  of  hyper- and hypo-parathyroidism. ; (v) ACTH
(Adrenocorticotropic  Hormone),  a  niche  endocrine  test  for  adrenal  cortex
function;  (vi)  Calcitonin,  another  endocrine test for a rare disease; (viii)
Erythropoietin  (EPO), a test for certain types of anemia; and (ix) TSH (Thyroid
Stimulating Hormone or Thyrotropin), a common and popular thyroid function test,
but  faced  with  over  forty  competitors'  products  on  the  same test.

       Currently,  the  Company  has  a  total  of nine  niche  immunodiagnostic
products for distribution.  All the products are based on the microplate format,
except  for  the  PTH  and  TSH IRMA. This microplate or microtiter platform was
chosen, because microplate readers are quite common in the clinical and hospital
medical  laboratory setting.  All the test kits, except TSH, are targeted at the
niche laboratory  market.  Nonetheless, due to the aging or maturation of the in
vitro  diagnostics  industry,  unprecedented  fierce  competition  coupled  with
healthcare cost containment has resulted in the appearance of the previous niche
tests  on  the  menu  of  proprietary  instrumentation  made  by  billion dollar
well-capitalized  companies  owned  by the world-class pharmaceutical companies.
At  present, the only product, which truly can be considered "niche" is the CDT.

     CDT (Carbohydrate  Deficient  Transferrin).  The CDT Test has been reported
as  the  most  reliable  test  for  identification of chronic alcohol abuse. The
worldwide market potential is  estimated  at  between  US $1.5 to US $ 2 million
per annum.  The market potential has been reduced, due to the discontinuation of
reimbursement  in  Germany.  This  test  uses  microplate  format  Turbidimetric
Immunoassay with prepackaged  chromatography  columns.  The  SGBI  CDT test kit,
trademarked  as ChronAlco  I.D. in Germany, has been found to be superior to the
product  made  by the only other manufacturer (competitor) by two leading German
scientists.  Over 60%  of the product sales realized by the Company were derived
from this product during the fiscal year ended June 30, 2000.

*   Intact-PTH  on  the  ELISA  Microplate format (2nd Generation). This product
has  been cleared under the 510(k) regulations by the FDA in late December 1997.
It  has  one  distinct advantage over the two other ELISA microplate PTH kits on
the market. It is faster and easier, with performance characteristics similar or
superior to the competitors.  Nonetheless, the Company has derived insignificant
sales  to  date,  despite  some  meaningful  increases  in  terms  of percentage
increase.  The  management believes that the lack of significant sales is mostly
likely  due  to  the  current  market  trend  of complete turn-key (hands off or
complete) automation in the laboratory business, dominated by divisions of large
pharmaceutical  companies.

*    Intact-PTH  IRMA  (ImmunoRadioMetricAssay).  The  radioactive  version will
compete  mainly  based  on price. The worldwide market potential for all the PTH
kits,  with  over  12  competitors, is estimated at   US $ 50 million per annum.

*    CRP  (C-Reactive  Protein).  Turbidimetric  Immunoassay  (TIA),
for  the  differential  diagnosis  of viral vs. bacterial infection. Valuable to
preclude  overuse  of  antibiotic  treatment  in  infections  of viral etiology.
Recently,  the CRP test has been reported to have applications in predicting the
outcome  of  stable angina patients. The worldwide market potential is estimated
at  US $ 7 million per annum.  However, the Company has derived negligible sales
since  the completion of product development in early 1997.  It is believed that
the  technology  used  by  the  Company  is  obsolete, suffering from analytical
sensitivity.  Due  to  the  dismal  probability  of  acquiring  significant
market-share,  the  management  has  decided  to  discontinue  this  product.

*    Microalbumin  quantitative  test via TIA. Highly sensitive determination of
small  quantities  of  albumin in urine. Early detection of microalbuminuria can
prevent  subsequent  irreversible  renal  impairment  in patients with Diabetics
Mellitus.  The  worldwide  market potential is estimated at   US $ 5 million per
annum.  However,  the  Company  has  derived negligible sales for the last three
years  (since  the  completion  of  product  development on this product) due to
market  dominance  of  large  companies,  such as Roche/ Boehringer Mannheim and
Beckman  Instruments,Inc.

*    ACTH  (Adrenocorticotropic  Hormone)  ELISA.  This  product is the only 2nd
Generation  ELISA Kit in the market. This test is intended for the assessment of
adrenal  cortex  function such as Addison Disease and the differential diagnosis
of Cushing Syndrome. The estimated market potential size is  US $ 5 million  per
annum.

*    Calcitonin  ELISA.  This  product  is the only ELISA in the market. This is
another  calcium  metabolism test. The test volume has been increasing in Europe
and  the  US. The estimated market potential size is  US $ 1 million  per annum.

*    Erythropoietin  (EPO)  ELISA.  Quantitation  of  serum  erythropoietin
concentration  serves as a diagnostic adjunct in determining the cause of anemia
or  erythrocytosis  (an  increase  of  red  blood  cell mass). Also, Amgen, Inc.
manufacturers the drug Erythropoietin, trade-name Epogen.  Hence, it is believed
that  there  is  a small market for drug monitoring as well.  However, there are
several  competitors  including  at  least  one  competitor with fully automated
system.

*    TSH  IRMA.  TSH  (Thyrotropin) is a very useful, if not the most important,
screening  test  for  thyroid  function assessment.  However, there are at least
forty  kits  in  the  market-place, so this product is not a niche product.  The
Company's  kit  is  based  on  the  ImmunoRadioMetricAssay  and  was  originally
developed  specifically  for  sale  to  a  small  German  distributor,  who  had
overestimated  its  ability  to  sell  significant  quantities  in  Germany.

The  majority  of  the  sales  and repeat orders are from Germany and the United
States.

To  date, the Company's efforts to sell its products to emerging markets such as
the  mainland  China,  Hong  Kong and Taiwan were  unsuccessful and the sales to
date  is  very  limited.  At  present,  the  Notified Bodies of the CE (European
Community)  has  not  yet completed its final regulations on in vitro diagnostic
kits.  The Company intends to comply with the CE Mark regulations in due course.
Although  the Company has had positive experience with the US FDA regulations in
clearing  five  of  its  products  filed under the 510 (k) process, there can be
no  assurance that its effort in compliance with the CE Mark will be successful.

     In  the  immunodiagnostic  business,  the  Company  continues to attempt to
expand  its  sales  and  distribution  on  products  already  developed  and
continually  manufactured.

OTHER  BY  PRODUCTS

     The  knowledge gained during developing the glucose sensor, has resulted in
the development of two by-products based on the measuring systems of the glucose
sensor:

*     a high precision analytical micro system for monitoring and controlling of
     (bio)chemical  processes  in  biotechnology, chemistry  and Pharma industry
and
*     a  polarimeter/spectrometer  designed  for  laboratory  work

     During  his  work  at  the  University in Mainz, Germany, one area of Prof.
Barnikol's  research  focused on respiration processes.  From this research work
Gluko's  projects  in  the  field  of  anesthesia,  intensive  care  and  sleep
diagnostics  derived.  The  product  line  comprises  monitoring  devices  as:

*     a  sensor  tube
*     a  sensor  connector  for  new  borns
*     a  nose  sensor
*     a  main  stream  respiratory  oxygen  sensor

     Further  by  products  of  Gluko are:

*     an  oxygen  sensor  device  for  the  skin  (skin-oxy-meter)
*     an  equipment  for  small  animal  (rats  and  also  mice)  experiments
*     a  respiratory  microvalve
*     a  micro  respiratory  flow  sensor

*     Module  micro controlling and heating system for setting defined levels of
      temperature  on  basis  of  Peltier  technique.



DEVELOPMENT  PROCESS

OXYGEN  CARRIER

     In December 1997 the Company decided that porcine hemoglobin should be used
as basic material for its artificial oxygen carriers.  In March 1999 the Company
came  to  the  fundamental decisions as to which hemoglobin hyperpolymer will go
into  preclinical  investigation  and that glutaraldehyde will be taken as cross
linker  and  pyridoxalphosphate as effector.  The fine adjustment of the formula
of  the  artificial  oxygen  carriers  -  optimized  for  laboratory scale - was
finalized  in  Summer 2000.  This fine adjustment comprises different conditions
like  concentrations  of glutaraldehyde and pyridoxalphoshate, incubation times,
and  temperature.

     In  laboratory  scale  the manufacturing is set out as follows: First, pure
porcine  blood  must  be  obtained  from slaughterhouses.  The blood must not be
contaminated  with  endotoxins  released  by  bacteria  or  other  contaminating
material.  Therefore, it must be guaranteed that the pigs, of which the blood is
taken,  were  neither ill nor had received medicine.  The state of health of the
pigs has to be contractually fixed with the pig breeders.  In order to determine
and  prove the purity of the source material as well as that of intermediate and
final  products,  an  analytic  department  has  been  set  up.

     After  release of the hemoglobin molecules from erythrocytes, about fifteen
molecules  are  cross-linked  to  a hyperpolymer molecule by a chemical reaction
using  glutaraldehyde  as  a  cross-linker.  This hemoglobin hyperpolymer is the
artificial  oxygen  carrier.  An advantage of the hyperpolymer structure is that
it  prevents  the oxygen carrier from secreting via the kidneys which would have
harmful  effects  on  the  patients.

     Pyridoxalphosphate  is  used  as  an  effector  by which the oxygen binding
properties of the hemoglobin hyperpolymer molecules, for instance the functional
oxygen  transport capacity, are adjusted properly.  During all preparation steps
defined conditions have to be chosen and maintained carefully (e.g. temperature,
pH  of  the solutions).  After preparation of the oxygen carrying hyperpolymers,
they  are  separated into a high molecular fraction and a low molecular fraction
to  obtain  the  blood  additive  and the blood volume substitute, respectively.

    At  this  point in time, the Company is developing the upscaling process for
preparation  of  a  large  amount of oxygen carrier for preclinical and clinical
trials.  According  to  regulatory  requirements, all drugs have to pass through
preclinical and clinical trials before approval (e.g. FDA approval: Federal drug
administration)and  launching to the market.  In preclinical trials, experiments
using animal models and tissue culture models have to be carried out to evaluate
the  efficacy and safety of the developed drug.  Phase I of the clinical trials,
so  called "human pharmacology" comprises the application of the drug in healthy
volunteers.  Phase  II  is called "therapeutic explanatory" and comprises trials
with  a  small  number  of  ill  patients.  Phase  III  is  called  "therapeutic
confirmation"  and  comprises  trials  with  a  larger  number  of ill patients.

     Management  of  the  Company  believes  that  the European and FDA approval
process  will  take  several  years.

LONG-TERM  IMPLANTABLE  GLUCOSE-SENSOR  AND  TECHNICAL  BETA-CELL

     The  glucose sensor under development by Gluko is based on physical methods
for  the  determination  of  the  diabetic's  glucose  level.  Three  physical
measurement  systems  have  been  developed  for the glucose detection system: a
polarimetric,  an  infrared  system and a refractrometric system.  These systems
have to be proved to be specific for in vitro determination of glucose levels in
the  physiological  range  of  50  to  500  milligram glucose per decilitre.  At
present,  it  is  not settled which one of the systems will be used in the first
generation  of the sensor.  Gluko endeavors to install two independent measuring
systems  in  its  sensor to increase the specificity and accuracy of the glucose
determination.

     The  sensor  will  be  implanted  into  the  subcutaneous fat tissue in the
stomach  area near the belly button.  The Company endeavors to develop a glucose
sensor  that might be implanted for a period of three to five years.  To protect
the  detection  system  inside the measuring chamber from large compounds of the
interstitial fluid, especially from proteins, and to increase the specificity of
the  system,  a microdialysing exchange membrane will be part of the sensor.  In
experiments  done  so  far  the  membrane materials tested revealed reproducible
results  over  a  period  of  about  three  weeks.

     At  present, the development of the sensor is not finalized.  At the MEDICA
1998  trade fair, Duesseldorf, Germany, a presentation of a pre-prototype of the
glucose  sensor  demonstrated  the  final  miniaturized  optical  systems of the
polarimetric  and the infrared detection systems developed by Gluko's engineers.
The  Company  now  pursues  the  further  and  consequent miniaturization of the
sensors electronics (first step: SMD technology {surface mounted device}, second
step:  so  called  one-chip-technology),  the  further development of the energy
supply,  the  telemetric  system,  and  the  micro-dialysing  exchange  system.

     During  the  day,  the  measuring  signal  will be sent telemetrically to a
glucose  watch  which  the diabetic patient will carry at his wrist.  During the
night,  the telemetric signal will be sent to a receiver near the bed which will
monitor  the  glucose  level  and  warn  the  patient  of  hypoglycemia  and
hyperglycemia.

     The  latest  further  development in the sensor construction (spring/summer
2000) opens the  additional possibility  to develop also an "insertable"  sensor
for  the  initial clinical adjustment of diabetics.  In contrast to an implanted
sensor  that is completely under the skin and has no connection  at  all through
the skin to the outside, an inserted sensor is so to speak "pierced" through the
skin,  that  means it has a connection to the outside.  The insertable sensor of
the Company is being designed to allow a continuous glucose  determination  over
several  days  and will exhibit the same  measuring principles  and  almost  the
identical  design  as  the implantable sensor.  In  contrast  to the implantable
sensor, the functional capacity does not depend on a complete  miniaturizing  of
the  electronic system.  The analyzing unit will be outside  of  the  human body
and connected by cable with the insertable sensor.

     The construction of the glucose sensor has been changed in such a way that,
in  future, all moveable mechanical parts can be completely dispensed with which
might  increase the safety of the sensor and might have a positive effect on the
sensors'  energy  supply.

     The  development  of  an  appropriate  implantable  insulin  pump  and  its
combination  with the glucose sensor to a closed loop will enable the company to
produce  a  technical  beta-cell,  so that the insulin dependent patient will be
automatically  supplied  properly  with  the  necessary  amounts  of  insulin.

     According  to  regulatory  requirements,  all  medical devices have to pass
through  clinical  trials  before  approval  (e.g.  FDA  approval;  Federal drug
administration)  and  launching  to  the  market.  Unlike  the  Company's oxygen
carriers  that  are  classified  under  pharmaceutical products, glucose sensors
being medical devices have a separate approval process.  The clinical trials for
the  glucose  sensor  do  not  have  different  phases and entails doing studies
immediately  with  diabetic  patients.

     Management  of  the Company believes that European and FDA approval process
will  take  several  years  for  the  implantable  glucose  sensor.


PATENTS  AND  PROPRIETARY  RIGHTS

     The  Company  has  the  policy  of seeking patens covering its research and
development and all modifications and improvements thereto.  Sangui AG owns five
German  and  US  patents  relating  to  its artificial oxygen carrier, its uses,
application  and  certain  steps  of the manufacturing process.  The Company has
several  patent  applications  pending  in  the United States, Europe and Japan.
Gluko  owns two German patents relating to the glucose sensor technology and six
related  to  the  by-products.  Gluko has several patent applications pending in
Germany,  the  United  States,  Europe  and  Japan related to the glucose sensor
technology  as  well  patent  applications  for  the  by-products.

     The Company cannot ensure that its patents or other proprietary rights will
be  determined  to  be  valid  or  enforceable  if  challenged  in  court  or
administrative  proceedings or that we will not become involved in disputes with
respect  to  the  patents  or  proprietary  rights of third parties.  An adverse
outcome  from  these  proceedings  could  subject  the  Company  to  significant
liabilities  to third parties, require disputed rights to be licensed from third
parties  or require the Company to stop using its technology, any of which would
result  in  a  material  adverse  effect on the Company's results of operations.


MARKETING  AND  DISTRIBUTION

     Other  than  the  immunodiagnostic  products,  the  Company  has  not  yet
manufactured  its  products  in  commercial  quantities.

     SGBI  markets  its  immunodiagnostic  products  through  a distributor in a
particular  country.  The  products  are targeted at the smaller laboratories in
Western  Europe  and the United States, who may have insufficient test volume to
justify  the  installation  of  "turn-key"  fully  automated  proprietary
instrumentation  by  the  large  competitors.  It  also  includes end users like
independent  clinical,  hospital  or  physician  operated  laboratories.

     The  Company  sells  its  CDT  kits  mainly through one German distributor,
selling  directly  to  one  customer  in  the  US  and  one distributor covering
Switzerland  and  Austria.  As  of  June  30, 2000, significant product sales in
terms  of  its diagnostic division in the US, have been realized only on the CDT
test.  DPC  Biermann  GmbH  was  the  Company's  main distributor in Germany and
succeeded  in  obtaining  significant  market-share  in  the  German  Republic.
Unfortunately,  due  to  pressure  of  the  Company's  competitor,  DPC Biermann
discontinued its sale of the Company's CDT test kit in January, 2000 in order to
form  a  strategic  alliance with the Company's competitor.  Management does not
believe  this  will  have  a  material  effect  on overall sales of the Company.
Nonetheless,  management  has  concerns  whether  it  can  effectively penetrate
additional market-share in Germany with its current German distributor, who is a
much  smaller  company  as  compared  to  DPC  Biermann.

     On  the four ELISA products, although comparative increases in turnover and
number  of orders from various distributors have been significant, the impact on
profit  and  loss is not yet significant.  The Company has limited experience in
sales  and  marketing  of  products.  In general, the distributor is required to
commit to a minimum sales volume in order to maintain an exclusive position in a
given  territory.  It  is not uncommon to provide a 30% to 50 % discount or even
more from the product transfer price.  The distributor typically uses the margin
to  pay for the shipping cost, its overhead, sales staff and keep the balance as
profit.  To  date,  no  minimum  sales volume was required, because there was no
exclusive  distribution  agreement.

     Four  customers  accounted for 70% and 82% of sales for the year ended June
30,  2000  and  the  six-month  period  ended  June  30,1999,  respectively.

