U. S. Securities and Exchange Commission
                     Washington, D. C.  20549

                           FORM 10-KSB

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

     For the fiscal year ended December 31, 2001

[ ]  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934

     For the transition period from _____________ to ____________

                   Commission File No. 0-24480
                   ---------------------------


                       SANGUINE CORPORATION
                       --------------------
          (Name of Small Business Issuer in its Charter)

            NEVADA                                    95-4347608
            ------                                    ----------
(State or Other Jurisdiction of                (I.R.S. Employer I.D. No.)
 incorporation or organization)

                    101 East Green Street, #11
                    Pasadena, California  91105
                    ---------------------------
             (Address of Principal Executive Offices)

            Issuer's Telephone Number:  (626) 405-0079
            --------------------------

                               N/A
                               ---
  (Former Name or Former Address, if changed since last Report)

Securities Registered under Section 12(b) of the Exchange Act: None
--------------------------------------------------------------
Name of Each Exchange on Which Registered: None
------------------------------------------
Securities Registered under Section 12(g) of the Exchange Act:
--------------------------------------------------------------

                    $0.001 par value common stock

     Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the Company was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
     (1)   Yes  X    No            (2)   Yes  X    No
               ---      ---                  ---      ---

     Check if there is no disclosure of delinquent files in response to Item
405 of Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of Company'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.  [ ]

     State Issuer's revenues for its most recent fiscal year: December 31,
2001 - $0.

     State the aggregate market value of the voting stock held by
non-affiliates computed by reference to the price at which the stock
was sold, or the average bid and asked prices of such stock, as of a specified
date within the past 60 days.

     March 27, 2002 - $2,740,128.30.  There are approximately 19,572,345
shares of common voting stock of the Registrant beneficially owned by
non-affiliates.  This valuation is based upon the average bid prices for the
common stock of the Registrant on the OTC Bulletin Board of the NASD on March
27, 2002.

                                   N/A
                                   ---
                (ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
                        DURING THE PAST FIVE YEARS)


                  (APPLICABLE ONLY TO CORPORATE ISSUERS)

                       March 27, 2002 - 30,723,607
                       ---------------------------
        State the number of shares outstanding of each of the Issuer's
         classes of  common equity, as of the latest practicable date:


                            Part III, Item I
                            ----------------
                    DOCUMENTS INCORPORATED BY REFERENCE


Transitional Small Business Issuer Format:   Yes  X   No
------------------------------------------       --- ----
                                1
<PAGE>
                              PART I

Item 1.  Description of Business.
         ------------------------

Business Development.
---------------------

     We were organized under the laws of the State of Utah on January 24,
1974, under the name "Sight and Sound Systems, Inc."  We had an initial
authorized capital of $50,000 comprised of 5,000,000 shares of $0.001 par
value common stock.

     We commenced a public offering of our common stock on March 7, 1974.  The
offering was completed in June, 1974.

     We changed our name to "Kricket Corporation" on July 8, 1974.

     On April 9, 1976, we increased our authorized capital to $250,000,
comprised of 25,000,000 shares of $0.01 par value per share common stock.

     We again increased our authorized capital on December 22, 1996, to
$1,000,000, comprised of 100,000,000 shares of $0.01 par value common stock.

     On December 5, 1977, we changed our name to "International Health
Resorts, Inc."

     We organized a wholly-owned subsidiary under the laws of the State of
Nevada, and on May 11, 1992, we merged into this subsidiary to change our
domicile from the State of Utah to the State of Nevada.  As a part of this
merger, our authorized capital was reduced to $100,000, comprised of
100,000,000 shares of $0.001 par value common stock, and we effected a one for
20 reverse split of our outstanding shares of common stock.

     On June 14, 1993, we entered into an Agreement and Plan of Reorganization
under which we acquired 94% of the outstanding shares of Sanguine Corporation,
a California corporation ("Sanguine California"), in exchange for shares of
our common stock, and we succeeded to intended operations of Sanguine
California, which are those activities described under the caption "Business"
below.

     We effected a 1.5 for one forward split of our outstanding securities and
changed our name to "Sanguine Corporation" on June 25, 1993.

     On September 1, 2000, we completed a private placement of certain
securities through Laidlaw Global Securities, Inc. of New York, New York
(respectively, "Laidlaw" and the "Laidlaw Private Offering") of 1,635,970
units at $0.50 per unit for aggregate proceeds of $817,985.  Each unit
consisted of two shares of our common stock and one redeemable warrant
entitling the holder to purchase one share of our common stock at an exercise
price of $.40 per share.  The warrant exercise price was reduced to $.35 per
share because the Company was unable to timely file a registration statement
with the Securities and Exchange Commission covering the shares underlying
these warrants.  Laidlaw was also granted the option to acquire 163,597
of these units at an exercise price of $0.001 per share as part of its
                                2
<PAGE>
compensation related to this offering.  With the exception that Laidlaw has
exercised its warrants to acquire the common stock and warrants that comprised
these units, none of these warrants have been exercised.  For additional
information respecting the Laidlaw Private Offering, see the Company's 8-K
Current Report dated September 1, 2000, which is incorporated herein by
reference.  For a complete description of these warrants, see the Company's
SB-2 Registration Statement filed with the Securities and Exchange Commission
on or about December 8, 2000 (the "Registration Statement"), which is
incorporated herein by reference, and pursuant to which the common stock and
other securities principally held by the investors in the Laidlaw Private
Offering were registered for resale.  See Part III, Item 13.

     On January 19, 2001, Sanguine executed a Service Agreement with Irisys
Research and Development LLC ("IriSys") pursuant to which IriSys would
provide  Sanguine with expertise in preformulation development, analytical
chemistry and stability protocol design and testing, including preparation of
regulatory standards required to achieve regulatory compliance for Sanguine's
product, PHER-O2, a synthetic substitute for human red blood cells.  For more
information on this Service Agreement, see the 8-K Current Report of the
Company dated January 19, 2001, which is incorporated herein by reference.
See Part III, Item 13.

     On February 27, 2001, Sanguine executed a Consulting Agreement with
National Financial Communications Corp. ("NFC") whereby NFC shall provide
public relations, communications services, advisory and consulting services
for the Company, commencing March 1, 2001, for a period of one year.  In
accordance with the Consulting Agreement, the Company pays $5,000 per month,
plus expenses, for these services.

     We filed Articles of Merger in the State of Nevada on September 11, 2001,
and in the State of California on September 26, 2001, to acquire the remaining
6% of the outstanding securities of Sanguine California, our 94%-owned
subsidiary through which substantially all of our operations had been
conducted from our succession to these operation in June, 1993; and we
simultaneously qualified to do business in the State of California as a
                                3
<PAGE>
foreign corporation.  910,225 shares of our common stock were issued to the
persons who owned the remaining 6% of Sanguine California.  For more
information on this merger, see the 8-K Current Report of the Company dated
September 26, 2001, which is incorporated herein by reference.  See Part III,
Item 13.

     On November 5, we executed a Financial Consulting Services Agreement with
Ascendiant Capital Group, Inc. ("Ascendiant") for a period of 12 months.  The
services to be provided include but are not limited to advice regarding
mergers and acquisitions, client introductions and advice regarding financing
sources.  In connection with this Agreement, the Company issued 825,000 shares
of common stock which resulted in $103,950 of general and administrative
expenses.

     We filed an S-8 Registration Statement with the Securities and Exchange
Commission December 17, 2001, which is incorporated herein by reference, to
register 825,000 shares of our common stock for services rendered and to be
rendered for our benefit by three consultants, Richard H. Walker, Mark
Bergendahl and Bradley J. Wilhite.  These persons are "affiliates" of
Ascendiant.  See Part III, Item 13.