      To  raise  its  profile,  the  Company  regularly  participates in various
medical and health related product exhibitions and trade fairs, for instance the
latest  Medica  2000  held  in  Duesseldorf.

GOVERNMENT  REGULATION

     SGBI  and  its  subsidiaries  are,  and  will  continue  to  be, subject to
governmental  regulation  under  the  Occupational  Safety  and  Health Act, the
Environmental  Protection  Act,  the  Toxic  Substances  Control  Act, and other
similar laws of general application, as to all of which SGBI believes it and its
subsidiaries  are  in  material  compliance.  Any  future  of,  and  the cost of
compliance with, these laws and regulations could have a material adverse effect
on  the  business, financial condition, and results of operation of SGBI and its
subsidiaries.

     Because  of  the  nature of the operations of SGBI and its subsidiaries and
the  use  of hazardous substances and their ongoing research and development and
manufacturing  activities,  SGBI  and  its subsidiaries are subject to stringent
federal,  state  and  local  laws, rules, regulations and policies governing the
use,  generation,  manufacturing,  storage,  air  emission,  effluent discharge,
handling  and  disposal of certain materials and wastes. Although it is believed
that  SGBI  and  its subsidiaries are in material compliance with all applicable
governmental  and environmental laws, rules, regulations and policies, there can
be  no  assurance  that  the  business,  financial  conditions,  and  results of
operations  of  SGBI  and  its  subsidiaries  will  not  be materially adversely
affected  by  current  or  future  environmental  laws,  rules,  regulations and
policies,  or  by  liability occurring because of any past or future releases or
discharges  of  materials  that  could  be  hazardous.

     Additionally,  the  clinical  testing, manufacture, promotion and sale of a
significant  majority  of the products and technologies of the subsidiaries, and
to  a  much  less  extent  to SGBI, if those products and technologies are to be
offered  and  sold  in the United States, are subject to extensive regulation by
numerous governmental authorities in the United States, principally the FDA, and
corresponding  state  regulatory  agencies.  Additionally,  to  the extent those
products  and  technologies are to be offered and sold in markets other than the
United  States,  the  clinical testing, manufacture, promotion and sale of those
products and technologies will be subject to similar regulation by corresponding
foreign  regulatory  agencies.  In  general,  the  regulatory  framework  for
biological  health care products is more rigorous than for non-biological health
care  products.  Generally,  biological health care products must be shown to be
safe,  pure, potent and effective. There are numerous state and federal statutes
and  regulations  that  govern  or  influence  the testing, manufacture, safety,
effectiveness,  labeling,  storage,  record  keeping,  approval,  advertising,
distribution  and  promotion of biological health care products.  Non-compliance
with  applicable  requirements  can  result  in,  among  other  things,  fines,
injunctions,  seizures  of  products,  total  or  partial  suspension of product
marketing, failure of the government to grant pre-market approval, withdrawal of
marketing  approvals,  product  recall  and  criminal  prosecution.


COMPETITION

IMMUNODIAGNOSTIC  KITS

TYPE  OF  IMMUNODIAGNOSTIC  KIT     MAJOR   COMPETITORS

Intact-PTH  on the ELISA Microplate format       Abbott Laboratories
                                                 Bayer
                                                 Hoffman  La-Roche
                                                 DPC
                                                 Nichols Institute Diagnostics
                                                 DSL  (Diagnostic Systems
                                                          Laboratories)
                                                 Bio  Rad
                                                 DiaSorin

Intact-PTH  IRMA                                 Nichols
                                                 IncStar
                                                 DSL

ACTH  ELISA                                      Bayers
                                                 DPC
                                                 Nichols  Institute
                                                 DSL
                                                 CIS
                                                 DiaSorin
                                                 Euro  Diagnostics

Calcitonin  ELISA                                Nichols Institute Diagnostics
                                                 DPC
                                                 Mitsubishi
                                                 DiaSorin
                                                 DSL

CDT                                              Axis  Biochemical,
                                                 ASA
                                                Hoffman-La-Roche (Distributor of
                                                    one  Version  of  Axis  kit)

Erythropoietin  ELISA                            R&D  Laboratories
                                                 Nichols  Institute
                                                 DLS
                                                 DPC

CRP                                              BMC/  Hitachi
                                                 Beckman

Microalbumin  quantitative  test  via  TIA       BMC/  Hitachi
                                                 Beckman
                                                 DPC

     The  market  for  the  products  and  technologies of the Company is highly
competitive, and  SGBI  expects competition to increase.  SGBI will compete with
many other health  care research product suppliers, most of which will be larger
than  SGBI.

     Some of the competitors of SGBI offer a broad range of equipment, supplies,
products  and  technology,  including  many  of  the  products  and technologies
contemplated  to  be  offered  by  SGBI.  To  the  extent that customers exhibit
loyalty  to  the  supplier that first supplies them with a particular product or
technology, the competitors of SBGI may have an advantage over SGBI with respect
to  products and technologies first developed by such competitors. Additionally,
many  of  the  competitors  of  SGBI  have,  and  will continue to have, greater
research  and  development,  marketing,  financial and other resources than SGBI
and, therefore, represent and will continue to represent significant competition
in  the  anticipated markets of SGBI.  As a result of their size and the breadth
of  their  product  offerings,  certain of these companies have been and will be
able  to  establish  managed  accounts by which, through a combination of direct
computer  links and volume discounts, they seek to gain a disproportionate share
of  orders for health care products and technologies from prospective customers.
Such  managed accounts present significant competitive barriers for SGBI.  It is
anticipated  that SGBI will benefit from their participation in selected markets
which,  as  they  expand,  may attract the attention of the competitors of SGBI.
There  can be no assurance that the Company will be able to compete successfully
in  these  markets.

     The  competition  in  the  US  $  20 billion diagnostic business is fierce,
mainly  dominated  by  the  large  pharmaceutical  and  larger  established
biotechnology  companies  such  as  Abbott  Laboratories,  Hoffman La Roche etc.

     For  its CDT kits, the Company's only competitor is Axis Biochemicals, ASA,
in Oslo, Norway which has entered into European and distributorship arrangements
with  Bio  Rad  Laboratories,  Inc.  and  Roche  Diagnostics,  a  division  of
Hoffman-La-Roche.   Large  competitors with complete automation with proprietary
instrumentation  have  offered  packaged  reagent  rental  programs to potential
customers,  for  which the use of instrument is not paid by the customers except
for  some  small  commitment  to  purchase  the  products.  These  large
companies  dominate  essentially  over 80% of the endocrine assay markets in the
developed  countries  such  as  the United States, Western Europe and Japan with
their proprietary fully automated instruments. SGBI can only attempt to increase
the  sales  for  its  endocrine  products  to  small  laboratories  through  its
distributors  and  seek  to  enter  emerging  markets in Latin America, Asia and
Eastern Europe, where the need for endocrine has been traditionally minimal, due
to  the  prevalent  poverty  and  in some cases over-population. There can be no
assurance  that  the  Company  will  be  able  to  compete successfully in these
markets.

BLOOD  VOLUME  SUBSTITUTE

     In  the  business  of  blood  volume  substitute,  there  are  at least six
large companies  that  have  obtained  substantial capitalization either through
equity funding or through acquisition by  large  corporations,  such  as  Baxter
International  acquiring Somatogen. Other future competitors are Hemosol Inc. in
Canada,  Northfield,  Alliance  Pharmaceutical  and  Enzon.  Nearly  all  these
companies  have  already made strategic marketing alliances with large companies
with  established  marketing  and  distribution  channels,  such  as Johnson and
Johnson,  Eli  Lilly  and Company, and Pharmacia/Upjohn. Most of these companies
have already proceeded Clinical Trial Phase II with the FDA.  To be competitive,
the  Company  is  attempting  to  develop  well-characterized and differentiated
products  in unique formulations which could capture some of the market as a new
generation  of  oxygen  carrier/additives  to  address the markets of artificial
blood volume substitutes as well as the potential new market of therapeutics for
oxygen  deficiencies.  There  can  be  no  assurances  that  the  management's
objectives  can  be  achieved.

BLOOD  ADDITIVE

     In the business of blood additive, the Company is not aware of any existing
or potential  competitors.

GLUCOSE  SENSOR

     The  Company  is not aware of any glucose sensing implants available in the
marketplace  at  this  juncture.  However,  Johnson  & Johnson has a significant
market share on in vitro glucose measuring device, using a small amount of blood
from finger tips.  Other large companies, such as Abbott Laboratories, Inc. also
have  similar  in  vitro  glucose  measuring devices on the market.  In the last
years  different  approaches  have  been  chosen by companies to reduce the pain
caused  by  the  finger  pricks  necessary  for  the  determination of the blood
glucose.  Cygnus  Inc.,  Redwood  City,  California,  USA, for example, has been
developing a device which collects interstitial fluid at the diabetic's wrist by
use  of  electrical  energy.  Cygnus  applied  for FDA approval and received the
instruction  for  further  testing  of  the  device.  On  devices  close  to  an
implantable  glucose  sensor,  MiniMed Inc. of Sylmar, CA has submitted to FDA a
Notification  on  a  Continuous  Glucose  Sensor For Diabetes in December, 1997.
MiniMed  Inc.  announced  its  intention to produce and market this product.  It
expects  to  utilize the sensor for a series of products, the first two of which
will  be  a physician diagnostic device and an alarm product to warn people with
diabetes  of  dangerously  low  glucose  levels.  However,  the reagents for the
MiniMed's  sensor  are stable for only a few days.  By contrast to the objective
of  an  implantable long term glucose sensor by Gluko, the MiniMed's sensor does
not  solve  the  problem  in  the  long  term.

     Gluko is aware of three other companies also developing implantable glucose
sensors.  Medical  Research  Group,  LLC, MRG, a privately-held company has been
developing  a  glucose  sensor  and  is  planning to connect this sensor with an
insulin  pump  developed  by Minimed.  The sensor under development by Synthetic
Blood  International,  Kettering,  Ohio,  USA  is  based on an enzymatic glucose
determination.  Animas,  Corp., Frazer, Pennsylvania, USA has been developing an
implantable  glucose  sensor  based  on  infrared spectroscopy.  There can be no
assurance  that  the  Company  will  be  able  to  compete successfully in these
markets.

RISK  FACTORS

     An  investment in SGBI involves significant risks associated with economic,
business,  market and financial factors and developments  which may have adverse
impacts  on  the  Company's  future performance, including significant risks not
normally  associated  with  investing  in  equity  securities  of  United States
companies  including  the  following:


LIMITED  OPERATING  HISTORY  OF  THE  COMPANY;  LOSSES  ARE EXPECTED TO CONTINUE

     The  Company  is  a  relatively  new  entity and owns all of the issued and
outstanding  capital  stock  of  its  subsidiaries.  SGBI  has limited operating
histories  upon which a significant evaluation of the Company's prospects can be
made.  The  prospects  of  SGBI  must  be  considered keeping in mind the risks,
expenses,  and difficulties frequently encountered in the establishment of a new
business  in  an  ever  changing  industry  and  the  research,  development,
manufacture,  commercialization, distribution, and commercialization of esoteric
medical technology, procedures, and products and related technologies. There can
be  no  assurance  that unanticipated technical or other problems will not occur
which  would  result in material delays in product commercialization or that the
efforts  of  SGBI will result in successful product commercialization.  SGBI has
been  operating  at a loss and expects its losses to increase as its development
efforts  and  testing  activities  accelerate.  It  is  currently  unknown  when
profitable  operations  might  be  achieved.

DEPENDENCE  ON  KEY  PERSONNEL

     The  future  success  of  the  Company  will  depend  on  the  service  of
its key  scientific  personnel in its pharmaceutical, chemistry and biochemistry
departments  and,  when appropriate, computer hardware and software engineering,
electrical  and  mechanical  engineering  and  management  personnel  and,
additionally,  its  ability  to  identify,  hire and retain additional qualified
personnel.  There is intense competition for qualified personnel in the areas of
the  activities  of SGBI and there can be no assurance that SGBI will be able to
attract  and  retain  personnel necessary for the development of the business of
SGBI.  Because  of  the intense competition, there can be no assurance that SGBI
will  be  successful  in  adding  technical  personnel  if needed to satisfy its
staffing  requirements. Failure to attract and retain key personnel could have a
material  adverse  effect  on  SGBI.

     SGBI  and  its  subsidiaries  are dependent on the efforts and abilities of
their senior management.  The loss of various members  of  management could have
a material adverse effect on the business and prospects of SGBI.  In particular,
SGBI  will  depend on the service of Professor Barnikol because of his expertise
in  the  development  of the oxygen carrier and glucose sensor.  There can be no
assurance  that upon the departure of key personnel from the service of SGBI  or
its subsidiaries that suitable replacement personnel will be available.

FUTURE  CAPITAL  NEEDS  AND  UNCERTAINTY  OF  ADDITIONAL  FUNDING

     Although the Company's cash position is  strong,  substantial funds will be
required  to  effect  the  Company's development plans. The Company will require
additional  cash  for:  (i)  payment  of  increased  operating  expenses;
(ii)  payment  of  development  expenses;  and  (iii)  further
implementation  of  those  business  strategies.  Such additional capital may be
raised  by  additional  public  or  private financing, as well as borrowings and
other  resources.  To  the extent that additional capital is received by SGBI by
the sale of equity or equity-related securities, the issuance of such securities
will  result  in  dilution  to  the  Company's  shareholders.  There  can  be no
assurance  that  additional  funding will be available on favorable terms, if at
all.  If  adequate  funds  are  not  available,  SGBI may be required to curtail
operations  significantly  or to obtain funds through entering into arrangements
with collaborative partners or others that may require SGBI to relinquish rights
to  certain  of  the  technologies  or  product  candidates  that SGBI would not
otherwise relinquish. The inability of the Company to access the capital markets
or  obtain  acceptable  financing  could  have  a material adverse effect on the
results  of  operations  and  financial  condition of the Company.  Moreover, if
funds  are  not  available  from  any  sources,  the  Company may not be able to
continue  to  operate.

LICENSES  AND  CONSENTS

     The  utilization  or  other  exploitation  of  the  products  and  services
developed  by  SGBI  or its subsidiaries may require SGBI or its subsidiaries to
obtain licenses or consents from the producers or other holders of copyrights or
other  similar  rights  relating to the products and technologies of SGBI or its
subsidiaries.  In the event SGBI or its subsidiaries are unable, if so required,
to obtain any necessary license or consent on terms which the management of SGBI
or  its  subsidiaries consider to be reasonable, SGBI or its subsidiaries may be
required  to cease developing, utilizing, or exploiting products or technologies
affected  by  those  copyrights  or  similar  rights.  In  the event SGBI or its
subsidiaries  is  challenged  by the holders of such copyrights or other similar
rights,  there  can  be no assurance that SGBI or its subsidiaries will have the
financial  or  other resources to defend any resulting legal action, which could
be  significant.


TECHNOLOGICAL  FACTORS

     The  market  for  the  products  and  technology  developed  by  SGBI  is
characterized  by  rapidly  changing  technology  which  could result in product
obsolescence  or  short  product  life  cycles.  Similarly,  the  industry  is
characterized  by  continuous  development  and introduction of new products and
technology  to  replace  outdated  products  and  technology.  Accordingly,  the
ability of SGBI to compete will be dependent upon the ability of SGBI to provide
new  and  innovative  products  and  technology.  There can be no assurance that
competitors  will  not develop technologies or products that render the proposed
products  and  technology  of  SGBI  obsolete  or less marketable.  SGBI will be
required  to adapt to technological changes in the industry and develop products
and  technology  to  satisfy  evolving industry or customer requirements, any of
which could require the expenditure of significant funds and resources, and SGBI
does  not  have  a  source  or  commitment  for  any  such  funds and resources.
Development  efforts  relating  to  the  technological  aspects  of  the various
products  and  technologies  to  be  developed  by  SGBI  are  not substantially
completed.  Accordingly, SGBI will continue to refine and improve those products
and  technologies.  Continued  refinement and improvement efforts remain subject
to  the  risks  inherent  in  new  product  development, including unanticipated
technical  or  other  problems  which could result in material delays in product
commercialization  or  significantly increased costs.  In addition, there can be
no  assurance that those products and technologies will prove to be sufficiently
reliable  or  durable  in  wide  spread  commercial application. The products or
technologies  sought  to  be developed by SGBI will be the result of significant
efforts  which  may  result  in  errors  that  become  apparent  subsequent  to
widespread  commercial  utilization.  In  such  event, SGBI would be required to
modify  such  products or technologies and continue with additional research and
development,  which  could  delay  the  plans  of  SGBI  and cause SGBI to incur
additional  cost.

EARLY STAGE OF PRODUCT DEVELOPMENT; LACK OF COMMERCIAL PRODUCTS; NO ASSURANCE OF
SUCCESSFUL  PRODUCT  DEVELOPMENT

   Although the Company is currently marketing immunodiagnotic kits, its primary
efforts  are  devoted  on  the  development  of  proprietary  products involving
artificial  oxygen  carriers  and  glucose  sensors.


     The potential products of SGBI will  require  additional  pre-clinical  and
clinical  development,  regulatory  approval  and additional investment prior to
commercialization,  either  by  SGBI  independently  or  by  others  through
collaborative  arrangements.  Potential  products that appear to be promising at
early stages of development may be ineffective or be shown to cause harmful side
effects  during  pre-clinical  testing  or  clinical  trials,  fail  to  receive
necessary  regulatory approvals, be difficult to manufacture, be uneconomical to
produce,  fail  to  achieve  market  acceptance  or  be  precluded  from
commercialization  by  proprietary  rights  of others. There can be no assurance
that any potential products will be successfully developed, prove to be safe and
efficacious  in  clinical  trials,  satisfy  applicable regulatory standards, be
capable  of  being  produced  in  commercial  quantities  at acceptable costs or
achieve  commercial  acceptance.

     All  products  and  technologies  under  development  by  SGBI will require
significant  commitment  of personnel and financial resources.  Several products
will  require  extensive  evaluation  and pre-marketing clearance by the FDA and
comparable agencies in other countries prior to commercial sale.  SGBI regularly
re-evaluates  its   product  development  efforts.  On  the  basis  of  these
re-evaluations, SGBI may abandon development efforts for particular products. No
assurance  can  be  given  that any product or technology under development will
result  in  the  successful  introduction  of  any  new product.  The failure to
introduce  new  products into the market on a timely basis could have a material
adverse  effect on the business, financial conditions or results of operation of
SGBI.

     The  technologies  of SGBI have not yet been tested in humans and there can
be  no  assurance  that  human  testing  of  potential  products  based  on such
technologies  will  be  permitted  by  regulatory  authorities or, even if human
testing  is permitted, that products based on such technologies will be shown to
be  safe  or  efficacious.  Potential products based on the technologies of SGBI
are  at  an  early  stage  of  testing  and  there can be no assurance that such
products  will  be  shown  to  be  safe  or  effective.

MARKET  ACCEPTANCE

     There  can  be no assurance that the products and technologies of SGBI will
achieve  a  significant  degree  of  market  acceptance, and that acceptance, if
achieved,  will  be  sustained  for  any significant period or that product life
cycles  will be sufficient ( or substitute products developed) to permit SGBI to
achieve or sustain market acceptance could have a material adverse effect on the
business,  financial  condition,  and  results  of  operations  of  SGBI.

GOVERNMENT  REGULATION;  NO  ASSURANCE  OF  PRODUCT  APPROVAL

     The clinical testing, manufacture, promotion, and sale of biotechnology and
pharmaceutical  products  are  subject  to  extensive  regulation  by  numerous
governmental  authorities  in  the  United  States,  principally  the  FDA,  and
corresponding state and foreign regulatory agencies prior to the introduction of
those products.  Management of SGBI believes that many of the potential products
of  SGBI  will  be  regulated  by  the FDA under current regulations of the FDA.
Other  federal  and  state  statutes and regulations may govern or influence the
testing,  manufacture, safety, effectiveness, labeling, storage, record-keeping,
approval,  advertising, distribution and promotion of certain products developed
by  SGBI.  Noncompliance with applicable requirements can result in, among other
things,  fines,  injunctions,  seizure  of  products,  suspensions of regulatory
approvals, product recalls, operating restrictions, re-labeling costs, delays in
sales, cessation of manufacture of products, the imposition of civil or criminal
sanctions,  total  or  partial  suspension  of product marketing, failure of the
government  to  grant pre-market approval, withdrawal of marketing approvals and
criminal  prosecution.

     The FDA's requirements include lengthy and detailed laboratory and clinical
testing  procedures,  sampling  activities  and  other costly and time-consuming
procedures.  In  particular,  human therapeutic products are subject to rigorous
pre-clinical and clinical testing and other approval requirements by the FDA and
agencies in Germany, Singapore and other countries.  Although the  time required
for  completing  such  testing  and  obtaining  such  approvals  is  uncertain,
satisfaction  of these requirements typically takes a number of years and varies
substantially  based on the  type,  complexity  and  novelty  of  each  product.
Neither  SGBI  nor  its  subsidiaries  can  accurately  predict  when  product
applications or submissions for FDA or other regulatory review may be submitted.
Management of the Company has no experience in obtaining regulatory clearance on
these  types  of  products. The lengthy process of obtaining regulatory approval
and  ensuring  compliance  with  applicable  law  requires  the  expenditure  of
substantial  resources.  Any  delays  or  failure by SGBI or its subsidiaries to
obtain  regulatory  approval  and ensure  compliance  with appropriate standards
could  adversely  affect  the commercialization  of  such  products, the ability
of  SGBI  to  earn  product  or  royalty revenue, and its results of operations,
liquidity and capital resources.

     Pre-clinical  testing  is  generally  conducted  in  laboratory  animals to
evaluate the potential safety and effectiveness of a drug.  The results of these
studies  are submitted to the FDA, which must be approved before clinical trials
can  begin.  Typically, clinical evaluation involves a time consuming and costly
three-phase  process.  In  Phase  I,  clinical trials are conducted with a small
number  of  subjects  to determine the early safety profile, the pattern of drug
distribution  and  metabolism.  In  Phase II, clinical trials are conducted with
groups  of  patients  afflicted  with  a  specific disease in order to determine
preliminary efficacy, optimal dosages and expanded evidence of safety.  In Phase
III,  large-scale,  multi-center, comparative trials are conducted with patients
afflicted  with  a target disease in order to provide enough data to demonstrate
the  efficacy  and  safety  required  by  the FDA.  The FDA closely monitors the
progress  of  each  of  the  three  phases  of  clinical  trials and may, at its
discretion,  re-evaluate, alter, suspend or terminate the testing based upon the
data  which  have  been  accumulated  to  that  point  and its assessment of the
risk/benefit  ratio  to  the  patient.


     Clinical trials and the marketing and manufacturing of products are subject
to the rigorous testing and approval processes of the FDA and foreign regulatory
authorities.  The  process  of  obtaining  FDA  and  other  required  regulatory
approvals is lengthy and expensive.  There can be no assurance that SGBI will be
able  to  obtain  the  necessary  approvals  to  conduct clinical trials for the
manufacturing  and  marketing of products, that all necessary clearances will be
granted  to SGBI or their licensors for future products on a timely basis, or at
all,  or  that  FDA  review  or  other actions will not involve delays adversely
affecting  the  marketing  and  sale  of the products or SGBI.  In addition, the
testing and approval process with respect to certain new products which SGBI may
seek  to  introduce  is likely to take a substantial number of years and involve
the  expenditure  of  substantial  resources.  There  can  be  no assurance that
pharmaceutical  products  currently in development will be cleared for marketing
by  the FDA. Failure to obtain any necessary approvals or failure to comply with
applicable  regulatory  requirements could have a material adverse effect on the
business, financial condition or results of operations of SGBI.  Further, future
government regulation could prevent or delay regulatory approval of the products
of  SGBI.

     There  can be no assurance as to the length of the clinical trial period or
the  number  of  patients  the  FDA  will require to be enrolled in the clinical
trials  in  order  to  establish the safety and effectiveness of the products of
SGBI.  SGBI may encounter significant delays or excessive costs in their efforts
to  secure  necessary  approvals,  and  regulatory requirements are evolving and
uncertain.  Future  United  States or foreign legislative or administrative acts
could  also  prevent  or  delay regulatory approval of the products of SGBI.  If
commercial  regulatory  approvals  are  obtained,  they  may include significant
limitations  on  the  indicated  uses  for  which a product may be marketed.  In
addition,  a  marketed  product  is  subject  to  continual  FDA  review.  Later
discovery  of  previously  unknown  problems  or  the failure to comply with the
applicable  regulatory  requirements may result in restrictions on the marketing
of  a  product,  or  even the removal of the product from the market, as well as
possible  civil  or  criminal  sanctions.  Failure  of  SGBI to obtain marketing
approval  for  any of their products under development on a timely basis, or FDA
withdrawal  of  marketing  approval once obtained, could have a material adverse
effect  on  the business, financial condition and results of operations of SGBI.

     Any  party  that  manufactures  therapeutic  or  pharmaceutical products is
required  to  adhere  to applicable standards for manufacturing practices and to
engage  in extensive record keeping and reporting.  Any manufacturing facilities
of  SGBI  are  subject  to  periodic  inspection  by state and federal agencies,
including  the  FDA  and  comparable  agencies  in  foreign  countries.

     The  effect of governmental regulation may be to delay the marketing of new
products for a considerable period of time, to impose costly requirements on the
activities of SGBI or to provide a competitive advantage to other companies that
compete  with  SGBI.  There  can  be  no  assurance that FDA or other regulatory
approval  for  any products developed by SGBI will be granted on a timely basis,
if  at  all  or,  if  granted, that compliance with regulatory standards will be
maintained.  Adverse  clinical  results  by SGBI could have a negative impact on
the  regulatory process and timing.  A delay in obtaining, or failure to obtain,
regulatory  approvals  could  preclude  or  adversely  affect  the  marketing of
products  and  the  liquidity  and  capital  resources  of  SGBI.  The extent of
potentially  adverse  governmental  regulation  that  might  result  from future
legislation  or  administrative  action  cannot  be  predicted.

      SGBI  will be subject to regulatory authorities in Germany, Singapore, and
other  countries  governing  clinical  trials and product sales.   Even  if  FDA
approval  to  obtained,  approval  of  a  product  by  the comparable regulatory
authorities of other  countries  must be  obtained  prior to the commencement of
marketing  the  product  in  those  countries.  The approval process varies from
country to country and the time  required  may  be  longer  or shorter than that
required for FDA approval.  The  foreign  regulatory  approval  process includes
all  of  the  risks associated  with obtaining FDA approval set forth above, and
approval  by  the  FDA does not ensure approval by the health authorities of any
other country.   There can  be  no  assurance that any foreign regulatory agency
will approve any product submitted  for  review  by  SGBI.

     SGBI  is  subject to various federal, state and local laws, regulations and
recommendations  relating  to  safe  working  conditions,  laboratory  and
manufacturing  practices,  the  experimental  use  of  animals  and  the use and
disposal of hazardous or potentially hazardous substances, including radioactive
compounds  and  infectious  disease agents, used in connection with its research
work.  The  extent  and  character  of governmental regulation that might result
from future legislation or administrative action cannot be accurately predicted.

INTENSE  COMPETITION

     Competition  in  the biotechnology and pharmaceutical industries is intense
and is expected to increase. SGBI and its subsidiaries compete directly with the
research  departments  of  biotechnology  and pharmaceutical companies, chemical
companies  and,  possibly,  joint  collaborations between chemical companies and
research  and  academic  institutions.  Management  of  SGBI is aware that other
companies  and  businesses  have  developed and are in the process of developing
technologies  and  products  which  may  be  competitive  with  the products and
technologies  developed  and  offered  by  SGBI.  The  biotechnology  and
pharmaceutical  industries  continue  to  undergo rapid change.  There can be no
assurance  that  competitors  have  not  or  will  not  succeed  in  developing
technologies  and  products  that are more effective than any which have been or
are being developed by SGBI or which would render the technology and products of
SGBI  obsolete.  Many  of  the  competitors  of  SGBI have substantially greater
experience,  financial  and  technical  resources  and production, marketing and
development  capabilities  than SGBI.  Accordingly, certain of those competitors
may  succeed  in  obtaining  regulatory  approval  for  products more rapidly or
effectively  than  SGBI.

UNCERTAINTIES  ASSOCIATED  WITH  PATENTS  AND  PROPRIETARY  RIGHTS

     The  success  of  SGBI  and  its  subsidiaries  may depend in part on their
ability to obtain patents for their technologies and products, if any, resulting
from  the  application of such technologies, to defend patents once obtained and
to  maintain  trade secrets, both in the United States and in foreign countries.
The  success  of SGBI will also depend upon avoiding the infringement of patents
issued  to  competitors.  There  can  be  no assurance that SGBI will be able to
obtain  patent  protection  for  products  based  upon  the  technology of SGBI.
Moreover,  there  can  be  no  assurance  that any patents issued to SGBI or its
subsidiaries  will  not  be  challenged, invalidated or circumvented or that the
rights  granted  thereunder  will  provide  competitive  advantages  to  SGBI.
Litigation,  which could result in substantial cost to SGBI, may be necessary to
enforce  the  patent  and  license  rights of SGBI or to determine the scope and
validity  of  its  and  others'  proprietary  rights.

     Due to the length of time and expense associated with bringing new products
through  development  and  the  length  of  time  required  for the governmental
approval  process,  the  biotechnology  and  pharmaceutical  industries  have
traditionally placed considerable importance on obtaining and maintaining patent
and  trade  secret  protection  for  significant  new technologies, products and
processes.  The  enforceability  of  patents  issued  to  biotechnology  and
pharmaceutical  firms  can  be  highly  uncertain.  Federal  court  decisions
establishing  legal  standards for determining the validity and scope of patents
in  the  field  are  in transition.  In addition, there can be no assurance that
patents  will  be  issued  or,  if  issued,  any  such  patents will afford SGBI
protection  from  infringing  patents  granted  to  others.

     A  number  of  biotechnology and pharmaceutical companies, and research and
academic institutions, have developed technologies, filed patent applications or
received  patents on various technologies that may be related to the business of
Sangui  and  its  Subsidiaries.  Some  of  these  technologies,  applications or
patents  may  conflict with the technologies of SGBI.  Such conflicts could also
limit  the  scope  of  the patents, if any, that SGBI or its subsidiaries may be
able  to  obtain  or  result  in  the denial of the patent applications of SGBI.

     The  lead product in SGBI's immunodiagnostic business segment pertains to a
Carbohydrate-Deficient  Transferrin  (CDT)  serum (blood) test.  The Company has
been selling a  CDT  kit  in  small quantities since 1997.   Later,  the Company
successfully developed a second assay, which has been registered as a  trademark
in  Germany  as  ChronAlco  I.D.

     Pharmacia/Upjohn  owns  a  patent  on  the  isolation  of  CDT isoforms and
announced  in  November  1998  that  it  would  discontinue  this  product  for
distribution  in  Germany  effective  in 1999.  A second and smaller competitor,
Axis Biochemicals, ASA ("Axis"), has  a U.S. patent granted and expects a German
or  European  patent  granted  for a competing product. Pharmacia/Upjohn advised
their  customers  to  obtain  the  product  from  Bio  Rad  laboratories,  which
distributes  one  version  of  the  Axis  product  on  an  exclusive  basis.

     The  Company  believes  that  this  second  assay should be relatively more
resistant  to  the current claims of the Axis patent application.  The Company's
German  and  American  patent  attorneys  both  estimate  that mostly likely the
Company  should  prevail  if  and  when  the ChronAlco I.D. is challenged by the
Company's  competitor.  However,  there  can  be no assurance that SGBI will not
become  involved  in patent infringement litigation with Axis regarding the sale
of  SGBI's  original  version  of the CDT test.  Despite the assurances from the
patent  attorneys,  the  possibility  that  the  Company  may  lose  in a patent
law-suit,  no  matter  how  remote,  can still exist.   The Company has provided
$25,000  for  the  potential  costs  associated with legal fees for the exposure
resulting  from  the  relative  small volume of sales of the Company's first CDT
kit.   Litigation  generally  and  patent  litigation  in  particular  is  time
consuming  and costly.  In the event SGBI becomes involved in litigation, unless
such  litigation  is  resolved quickly, the resources of SGBI may be utilized to
pay the costs and fees incurred in such litigation.  Thus, the resources of SGBI
to pursue research and development of the products of SGBI could be reduced by a
significant amount.  The Company has ceased to sell the first version of the CDT
kit  to  minimize  the  legal  exposure.

     Many  of  the  competitors  of  SGBI have, or are affiliated with companies
having,  substantially  greater resources than SGBI, and such competitors may be
able  to  sustain the costs of complex patent litigation to a greater degree and
for  longer  periods  of  time  than  SGBI.  Uncertainties  resulting  from  the
initiation  and  continuation  of  any patent or related litigation could have a
material  adverse  effect  on  the ability of SGBI to compete in the marketplace
pending  resolution of the disputed matters.  Moreover, an adverse outcome could
subject  SGBI  to  significant  liabilities to third parties and require SGBI to
license  disputed  rights  from third parties or cease using the technology.  In
the  event  that third parties have or obtain rights to intellectual property or
technology  used  or needed by SGBI, there can be no assurance that any licenses
would  be available to SGBI or would be available on terms reasonably acceptable
to  SGBI.

     SGBI  may  rely  on  certain  proprietary  technologies, trade secrets, and
know-how  that  are  not  patentable.  Although  SGBI has taken steps to protect
their  unpatented  trade  secrets  and  technology,  in  part through the use of
confidentiality  agreements with their employees, consultants and certain of its
contractors,  there  can  be no assurance that: (i) these agreements will not be
breached;  (ii)  SGBI  would have adequate remedies for any breach; or (iii) the
proprietary  trade  secrets and know-how of SGBI will not otherwise become known
or  be  independently  developed  or  discovered  by  competitors.


RISK  OF  PRODUCT  LIABILITY;  POTENTIAL  UNAVAILABILITY  OF  INSURANCE

     The  business  of  SGBI will expose it to potential product liability risks
that  are  inherent  in  the  testing,  manufacturing  and  marketing  of  human
pharmaceutical  and  therapeutic  products. SGBI does not currently have product
liability  insurance,  and  there  can be no assurance that SGBI will be able to
obtain or maintain such insurance on acceptable terms or, if obtained, that such
insurance will be adequate to cover potential product liability claims or that a
loss  of  insurance  coverage  or  the assertion of a product liability claim or
claims  would  not materially adversely affect the business, financial condition
and  results  of  operations  of  SGBI.  SGBI  face an inherent business risk of
exposure to product liability and other claims in the event that the development
or  use  of  its  technology  or products is alleged to have resulted in adverse
effects.  Such  risk  exists  even  with  respect  to  those  products  that are
manufactured  in  licensed  and  regulated  facilities or that otherwise possess
regulatory  approval  for  commercial sale.  There can be no assurance that SGBI
will  avoid  significant  product liability exposure.  While SGBI has taken, and
will  continue to take, what they believe are appropriate precautions, there can
be  no  assurance  that  they  will  avoid  significant  liability exposure.  An
inability  to  obtain  product  liability  insurance  at  acceptable  cost or to
otherwise  protect  against  potential product liability claims could prevent or
inhibit  the  commercialization  of  products  developed  by  SGBI.  A  product
liability  claim could have a material adverse effect on the business, financial
condition  and  results  of  operations  of  SGBI.