Events Subsequent to December 31, 2001.
---------------------------------------

     *    On February 15, 2002, we entered into an Exclusive License
          Agreement (the "Exclusive License Agreement") with
          Ascendiant-Asia, LLC, a Nevada limited liability corporation
          ("Ascendiant-Asia"), whereby we granted to Ascendiant-Asia an
          exclusive license to PHER-02, our developmental synthetic red
          blood cell product, the licensed process and all proprietary,
          formula, developmental, technological, intellectual property and
          patent rights, and all other applications of the above in certain
          countries in Asia, including the People's Republic of China,
          Thailand, Laos, Cambodia, Vietnam, Singapore, Malaysia, Indonesia,
          North Korea, Burma, Mongolia and Taiwan.

     *    On February 20, 2002, we executed and delivered three warrants
          under which we granted to Richard H. Walker, Mark Bergendahl
          and Bradley J. Wilhite warrants to acquire 1,000,000 shares each
          of our common stock at an exercise price of $0.15 per share.  The
          Company estimates the issuance of these warrants for services will
          result in approximately $330,000 of expenses in the first quarter of
          2002.

     *    We entered into the following agreements with First York Partners,
          Inc. ("First York Partners"):

               A 5% Convertible Note for the sum of $25,000 convertible at
               the lesser of (i) $.08; or (ii) sixty-six and two-thirds
               percent (66-2/3%) of the average of the closing bid prices
               as reported by the NASD OTC Bulletin Board, NASDAQ SmallCap
               Market, NASDAQ National Market System, American Stock
               Exchange, New York Stock Exchange or "Pink Sheets"
               (whichever of the foregoing is at the time the principal
               trading exchange or market for the common stock, the
               "Principal Market"), or if not then trading on a Principal
               Market, such other principal market or exchange where the
               common stock is listed or traded for the five trading days
               immediately preceding but not including a conversion date.  The
               beneficial conversion feature of the note is estimated to
               result in $25,000 in additional interest expense;
                                4
<PAGE>
               A Common Stock Purchase Warrant for the right to purchase
               5,937,500 shares of common stock of the Company exercisable
               at a purchase price of $.08, provided, however, the purchase
               price shall be adjusted to be sixty-six and two-thirds
               percent (66-2/3%) of the average of the closing bid prices
               for the Common Stock as reported for the Principal Market
               (as defined in Section 10(d) of this Warrant) for the five
               trading days preceding but not including the effective date
               of the registration statement referred to in Section
               10.1(iv) of the Subscription Agreement.  Except in
               connection with other adjustments set forth in this Warrant
               the Purchase Price will not be adjusted below $.08.  The
               Company estimates the issuance of the warrants for services
               will result in approximately $712,000 of expenses in the first
               quarter of 2002;

               A related Subscription Agreement regarding the 5%
               convertible note and the Common Stock Purchase Warrant,
               granting, among other rights, registration rights of the
               exercise and or conversion of any of the notes and/or
               warrants described, protection against dilution in certain
               events, including the payment of dividends or splits or in
               the event of any merger where we are not the survivor, or
               any reclassification or capital reorganization, and call
               provisions for the benefit of the Company;

               A related Fund Escrow Agreement respecting the disbursement
               of the proceeds of the 5% convertible note and related
               matters; and

               A $3,750 5% convertible note to Barbara R. Mittman for legal
               services rendered regarding all of the foregoing on behalf
               of First York Partners convertible at the lesser of (i)
               $.08; or (ii) sixty-six and two-thirds percent (66-2/3%) of
               the average of the closing bid prices as reported by the
               NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ
               National Market System, American Stock Exchange, New York
               Stock Exchange or "Pink Sheets" (whichever of the foregoing
               is at the time the principal trading exchange or market for
               the common stock, the "Principal Market"), or if not then
               trading on a Principal Market, such other principal market
               or exchange where the common stock is listed or traded for
               the five trading days immediately preceding but not
               including a conversion date.

     *    We approved an Engagement Letter to engage Leonard W. Burningham,
          Esq. to perform certain legal services for us and that included
          the granting of warrants to Mr. Burningham to purchase 500,000
          shares of common stock at the exercise price equal to the lower of
          50% of the average bid price of the Company's common stock for the
          five trading days prior to the exercise of the warrant or $0.08 per
          share.  The Company estimates the issuance of these warrants for
          services will result in approximately $60,000 of expenses in the
          first quarter of 2002.

     All of these subsequent event matters were adopted by the Board of
Directors at a special meeting held on March 11, 2002, and are fully discussed
in an 8-K Current Report of the Company dated March 11, 2002, which is
incorporated herein by reference.  See Part III, Item 13.

     *    On April 1, 2002, we entered into an Exclusive License
          Agreement (the "Exclusive License Agreement") with
          Ascendiant-South America, LLC, a Nevada limited liability
                                5
<PAGE>
          corporation ("Ascendiant-South America"), whereby we granted to
          Ascendiant-South America an exclusive license to PHER-02, our
          developmental synthetic red blood cell product, the licensed process
          and all proprietary, formula, developmental, technological,
          intellectual property and patent rights, and all other applications
          of the above South America.

Business.
---------

     We are engaged in the development of a synthetic red blood cell product
called "PHER-O2."  The development of this product presently comprises our
sole business operations.  PHER-O2 is composed of perfluoro-decalin molecules,
or synthetic red blood cells, purified water and a proprietary, synthetic,
fluorinated surfactant, or wetting agent, to hold the emulsion together.
Perfluoro-decalin has great oxygen-carrying capacity, yet it can be as much as
25 times smaller than a red blood cell.  We believe that PHER-O2 can carry
three to four times the oxygen of human blood per unit volume. This increased
oxygen-carrying capacity would make PHER-O2 useful in the treatment of heart
attacks, strokes, cancer and other diseases for which increased oxygenation is
beneficial.  We also believe that perfluoro-decalin is effective as an imaging
agent in X-ray imaging, nuclear magnetic resonance imaging and CAT scans,
without side effects.  Our management estimates that PHER-O2 has several other
advantages over human blood: that it can be sterilized to be free of disease;
that it has the quality of a universal match for all blood types; that it can
be mass-produced; and that it can be stored much longer than human blood.

     We are concentrating our research and development efforts on completing
the emulsion of perfluoro-decalin and the synthetic surfactants that make up
PHER-O2.  We completed the compounding of PHER-O2, and we will perform initial
gross animal tests, which do not require regulatory approval prior to
commencement.  However, regulatory agencies may review the data gathered from
any of these tests.  We plan to manufacture the experimental doses of PHER-O2
required to conduct these tests.  Our second phase of development will
involve:

     *    seeking regulatory approval for gross animal testing and
conducting this testing; and

     *    the manufacturing of available product for this testing.

     In our third phase of operations, we intend to continue developing the
perfluorocarbon compounds in PHER-O2 in order to optimize its quality.  We
expect to begin animal safety and efficacy trials in accordance with FDA
guidelines and comparable foreign regulatory requirements.

     In our final phase, we intend to:

     *    complete United States testing of PHER-O2;

     *    seek all necessary FDA approvals and begin American and Canadian
sales for transfusion; and

     *    complete overseas testing in China and begin overseas sales there
and in other Asian countries.
                                6
<PAGE>
     In our final phase, we also intend to continue trials to test PHER-O2 for
other applications, including transplant organ preservation and treatment of
carbon monoxide poisoning, sickle cell anemia, heart attack and stroke.  We
will have to conduct similar rigorous testing and clinical trials of PHER-O2
for each desired application.

     PHER-O2 has not been tested on animals or humans; nor have we submitted
any application to any federal, state or foreign agency to seek authority for
such testing.  The development process will be time consuming and expensive.
It will also be subject to extreme governmental regulation.  We will have to
prove that our product is safe and efficacious for human use.  Until then, we
will have no potential for revenues from operations.  We can not assure you
that we will be able to raise the money necessary to develop PHER-O2 or that,
if we raise sufficient funds, that we will ever receive the necessary federal,
state or foreign agency approval to manufacture or market the product.

Principal Products or Services and their Markets.
-------------------------------------------------

     We have one lead product, PHER-O2. Our success hinges largely on the
success of this product.  We can not assure you that it will ever be
successful.  PHER-O2 is made up of perfluoro-decalin, which is a type of
perfluorocarbon that is harmless to humans and the atmosphere, purified water
and a proprietary surfactant to hold the emulsion together.  Perfluoro-decalin
gives the product its oxygen carrying ability.  The surfactant is non-toxic
and, being fluorinated, helps increase PHER-O2's oxygen carrying capacity and
emulsion stability.  We believe that the unique chemical nature of PHER-O2
will make it ideal for many medical applications, although each application
will be subject to the same types of rigorous testing, clinical trials and
governmental regulatory approval process.

     We believe that PHER-O2 has the following advantages over human blood:

     *    may carry three to four times the oxygen of human blood per unit
volume;

     *    free of HIV, hepatitis and other blood-borne disease;

     *    universal match for all blood types;

     *    may be mass-produced;

     *    may have a three-year shelf life;

     *    may be stored at room temperature;

     *    has controllable circulatory half-life; and

     *    may be 1/25th the size of a red blood cell.

     PHER-O2 is a second generation improved drug from Fluosol-DA, the only
synthetic red blood cell approved by the FDA.  This approval was completed
under the management of our President and CEO, Thomas C. Drees, Ph.D.
                                7
<PAGE>
     We believe that its unique qualities may make PHER-O2 ideal for blood
transfusions and numerous other medical applications, including:

     *     nuclear magnetic resonance imaging;

     *     CAT scans;

     *     cardioplegia, or the priming of heart-lung machines in open heart
surgery; and

     *     treatment of heart attacks, strokes, head and neck tumors and
hemorrhagic shock.

     We intend to fully exploit the immense worldwide market for these
applications.

     Blood transfusion represents a vast market for synthetic red blood cells.
The limited supply of safe donated blood is the largest constraint on the
number of transfusions given annually.  If a safe blood substitute were widely
available, more transfusions could be given to those who desperately need
them.

    We hope to fulfill this need with PHER-O2. The key ingredients in PHER-O2
are readily available in the United States from many manufacturers.  When
combined, using our proprietary emulsion process, we hope that the result will
be a plentiful alternative to donated human blood.

     Another disadvantage to the use of human blood in transfusions is
the waiting period while the donor's blood is being matched to the
recipient's.  Because we believe that PHER-O2 does not need to be matched to
the recipient's blood type, the use of PHER-O2 would eliminate this
potentially fatal wait, and increase its use in ambulances, emergency rooms
and battle fields.

     As HIV, hepatitis and other diseases have infected the world's blood
supply, the need for an absolutely sterile blood product has become
increasingly apparent.  There is currently no 100% effective method for
detecting blood-borne diseases and sterilization of donated blood is not
possible.  In light of these facts, PHER-O2's potential sterility makes it
especially attractive in comparison to donated blood with its risk of AIDS,
hepatitis and mad cow disease.

     PHER-O2's anticipated ability to carry up to four times the oxygen
of human blood makes it promising for many medical applications in which
increased oxygenation is vital. PHER-O2 molecules are up to 25 times smaller
than human red blood cells.  Management believes that this fact will make
PHER-O2 particularly useful for oxygenating organs through blocked arteries,
which are the primary cause of heart attack and stroke.

     One of our competitors had obtained in 1989 FDA approval under Dr Drees'
management for the use of a similar product in angioplasty, the treatment of
blocked arteries with small inflated balloons.  This application involves the
injection of the blood substitute into the artery past the inflated balloon.
As a result, the heart receives more oxygen, the treating physician can keep
the balloon inflated longer and the angioplasty is more effective than it
                                8
<PAGE>
would otherwise be.  This competitor announced in 1993 that it would no longer
manufacture its product, leaving us well positioned in this market segment.

     Management also believes that PHER-O2 will be ideal for use in
open-heart surgery.  Cardiac surgeons need an oxygen-carrying fluid that can
be used to prime the heart-lung bypass machines that are used mechanically to
pump and oxygenate heart patients' blood.  This procedure is known as
"cardioplegia."  Surgeons currently use saline, dextrose or hydroxyethyl
starch solutions for this purpose, but these fluids can dilute the red blood
cells in the body, and thus decrease the ability of the blood to carry
oxygen.
Moreover, the risk of infection from whole blood or its derivatives makes them
undesirable for use as priming fluids. PHER-O2's significant oxygen-carrying
ability and its sterility address both of these concerns.

     The treatment of head and neck tumors is another promising
application for PHER-O2.  Increased oxygenation of these tumors makes them
more susceptible to the effects of radiation and chemotherapeutic drugs.

     Another potential benefit of PHER-O2, though little understood, is the
ability of oxygen-rich blood to cause a tumor to produce hydrogen peroxide,
which in turn tends to shrink the tumor.

     The perfluoro-decalin molecule in PHER-O2 also works as a radiopaque
agent in X-ray imaging and as a contrast agent in nuclear magnetic
resonance imaging and CAT scans.  However, unlike many currently-available
imaging agents, PHER-O2 has no known side effects.

Competition.
------------

      Ten years ago there were 15 possible competitors.  Five companies are
still working to develop alternatives to human blood.  They include:

     *     Alliance Pharmaceutical Corporation of San Diego, California,
               (PFC);

     *     Biopure Corporation of Cambridge, Massachusetts, (cows blood);


     *     Hemasol, Inc. of Etobicoke, Ontario, Canada (outdated human
blood);

     *     Northfield Laboratories, Inc. of Evanston, Illinois, (outdated
human blood); and

     *     Synthetic Blood International, San Diego, Califronia, (PFC).

     Each of these competitors files reports with the Securities and Exchange
Commission and these reports are available for review in the Securities and
Exchange Commission's EDGAR Archives.  These competitors are involved in the
development of a wide variety of human blood substitutes, including synthetic
compounds, recycled outdated human blood and bovine hemoglobin.  Neither the
list of competitors nor the list of human blood substitutes is exhaustive.
                                9
<PAGE>
Furthermore, some of our existing or potential competitors have significantly
greater technical and financial resources than we do and may be better able to
develop, test, produce and market products.  These competitors may develop
products that are competitive with or better than our product and that may
render our product obsolete.  We can provide no assurance that we will be able
to compete successfully.  At the present time, the above five companies have
suspended clinical trials.

Sources and Availability of Raw Materials.
------------------------------------------

     We plan to purchase highly purified medical-grade perfluorocarbons and
surfactants from reliable vendors and to emulsify these ingredients in our own
or other facilities, depending upon funding.  FluoroMed, LP, F2 Chemicals,
Ltd. and KC America are qualified medical grade perfluorocarbon vendors.
Surfactants are available through several vendors.  Because intravenous
solutions manufacturing plants are very expensive and FDA approval of these
plants is a lengthy process, we intend to hire a third party to package the
product in sterile plastic bags with intravenous sets attached.  Abbott
Laboratories, Baxter, B. Braun Medical Inc., Fresenius Kabi, and Alliance
Medical Products, Inc. are a few of the companies with the qualifications and
capacity to perform this function.  However, we can not assure you that any of
these ingredients or services will be available or that they will be available
at prices that are low enough to make our operations profitable.