UNCERTAINTIES  RELATING  TO  PRICING  AND  THIRD-PARTY  REIMBURSEMENT

     The  operating  results  of  SGBI may depend in part on the availability of
adequate reimbursement for the products of SGBI from third-party payers, such as
government  entities,  private  health  insurers and managed care organizations.
Third-party  payers are increasingly seeking to negotiate the pricing of medical
services  and products.  In some cases, third-party payers will pay or reimburse
a  user or supplier of a product for only a portion of the purchase price of the
product.  In  the  case  of  the  products  of SGBI, payment or reimbursement by
third-party  payers  of  only  a portion of the cost of such products could make
such  products less attractive, from a cost perspective, to users, suppliers and
physicians.  There can be no assurance that reimbursement, if available, will be
adequate.  Moreover, certain of the products  of  SGBI  may  not  be of the type
generally  eligible  for  third-party  reimbursement.  If adequate reimbursement
levels  are  not provided by government entities or other third-party payers for
the  products  of  SGBI,  the  business,  financial  condition  and  results  of
operations  of  SGBI  would  be  materially  adversely  affected.  A  number  of
legislative  and regulatory proposals aimed at changing the nation's health care
system  have  been  proposed in recent years.  While SGBI cannot predict whether
any  such  proposals  will  be adopted, or the effect that any such proposal may
have  on its business, such proposals, if enacted, could have a material adverse
effect  on  the  business, financial condition or results of operations of SGBI.

RISK  OF  PRODUCT  RECALL;  PRODUCT  RETURNS

Product  recalls  may  be  issued  at  the  discretion of SGBI, the FDA or other
government  agencies having regulatory authority for product sales and may occur
due  to disputed labeling claims, manufacturing issues, quality defects or other
reasons.  No  assurance  can be given that product recalls will not occur in the
future.  Any  product  recall  could  materially  adversely affect the business,
financial condition or results of operations of SGBI.  There can be no assurance
that future recalls or returns would not have a material adverse effect upon the
business,  financial  condition  and  results  of  operations  of  SGBI.

RISKS  OF  INTERNATIONAL  SALES  AND  OPERATIONS

     SGBI's  results  of  operations are subject to fluctuations in the value of
the  German  Deutschmark  against  the  U.S.  Dollar  due  to  SGBI's  German
subsidiaries.  Although  management  of  SGBI  will monitor exposure to currency
fluctuations, there can be no assurance that exchange rate fluctuations will not
have  a  material  adverse  effect  on  the  results  of operations or financial
condition  of  SGBI.  In the future, SGBI could be required to sell its products
in  other  currencies,  which would make the management of currency fluctuations
more  difficult  and  expose  SGBI  to  greater  risks  in  this  regard.

     The  products  of  SGBI  will  be  subject  to  numerous foreign government
standards  and  regulations  that  are continually being amended.  Although SGBI
will  endeavor  to satisfy foreign technical and regulatory standards, there can
be  no  assurance  that the products of SGBI will comply with foreign government
standards and regulations, or changes thereto, or that it will be cost effective
for  SGBI to redesign its products to comply with such standards or regulations.
The  inability  of  SGBI  to  design or redesign products to comply with foreign
standards  could  have  a  material adverse effect on SGBI's business, financial
condition  and  results  of  operations.

LACK  OF  COMMERCIAL  MANUFACTURING  AND  MARKETING  EXPERIENCE

     SGBI  has  not  yet manufactured its products, other than its nine in vitro
immunodiagnostic  products,  in commercial quantities.  Its subsidiaries will be
engaged  in manufacturing pharmaceutical products which will be subject to  much
more  stringent  regulatory requirements, as compared to the in vitro diagnostic
products.  No  assurance  can be given that its subsidiaries, on a timely basis,
will be able to make the transition from manufacturing clinical trial quantities
to  commercial  production  quantities  successfully  or  be able to arrange for
contract  manufacturing.  SGBI  and  its  subsidiaries have no experience in the
sales,  marketing and distribution of  products.  There can be no assurance that
SGBI will be able to establish sales, marketing and distribution capabilities or
make  arrangements  with  collaborators,  licensees  or  others  to perform such
activities  or  that  such  efforts  will  be  successful.

The  manufacture of the products of SGBI involves a number of steps and requires
compliance  with stringent quality control specifications imposed by SGBI and by
the  FDA.  Moreover, SGBI's products can only be manufactured in a facility that
has  undergone  a  satisfactory  inspection by the FDA.  For these reasons, SGBI
would  not  be  able  quickly  to  replace its manufacturing capacity if it were
unable  to  use  its  manufacturing  facilities  as  a result of a fire, natural
disaster (including an earthquake), equipment failure or other difficulty, or if
such facilities are deemed not in compliance with the FDA's GMP requirements and
the  non-compliance  could  not  be rapidly rectified.  The inability or reduced
capacity  of  SGBI  to  manufacture their products would have a material adverse
effect  on  SGBI's  business  and  results  of  operations.

     SGBI  may  enter into arrangements with contract manufacturing companies to
expand  its  production  capacities  in  order  to  satisfy requirements for its
products, or to attempt to improve manufacturing efficiency.  If SGBI chooses to
contract  for  manufacturing  services  and encounters delays or difficulties in
establishing relationships with manufacturers to produce, package and distribute
its finished products, clinical trials, market introduction and subsequent sales
of  such  products would be adversely affected.  Further, contract manufacturers
must  also  operate in compliance with the FDA's GMP requirements; failure to do
so  could  result  in,  among  other things, the disruption of product supplies.

HAZARDOUS  MATERIALS  AND  ENVIRONMENTAL  MATTERS

     The  research  and  development  processes  of SGBI involves the controlled
storage,  use  and  disposal  of  hazardous materials and radioactive compounds.
SGBI  is  subject to federal, state and local laws and regulations governing the
use,  generation,  manufacturing,  storage,  handling,  and  disposal  of  such
materials  and  certain  waste  products.  Although  SGBI  does  not  currently
manufacture commercial quantities of its product candidates, it produces limited
quantities  of  such  products  for  its  clinical  trials  and  SGBI intends to
manufacture  commercial quantities of its products.  Although SGBI believes that
its  safety  procedures for handling and disposing of such materials comply with
the  standards  prescribed  by such laws and regulations, the risk of accidental
contamination  or  injury  from these materials cannot be completely eliminated.
In the event of such an accident, SGBI could be held liable for any damages that
result, and any such liability could exceed the resources of SGBI.  There can be
no assurance that SGBI will not be required to incur significant costs to comply
with  current  or  future  environmental  laws  and  regulations  nor  that  the
operations,  business  or  assets  of  SGBI  will not be materially or adversely
affected  by  current  or  future  environmental  laws  or  regulations.

DEPENDENCE  ON  MAJOR  CUSTOMERS

     The Company has a relatively small customer base.  Four customers accounted
for  62  % of accounts receivable as of June 30, 2000.  Four customers accounted
for  70%  and  82%  of  sales for the year ended June 30, 2000 and the six month
period ended June 30, 1999, respectively.  Although the Company is currently the
supplier  of  certain  immunodiagnostic  kits  to  these  customers, there is no
assurance  that  the Company will continue to be the supplier or the supplier of
choice.  In  the event that the Company loses the business from any of its major
customers,  this  would  have  a  significant  negative  impact on the Company's
sales.


HUMAN  RESOURCES

As  of June 30, 2000 the Company had 22 full time employees and 8 part time.  Of
the  full time employees 19 were involved in research and development and 3 were
responsible for administrative matters.  The Company had consulting arrangements
with  2  individuals  as of that date.  The Company considers its relations with
its  employees  to  be  favorable.



ITEM  2.
Properties

     The  Company's US laboratory facility consist of approximately 3,360 square
feet.  It is located in Santa Ana, California.  Rent expense for the fiscal year
ended  June  30,  2000  was  $37,376.88.

     The  facilities of the German subsidiaries, approximately 800 square meter,
are  based  in  the  Forschungs  -  und  Entwicklungszentrum  of  the University
Witten/Herdecke, Germany. Rent  expense  for  the  fiscal year was approximately
$83,000.  The Singaporean subsidiary, approximately  350 square meters, is based
in the Science Park II, Gemini  Building.  There  was  no  rent  expense for the
fiscal  year for the Singapore  subsidiary.


ITEM  3.
Litigation

The  Company  is  not  involved  in  any  pending  legal  proceeding.


ITEM  4.
Submission  of  matters  to  a  vote  of  security  holders

Not  applicable


PART  II

ITEM  5.  MARKET  FOR  SGBI'S  SECURITIES

     SGBI's  common stock is presently traded on the OTC Bulletin Board operated
by  Nasdaq  under  the  symbol  SGBI.

     The  following  table sets forth the high and low closing prices for shares
of  SGBI  common  stock  for  the  calendar  periods  noted,  as reported by the
National  Daily  Quotation  Service  and  the  Over-The-Counter  Bulletin Board.
Quotations  reflect  inter-dealer  prices,  without retail mark-up, mark-down or
commission  and  may  not  represent  actual  transactions.

                                       CLOSING  PRICES
      YEAR     PERIOD                HIGH        LOW
     -----     ------                ----       ----
     2000     First  quarter         $5.00      $2.00
              Second  quarter        $3.31      $2.06

     1999     First  quarter         $4.75      $2.75
              Second  quarter        $3.06      $2.06
              Third  quarter         $4.19      $2.00
              Fourth  quarter        $3.63      $1.50

     1998     Second  quarter        $1.69      $1.31
              Third  quarter         $2.25      $1.31
              Fourth  quarter        $13.50     $1.13


     In  addition to freely tradeable shares, SGBI has numerous shares of common
stock  outstanding  which could be sold pursuant to Rule 144.  In general, under
Rule  144,  subject  to  the satisfaction of certain other conditions, a person,
including one of our affiliates, who has beneficially owned restricted shares of
common  stock  for  at  least one year is entitled to sell, in certain brokerage
transactions,  within  any  three-month period, a number of shares that does not
exceed  the  greater of 1% of the total number of outstanding shares of the same
class,  or  the  average  weekly  trading  volume during the four calendar weeks
immediately  preceding  the sale.  A person who presently is not and who has not
been  an  affiliate for at least three months immediately preceding the sale and
who  has beneficially owned the shares of common stock for at least two years is
entitled  to sell such shares under Rule 144 without regard to any of the volume
limitations  described  above.

     At  October  9,  2000, the number of record holders of the Company's common
stock was 2,041.  The Company did not pay any cash dividends during the past two
fiscal  years  and  does  not  contemplate  paying  dividends in the foreseeable
future.


RECENT  SALES  OF  UNREGISTERED  SECURITIES

     During  the  fiscal year ended, the Company sold unregistered shares of its
Common  Stock  pursuant  to Regulation S under the Securities Act of 1933 in the
following  transactions:

     On  July 6, 1999, the Company sold 466,485 shares of common stock for $1.15
per  share  to  Euro-American  GmbH.  Proceeds  from  the  offering  amounted to
$536,458  of  which,  $50,000  was received during the six months ended June 30,
1999.  The  co-owners  of  Euro-American  GmbH  also  serve  as directors of the
Company.

     As of March 29, 2000, the Company entered into a subscription agreement and
issued  8,000,000  shares  of  common stock (and 80,000 shares to the finder) to
Euro-American  GmbH, a venture capital firm in Germany, valued at $7,712,000, of
which  the  Company  has  received $7,476,999 in cash and recorded the remaining
$235,001  as  stock  subscriptions  at  June  30,  2000.


ITEM  6.
MANAGEMENT'S  DISCUSSION  AND  ANALYSIS  OF  FINANCIAL  CONDITION AND RESULTS OF
OPERATIONS

     The  following  discussion  contains  forward  looking  statements that are
subject  to  business  and  economic  risks and uncertainties, and the Company's
actual  results  could  differ  materially from these forward looking statement.
The  following  discussion  regarding  the  financial  statements of the Company
should  be  read in conjunction with the financial statements and notes thereto.

GENERAL
Twelve  Months  Ended  June  30,  2000  and  six  months  ended  June  30,1999:

RESULTS  OF  OPERATIONS

     Sales  for  the  twelve  month  period  ended  June 30, 2000 were $429,400,
compared  to  $178,835  for  the  six  months  ended June 30,1999.  Most of this
increase  is  attributed  to an increase in sales of the Company's CDT test kit.
Under  pressure  of the Company's competitor, DPC Biermann discontinued its sale
of  the  Company's  CDT  test  kit in January, 2000 in order to form a strategic
alliance  with  the Company's competitor.  Management does not believe this will
have a material effect on overall sales of the Company.  Nonetheless, management
has  concerns as to whether it can effectively penetrate additional market-share
in Germany with its current German distributor, who is a much smaller company as
compared  to  DPC  Biermann.

     Cost  of  sales  for  the  twelve  month  period  ended  June 30, 2000 were
$282,611,  compared  to  $117,464  for  the six months ended June 30,1999.  This
increase  is  attributed  to an increase in sales of the Company's CDT test kit.
The  gross  margin  of approximately 34% remains unchanged from June 30, 1999 to
June  30,  2000.

     Research  and  development  expenses for the twelve month period ended June
30,  2000  were $183,878, compared to $265,270 for the six months ended June 30,
1999.  These  figures have been reduced to reflect $736,070 for the twelve month
period  ended  June  30, 2000 and $240,000 for the six month ended June 30, 1999
which  expenses  were  provided  by  grants  from  the  German  state  of
North-Rhine/Westphalia.

     General  and administrative expenses for the twelve month period ended June
30,  2000  were  $2,898,958,  compared to $731,200 for the six months ended June
30,1999.  This  increase  is attributed to the amortization of a prepaid service
contract  of  $1,572,500, an increase in consulting fees of $180,000 in relation
to  the  acquisition of Felnam and increase in salaries, rent and other expenses
for  approximately  $415,000  as compared to $467,500 classified as expense from
the  same  prepaid  service  contract  and  salaries, rent and other expenses of
$263.200  for  the six months ended June 30,1999.  Gain on marketable securities
for  the twelve month period ended June 30, 2000 was $80,557, compared to a loss
of  $880,138  for  the  six  months  ended  June  30,1999.

     The  basic  loss  for  the  twelve  month  period  ended  June 30, 2000 was
$2,749,879,  compared  to $1,819,436 for the six months ended June 30,1999.  The
increase  in  basic  loss  is  a  result  primarily  of  increase in general and
administrative  expenses  (as noted above), depreciation, offset by other income
in  the  current  year.


LIQUIDITY  AND  CAPITAL  RESOURCES

     At June 30, 2000 the Company had cash of $8,653,966 (received from the sale
of stock and receipt of grants) and current liabilities of $330,206. The Company
intends  to  intensify  its  development  efforts during the current fiscal year
ending  June  30,  2001.  The  Company  believes that its available cash will be
sufficient  to  satisfy  its requirements for this period through June 30, 2000.
However,  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  during  the  current  year.  No assurance can be
given that these efforts  will  be  successful.



ITEM  7.  FINANCIAL  STATEMENTS


CONTENTS

Independent  Auditors'  Report

Independent  Auditors'  Report

Consolidated  Balance  Sheet

Consolidated  Statements  of
 Operations  Other  and  Comprehensive  Loss

Consolidated  Statements  of
 Stockholders'  Equity

Consolidated  Statements  of
 Cash  Flows

Notes  to  the  Consolidated
 Financial  Statement


<PAGE>













                                             SANGUI BIOTECH INTERNATIONAL, INC.

                                               CONSOLIDATED FINANCIAL STATEMENTS

                                                FOR THE YEAR ENDED JUNE 30, 2000

                                                                            WITH

                                            INDEPENDENT AUDITORS' REPORT THEREON




<PAGE>





                          INDEPENDENT AUDITORS' REPORT


To  the  Stockholders  of
  Sangui  Biotech  International,  Inc.


We  have  audited the accompanying consolidated balance sheet of Sangui  Biotech
International,  Inc.  (the  "Company")  as  of  June  30,  2000  and the related
consolidated  statements  of  operations  and  comprehensive loss, stockholders'
equity  and  cash  flows  for the year then ended.  These consolidated financial
statements  are  the  responsibility  of  the  Company's  management.  Our
responsibility  is  to  express  an  opinion  on  these  consolidated  financial
statements  based  on  our  audit.  We did not audit the financial statements of
Sangui  BioTech  AG  and  GlukoMediTech,  AG, wholly owned subsidiaries, which
statements  reflect  total assets of $4,299,743 and $3,710,420 at June 30, 2000,
respectively,  and total revenues of $0 and $0, respectively, for the year ended
June 30, 2000.  Those statements were audited by other auditors whose report has
been  furnished  to us, and in our opinion, insofar as it relates to the amounts
included  in  Sangui  BioTech AG and GlukoMediTech, AG, is based solely on the
report  of  other  auditors.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audit  and  the  report  of  other  auditors  provide a reasonable basis for our
opinion.

In  our  opinion,  based  on  our  audit  and  the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the  consolidated  financial  position  of Sangui BioTech International, Inc. at
June 30, 2000, and the results of its operations and its cash flows for the year
then  ended  in  conformity with accounting principles generally accepted in the
United States of America.




                                        CORBIN  &  WERTZ

Irvine,  California,  U.S.A.
August  30,  2000


<PAGE>






                         REPORT OF INDEPENDENT AUDITORS


The  Shareholders
Sangui  BioTech  International,  Inc.
Santa  Ana,  California


We  have  audited  the  accompanying  consolidated  statements of operations and
comprehensive  income,  shareholders'  equity  and cash flows for the six months
ended  June  30,  1999.  These  consolidated  financial  statements  are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion  on  these  consolidated  financial  statements  based  on  our  audit.