Patents, Trademarks, Licenses, Franchises, Concessions, Royalty Agreements or
Labor Contracts.
----------------

     We filed United States Application Patent Nos. 07/952/403 and 08/230/672,
covering PHER-O2, with the United States Patent Office on September 28, 1992
and April 21, 1994, respectively.  No patent has been issued, and we may have
to amend our patent application before any patent is issued, if ever.

     We filed European Application Patent No. (UK)EPO261802, covering PHER-O2,
with the European Patent Office on August 25, 1997.  No patent has been issued
and, and we may have to amend our patent application before any patent is
issued, if ever.

     We have formulated certain proprietary surfactants during the course of
our research and development activities.  The surfactant is mixed with the
basic chemical of our product, perfluoro-decalin, to maintain the small
particle size in the emulsion of PHER-O2 because the particle size of decalin
alone in the blood stream may quickly increase in size and block arteries and
veins.

     There is a dispute over the ownership of certain of these inventions with
Battelle Memorial Institute, the firm that we previously engaged to conduct
research and development for us on PHER-O2.  We intend to pursue our rights to
all of these inventions.  We clearly own five formulas, and the dispute is
over eight others which are very expensive and may never be used.

Governmental Approval of Principal Products or Services.
--------------------------------------------------------
                                10
<PAGE>
     The FDA and comparable foreign agencies require laboratory testing,
animal and human clinical testing and other costly and time-consuming
procedures before biomedical products such as PHER-O2 can be marketed.  To
date, we have not begun any of these procedures. Our plan for obtaining FDA
and overseas approval of PHER-O2 is set forth under the heading "Plan of
Operation" of the caption "Management's Discussion and Analysis or Plan of
Operation."

     We can not assure you that these testing procedures will be successfully
completed, that if completed, they will show PHER-O2 to be safe and
efficacious, or that we will obtain any required governmental approvals.  Nor
can we assure you that we will ever be permitted to market PHER-O2 in the
United States or most foreign countries.  The same holds true for any other
related products or proprietary rights that we may develop.

Effects of Existing or Probable Governmental Regulations.
---------------------------------------------------------

     Regulation by governmental authorities in the United States and
foreign countries will significantly affect our ability to manufacture and
market our product and to conduct our ongoing research and product development
activities.  Our lead product, PHER-O2, will require regulatory approval by
appropriate governmental agencies before it can be commercialized.  Human
therapeutic products are subject to rigorous pre-clinical and clinical testing
and other approval procedures by the FDA and similar health authorities in
foreign countries.  Various federal, state and foreign statutes also govern or
influence the manufacturing, safety, labeling, storage, record-keeping and
marketing of such products.  The process of obtaining these approvals is
costly and time consuming.  In addition, ongoing compliance with these
requirements can require the expenditure of substantial resources.  If we or
our collaborators or licensees fail to obtain or experience delay in obtaining
required regulatory approvals the marketing of our product and our ability to
derive product or royalty revenue would be severely limited.

     Pre-clinical testing is generally conducted in animal or in vitro
models to evaluate the potential efficacy and safety of a compound before it
is administered to humans.  The results of these studies are submitted to the
FDA as part of an Investigational New Drug application ("New Drug
Application"), which must be approved before human clinical testing can
begin.
No tests of any nature whatsoever have yet been run on PHER-O2, except,
successful stability tests.

     Clinical trials involve the administration of the investigational
new drug to healthy volunteers or to patients, under the supervision of a
qualified principal investigator.  Clinical trials are conducted in accordance
with certain standards under protocols that detail the objectives of the
study, the parameters to be used to monitor safety and the efficacy criteria
to be evaluated.  Each protocol must be submitted to the FDA as part of the
New Drug Application.  Further, each clinical study must be conducted under
the auspices of an independent investigational review board at the institution
where the study will be conducted.  Consideration will be given to ethical
factors, the safety of human subjects and the possible liability of the
institution, among other things.
                                11
<PAGE>
     Clinical trials are typically conducted in three sequential phases, but
the phases may overlap.  In the first phase, the product is usually infused
into a limited number of human subjects and will be tested for safety or
adverse effects, dosage tolerance and pharmacokinetics, or clinical
pharmacology.  The second phase involves studies in a somewhat larger patient
population to identify possible adverse effects and safety risks and to begin
gathering preliminary efficacy data.  The third phase of trials is designed to
further evaluate clinical efficacy and to further test for safety within an
expanded patient population at geographically dispersed clinical study sites.
Although we believe that our product is substantially different from other
synthetic blood products, we may encounter problems in clinical trials which
will cause us to delay or suspend them.

     In the case of biologic products such as PHER-O2, the results of
pharmaceutical development and the pre-clinical and clinical testing are
submitted to the FDA in the form of a Product License Application.  This
application must be approved before commercial sales may begin.  We must also
file an Establishment License Application, which describes the manufacturing
process for the product and the facility at which the product will be
produced.  The FDA may respond to the filings by granting a license for the
manufacture of the product from a designated facility and the commercial sale
of the product.  It may also deny the applications if it finds that the
applications do not meet the criteria for regulatory approval, require
additional testing or information or require post-marketing testing and
surveillance to monitor the safety of the product if it does not believe that
the applications contains adequate evidence of the safety and efficacy of the
drug.  Despite the submission of this data, the FDA may ultimately
decide that the application does not satisfy its regulatory criteria for
approval.  The testing and approval process is likely to require substantial
time and effort.  We can not guarantee that approval will be granted for
our product or our proposed facilities on a timely basis, if at all.

     In addition to regulations enforced by the FDA, we may also be subject to
regulation under the Occupational Safety and Health Act; the Environmental
Protection Act; the Toxic Substances Control Act; the Resource Conservation
and Recovery Act; the Comprehensive Environmental Response, Compensation and
Liability Act; the National Environmental Policy Act; the Clean Air Act; the
Medical Waste Tracking Act; the federal Water Pollution Control Act; and other
present and potential federal, state, local and foreign regulations.

Cost and Effect of Compliance with Environmental Laws.
------------------------------------------------------

     Management believes that all of the substances making up PHER-O2 are
inert and non-toxic and that no toxic or hazardous materials will be
byproducts of the manufacturing process of PHER-O2.  PHER-O2 is totally
inert.
Accordingly, we do not believe that we will have any material expenditures for
compliance with environmental laws, rules or regulations.

Research and Development Expenses.
----------------------------------

     Since inception we have expended a total of approximately $1,199,297 on
research and development.  During years ended December 31, 2001 and 2000,
research and development expense was $188,007 and $67,485, respectively.  None
of these costs were borne by customers or others.
                                12
<PAGE>
Number of Employees.
--------------------

     We presently have three employees, our Chairman, President and CEO,
Thomas C. Drees, Ph.D.; our Chief Financial Officer, David E. Nelson; and our
Vice Chairman and Secretary/Treasurer, Anthony G. Hargreaves.  Dr. Drees and
Mr. Hargreaves are employed full time.  If we are able to commence initial
animal testing and manufacturing of this product for these tests, we will need
additional employees.  We are presently unable to estimate the exact number of
employees that we may need for these services.

Item 2.  Description of Property.
         ------------------------

     We lease approximately 970 square feet of office space located at 101
East Green Street, Suite 11, Pasadena California, 91105, at a base rent of
$1,764.20 per month.  The lease runs through April 30, 2004.
Item 3.  Legal Proceedings.
         ------------------

     We are not a party to any pending legal proceeding.  To the knowledge of
management, no federal, state or local governmental agency is presently
contemplating any proceeding against us.  No director, executive officer or
other person who may be deemed to be our "affiliate" or who is the owner of
record or beneficially of more than five percent of our common stock is a
party adverse to us or has a material interest adverse to us in any
proceeding.

Item 4.  Submission of Matters to a Vote of Security Holders.
         ----------------------------------------------------

     None; not applicable.

                                  PART II

Item 5.  Market for Common Equity and Related Stockholder Matters.
         ---------------------------------------------------------

Market Information.
-------------------

     The Company's common stock commenced to trade on the "OTC
Bulletin Board" of the National Association of Securities Dealers, Inc.
("NASD") in the second quarter of 1994 under the symbol "SGNC."

     The range of high and low bid quotations for the Company's common stock
during the each quarter of the year ended December 31, 1999, each quarter of
the calendar year ended December 31, 2000, and each quarter of the calendar
year ended December 31, 2001, is shown below.  Prices are inter-dealer
quotations as reported by the NASD and do not necessarily reflect
transactions, retail markups, mark downs or commissions.
                                13
<PAGE>
<TABLE>
<CAPTION>
                             STOCK QUOTATIONS*

                                                  BID

Quarter ended:                          High                Low
--------------                          ----                ---

<S>                                     <C>                 <C>
March 31, 1999                          $0.16               $0.10

June 30, 1999                           $0.11               $0.08

September 30, 1999                      $0.09               $0.07

December 31, 1999                       $0.50               $0.09

March 31, 2000                          $1.90625            $0.23

June 30, 2000                           $1.50               $0.625
September 30, 2000                      $0.8125             $0.3125

December 31, 2000                       $0.22               $0.665

March 31, 2001                          $.32                $.1875

June 30, 2001                           $.50                $.17

September 30, 2001                      $.32                $.15

December 31, 2001                       $.21                $.11
</TABLE>

          *    The future sale of presently outstanding "restricted
               securities" (common stock) of the Company by present members of
               management and others may have an adverse effect on any market
               in the shares of common stock of the Company.  See the heading
               " Recent Sales of Unregistered Securities," below.

Recent Sales of Unregistered Securities.
----------------------------------------

     The following "restricted securities" of the Company were sold during the
past three calendar years:

                         Number of
Name                   Shares or Units         Date            Consideration
----                   ---------------         ----            -------------
Nine subscribers        52,777                  4/28/99         $  9,499
under Rule 506
offering

12 subscribers          46,329                  5/31/00         $ 23,900
under Rule 506
offering

Four subscribers     1,635,970 (2)               9/1/00         $817,985
under Laidlaw
Offering

Five members of
the Advisory Board     530,000 (3)              11/2000-1/2002  Services
                                14
<PAGE>

NB, Inc.               250,000 (4)               5/2001         Services

Laidlaw Global
Securities, Inc.       327,194 (2)               5/2001         Warrant Ex

Five subscribers       840,195 (5)              11/2001         Sub-Merger
from California
Corporation

          (1)  Various prices from $0.10 to $0.25 per share in cash and/or
services.

          (2)  We sold 1,635,970 units in the Laidlaw Private Offering.  Each
unit consisted of two shares of our common stock and one redeemable warrant
entitling the holder to purchase one share of our common stock at a price of
$0.40 per share. This exercise price has been reduced to $0.35 per share
because the Company's registration statement was not filed within 30 days of
the closing of the offering.  Laidlaw received warrants to acquire 10% of
these units as part of its compensation.

          (3) See the caption "Executive Compensation" of the Registration
Statement.

          (4) Miscellaneous public relations services.

          (5) Issued in connection with the acquisition of the remaining 6%
interest in our 94%-owned subsidiary, Sanguine California.

     We issued all of these securities to persons who were either "accredited
investors," or "sophisticated investors" who, by reason of education, business
acumen, experience or other factors, were fully capable of evaluating the
risks and merits of an investment in our company; and each had prior access to
all material information about us.  We believe that the offer and sale of
these securities was exempt from the registration requirements of the
                                15
<PAGE>
Securities Act, pursuant to Sections 4(2) and 4(6) thereof, and Regulation D
of the Securities and Exchange Commission and from various similar state
exemptions.

Holders.
--------

     The number of record holders of the Company's common stock as of
March 27, 2002, was approximately 525.

Dividends.
----------

     We have not declared any cash dividends on our common stock, and do not
intend to declare dividends in the foreseeable future.  Management intends to
use all available funds for the development of Sanguine's business.  There are
no material restrictions limiting, or that are likely to limit, our ability to
pay dividends on our common stock.

Item 6.  Management's Discussion and Analysis or Plan of Operation.
         ----------------------------------------------------------

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

     We have not commenced planned principal operations, but have made good
progress since the end of fiscal 1998, in formation and stability testing.

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

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

          Stage B (approximately one year): In the second year, we intend
          to prepare New Drug Applications for FDA, European, Chinese and
          South American approval, conducted in the United States and
          overseas.  During this period, we also plan to submit license
          applications for transfusion with overseas authorities, begin
                                16
<PAGE>
          production of PHER-O2 itself or with our subcontractors and submit a
          New Drug Application for PHER-O2 in the United States. During the
          course of Stage B, we estimate that we will need to hire a few
          additional employees.  Estimated cost is $5,000,000, divided as
          follows: Prepare and file United States, European, Chinese and South
          American New Drug Applications, $600,000; conduct human safety and
          efficacy trials through a subcontractor in the United States and
          overseas, $3,200,000; set-up pilot facility, or subcontract, to
          manufacture small quantities of PHER-O2 for use in testing and in
          connection with the New Drug Applications, $500,000; submit license
          applications for use of PHER-O2 in transfusions overseas, $200,000;
          and administrative, patent and proprietary right protection and
          marketing costs, $500,000.

          Stage C (approximately one year): In the third year, we plan to
          complete overseas testing of PHER-O2, begin sales in Europe, China,
          and South America and other overseas areas that may have approved
          PHER-O2 by this time and may begin construction of facility for
          manufacturing, storing, inspecting and shipping PHER-O2. During the
          course of Stage C, we estimate that we will need to hire additional
          employees.  During the third year, we plan to complete testing of
          PHER-O2 in the United States and receive all necessary FDA approvals
          and begin American, South American, Chinese and Canadian sales for
          cancer treatment and angioplasty.  During this period, we also plan
          to subcontract this process, and continue trials of other PHER-O2
          applications, including transplant organ preservation and treatment
          of carbon monoxide poisoning, sickle cell anemia, stroke and heart
          attack.  The estimated cost for Stage C is $25,000,000, divided as
          follows:  Complete human safety and efficacy clinical trials and
          obtain United States and overseas agency approval of PHER-O2,
          $13,000,000; subcontract with major emulsifying firm, $5,000,000;
          recruit and train sales force of the United States and foreign
          markets, $5,000,000; and administrative, patent and proprietary
          right protection and marketing costs, $2,000,000.

     These cost estimates are based upon the prior experience of
Thomas C. Drees, Ph.D., our President and CEO.  Dr. Drees has more than 30
years' experience in the blood industry.

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

     *     manufacture experimental doses of  PHER-O2; and

     *     perform preliminary animal tests in accordance with FDA and

     *     comparable foreign overseas regulations.

     In January, 2001, we engaged IriSys, Inc. ("IriSys") to provide us with
expertise in preformulation development, analytical chemistry and stability
protocol design and testing, including preparation of regulatory standards
required to achieve regulatory compliance for our principal product, PHER-O2,
to produce bottled PHER-02 for animal trials, and to conduct stability
trials.  We were successful in developing improved formulations of our
surfactants.
                                17
<PAGE>
     In March, 2002, we granted an Exclusive License Agreement for parts of
Asia regarding PHER-02 and related technology and patents to Ascendiant-Asia
and Ascendiant-South America.

     Our ability to carry out our plan depends entirely upon our ability to
obtain additional substantial equity, debt financing or royalties.  We can not
assure you that we will receive this financing, and except for the possibility
of receiving funds from the exercise of outstanding warrants, we do not have
any arrangements that would ensure us any funding.  If we do not receive it,
we will not be able to proceed with our business plans.