We  conducted our audit in accordance with auditing standards generally accepted
in  the  United  States  of  America.  Those  standards require that we plan and
perform  the audit to obtain reasonable assurance about whether the consolidated
financial  statements  are  free  of  material  misstatement.  An audit includes
examining,  on  a test basis, evidence supporting the amounts and disclosures in
the  financial  statements.  An  audit  also  includes  assessing the accounting
principles  used  and  significant  estimates  made  by  management,  as well as
evaluating  the  overall  financial statement presentation.  We believe that our
audit  provides  a  reasonable  basis  for  our  opinion.

In  our  opinion,  the financial statements referred to above present fairly, in
all  material  respects,  the results  of  operations  and  cash flows of Sangui
BioTech International, In. for the six months ended June 30, 1999, in conformity
with  accounting  principles generally accepted in the United States of America.


                                        Ernst  &  Young  AG.

Dusseldorf
Federal  Republic  of  Germany
March  24,  2000

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                                      CONSOLIDATED BALANCE SHEET

<TABLE>
<CAPTION>
<S>                                                            <C>
ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . .  JUNE 30, 2000

Current assets:
  Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . .  $    8,653,966
  Accounts receivable . . . . . . . . . . . . . . . . . . . .          55,718
  Grant receivable. . . . . . . . . . . . . . . . . . . . . .         176,844
  Inventories . . . . . . . . . . . . . . . . . . . . . . . .          79,690
  Prepaid expenses. . . . . . . . . . . . . . . . . . . . . .          74,322
  Other current assets. . . . . . . . . . . . . . . . . . . .         141,188
                                                               ---------------
    Total current assets. . . . . . . . . . . . . . . . . . .       9,181,728

Property and equipment, net . . . . . . . . . . . . . . . . .         417,312

Patents, net. . . . . . . . . . . . . . . . . . . . . . . . .          46,308
                                                               ---------------

                                                               $    9,645,348
                                                               ===============

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
  Accounts payable and accrued expenses . . . . . . . . . . .  $      230,206
  Related party payable . . . . . . . . . . . . . . . . . . .         100,000
                                                               ---------------
    Total current liabilities . . . . . . . . . . . . . . . .         330,206
                                                               ---------------

Commitments and contingencies

Stockholders' equity:
  Preferred stock, no par value; 5,000,000 shares authorized;
    505,000 shares issued and outstanding . . . . . . . . . .           5,050
  Common stock, no par value; 50,000,000 shares authorized;
    40,514,363shares issued and outstanding . . . . . . . . .      18,525,831
  Stock subscriptions receivable. . . . . . . . . . . . . . .        (351,660)
  Prepaid consulting fees . . . . . . . . . . . . . . . . . .      (1,105,000)
  Accumulated deficit . . . . . . . . . . . . . . . . . . . .      (7,648,265)
  Accumulated other comprehensive loss. . . . . . . . . . . .        (110,814)
                                                               ---------------
    Total stockholders' equity. . . . . . . . . . . . . . . .       9,315,142
                                                               ---------------

                                                               $    9,645,348
                                                               ===============

</TABLE>

                                            See independent auditors' report and
                    accompanying  notes  to  consolidated  financial  statements

<PAGE>

                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                           CONSOLIDATED STATEMENTS OF OPERATIONS
                                                          AND COMPREHENSIVE LOSS

<TABLE>
<CAPTION>



<S>                                           <C>           <C>
                                               FOR THE      FOR THE SIX
                                              YEAR ENDFED   MONTHS ENDED
                                              JUNE 30, 2000 JUNE 30, 1999
                                              -------------  ------------

Sales. . . . . . . . . . . . . . . . . . . .  $   429,400   $   178,835

Cost of sales. . . . . . . . . . . . . . . .      282,611       117,464
                                              ------------  ------------

Gross profit . . . . . . . . . . . . . . . .      146,789        61,371

Operating expenses:
  Research and development . . . . . . . . .      183,878       265,270
  General and administrative . . . . . . . .    2,898,958       731,200
  Depreciation and amortization. . . . . . .      151,317        55,343
                                              ------------  ------------

    Total operating expenses . . . . . . . .    3,234,153     1,051,813
                                              ------------  ------------

Loss from operations . . . . . . . . . . . .   (3,087,364)     (990,442)
                                              ------------  ------------

Other income (expense):
  Interest income. . . . . . . . . . . . . .      154,398        33,842
  Interest expense . . . . . . . . . . . . .      (15,537)            -
  Other income . . . . . . . . . . . . . . .      118,067        17,302
  Gain (loss) on marketable securities . . .       80,557      (880,138)
                                              ------------  ------------
    Total other income (expense) . . . . . .      337,485      (828,994)
                                              ------------  ------------

Net loss . . . . . . . . . . . . . . . . . .   (2,749,879)   (1,819,436)
                                              ------------  ------------

Other comprehensive (loss) income:
  Reversal of unrealized losses. . . . . . .            -       814,413
  Foreign currency adjustments . . . . . . .      (47,746)     (159,682)
                                              ------------  ------------
    Total other comprehensive (loss) income.      (47,746)      654,731
                                              ------------  ------------

Comprehensive loss . . . . . . . . . . . . .  $(2,797,625)  $(1,164,705)
                                              ============  ============

Net loss available to common stockholders'
  per common share . . . . . . . . . . . . .  $     (0.08)  $     (0.06)
                                              ============  ============

Basic and diluted weighted average common
  shares outstanding . . . . . . . . . . . .   34,476,465    29,417,956
                                              ============  ============

</TABLE>
                                            See independent auditors' report and
                    accompanying  notes  to  consolidated  financial  statements

<PAGE>

                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
<S>                                 <C>              <C>            <C>         <C>          <C>              <C>
                                          Preferred Stock             Common Stock           Stock               Prepaid
                                    Shares           Amount         Shares      Amount       Subscriptions    Consulting Fees
                                    ---------------  -------------  ----------  -----------  ---------------  -----------------

Balance at January 1, 1999 . . . .          505,000  $       5,050  28,151,390  $ 5,848,415  $     (467,974)  $              -

Issuance of common stock for cash
  at $1.15 per share . . . . . . .                -              -     650,000      747,500               -                  -

Issuance of common stock for
 prepaid consulting fees valued at
  $1.21 per share. . . . . . . . .                -              -   2,600,000    3,145,000               -         (3,145,000)

Issuance of common stock for cash
  and forgiveness of notes payable
  to shareholder at $1.15 per
  share. . . . . . . . . . . . . .                -              -     466,488      536,458               -                  -

Receipt of stock subscriptions . .                -              -           -            -         126,902                  -

Recognition of permanent loss
  on marketable securities . . . .                -              -           -            -               -                  -

Amortization of prepaid consulting
  fees . . . . . . . . . . . . . .                -              -           -            -               -            467,500

Currency translation adjustment. .                -              -           -            -               -                  -

Net loss for the six months ended
  June 30, 1999. . . . . . . . . .                -              -           -            -               -                  -
                                    ---------------  -------------  ----------  -----------  ---------------  -----------------

Balance at June 30, 1999 . . . . .          505,000          5,050  31,867,878   10,277,373        (341,072)        (2,677,500)

[continued]

<S>                                 <C>              <C>           <C>
                                    Accumulated
                                    Other                         Total
                                    Comprehensive    Accumulated  Stockholders'
                                    Income (Loss)    Deficit       Equity
                                    ---------------  ------------  ------------

Balance at January 1, 1999 . . . .  $     (717,799)  $(3,078,950)  $ 1,588,742

Issuance of common stock for cash
  at $1.15 per share . . . . . . .               -             -       747,500

Issuance of common stock for
 prepaid consulting fees valued at
  $1.21 per share. . . . . . . . .               -             -             -

Issuance of common stock for cash
  and forgiveness of notes payable
  to shareholder at $1.15 per
  share. . . . . . . . . . . . . .               -             -       536,458

Receipt of stock subscriptions . .               -             -       126,902

Recognition of permanent loss
  on marketable securities . . . .         814,413             -       814,413

Amortization of prepaid consulting
  fees . . . . . . . . . . . . . .               -             -       467,500

Currency translation adjustment. .        (159,682)            -      (159,682)

Net loss for the six months ended
  June 30, 1999. . . . . . . . . .               -    (1,819,436)   (1,819,436)
                                    ---------------  ------------  ------------

Balance at June 30, 1999 . . . . .         (63,068)   (4,898,386)    2,302,397

</TABLE>

Continued

<PAGE>

                                              SANGUI BIOTECH INTERNATIONAL, INC.

                     CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - CONTINUED

                                                FOR THE YEAR ENDED JUNE 30, 2000

<TABLE>
<CAPTION>
<S>                                 <C>              <C>            <C>         <C>          <C>              <C>
                                          Preferred Stock             Common Stock           Stock               Prepaid
                                     Shares           Amount         Shares      Amount       Subscriptions    Consulting Fees
                                     ---------------  -------------  ----------  -----------  ---------------  -----------------


Issuance of common stock for cash
  at $1.15 per share. . . . . . . .                -              -     466,485      536,458               -                  -

Issuance of common stock for cash
  at $0.964 per share (including
  80,000 shares issued for finders
  fees) . . . . . . . . . . . . . .                -              -   8,080,000    7,712,000        (235,001)                 -

Issuance of common stock for the
  recapitalization of Felnam
  Investments . . . . . . . . . . .                -              -     100,000            -               -                  -

Receipt of stock subscriptions. . .                -              -           -            -         224,413                  -

Amortization of prepaid consulting
  fees. . . . . . . . . . . . . . .                -              -           -            -               -          1,572,500

Currency translation adjustment . .                -              -           -            -               -                  -

Net loss. . . . . . . . . . . . . .                -              -           -            -               -                  -
                                     ---------------  -------------  ----------  -----------  ---------------  -----------------

Balance at June 30, 2000. . . . . .          505,000  $       5,050  40,514,363  $18,525,831  $     (351,660)  $     (1,105,000)
                                     ===============  =============  ==========  ===========  ===============  =================

[continued]

<S>                                 <C>              <C>           <C>
                                    Accumulated
                                    Other                         Total
                                    Comprehensive    Accumulated  Stockholders'
                                    Income (Loss)    Deficit       Equity
                                    ---------------  ------------  ------------


Issuance of common stock for cash
  at $1.15 per share. . . . . . . .               -             -       536,458

Issuance of common stock for cash
  at $0.964 per share (including
  80,000 shares issued for finders
  fees) . . . . . . . . . . . . . .               -             -     7,476,999

Issuance of common stock for the
  recapitalization of Felnam
  Investments . . . . . . . . . . .               -             -             -

Receipt of stock subscriptions. . .               -             -       224,413

Amortization of prepaid consulting
  fees. . . . . . . . . . . . . . .               -             -     1,572,500

Currency translation adjustment . .         (47,746)            -       (47,746)

Net loss. . . . . . . . . . . . . .               -    (2,749,879)   (2,749,879)
                                     ---------------  ------------  ------------

Balance at June 30, 2000. . . . . .  $     (110,814)  $(7,648,265)  $ 9,315,142
                                     ===============  ============  ============

</TABLE>
                                            See independent auditors' report and
                    accompanying  notes  to  consolidated  financial  statements

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                           CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
<S>                                                        <C>           <C>
                                                         FOR THE      FOR THE SIX
                                                      YEAR ENDFED   MONTHS ENDED
                                                      JUNE 30, 2000 JUNE 30, 1999
                                                      -------------  ------------

Cash flows from operating activities:
  Net loss. . . . . . . . . . . . . . . . . . . . . .  $(2,749,879)  $(1,819,436)
  Adjustments to reconcile net loss to net cash
    used in operating activities:
  Depreciation and amortization . . . . . . . . . . .      151,317        55,343
  Amortization of prepaid consulting fee. . . . . . .    1,572,500       467,500
  (Gain) loss recorded on marketable securities . . .      (80,557)      880,138
    Changes in operating assets and liabilities:
      Accounts receivable . . . . . . . . . . . . . .       43,856       (77,801)
      Grant receivable. . . . . . . . . . . . . . . .      (79,844)      (97,000)
      Inventory . . . . . . . . . . . . . . . . . . .       32,346       (72,150)
      Prepaid expenses and other assets . . . . . . .     (112,210)       30,418
      Accounts payable and accrued expenses . . . . .      102,786        18,131
      Accrued commitments and contingencies . . . . .            -        25,000
                                                       ------------  ------------

  Net cash used in operating activities . . . . . . .   (1,119,685)     (589,857)
                                                       ------------  ------------

Cash flows from investing activities:
  Proceeds from sale of marketable securities . . . .    1,369,177        50,620
  Purchase of marketable securities . . . . . . . . .            -    (1,288,620)
  Cash grants received for property and equipment . .       81,490       185,000
  Purchase of property and equipment. . . . . . . . .     (222,641)      (79,671)
                                                       ------------  ------------

  Net cash provided by (used in) investing activities    1,228,026    (1,132,671)
                                                       ------------  ------------

Cash flows from financing activities:
  Issuance of stock for cash. . . . . . . . . . . . .    7,963,457       608,958
  Proceeds from collection of stock subscription
    receivable. . . . . . . . . . . . . . . . . . . .      224,413       176,902
  Proceeds from related party payable . . . . . . . .      100,000             -
                                                       ------------  ------------

  Net cash provided by financing activities . . . . .    8,287,870       785,860
                                                       ------------  ------------

Effect of foreign exchange rate changes on cash . . .      (47,746)     (159,682)
                                                       ------------  ------------
</TABLE>

Continued

<PAGE>

                                              SANGUI BIOTECH INTERNATIONAL, INC.

                               CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

<TABLE>
<CAPTION>
<S>                                               <C>             <C>
                                                   FOR THE YEAR    FOR THE SIX
                                                      ENDED       MONTHS ENDED
                                                  JUNE 30, 2000  JUNE 30, 1999
                                                  -------------  -------------
Net change in cash and cash equivalents. . . . .       8,348,465   (1,096,350)

Cash and cash equivalents at beginning of period         305,501    1,401,851
                                                  --------------  ------------

Cash and cash equivalents at end of period . . .  $    8,653,966  $   305,501
                                                  ==============  ============

Supplemental disclosure of cash flow information
  Cash paid during the period for interest . . .  $       15,537  $         -
                                                  ==============  ============
  Cash paid during the period for income taxes .  $            -  $         -
                                                  ==============  ============
</TABLE>

See  accompanying  notes  to  consolidated  financial  statements for additional
information  relating  to non-cash investing and financing activities during the
periods  ended  June  30,  2000  and  1999.


                                            See independent auditors' report and
                    accompanying  notes  to  consolidated  financial  statements

<PAGE>
                                            SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES
----------------------------------------------------------

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

Sangui  BioTech  International,  Inc.  (the "Company") ("SGBI") was incorporated
under  the  laws  of  the  state  of  Colorado on July 14, 1995 to engage in any
business  permitted  by  law.  The  Company, pursuant to the recapitalization of
Sangui  BioTech, Inc. ("SBT"), is engaged in the development of immunodiagnostic
tests.

Since  inception,  the  Company  has  primarily  been  engaged in the commercial
development  and  manufacturing  of immunodiagnostic kits, which are sold by the
Company  in niche markets in the United States and Europe, under the name of the
Company's  wholly  owned subsidiary Sangui BioTech,  Inc. ("Sangui USA"). Sangui
USA's laboratory and headquarters are located in Santa Ana, California, and this
facility is devoted to immunodiagnostic research, development, manufacturing and
distributing,  marketing,  and administrative functions for the Company.  Sangui
USA  was incorporated in the state of Delaware on August 2, 1996.  Sangui USA is
the  parent  company  to  two  wholly  owned  subsidiaries, SanguiBioTech AG and
GlukoMediTech,  AG.  SanguiBioTech  AG  ("Sangui  AG")  and  GlukoMediTech,  AG
("Gluko")  were incorporated in Mainz, Germany on November 25, 1995 and July 15,
1996,  respectively.  Sangui  AG  and  Gluko  are  engaged  in  Germany  in  the
development  of  artificial  oxygen  carriers  and  glucose  implant  sensors,
respectively.

On  May  15,  1999,  Sangui  BioTech  PTE  Ltd.  ("SBTS")  was  incorporated  in
Singapore.  SBTS  is  expected  to  become  a  regional  office for SGBI and its
subsidiaries  and  to  be  engaged  in the business of carrying out research and
development  projects  in  conjunction  with  the  German  subsidiaries.

Termination  of  Development  Stage
-----------------------------------

As  noted  above,  the Company was incorporated in 1995 and had been principally
engaged  in  raising capital, obtaining financing, advertising and promoting the
Company,  development  of  its  products  and  administrative function.  Planned
operations,  as  discussed  above,  have  commenced in relation to the Company's
business  plan.  Accordingly,  the  Company  is  no  longer  to  be considered a
development  stage  enterprise.

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

The  consolidated  financial  statements include the accounts of the Company and
its  wholly  owned  domestic  and  foreign  subsidiaries.  All  significant
inter-company accounts and transactions have been eliminated upon consolidation.


<PAGE>

                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

Risk  and  Uncertainties
------------------------

Both  the Company's small line of in vitro immunodiagnostic products, as well as
the  future  pharmaceutical  (artificial oxygen carriers or blood substitute and
additives)  and  in  vivo biosensors (glucose implant sensor) being developed by
its German subsidiaries, 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.
Currently, most of the Company's immunodiagnostic tests for use with humans have
been  cleared  by the above regulatory agencies.  There can be no assurance that
the  Company  will  maintain  the  regulatory  approvals  required to market its
products  elsewhere.  The  pharmaceutical  and  biosensor  products,  under
development  in  Germany  and Singapore (in the future), will be subject to much
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 failure in obtaining regulatory clearance as well as the
timely  receipt  of  the  said  clearance,  if  obtained.

The  Company's  revenues  from  product  sales derived from its immunodiagnostic
operations  in the U.S. are small. However, management believes its current cash
position  of approximately $8,650,000 at June 30, 2000 is sufficient to fund the
Company's  operations  and  working  capital requirements through June 30, 2001.