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

     Revenues for the calendar years ending December 31, 2001 and 2000 were $0
and $0, respectively.  We had no material operations, except the research and
development activities related to our subcontracted research and development
of our product.

     We realized a net loss of ($1,037,570), with a loss of ($.04) per share
during the calendar year ended December 31, 2001, and a net loss of
$(1,444,616), with a loss of $(0.06) per share for the year ending
December 31, 2000.

     Our research and development expenses were $188,007 in 2001, compared to
$67,485 in 2000.  The increase in 2001 was for developmental expenses related
to our research and development contract with IriSys.

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

     As of December 31, 2001, we had $23,445 in cash, with $2,100,989 in
current liabilities.

     During the calendar year ended December 31, 2001, we had net expenses of
$918,166, while receiving $0 in revenues.  We received no revenues, and
had total expenses of $1,409,670 during the calendar year ended December 31,
2000.

     Cash resources at December 31, 2001 and 2000 were $23,445 and $531,952,
respectively.  Liquidity was provided through the sale of our common stock in
2000 in the net amount of $635,320.

Item 7.  Financial Statements.
         ---------------------

          Financial Statements for the years ended
          December 31, 2001, and December 31, 2000

          Independent Auditors Report

          Balance Sheet - December 31, 2001 and 2000
                                18
<PAGE>
          Statements of Operations Accumulated for the
          Period January 18, 1990 to December 31, 2001
          and the Years ended December 31, 2001
          and 2000

          Statements of Stockholders' Equity January 18,
          1990 to December 31, 2001

          Statements of Cash Flows Accumulated for the
          Period January 18, 1990 to December 31, 2001
          and the Years Ended December 31, 2001 and 2000

          Notes to Financial Statements
                                19
<PAGE>
                      SANGUINE CORPORATION
                Consolidated Financial Statements
                    December 31, 2001 and 2000
<PAGE>
                                                                 SANGUINE CORP
                                    Index to Consolidated Financial Statements


                                                                 Page


Independent Auditors' Report                                      F-2

Consolidated Balance Sheet                                        F-4

Consolidated Statement of Operations                              F-5

Consolidated Statement of Stockholders' Deficit                   F-6

Consolidated Statement of Cash Flows                              F-9

Notes to Consolidated Financial Statements                        F-10
                               F-1
<PAGE>
                                                  INDEPENDENT AUDITORS' REPORT


To the Board of Directors and Stockholders of
Sanguine Corporation

We have audited the accompanying consolidated balance sheet of Sanguine
Corporation (a development stage company) as of December 31, 2001  and 2000,
and the related consolidated statements of operations, stockholders' deficit
and cash flows for the years then ended and cumulative amounts from
January 18, 1990 (date of commencement of development stage) through December
31, 2001.  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 audits.

We conducted our audits in accordance with generally accepted auditing
standards of the United States of America.  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
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
audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Sanguine
Corporation as of December 31, 2001 and 2000, and the results of their
operations and their cash flows for the years then ended and cumulative
amounts from January 18, 1990 (date of commencement of development stage)
through December 31, 2001, in conformity with generally accepted accounting
principles of the United States of America.

The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern.  As discussed in Note 2 to
the consolidated financial statements, the Company has a deficit in working
capital, a stockholders' deficit, has not generated revenues from operations,
and has incurred significant losses since inception.  These conditions raise
substantial doubt about its ability to continue as a going concern.
Management's plans regarding those matters also are described in Note 2.  The
consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.


/s/TANNER + CO.
Salt Lake City, Utah
March 12, 2002
                               F-3
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                                    Consolidated Balance Sheet

                                                                  December 31,

-----------------------------------------------------------------------------
<S>                                             <C>            <C>
                      Assets                         2001          2000

Current assets - cash                                $23,445        $531,952
Prepaid expense                                       69,375               -

                                                      92,820         531,952

Property and equipment less accumulated
 depreciation of $4,609 for 2001 and 2000                  -               -

                                                     $92,820        $531,952

            Liabilities and Stockholders' Deficit

Current liabilities:
     Related party payables                         $192,548        $136,845
     Accrued salaries                                644,000         584,000
     Accrued interest payable                        172,095          59,695
     Other accrued expenses                            2,369           2,369
     Notes payable                                 1,089,977         938,143

                Total current liabilities          2,100,989       1,721,052

Commitments                                                -               -

Stockholders' deficit:

       Common stock 100,000,000 shares
         authorized, $.001 par value;
         30,603,577 and 28,111,188
         shares issued and outstanding,
         respectively                                 30,604          28,111
       Paid-in capital                             2,152,824       1,936,816
       Deficit accumulated during the
         development stage                        (4,191,597)     (3,154,027)

                 Total stockholders' deficit      (2,008,169)     (1,189,100)

                 Total liabilities and
                   stockholders' deficit             $92,820        $531,952
</TABLE>
          See accompanying notes to consolidated financial statements.
                               F-4
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                          Consolidated Statement of Operations

                                    Years Ended December 31,
<S>                                <C>         <C>          <C>
                                       2001          2000        Cumulative
                                                                   Amounts
Revenue                             $        -   $        -     $  150,000

Research and development              (188,007)     (67,485)    (1,199,297)

Consulting                            (369,125)    (369,000)    (1,035,645)

General and administrative expenses   (361,034)    (973,185)    (2,077,039)

         Loss from operations         (918,166)  (1,409,670)    (4,161,981)

Other income (expense):

       Interest income                  12,831        9,780         27,453
       Interest expense               (132,235)     (44,726)      (263,534)

         Loss before benefit for
                income taxes        (1,037,570)  (1,444,616)    (4,398,062)

Benefit for income taxes                     -            -              -

         Net loss                  $(1,037,570) $(1,444,616)   $(4,398,062)

         Loss per common share -
         basic and diluted         $      (.04)   $    (.06)

         Weighted average shares
         - basic and diluted        28,783,000   25,073,000
</TABLE>
          See accompanying notes to consolidated financial statements.
                               F-5
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                               Consolidated Statement of Stockholders' Deficit

                                                       Period January 18, 1990
                                   (Date of Commencement of Development Stage)
                                                     Through December 31, 2001
<CAPTION>
                                                          Deficit
                                                        Accumulated
                                             Additional During the
                              Common Stock     Paid In  Development
                           Shares     Amount   Capital     Stage      Total
<S>                     <C>        <C>      <C>         <C>       <C>
Balance, January 1, 1990
Retroactively Restated   1,428,364 $ 1,428 $2,423,214 ($2,464,642) $  (40,000)

Issuance of common stock
for cash                         -       -          -           -           -

Balance, December 31,
1990                     1,428,364   1,428  2,423,214  (2,464,642)    (40,000)

Net Income                                                 73,917      73,917

Balance, December 31,
1991                     1,428,364   1,428  2,423,214  (2,390,725)     33,917

Common Stock Issued for
Services ($0 Per Share)      2,720       2          -           -           2

Contributed Capital by
Officer                          -       -        750           -         750

Net Loss                         -       -          -     (77,011)    (77,011)

Balance, December 31,
1992                     1,431,084   1,430  2,423,964  (2,467,736)    (42,342)

Common Stock Issued to
Acquire 94% of Outstanding
Shares of Sanguine
Corporation (A California
Corporation)            14,589,775  14,590          -     (14,590)          -

Common Stock Issued for
Cash ($.22 Per Share)      510,000     510    109,490           -     110,000

Net Loss                         -       -          -     (92,895)    (92,895)

Balance, December 31,
1993                    16,530,859  16,530  2,533,454  (2,575,221)    (25,237)

Quasi-Reorganization Restated
of Equity Accounts               -       - (2,423,964)  2,423,964           -