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

Assets  and  liabilities  of the Company's German 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 earnings but are included
in comprehensive income and accumulated in a separate component of stockholders'
equity.  Income  and  expense  are translated at weighted average exchange rates
for  the  period.  During fiscal 2000 and 1999, the Company had foreign exchange
transaction  gains  included  in  other  income  of  approximately  $100,000 and
$17,000,  respectively.

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

The  preparation  of  financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect  the reported amounts of assets and liabilities, disclosure of contingent
assets and liabilities at the date of the financial statements, and the reported
amounts  of  revenues  and expenses during the reporting period.  Actual results
could  differ  from  those  estimates.


<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

Concentration  of  Risk
-----------------------

Four  customers  accounted  for  62% of accounts receivable as of June 30, 2000.
Four  customers  accounted  for 70% and 82% of sales for the year ended June 30,
2000  and  the  six-month period ended June 30, 1999, respectively.  The loss of
any  of  these  customers in the future would significantly affect the Company's
operating  results.

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

The  Company  does  not maintain its cash 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 with maturity of three months or less, and for which the
Company  has  no  requirements  for  compensating  balances.  The  Company  also
maintains  bank  accounts  in  Germany.

Inventories
-----------

Inventories,  which  consist primarily of finished immunodiagnostic products and
related  materials,  are  stated  at  the  lower  of  cost  or  market with cost
determined  on  a  first-in,  first-out  (FIFO)  basis.  The  Company  regularly
monitors  inventory  for  excess  or  obsolete  items  and  makes  any valuation
corrections  when  such  adjustments  are  needed.

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

From  time  to  time,  the Company invests in various short-term debt and equity
securities.  These securities are classified as available-for-sale as defined by
Statement  of  Financial  Accounting Standards ("SFAS") No. 115, "Accounting for
Certain  Investments  in  Debt  and  Equity  Securities."  At June 30, 2000, the
Company  held  no  such  investments  in  debt  and  equity  securities.

Property  and  Equipment
------------------------

Property  and  equipment  are  recorded at cost and are depreciated or amortized
using  the straight-line method over the expected useful lives, which range from
three  to  five  years.  Depreciation  and  amortization expense for the periods
ended  June  30,  2000  and  1999  was  $131,440  and  $41,594,  respectively.
Expenditures  for  normal  maintenance  and  repairs  are charged to income, and
significant  improvements  are  capitalized.  The  cost  and related accumulated
depreciation  of  assets  are removed from the accounts upon retirement or other
disposition;  any  resulting  gain  or  loss  is  reflected  in the statement of
operations.


<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

Patents
-------

Patents  are recorded at cost and are depreciated using the straight-line method
over  their  estimated  useful  lives,  which  range from three to eleven years.
Amortization  expense  for  the periods ended June 30, 2000 and 1999 was $19,877
and  $13,749,  respectively.

Impairment  of  Long-Lived  Assets
----------------------------------

Management  of  the  Company  assesses  the  impairment  of long-lived assets by
comparing the future undiscounted cash flows (without interest charges) from the
use  and  ultimate  disposition of such assets with their carrying amounts.  The
amount  of impairment, if any, is measured based on fair value and is charged to
operations  in  the period in which such impairment is determined by management.
Based  on its analysis, management of the Company believes that no impairment of
long-lived  assets  exist  as  of  June  30,  2000.

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

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

Research  and  Development
--------------------------

Research  and development are charged to operations as they are incurred.  Legal
fees  and  other  direct  costs incurred in obtaining and protecting patents are
expensed  as  incurred.

Grants
------

The  Company  receives  grants from the German government which are used to fund
research  and  development activities and the acquisition of equipment.  Revenue
from  grants  for  the  reimbursement  of  research and development expenses are
offset  against  research and development expenses when the related expenses are
incurred.  Grants  related  to the acquisition of tangible property are recorded
as  a  reduction  of  the  properties'  historical  cost.


<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

Income  Taxes
-------------

The  Company  accounts  for  deferred income taxes using the liability method in
accordance  with  SFAS  No. 109, "Accounting for Income Taxes."  Deferred income
taxes  are computed based on the tax liability or benefit in future years of the
reversal  of  temporary differences in the recognition of income or deduction of
expenses  between  financial  and  tax  reporting  purposes.  The net difference
between  income  tax  expense  and  taxes  currently payable is reflected in the
balance  sheet  as  deferred  taxes.  Deferred tax assets and/or liabilities are
classified as current and non-current based on the classification of the related
asset  or  liability  for financial reporting purposes, or based on the expected
reversal  date for deferred taxes that are not related to an asset or liability.
A valuation allowance is provided for significant deferred tax assets when it is
more  likely  than  not  that  such  assets  will  not  be  recovered.

Accounting  for  Stock-Based  Compensation
------------------------------------------

The  Company accounts for stock-based compensation issued to employees using the
intrinsic value based method as prescribed by APB Opinion No. 25 "Accounting for
Stock  Issued to Employees" ("APB 25").  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 SFAS No. 123
"Accounting  for  Stock-Based  Compensation."  This  standard, if fully adopted,
changes  the  method  of accounting 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  7).


<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

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

The  Company has adopted SFAS No. 128 "Earnings Per Share." SFAS No. 128 changes
the  methodology  of calculating earnings per common share. The adoption of SFAS
No.  128 has not materially impacted the Company's financial position or results
of  operations.

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.  Basic
and  diluted  loss per share are the same as the effect of stock options on loss
per  share are anti-dilutive and thus not included in the diluted loss per share
calculation  (see  Note  9).

Fair  Value  of  Financial  Instruments
---------------------------------------

The Company has adopted SFAS No. 107, "Disclosures About Fair Value of Financial
Instruments."  SFAS  No. 107 requires disclosure of fair value information about
financial  instruments  when  it  is  practicable  to  estimate that value.  The
carrying  amount  of the Company's cash, receivables, trade payables and accrued
expenses  and  note  payable  approximate their estimated fair values due to the
short-term  maturities  of  these  financial  statements.

Comprehensive  Income
---------------------

The Company has adopted SFAS No. 130, "Reporting Comprehensive Income." SFAS No.
130  establishes standards for reporting and display of comprehensive income and
its  components  in  a  full set of general-purpose financial statements.  Total
comprehensive  income 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  are  the  changes  in  the  cumulative  foreign  currency  translation
adjustments  and  unrealized gains (losses) on marketable securities recorded as
components  of  stockholders'  equity.

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

The  Company  has  adopted  SFAS  No.  131,  "Disclosures  about  Segments of an
Enterprise  and  Related  Information."  SFAS  No.  131  changes  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  10).

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

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

The FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging
Activities."  SFAS  No.  133  establishes accounting and reporting standards for
derivative  instruments,  including  certain  derivative instruments embedded in
other  contracts,  and  for  hedging  activities.  It  requires  that  an entity
recognize  all  derivatives as either assets or liabilities on the balance sheet
at  their  fair value.  This statement is effective for financial statements for
all  fiscal  quarters  of  all  fiscal  years  beginning after June 15, 2000 (as
amended  by  SFAS  No.  137).  The  Company does not expect the adoption of this
standard  to  have  a  material  impact  on its results of operations, financial
position  or  cash  flows  as  it currently does not engage in any derivative or
hedging  activities.

In  March  2000, the Emerging Issues Task Force reached a consensus on Issue No.
00-2,  "Accounting  for  Web  Site  Development  Costs,"  ("EITF  00-2")  to  be
applicable  to all web site development costs incurred for the quarter beginning
after  June  30,  2000.  The  consensus  states  that  for  specific  web  site
development  costs,  the accounting for such costs should be accounted for under
Statement  on  Position 98-1 ("SOP 98-1"), "Accounting for the Costs of Computer
Software  Developed  or Obtained for Internal Use."  The Company does not expect
the adoption of EITF 00-2 to have a material effect on its financial statements.

In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulletin  101  ("SAB  101"),  "Revenue  Recognition,"  which  outlines the basic
criteria  that  must  be  met  to  recognize  revenue  and provides guidance for
presentation  of  revenue  and  for  disclosure  related  to revenue recognition
policies  in  financial  statements  filed  with  the  Securities  and  Exchange
Commission.  The  effective  date of this pronouncement is the fourth quarter of
the  fiscal  year  beginning after December 15, 1999.  The Company believes that
adopting  SAB  101 will not have a material impact on its financial position and
results  of  operations.

In March 2000, the FASB issued Interpretation No. 44 ("FIN 44"), "Accounting for
Certain Transactions involving Stock Compensation, an interpretation of APB 25."
FIN  44  clarifies  the application of APB 25 for (a) the definition of employee
for purposes of applying APB 25, (b) the criteria for determining whether a plan
qualifies  as a noncompensatory plan, (c) the accounting consequence for various
modifications  to the terms of a previously fixed stock option or award, and (d)
the  accounting  for  an  exchange  of  stock  compensation awards in a business
combination.  FIN  44  is  effective  July 1, 2000, but certain provisions cover
specific  events that occur after either December 15, 1998, or January 12, 2000.
The  adoption  of  certain other provisions of FIN 44 prior to June 30, 2000 did
not  have  a  material effect on the financial statements.  The Company does not
expect that the adoption of the remaining provisions will have a material effect
on  the  financial  statements.

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  1  -  SUMMARY  OF  SIGNIFICANT  ACCOUNTING  POLICIES,  CONTINUED
----------------------------------------------------------------------

Reclassifications
-----------------

Certain  reclassifications  were  made to prior period amounts, enabling them to
conform  to  current  period  presentation.

NOTE  2  -  BUSINESS  ACQUISITIONS
----------------------------------

On  March  30,  2000,  the  Company acquired all the outstanding common stock of
Felnam  Investments,  Inc.  ("Felnam").  The  transaction was funded through the
issuance  of  100,000  shares  of  the  Company's  stock valued at $0 due to the
Company  treating  the  transaction  as  a  recapitalization  of the Company. In
conjunction with the transaction, the Company incurred approximately $180,000 of
transaction  costs, which are charged to operations.  The net assets and results
of  operations  of  Felnam  were  not  material  to  the  Company's consolidated
financial statements.  Accordingly, pro forma financial information has not been
disclosed.

NOTE  3  -  PROPERTY  AND  EQUIPMENT
------------------------------------

Property  and  equipment  at  June  30,  2000  consists  of  the  following:

<TABLE>
<CAPTION>
<S>                                               <C>
  Leasehold improvements . . . . . . . . . . . .  $ 139,268
  Technical and laboratory equipment . . . . . .    755,435
  Office equipment . . . . . . . . . . . . . . .     31,170
  Company car. . . . . . . . . . . . . . . . . .      8,266
                                                  ----------
                                                    934,139

  Less accumulated depreciation and amortization   (516,827)
                                                  ----------

                                                  $ 417,312
                                                  ==========
</TABLE>

NOTE  4  -  PATENTS
-------------------

Patents  as  of  June  30,  2000  consist  of  the  following:

<TABLE>
<CAPTION>



<S>                              <C>
  Patents . . . . . . . . . . .  $ 79,934

  Less accumulated amortization   (33,626)
                                 ---------

                                 $ 46,308
                                 =========
</TABLE>

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  5  -  MARKETABLE  SECURITIES
----------------------------------

On  September 15, 1998, the Company entered into a stock purchase agreement with
Euro-American  GmbH,  a  principal  stockholder  of the Company.  As part of the
agreement,  the  Company  accepted  9,644,986  freely  trading shares of another
public  company  as  payment for 1,928,995 shares of the Company's common stock.
The  shares  were  valued at $0.50 per share of the Company's stock or $964,498.
This  value  approximated the trading price of the stock received.  The co-owner
of  Euro-American GmbH, who is a director of the Company, was also a director of
the  other  public  company.

As  of  December  31,  1998,  the  shares  were  classified  as  securities
available-for-sale and were valued at the market price.  The $814,413 unrealized
loss  on the shares was classified as a separate component of equity at December
31,  1998.

During  the  six  months ended June 30, 1999, the Company began to actively sell
these  shares.  As a result of the decline of shares' value, which was viewed by
the  management  of the Company as other than temporary, the shares were written
down  to $0 and the unrealized loss of $814,413 was reclassified from unrealized
loss  and  charged  directly  to  the  statement  of  operations.

During  fiscal  2000, the Company sold its remaining shares for $80,557 which is
included  in  gain  on  sale  of  securities  in  the  accompanying statement of
operations.

NOTE  6  -  COMMITMENTS  AND  CONTINGENCIES
-------------------------------------------

Operating  Lease
----------------

The  Company  leases  its office and laboratory facilities in the United States,
Germany and Singapore under three operating leases which expire through December
2003,  respectively.

Future  minimum  lease  payments  under  this  lease  at  June  30,  2000  are:

<TABLE>
<CAPTION>
<S>                    <C>
Years Ending
June 30,
-------------

2001. . . .      .  $206,000
2002. . . . .        206,000
2003. . . . .        180,000
2004. . . . .         45,000
                    --------

                     637,000
                =============
</TABLE>

Rent  expense for the year ended June 30, 2000 and for the six months ended June
30,  1999  was  approximately  $120,000  and  $61,000,  respectively.

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  6  -  COMMITMENTS  AND  CONTINGENCIES,  CONTINUED
-------------------------------------------------------

Patent  Issues
--------------

The Company's lead product in its immunodiagnostic business is a blood test kit.
A  competitor  was  granted  a  patent  in the U.S. in August 1998 for a similar
competing  product.  The  Company  has  accrued  $25,000 for the potential costs
associated  with  defending  its  product  against potential patent infringement
claims.

Grants
------

In  November  1998,  the  German  state  of  North-Rhine-Westphalia  granted the
Company's  subsidiary,  Sangui  AG, German Marks (DM) 3,574,575 for the research
and  development  of  the Company's artificial oxygen carrier.  The grant covers
the  period  from  April  1998  to March 2001.  The grant covers 40% of eligible
research  and  development  costs and capital expenditures and is subject to the
Company's  ability  to  cover  the  remaining  60%  of the costs.  An additional
condition of the grant is that the product must be developed and produced in the
German  state  of  North-Rhine-Westphalia,  if  developed  by  2003.

On  September  8,  1999,  the German state of North-Rhine-Westphalia granted the
Company's  subsidiary,  Gluko,  DM 4,340,764 for the research and development of
the Company's long-term implantable glucose sensor.  The grant covers the period
from  December  1998 to November 2001, including retroactive months.  This grant
includes  the  same  terms  as  the  Sangui  AG  grant.

Based  on research and development expenditures and capital expenditures through
June  30, 2000 and 1999, the Company had qualified for $817,560 and $425,000, of
the  grants,  respectively.  Approximately  $736,070  and  $240,000  related  to
research  and  development  expenditures  while the remaining related to capital
expenditures,  respectively.  The  $736,070 and $240,000 related to research and
development  expenditures  has  been  recorded  as  a  reduction of research and
development  expenses,  while  the  $81,490  and  $185,000  related  to  capital
expenditures was recorded as a reduction to the historical costs of property and
equipment, respectively.  Through June 30, 2000, $1,065,716 of the grants amount
has  been  received.  The  remaining amount of $176,844 has been booked as grant
receivable  at  June  30,  2000.

SEC  Inquiry
------------

During the six months ended June 30, 1999, the Company and certain directors and
former  officers  received  an  inquiry  from  the  U.S. Securities and Exchange
Commission  ("SEC")  related to the timing and nature of certain transactions by
these  individuals  in  the  Company's  common stock.  The Company is unaware of
whether the inquiry is continuing.  Although these individuals may be exposed to
potential fines and penalties stemming from the SEC's inquiry, management of the
Company  believes  that  any  potential  exposure  to  the  Company  is minimal.

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  7  -  STOCKHOLDERS'  EQUITY
---------------------------------

Common  Stock
-------------

The  Company  is  authorized  to  issue 50,000,000 shares of no par value common
stock.  The  holders  of the Company's common stock are entitled to one vote for
each  share  held of record on all matters to be voted on by those stockholders.

On  September  15,  1998,  the  Company  entered into an exchange agreement with
Euro-American  GmbH  to  sell  1,062,394 shares of its common stock at $0.50 per
share,  or  $531,197.  Payment  was  in  the  form  of a promissory note bearing
interest  at  9%  with  monthly payments of $24,267, maturing September 1, 2000.
Principal payments of $224,413 and $126,902 were received on the note during the
year  ended  June 30, 2000 and the six months ended June 30, 1999, respectively.
As  of  June  30,  2000,  the  remaining  unpaid principal balance was $116,659.

Through December 31, 1998, the Company received $675,000 from Euro-American GmbH
which  were  recorded  as  non-interest  bearing  notes payable.  During the six
months  ended  June  30,  1999, the Company issued 650,000 and 466,488 shares of
common  stock  to  Euro-American  GmbH  in exchange for the forgiveness of these
notes  and  $608,958  of  cash.

In  April  1999,  the  Company  issued 2,600,000 shares of its common stock to a
consultant  in  exchange for a public relations/promotions contract covering the
period January 1999 to December 2002, as amended in August 2000.  The fair value
of  the  services  received  is  estimated  to be $3,145,000 and is based on the
original  proposal  that  the  promotions  company submitted to the Company when
negotiating the contract. Accordingly, the common stock was valued at $3,145,000
with  a corresponding prepaid asset recorded for the value of the services to be
received  under  the  contract.  The  $3,145,000  is  being  amortized  on  the
straight-line  basis  over  the  contract period. For the periods ended June 30,
2000  and  1999,  the  Company had recognized $1,572,500 and $467,500 of expense
leaving  a  prepaid  asset  of  $1,105,000  which the Company has offset against
stockholders'  equity in the accompanying financial statements at June 30, 2000.

During the fiscal year ended June 30, 2000, the Company issued 466,485 shares of
common  stock to Euro-American GmbH for $536,458, of which, $50,000 was received
during  the  six  months  ended  June  30,  1999.

During  the  fiscal  year  ended  June  30,  2000,  the  Company  entered into a
subscription  agreement  and issued 8,000,000 shares of common stock (and 80,000
shares  to  the finder) to Euro-America GmbH, a venture capital firm in Germany,
valued  at  $7,712,000, of which the Company has received $7,476,999 in cash and
recorded  the  remaining  $235,001  as  stock  subscriptions  at  June 30, 2000.

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  7  -  STOCKHOLDERS'  EQUITY,  CONTINUED
---------------------------------------------

Preferred  Stock
----------------

The  Company  is authorized to issue 5,000,000 shares of non-voting no par value
preferred  stock.  The  Board  of  Directors  is  empowered to issue liquidation
privileges,  dividend, conversion or other rights.  No such rights or privileges
have  been  granted.  505,000 shares have been issued and outstanding as of June
30,  2000.

Stock  Options
--------------

From  time  to  time,  the  Company  may issue stock options pursuant to various
agreements  and  other  contemporary  agreements.

In November 1999, pursuant to an agreement with its chairman, the Company issued
the chairman options to purchase 3,000,000 shares of common stock at an exercise
price of $0.01 valued at $10,845,000 (under APB 25), which will be recognized as
compensation  expense  at  the  time they become exercisable. The options can be
exercised  at  the  time the Company completes the development of the artificial
oxygen  carrier  or the implantable sensor and receives regulatory approval from
either  Germany,  the  United  States or Singapore.  The options are exercisable
through  June  2009.

 Option  activity  for  the  years  indicated  below  is  as  follows:

<TABLE>
<CAPTION>
<S>                                              <C>         <C>
                                                          Weighted
                                                           Average
                                                  Options    Price
-----------------------------------------------  ----------  -----

Outstanding,  January 1, 1999 and June 30, 1999           -      -
  Granted . . . . . . . . . . . . . . . . . . .   3,000,000  $0.01
  Exercised . . . . . . . . . . . . . . . . . .           -      -
  Cancelled/forfeited . . . . . . . . . . . . .           -      -
                                                 ----------  -----

Outstanding, June 30, 2000. . . . . . . . . . .   3,000,000  $0.01
                                                 ==========  =====

Exercisable, June 30, 2000. . . . . . . . . . .           -
                                                 ==========

Weighted average fair value of options granted.         $     3.62
                                                        ==========
</TABLE>

<PAGE>
                                             SANGUI BIO TECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  7  -  STOCKHOLDERS'  EQUITY,  CONTINUED
---------------------------------------------

3,000,000  of the options outstanding at June 30, 2000 have an exercise price of
$0.01  per  share  and a weighted average remaining contractual life of 9 years;
none  of  these  options  are  exercisable  at  June  30,  2000.

SFAS  123  Pro  Forma  Information
----------------------------------

Pro  forma  information regarding net income (loss) is required by SFAS 123, and
has  been  determined  as  if the Company had accounted for its employee's stock
options  under  the  fair  value  method  of SFAS 123.  The fair value for these
options  was  estimated  at  the  date  of  grant using the Black Scholes option
pricing  model  with the following assumptions for the year ended June 30, 2000:
risk  free  interest  rate of 6.0%; expected dividend yield of 0% for each year;
expected  lives  of  the  options  of  three years; and volatility factor of the
expected  market  price  of  the  Company's  common  stock  of  62.5%.

For purpose of pro forma disclosures, the estimated fair value of the options is
amortized  to  expense over the option vesting period.  Adjustments are made for
options  forfeited prior to vesting.  The effect on compensation expense and net
loss  had  compensation  cost  for  the  Company's  stock  option issuances been
determined  based  on  fair  value  on  the  date  of  grant consistent with the
provisions  of  SFAS  123  is  as  follows:

<TABLE>
<CAPTION>
<S>                                                 <C>
                                                        JUNE 30,
                                                           2000
  Net loss:
    As reported. . . . . . . . . . . . . . . . . .  $(2,754,865)
    Additional compensation expense under SFAS 123            -
                                                    ------------
    Pro forma net loss . . . . . . . . . . . . . .  $(2,754,865)
                                                    ============

  Loss per share:
    As reported. . . . . . . . . . . . . . . . . .  $     (0.08)
                                                    ============
    Pro forma. . . . . . . . . . . . . . . . . . .  $     (0.08)
                                                    ============
</TABLE>

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  8  -  INCOME  TAX  PROVISION
----------------------------------

Income tax expense for the year ended June 30, 2000 and for the six months ended
June  30,  1999  differed from the amounts computed by applying the U.S. Federal
income  tax  rate  of  34  percent to the loss from continuing operations before
provision  for  income  taxes  as  a  result  of  the  following:

<TABLE>
<CAPTION>
<S>                                                     <C>         <C>
                                                         2000        1999
                                                    ----------  ----------

Income tax benefit at U.S. federal statutory rates  $(881,557)  $(618,608)

Net operating losses not benefited . . . . . . . .    883,157     618,608
State and local income taxes, net of federal
  income tax effect. . . . . . . . . . . . . . . .     (1,600)          -
                                                    ----------  ----------

                                                    $       -   $       -
                                                    ==========  ==========
</TABLE>

The  tax effects of temporary differences that give rise to significant portions
of  the  deferred  tax  assets  at  June  30,  2000  are  presented  below:

Deferred tax assets:

Net operating loss carryforward          $2,100,000
                                         ----------
Loss valuation                           (2,100,000)
                                         ----------
   Net deferred tax asset                $        -
                                         ==========

As  of  June  30,  2000,  the  Company  had  net operating loss carryforwards of
approximately  $4,500,000,  $1,300,000 and $2,200,000 available to offset future
taxable  Federal, foreign and state income, respectively.  The federal and state
carryforward  amounts  expire  in  varying  amounts  between 2001 and 2011.  The
foreign  net  operating  loss  carryforwards  do  not have an expiration period.


<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

------
NOTE  9  -  BASIC  AND  DILUTED  LOSS  PER  COMMON  SHARE
---------------------------------------------------------

The  following  is  a  reconciliation  of the numerators and denominators of the
basic  and  diluted  loss  per  common  share  computations:

<TABLE>
<CAPTION>
<S>                                                    <C>           <C>
                                                          2000          1999
                                                   ------------  ------------

Numerator for basic and diluted loss earnings per
  common share - net loss . . . . . . . . . . . .  $(2,754,865)  $(1,819,436)
                                                   ============  ============

Denominator for basic and diluted earnings per
  common stock - weighted average shares. . . . .   34,476,465    29,417,956
                                                   ============  ============

Basic and diluted loss per common stock . . . . .  $     (0.08)  $     (0.06)
                                                   ============  ============
</TABLE>

NOTE  10  -  BUSINESS  SEGMENTS
-------------------------------

The  Company reports its business segments based on geographic regions which are
as  follows  for  the  period  ended  June  30:

<TABLE>
<CAPTION>



<S>                     <C>         <C>
                              2000        1999
                        ----------  ----------

  Net sales:
    Sangui USA . . . .  $  429,400  $  178,835
    Sangui BioTech AG            -           -
    GlukoMediTech, AG.           -           -
                        ----------  ----------

                        $  429,400  $  178,835
                        ==========  ==========

  Net loss:
    Sangui USA . . . .  $2,027,120  $1,494,810
    Sangui BioTech AG      548,587     187,335
    GlukoMediTech, AG.     156,460     137,291
    SBTS . . . . . . .      17,712           -
                        ----------  ----------

                        $2,749,879  $1,819,436
                        ==========  ==========
</TABLE>

<PAGE>
                                              SANGUI BIOTECH INTERNATIONAL, INC.

                                      NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                                          FOR  THE  YEAR  ENDED  JUNE  30,  2000

NOTE  10  -  BUSINESS  SEGMENTS,  CONTINUED
-------------------------------------------

<TABLE>
<CAPTION>



<S>                               <C>         <C>
                                        2000     1999
                                  ----------  -------

  Depreciation and amortization:
    Sangui USA . . . . . . . . .  $   42,264  $ 1,101
    Sangui BioTech  AG . . . . .      91,242   45,563
    GlukoMediTech, AG. . . . . .      17,811    8,679
                                  ----------  -------

                                  $  151,317  $55,343
                                  ==========  =======

  Identifiable assets:
    Sangui USA . . . . . . . . .  $1,606,665
    Sangui BioTech  AG . . . . .   4,299,743
    GlukoMediTech, AG. . . . . .   3,710,420
    SBTS . . . . . . . . . . . .      28,520
                                  ----------

                                  $9,645,348
                                  ==========
</TABLE>

NOTE  11  -  RELATED  PARTY  TRANSACTIONS
-----------------------------------------

As  described  in  Note  5,  the  Company  entered  into  a  transaction  with
Euro-American  GmbH, a principal stockholder whose co-owner is a director of the
Company.  In  this  transaction,  the  Company received shares of another public
company  (one  of whose directors is a director of the Company and a co-owner of
Euro-American  GmbH)  in exchange for shares of the Company's common stock.  The
Company  valued the stock at $964,498.  The Company recognized cumulative losses
of  approximately  $825,000  on  the  disposition  of  this  stock.

As  described  in  Note  7,  the  Company  entered  into other transactions with
Euro-American  GmbH.  In  these transactions, the Company has sold 1,116,488 and
8,000,000  shares  of  its  common  stock to Euro-American GmbH for $608,958 and
$7,476,999,  in  1999  and  2000,  respectively.

During  fiscal  2000,  the Company borrowed $100,000 from Euro-American GmbH for
working  capital  purposes.  The borrowings are non-interest bearing and are due
on  demand.  The  borrowings  were  repaid  in full subsequent to June 30, 2000.

<PAGE>


ITEM  8.  CHANGES  IN  AND  DISAGREEMENTS  WITH ACCOUNTANTS ON AN ACCOUNTING AND
FINANCIAL  DISCLOSURE

     Effective  July 10, 2000 the Board of Directors of the Company approved the
engagement  of  Corbin and Wertz as its independent auditors for the fiscal year
ended  June  30,  2000  to replace Ernst & Young Deutsche Allgemeine Treuhand AG
Wirtschaftspruefungsgesellschadt  ("Ernst & Young") who declined  to  stand  for
reelection.

     The  report  of Ernst & Young on the Company's financial statements for the
six  months ended June 30, 1999 did not contain an adverse opinion or disclaimer
of opinion and were not qualified or modified as to uncertainty, audit scope, or
accounting  principles.

     In  connection with the audit of the Company's financial statements for the
six  months  ended June 30, 1999, and in the subsequent interim period preceding
the  date  Ernst  &  Young  declined  to  stand  for  reelection,  there were no
disagreements  with  Ernst  &  Young  on any matters of accounting principles or
practices,  financial  statement  disclosure,  or  auditing scope and procedures
which,  if  not  resolved to the satisfaction of Ernst & Young would have caused
Ernst  &  Young  to  make  reference  to  the  matter  in  their  report.

     Prior  to  the  Company's  engagement of Corbin & Wertz the Company did not
consult  Corbin  &  Wertz  regarding  (i)  either  the application of accounting
principles  to  a special transaction or the type of audit opinion that might be
rendered  on the Company's financial statements, or (ii) any matter that was the
subject  of  a  disagreement  or  was  a  reportable  event.


PART  III

ITEM  9.  DIRECTORS  AND  EXECUTIVE  OFFICERS


     The  following table sets forth the names and ages of the current directors
and  executive  officers  of SGBI, their  principal  offices  and  positions and
the date each such person became a director or executive officer.  Our executive
officers  are  elected  annually by the Board of Directors.  Our directors serve
one year terms until their successors are elected.  The executive officers serve
terms  of  one year or until their death, resignation or removal by the Board of
Directors.  There  are  no family relationships between any of the directors and
executive  officers.  In  addition,  there  was  no arrangement or understanding
between  any executive officer and any other person pursuant to which any person
was  selected  as  an  executive  officer.

     The  directors  are  as  follows:

<TABLE>
<CAPTION>


<S>                         <C>                   <C>                 <C>                     <C>
NAME . . . . . . . . . . .  AGE                 ADDRESS             RESIDENCE          CURRENT POSITION

Prof. Wolfgang Barnikol     65            Arndtsr 8, D-58453        Germany          Chairman, Senior Vice
M.D., Ph. D.                              Witten, Germany                            President, Executive Director

Axel J. Kutscher            48            Deutschherrnufer 41,       Germany         Executive Director
                                          D-60554 Frankfurt
                                          Germany

Helmut Kappes               42            Franz- Liszt- Str. 32a     Germany         Non-Executive Director
                                          D-46282 Dorsten
                                          Germany

Oswald Burkhard             49            Martinsgasse 1, D-67547    Germany         Non-Executive Director
M.D., Ph.D.                               Worms, Germany

</TABLE>

     None  of the Directors are related to one another.  None of the independent
Directors has a business or professional relationship with SGBI and/or the other
Directors  and  substantial  shareholders  of  the  Company.

     The  day-to-day operations of SGBI are entrusted to the Executive Directors
of  the  Company who are assisted by a management team of key executive officers
("Executive  Officers").  The  particulars of the Executive Officers are set out
below:


<TABLE>
<CAPTION>


<S>                         <C>                   <C>                 <C>                     <C>
NAME . . . . . . . . . . .  AGE                 ADDRESS             RESIDENCE          CURRENT POSITION

Prof. Wolfgang Barnikol.    65            Arndtsr 8, D-58453        Germany          President and Chief
M.D., Ph. D.                              Witten, Germany                            Executive Officer

Oswald Burkhard             49            Martinsgasse 1, D-67547    Germany         Vice President
M.D., Ph.D.                               Worms, Germany

Ohnishi, Patrick            47            2 Cambridge Irvine         US              Secretary
                                          CA 92620

Borchert, Seiglinde         42            Bahnhofstr 12, D-58452     Germany         Chief Operating Officer
Ph.D.                                     Witten, Germany

</TABLE>

     The  business  and  working  experience  of the Directors and key Executive
Officers  of  the  Company  are  set  out  below:


PROF.  WOLFGANG  K.  R.  BARNIKOL,  M.D.,  Ph.D.,  Chairman,  Vice President and
Executive  Director  of the Company, has studied chemistry, physics and medicine
at  the Universities of Munster, Aachen and Mainz, Germany. In 1961, he received
a  Diploma  in  chemistry  from University of Mainz, Mainz, Germany. In 1964, he
obtained  the  doctorate  in  physical chemistry (Dr. rer. nat.) and in 1973 the
doctorate  in  medicine  (Dr.  med.)  both  from the University of Mainz, Mainz,
Germany.  In  that  same  year,  he  also  was  appointed  professor  in medical
physiology  at  University  of  Mainz, Mainz Germany.  In 1996, Dr. Barnikol was
awarded  a  specialist  in  medical  physiology  by  the  medical association of
Rheinland-Pfalz  Germany.  His  research  interest in physical chemistry focused
on  the  polymerization of styrene and the determination of molecular weights of
polymers  with  the  electron  microscope.  Dr.  Barnikol's  research  areas  in
medicine  are: (i) respiration; and (ii) blood and circulation.  In the field of
respiration, he works on the functional analysis of the bronchial system and gas
exchange.  Moreover,  he  is  engaged in the development of respiratory and skin
oxygen  sensors.  In  the  field  of  blood  and  circulation,  he  works on the
development  of  artificial  oxygen carriers for medical use, which are based on
polymerised  soluble  hemoglobins.  As  a  third sphere of work, Dr. Barnikol is
engaged  in  the  development of an implantable glucose sensor for patients with
diabetes  Type I.  Dr. Barnikol has published more than 100 scientific articles,
a  text book in physiology and a review on the situation of German universities.


     OSWALD  BURKHARD, M.D., PH.D., Vice President and Non-Executive Director of
the  Company, has more than 16 years of clinical experience in the diagnosis and
treatment  of  hematological and oncological diseases.  Since 1989, Dr. Burkhard
has  operated  his  own  facilities  in  Worms,  Germany,  which  specialize  in
hematology  and  oncology.  His  practice  offers  patients  all  diagnostic and
therapeutic  possibilities,  necessary for internal oncology. From 1982 to 1989,
Mr.  Burkhard was trained in hematology and oncology at the University School of
Medicine  at Mainz, Mainz, Germany.  During this time, he cared almost daily for
patients  with  hematological  or  oncological  problems.  Additionally,  he was
trained  in  transfusion  medicine.  He became a specialist in internal medicine
and hematology.  He has significant experience in clinical trials.  From 1975 to
1989,  he  worked  at  the  Institute for Physiology at the University of Mainz,
Mainz,  Germany  where  he  was involved in the physical chemistry of hemoglobin
solutions  and  the measurement of oxygen by fluorescence quenching. In 1988, he
obtained  the  Doctorate  in  Medicine from University of Mainz, Mainz, Germany.
Dr.  Burkhard  received  several  patents  for his scientific work.  In 1989, he
obtained  the  Tancre  award  of  the  University of Mainz, Mainz, Germany.  Dr.
Burkhard has studied chemistry, physics and medicine at the University of Mainz,
Mainz,  Germany.  He  received a diploma in Chemistry in 1973 from University of
Mainz, Mainz, Germany.  In 1976, he obtained the Doctorate in Physical Chemistry
from  University  of  Mainz,  Mainz,  Germany.  During  his thesis, Dr. Burkhard
synthesized  approximately  20  new  compounds.

     AXEL J. KUTSCHER, Non-Executive Director of the Company and director of the
Subsidiaries,  SanguiBioTech  AG  and  GlukoMediTech  AG,  brings to the Company
experience  14 years in sales management from a variety of industries, including
the  German  securities  industry.  From  1985  until  1987,  Mr. Kutscher was a
salesman  at  Deutsch-Amerikanische  Corporation  and International Stock Broker
Corporation  in  Essen,  Germany.  From  1988  until  1991,  Mr. Kutscher was an
account  executive  in  charge  of marketing and research at Hetkamp and Partner
GmbH,  Gelsenkirchen,  Germany.  For  the  next  two  years, Mr. Kutscher was an
account  manager  for  several private clients in Frankfurt, Germany.  After one
year  as  the  sales  manager  at  Euro-Pacific  Security  Service GmbH & Co KG,
Dusseldorf,  Germany, in 1995 Mr. Kutscher became the Vice President and manager
of  EURO-AMERICAN  GmbH,  Mulheim,  Germany.