Common Stock issued for
cash ($.39 Per Share)      191,000     191     74,809           -      75,000

Net Loss                         -       -          -    (230,779)   (230,779)

Balance, December 31,
1994                    16,721,859  16,721    184,299    (382,036)   (181,016)

Common Stock issued for:
Debt and payables ($.11
per share)               1,216,000   1,216    128,048           -     129,264
Services ($.13 per share)1,625,000   1,625    201,500           -     203,125

Net Loss                         -       -          -    (366,843)   (366,843)
                               F-6
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                               Consolidated Statement of Stockholders' Deficit

                                                       Period January 18, 1990
                                   (Date of Commencement of Development Stage)
                                                     Through December 31, 2001

                                                          Deficit
                                                        Accumulated
                                             Additional During the
                              Common Stock     Paid In  Development
                           Shares     Amount   Capital     Stage      Total

Balance, December 31,
1995                    19,562,859  19,562    513,847    (748,879)   (215,470)

Common Stock Issued for:
Cash ($.25 per share)       10,000      10      2,490           -       2,500
Debt and payables ($.25
per share)                 325,506     326     80,605           -      80,931
Services ($0 per share)    979,358     979          -           -         979

Net Loss                         -       -          -    (210,017)   (210,017)

Balance, December 31,
1996                    20,877,723  20,877    596,942    (958,896)   (341,077)

Common stock Issued
for Services ($.09 per
share)                     100,000     100      9,234           -       9,334

Net Loss                         -       -          -    (166,212)   (166,212)

Balance, December 31,
1997                    20,977,723  20,977    606,176  (1,125,108)   (497,955)


Common Stock issued for:
Cash ($.10 per share)    1,218,000   1,218    120,982           -     122,200
Debt and payables ($.22
per share)                 240,000     240     52,887           -      53,127
Services ($.12 per share)  674,494     675     77,952           -      78,627

Shares canceled           (100,000)   (100)       100           -           -

Net Loss                         -       -          -  (  366,439)   (366,439)

Balance, December 31,
1998                    23,010,217  23,010    858,097  (1,491,547)   (610,440)

Common Stock issued for:
Cash ($.18 per share)       52,777      53      9,447           -       9,500
Services ($0.10 per share) 100,000     100      9,900           -      10,000

Net Loss                         -       -          -  (  217,864)   (217,864)

Balance, December 31,
1999                    23,162,994 $23,163  $ 877,444 ($1,709,411)   (808,804)

Common stock issued for:
Cash ($.19 per share)    3,318,269   3,318    632,002           -     635,320
Services ($.26 per share)1,629,925   1,630    427,370           -     429,000

Net loss                         -       -          -  (1,444,616) (1,444,616)

Balance at December 31,
2000                    28,111,188 $28,111 $1,936,816 $(3,154,027)$(1,189,100)

                               F-7
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                               Consolidated Statement of Stockholders' Deficit

                                                       Period January 18, 1990
                                   (Date of Commencement of Development Stage)
                                                     Through December 31, 2001

                                                          Deficit
                                                        Accumulated
                                             Additional During the
                              Common Stock     Paid In  Development
                           Shares     Amount   Capital     Stage      Total

Common stock issued for:
 Services ($.25 per share) 125,000     126     31,125           -      31,251
 Services ($.23 per share)  75,000      75     17,175           -      17,250
 Services ($.13 per share) 825,000     825    103,125           -     103,950
 Services ($.17 per share)  50,000      50      8,500           -       8,550
 Prepaid services ($.23
  per share)               250,000     250     57,250           -      57,500
 Commission of private
  placement sale of common
  stock in 2000            327,194     327       (327)          -           -
 Acquisition of subsidiary
  stock held by minority
  shareholders             840,195     840       (840)          -           -

Net Loss                         -       -          -  (1,037,570) (1,037,570)

Balance at December 31,
2001                    30,603,577 $30,604 $2,152,824 $(4,191,597)$(2,008,169)
</TABLE>
                               F-8
<PAGE>
<TABLE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                          Consolidated Statement of Cash Flows

                                        Years Ended December 31
<S>                                     <C>           <C>         <C>
                                             2001          2000    Cumulative
                                                                     Amounts
Cash flows from operating activities:

Net loss                                 $(1,037,570)$(1,444,616) $(4,191,597)
 Adjustments to reconcile net loss to
 net cash used in operating activities:
   Depreciation and amortization                   -           -        4,609
   Common stock issued for services          161,001     429,000    1,027,802
   Note payable issued for services                -     699,200      699,200
   Recognition of prepaid services           208,125           -      208,125
   Increase (decrease) in:
       Accounts payable                       55,703      58,165      192,549
       Accrued interest payable              112,400      20,815      172,095
       Accrued liabilities                         -       2,369        2,369
       Accrued salaries                       60,000      60,000      644,000

       Net cash used in
       operating activities                 (440,341)   (175,067)  (1,240,848)

Cash flows from investing activities-              -           -       (4,609)

Cash flows from financing activities:

       Increase (decrease) in notes
       payable                               (68,166)     70,637      170,777
       Issuance of common stock                    -     635,320    1,097,375
       Contributed capital                         -           -          750

       Net cash provided by
       financing activities                  (68,166)    705,957    1,268,902

       Net (decrease) increase in cash      (508,507)    530,890       23,445

Cash, beginning of period                   531,952        1,062           -

Cash, end of period                        $ 23,445     $531,952    $ 23,445
</TABLE>
                               F-9
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000


1.     Organization and Significant Accounting Policies

The Company was incorporated January 27, 1974, in the State of Utah, using the
name Sight and Sound Systems, Inc.  On July 8, 1974, the Company changed its
name to International Health Resorts, Inc., and on June 25, 1993, the Company
filed a Certificate of Amendment changing the name to Sanguine Corporation.
In May of 1992, the Company changed its domicile to the State of Nevada.

The Company is engaged in developing synthetic red blood cells to be used by
the medical profession.  The Company is conducting research and development
leading to F.D.A. clinical trials.

On June 14, 1993, the Company entered into an Agreement and Plan of
Reorganization, wherein it was agreed that Sanguine Corporation (a Nevada
Corporation) would issue 14,589,775 shares of its common stock to acquire 94%
of the issued and outstanding shares of stock of Sanguine Corporation (a
California Corporation).  During the year ended December 31, 2001, the Company
acquired the remaining 6% of the California corporation in exchange for the
issuance of 840,195 shares of common stock.

Development Stage Company

The Company is considered a development stage Company as defined in SFAS No.
7.  The Company is devoting substantially all of its efforts to research and
development and obtaining financing.  Principal operations have not  commenced
and no significant revenues have been derived from operations since inception.
The Company has, at the present time, not paid any dividends and any dividends
that may be paid in the future will depend upon the financial requirements of
the Company and other relevant factors.

Concentration of Credit Risk

The Company maintains its cash in bank deposit accounts which, at times, may
exceed federally insured limits.  The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash and cash equivalents.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities
of three months or less to be cash equivalents.
                               F-10
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000


1.     Organization and Significant Accounting Policies Continued

Property and Equipment

Property and equipment are recorded at cost, less accumulated depreciation.
Depreciation and amortization are computed using the straight-line method over
the estimated useful lives of the assets or terms of the lease, which range
from 3 to 5 years.  Expenditures for maintenance and repairs are expensed when
incurred and betterments are capitalized.  Gains and losses on sale of
property and equipment are reflected in the statement of operations.

Use of Estimates in Financial Statements

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 and 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.

Income Taxes

The Company accounts for income taxes using the asset and liability method.
Under the asset and liability method, deferred tax assets and liabilities are
recognized for future tax consequences attributable to differences between the
financial statement carrying amounts of existing assets and liabilities and
their respective tax bases.  Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or settled.
The effect on deferred tax assets and liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date.