     HELMUT  KAPPES,  Director of the Company, and Director of the Subsidiaries,
Sangui  AG  and  Gluko,  brings  to the Company 13 years experience in sales and
general management from a variety of industries, including the German securities
industry.  In  1986,  Mr.  Kappes  spent  two  years  as  a  salesman  at
Deutsch-Amerikanische  Corporation and International Stock Broker Corporation in
Essen,  Germany.  From  1988 until 1991, Mr. Kappes was an account executive and
salesman  at Hetkamp and Partner GmbH, Gelsenkirchen, Germany.  For the next two
years,  Mr.  Kappes was a sport manager with Trotting Promotion GmbH, located in
Gelsenkirchen,  Germany.  After  one  year  as the sales manager at Euro-Pacific
Security  Service  GmbH  &  Co KG, Duesseldorf, Germany, Mr. Kappes has been the
Vice  President  and  manager  of EURO-AMERICAN GmbH, Duesseldorf, Germany since
1994.

     PATRICK  OHNISHI,  Secretary,  joined  SanguiBioTech,  Inc.  in 1997 and is
responsible  for  manufacturing,  purchasing,  packaging  and shipping.  He held
various key technical management positions for 14 years at the Nichols Institute
Diagnostics (now Quest Diagnostics, Inc.) such as Director of Manufacturing, and
Manager  of Technical Manufacturing.  He worked as a laboratory technician after
his  graduation  at  San  Diego  State  University  in  Biology.

     SIEGLINDE  BORCHERT,  Chief Operating Officer, after an apprenticeship as a
clerk  and  studying biology she made her Ph.D. in biochemistry.  She worked for
more  than  4  years  as  a  research scientist at the University in Goettingen,
Germany.  Subsequently  she participated in a further vocational training in the
field  of  public  relation  and  economy  studies followed by working as a free
lancer  for  a  scientific journal, Laborjournal, Freiburg, Germany, and for the
Forum  fuer Wissenschaft und Technik, Goettingen, Germany.  She started her work
for  Sangui  BioTech  AG  and  GlukoMeditech  AG  in  June  1998  as  a  Project
Coordinator.

     Section  16(a)  of  the  U.S.  Securities Exchange Act of 1934 requires the
officers  and  directors  of  the Company and those persons who beneficially own
more  than  10%  of  the  outstanding  stock  of  the Company to file reports of
securities  ownership  and  charges in such ownership with the SEC. Based solely
upon  a  review of copies of the reports filed, the Company believes that during
the  year ended June 30, 2000, the filing requirements were complied with by its
officers  and  directors.

ITEM  10.  EXECUTIVE  COMPENSATION  AND  OTHER  INFORMATION

Summary  Compensation  Table

     The  following  SGBI  summary compensation table shows certain compensation
information  for  services rendered in all capacities for the three fiscal years
ended  June  30,  1998,  1999 and 2000.  No executive officer's salary and bonus
exceeded  $100,000  in  any  of the applicable years.  The following information
includes  the  dollar  value of base salaries, bonus awards, the number of stock
options  granted  and  certain  other  compensation,  if  any,  whether  paid or
deferred.

<TABLE>
<CAPTION>

                          SUMMARY COMPENSATION TABLE

                             Annual Compensation                        Long Term Compensation
                             -------------------                        -----------------------
                                                                     Awards                     Payouts
                                                                     ------                     -------

<S>                    <C>         <C>     <C>         <C>           <C>             <C>         <C>        <C>
                                                                  Restricted      Securities
                                                   Other Annual     Stock         Underlying    LTIP     All Other
Name and                          Salary  Bonus    Compensation     Awards         Options     Payouts Compensation
Principal Position     Year        ($)     ($)        ($)            ($)           SARs (#)     ($)        ($)
------------------    ------     -------  -----   -------------   ----------      ----------   ------  ------------

 Wolfgang Barnikol      2000       -0-      -0-        -0-            -0-            -0-         -0-         -0-
  Chairman, CEO
  and President (1)
                        1999       -0-      -0-        -0-            -0-        3,000,000       -0-         -0-
                        1998       -0-      -0-        -0-            -0-            -0-         -0-         -0-

 Seiglinde Borhert      2000       -0-      -0-        -0-            -0-            -0-         -0-         -0-
  COO (2)

 John J. Kiang          2000       -0-      -0-        -0-            -0-            -0-         -0-         -0-
  Former President and
  Director (3)
                        1999       -0-      -0-        -0-            -0-            -0-         -0-         -0-
                        1998      88,000    -0-        -0-            -0-            -0-         -0-         -0-

 Oswald Burkhard        2000       -0-      -0-        -0-            -0-            -0-         -0-         -0-
  Vice-President (4)
                        1999       -0-      -0-        -0-            -0-            -0-         -0-         -0-
                        1998       -0-      -0-        -0-            -0-            -0-         -0-         -0-

 Patrick Onishi         2000      70,000    -0-        -0-            -0-            -0-         -0-         -0-
  Secretary
                        1999      70,000    -0-        -0-            -0-            -0-         -0-         -0-
                        1998      70,000    -0-        -0-            -0-            -0-         -0-         -0-

</TABLE>

(1)  Professor  Barnikol  receives  a  yearly salary of an aggregate $140,000 as
President  of  the  two  German  subsidiaries,  Sangui  AG and Gluko.  Professor
Barnikol  was  issued  3,000,000 options to purchase common stock of the Company
for  $0.01  per  share  exercisable until June 30, 2009 in consideration for the
transfer  of  all  his  patent  rights  to  the  Company.
(2)  Sieglinde  Borchert receives a monthly fee of approximately $5,500 from the
German  subsidiaries  Sangui  AG  and  Gluko.
(3)  John J.  Kiang  was  President, Chief Executive Officer and Director of the
Company until November  1998.  He  currently  serves  as  a  consultant  to  the
Company.
(4)  Oswald  Burkhard  receives  a  year compensation of approximately $6,000 as
Vice-President  of  the  two  German  subsidiaries.


                      Option  /  SAR  Grants  in  Last  Fiscal  Year

                                      Individual Grants

                             Number of          % of Total
                            Securities          Options/SARs
                            Underlying           Granted to          Exercise
                            Options/SARs         Employees in         (Base)
     Name                   Granted (#)           Fiscal Year         ($/Sh)
---------------------       ----------          --------------       ----------

Wolfgang Barnikol             3,000,000                100 %            $0.01
Chairman, CEO
and President

Aggregated  Options  Exercised  in  Last  Fiscal year and Year-End Option Values

<TABLE>
<CAPTION>
<S>                                  <C>          <C>            <C>                   <C>
                                                              Number of
                                                              Securities
                                                              Underlying
                                                              Unexercised      Value of Unexercised
                                                            Options/SARs at   In-the-Money Option/SARs
                                                               FY-End(#)            at FY-End($)
                                    Acquired      Value     ---------------   ------------------------
                                  on Exercise    Realized    Exercisable/            Exercisable/
    Name                              (#)          ($)       Unexercisable           Unexerciseable
---------------                   -----------    --------   ---------------   ------------------------

Wolfgang Barnikol,                      0            0      0/3,000,000             $0/$6,198,750(1)
President and CEO

</TABLE>

(1)  Based  on  a  price  of  $2.06  per  share as quoted on June 30, 2000.


Compensation  of  Directors

     To  date,  Directors  of the Company have not received any compensation for
serving  in  such  capacity.

Employment  Agreements

     The  Company has no existing employment agreements with its officers or key
employees.  Professor  Barnikol  has  an  agreement with the Company pursuant to
which  he  is entitled to 3% royalties of gross revenues earned with any product
based  on  his  inventions.   Professors  Barnikol  and  Sieglinde Borchert have
agreements with Sangui AG and Gluko.


ITEM  11.  SECURITY  OWNERSHIP  OF  CERTAIN  BENEFICIAL  OWNERS  AND  MANAGEMENT


The  following  table  sets  forth  certain  information  regarding  beneficial
ownership  of  the  common  stock  of  SGBI  as  of  June  30,  2000  by:

*     each  person  or  entity  known  to  own  beneficially  more  than  5%
      of  the  common  stock;
*     each  of  SGBI's  directors;
*     each  of  SGBI's  named  executive  officers;  and
*     all  executive  officers  and  directors  of  SGBI  as  a  group.

<TABLE>
<CAPTION>
<S>                              <C>                                      <C>                   <C>
                                 Name and Address of                      Amount and Nature of  Percent of
Title of Class                   Beneficial Owner (1)                     Beneficial Ownership  Class
------------------              ----------------------                    --------------------  -----------

Common Stock                     Dr. Wolfgang Barnikol (2)                          1,853,600    4.6%
                                 Arndtsr, 8, D-58453 Witten
                                 Germany


Common Stock                     Dr. Oswald Burkhard                                  794,400    2.9%
                                 Martinsgasse 1, D-67547 Worms
                                 Germany


Common Stock                     Axel J. Kutscher                                   1,135,384    2.8%
                                 Deutschhermufer 41, D-60554
                                 Germany


Common Stock                     Helmut Kappes                                      1,086,848    2.7%
                                 Franz-Liszt Str. 32a
                                 D-46282 Dorstein
                                 Germany

Common Stock                     Sieglinde Borchert                                    1,000    *
                                 Bahnhofstr. 12
                                 D-58452 Witten
                                 Germany

Common Stock                     All Officers and Directors as
                                 a Group (5 persons)                                4,871,232   12.0%
                                                                                    =========  ======
</TABLE>
*Less than 0.1%

ITEM  12.  CERTAIN  TRANSACTIONS


EURO-AMERICAN

     Euro-American  ("EA")  is  a  venture  capital  investment  corporation
organized  and established in Germany.  Axel Kutscher and Helmet Kappes, who are
Directors  and  substantial  shareholders of the Company, are also directors and
shareholders  of  EA.  On October 29, 1996, EA granted a loan of US$1,000,000 to
SGBI.  Pursuant  to  a  Common Stock Conversion and Subscription Agreement dated
March  24,  1997  between EA and SGBI, it was agreed that 10,000,000 shares at a
conversion  price of US$0.10 per Share be issued to EA, in satisfaction and full
repayment  of  the  loan.

     During  the  period  beginning  March  24,  1997  up  to June 10, 1999, the
Company  had  received a total funding of US $4,922,500 from EA in consideration
of  the  issuance  of 16,750,000 shares at an average subscription price ranging
from  approximately  US$0.20  to  US$1.15  per  share.

     In  addition, on September 21, 1998, the Company issued 4,591,389 Shares to
EA at a subscription price of US $0.50 per share in consideration of US $800,000
cash;  the issue to the Company of 9,644,986 shares at US $0.10 per share in the
capital  of  AMDL, Inc., a public company incorporated in the United States with
its  shares traded on OTCBB under the symbol AMDD; and  an amount of US $531,197
in  the  form  of a  promissory note payable by EA in monthly installments of US
$24,267  at  an  interest  rate  of 9%.  As at the date of the transaction, Axel
Kutscher,  one of the Executive Directors of the Company, was also a director of
AMDL  Inc.  He  has  since  resigned  from  the  board  of  AMDL  Inc.

     During  the  fiscal  year ended June 30, 2000 the Company borrowed $100,000
from  Euro-American  for working capital purposes which was repaid after the end
of  the  fiscal  year.  The  Company  issued  466,485  shares of common stock to
Euro-American  GmbH  for $536,458, of which, $50,000 was received during the six
months  ended  June  30,  1999.

     During  the  fiscal  year  ended  June 30, 2000, the Company entered into a
subscription  agreement  and issued 8,000,000 shares of common stock (and 80,000
shares  to  the  finder)  to  EA, valued at $7,712,000, of which the Company has
received  $7,476,999  in  cash  and  recorded  the  remaining  $235,001 as stock
subscriptions  at  June  30,  2000.


Stock  Option  granted  in  favor  of  Professor  Wolfgang  Barnikol

     The  Company  entered  into  a  stock option agreement which took effect on
September  24, 1999, with Professor Wolfgang Barnikol, an Executive Director and
substantial  shareholder  of  the  Company.  The  Professor  was granted a share
option  of  3  million  Shares  at  an  exercise  price of US$0.01 per share, in
consideration  of  the  assignment  of  his  patent  rights to the Company.  The
Professor  is entitled to exercise the option at the point the Company completes
the  development  of the artificial oxygen carrier or the implantable sensor and
receives  regulatory  approval  from  either  Germany,  Singapore  or the United
States.  The option shall terminate and cease to be exercisable on June 30, 2009
unless  terminated  earlier  in  accordance with the stock option agreement. The
stock  option  agreement  is governed under the laws of the State of California.

Rental  received  from  related  parties

     In  fiscal  year 1997,  NOHIV, a biotechnology company of which Messrs Axel
Kutscher  and Helmut Kappes were former Directors, rented some office space from
SGBI's  premises in Santa Ana for approximately three quarters of a year.    The
rental  charge was based on prevailing market rates conducted on an arm's length
basis.


ITEM  13  EXHIBITS  AND  REPORTS  ON  FORM  8-K


(a)   Index  to  Exhibits


Exhibit  No.
-----------


2.1  (1)  Exchange  Agreement  between  MRC Legal Services LLC and SanguiBioTech
        International,  Inc.,  dated  of  March  31,  2000  (1)

3.1  (1)  Articles  of  Incorporation  of  the  Company  (1)

3.2  (1)  Bylaws  of  the  Company(1)

3.3     Articles  of  Association  of  GlukoMeditech  Aktiengesellschaft

3.4     Articles  of  Association  of  SanguiBiotech  Aktiengesellschaft

3.5     Memorandum  and Articles of Association of Sangui Biotech Singapore Pte.
Ltd.

4.1     Stock  Option  Agreement  between Professor Wolfgang Barnikol and Sangui
Biotech  International,  Inc.  dated  November 3, 1999

10.1     Office  Lease  between  Brookhollow  Office  Park  and  Sangui  Biotech
International,  Inc.  dated  September  4,  1996  and  as  amended  2000

10.2     Fee Agreement between GlukoMeditech AG and Dr. Sieglinde Borchert dated
June  15,  1998

10.3     Fee Agreement between SanguiBiotech AG and Dr. Sieglinde Borchert dated
June  15,  1998

10.4     Service  Contract  between  GlukoMeditech  AG and Dr. Wolfgang Barnikol
dated  June  30,  1998

10.5     Service  Contract  between  SanguiBiotech  AG and Dr. Wolfgang Barnikol
dated  June  30,  1998

10.6     Service Agreement between Axel Kleinkorres Promotionsagentur and Sangui
Biotech  International,  Inc.  dated  April  26,  1999

10.7     Amendment  to  Service  Agreement  between  Axel  Kleinkorres
Promotionsagentur  and  Sangui Biotech International, Inc. dated August 18, 2000

10.8     Appropriation  Notice  from  North-Rhine-Westphalia to GlukoMediTech AG
dated  November  30,  1998

10.9     Appropriation Notice from North-Rhine-Westphalia SanguiBiotech AG dated
November  30,  1998

10.10     Lease  Contract  for  Business  Rooms between Research and Development
Centre,  Witten,  Germany  and  GlukoMeditech  AG  dated  June  6,  2000

10.11     Lease  Contract  for  Business  Rooms between Research and Development
Centre,  Witten,  Germany  and  SanguiBiotech AG  dated  June  7,  2000

10.12     Additional  Agreement  to  Lease  Contract  between  Research  and
Development  Centre,  Witten,  Germany  and  GlukoMeditech AG dated June 7, 2000

10.13     Additional  Agreement  to  Lease  Contract  between  Research  and
Development  Centre,  Witten,  Germany  and  SanguiBiotech AG dated June 7, 2000

21.1    Subsidiaries  of  the  Company

22.1    Financial  Data  Schedule

---------
(1)  Filed  as  an  Exhibit to the Report on Form 8-K filed on or about April 4,
2000  and  incorporated  herein  by  reference.


(b)         Reports  on  Form  8-K

     During  the  fourth  quarter of the fiscal year covered by this report, the
Company  field  a  Report  on  Form 8-K on or about April 4, 2000, reporting the
acquisition  of  all  the  common  stock  of  Felnam  Investments,  Inc.

<PAGE>

                                  SIGNATURES

        Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report on Form 10-KSB to be signed on its behalf
by
the  undersigned  hereunto  duly  authorized.

                                            SANGUI  BIOTECH  INTERNATIONAL, INC.

                                            /s/ Wolfgang Barnikol
                                              ----------------------------------
                                              President  and  Director

Date: October 13, 2000

        In  accordance with the Exchange Act, this report has been signed by the
following  persons  on behalf of the registrant and in the capacities and on the
dates  indicated.




Signatures                                    Title   Date
 ----------                                   -----   ----

  /s/   Wolfgang  Barnikol, M.D., Ph.D.    President and Chief Executive Officer
------------------------------------       and  Director,  Chairman
        Wolfgang  Barnikol                 October 13, 2000


/s/  Sieglinde  Borchert  PhD               Chief  Operating  Officer
------------------------------------
    Sieglinde  Borchert                     October 13, 2000


/s/  Oswald  Burkhard,  Ph.D  M.D.           Director
------------------------------------
     Oswald  Burkhard                        October 13, 2000


/s/  Axel  Kutscher            .            Director
------------------------------------
    Axel  Kutscher                          October 13, 2000


/s/   Helmut  Kappes                       Director
------------------------------------
    Helmut  Kappes                         October 13, 2000