Loss Per Share

The computation of basic loss per common share is based on the weighted
average number of shares outstanding during each period.
                               F-11
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

1.     Organization and Significant Accounting Policies Continued

Loss Per Share-continued

The computation of diluted loss per common share is based on the weighted
average number of shares outstanding during the year plus the common stock
equivalents which would arise from the exercise of stock options and warrants
outstanding using the treasury stock method and the average market price per
share during the year.  Options and warrants to purchase, 2,270,209  shares of
common stock at prices ranging from $.1275 to $.40 per share were outstanding
at December 31, 2001 and 2000, but were not included in the diluted loss per
share calculation because the effect would have been antidilutive.

Reclassifications

Certain amounts in the 2000 financial statements have been reclassified to
conform with the presentation of the current year financial statements.

2.     Going Concern

As of December 31, 2001, the Company's revenue generating activities are not
in place, and the Company has substantial recurring net losses from
operations.  In addition, the Company had an accumulated deficit and a working
capital deficit.  These factors raise substantial doubt about the Company's
ability to continue as a going concern.

The Company depends heavily on its ability to raise additional funds through
equity or debt financing activities.  There can be no assurance that such
funds will be available to the Company, or available on terms acceptable to
the Company.  If the Company is unable to raise such funds, it may be unable
to commence fully, or continue, operations or generate revenues.
                               F-12
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000


3.     Prepaid Expense

In April 2001, the Company entered into two consulting agreements in which the
consultants would provide financial, general business, and strategic planning
services.  As compensation for one consulting agreement, the Company issued
250,000 shares of its common stock at $0.23 per share.  The Company recorded
$57,500 of prepaid expense and has recognized the expense ratably over the one
year term of the consulting agreement. For the second consulting agreement,
the Company's President transferred 1,000,000 of his personal shares of common
stock in the Company as prepayment of the consulting fees.  The Company
recorded $220,000 of prepaid expense and a note payable to the Company's
President based on the current market price of the Company's common stock of
$0.22 per share (see note 4).  The Company has recognized the expense ratably
over the one year term of the consulting agreement.  At December 31, 2001 the
Company continued to carry $69,375 of prepaid expense and had recognized
$208,125 of consulting expense related to these agreements.

4.    Notes Payable

Notes payable consist of the following as of December 31,:

                                                 2001           2000

          Unsecured note payable to an officer
          of the Company due on demand, payable
          through the issuance of 1,600,000 shares
          of common stock as repayment for
          personally - held shares of the officer
          that were issued as payment of a Company
          obligation; the face value of the note is
          based on the market price per share on the
          date of transfer by the officer; interest
          is computed at 12% per year               $699,200   $      -

                               F-13
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

4.   Notes payable continued

          Unsecured note payable to an officer of
          the Company, due on demand, payable
          through the issuance of 1,000,000 shares
          of common stock as repayment for
          personally-held shares of the officer that
          were issued as payment of a Company
          obligation; the face value of the note is
          based on the market price per share on the
          date of transfer by the officer; interest
          is computed at 12% per year                 220,000           -

          Unsecured notes payable to an
          officer of the Company, due on demand,
          interest at 12% per annum                   198,943      128,306

          Unsecured note payable to an
          individual, due on demand,
          interest at 10% per annum,
          convertible into common stock
          at $.4252 per share.                         15,000       15,000

          Unsecured note payable to a
          partnership, due on demand,
          at 12% per annum interest                    25,000       25,000

                                                     $938,143     $168,306
5.     Income Taxes

The benefit for income taxes is different than amounts which would be provided
by applying the statutory federal income tax rate to loss before benefit for
income taxes for the following reasons:

                                         Years Ended
                                         December 31,
                                      2001          2000    Cumulative Amounts
          Income tax benefit at
           statutory rate           $387,000     $539,000       $1,640,000
                               F-14
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

          Expiration of net operating
            loss carryforwards             -           -         (247,000)
          Change in valuation
            allowance               (387,000)   (539,000)      (1,393,000)
                                    $      -     $     -         $      -

          Deferred tax assets are comprised of the following:

                                                    December 31,
                                                 2001            2000
          Net operating loss
          carryforwards                        $1,153,000        $788,000
          Accrued officers' salaries              240,000         218,000
          Valuation allowance                  (1,393,000      (1,006,000)
                                               $      -        $      -

At December 31, 2001, the Company had net operating loss carryforwards of
approximately $3,091,000.  These carryforwards are available to offset future
taxable income and begin to expire in 2007.  The amount of the loss
carryforwards which may be used is dependent upon the tax laws in effect at
the time the net operating loss carryforwards can be utilized.  The Tax Reform
Act of 1986 significantly limits the annual amount that can be utilized for
certain of these carryforwards as a result of a substantial change in
ownership that took place in a prior year.

A valuation allowance has been established that offsets the net deferred tax
asset because there is significant uncertainty surrounding its ultimate
realization.  The uncertainty is caused by the Company's recurring losses and
the annual limits referred to above.
                               F-15
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000


6.     Related Party Transactions

At December 31, 2001 and 2000, related party notes payable consist of the
following:

Unsecured note payable to an officer of the Company due on demand, payable
through the issuance of 1,600,000 shares of common stock as repayment for
personally - held shares of the officer that were issued as payment of a
Company obligation.  The face value of the note of $699,200 is based on the
market price per share on the date of transfer by the officer.  Interest is
computed at 12% per year.

Unsecured note payable to an officer of the Company, due on demand, payable
through the issuance of 1,000,000 shares of common stock as repayment for
personally-held shares of the officer that were issued as payment of a Company
obligation.  The face value of the note of $220,000 is based on the market
price per share on the date of transfer by the officer.  Interest is computed
at 12% per year.

Unsecured notes payable to an officer of the Company in the amount of
$198,943, due on demand, with interest at 12% per year.

Accrued interest on the related party notes total $166,510 and $58,941 at
December 31, 2001 and 2000, respectively, while interest expense on the notes
totaled $127,735 and $40,226 for the years ended December 31, 2001 and 2000,
respectively.

Accounts payable included amounts owed to officers of the Company as
reimbursement of Company expenses paid by such officers of $192,548 and
$136,845, respectively.
                               F-16
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

7.     Supplemental Cash Flow Information

Actual amounts paid for interest and income taxes are as follows:

                                             Years Ended
                                             December 31,
                                           2001       2000  Cumulative Amounts
          Interest                        $19,834   $5,171        $114,883
          Income taxes                    $    -    $    -        $     -

During the year ended December 31, 2001:

     *     The Company issued 250,000 shares of common stock valued at
          $57,500 as pre-payment of consulting services.  Such prepaid
          consulting services are being recognized over the term of the
          consulting agreement, which is 1 year.

     *    The Company recorded a note payable of $220,000 for repayment of
          1,000,000 shares of common stock personally held by an officer of
          the Company issued as pre-payment of consulting services for the
          Company.  Such prepaid consulting services are being recognized
          over the term of the consulting agreement, which is 1 year.

8.     Minority Interest

Sanguine Corporation (California) had a total of 6,586,800 shares of its
common stock issued and outstanding at June 14, 1993.  Pursuant to the
Agreement and Plan of Reorganization, Sanguine Corporation (Nevada) acquired
6,200,000 of the issued and outstanding shares.  The resulting 386,800 shares
of minority interest in the California Corporation represented approximately
six percent (6%) of the Company's outstanding stock.  No provision for
minority interest has been made on the financial statements because of the
losses incurred in the presented periods and the deficit stockholders' equity
of California.
                               F-17
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000
8.   Minority Interest Continued

In November 2001 Sanguine Corporation (Nevada) acquired the remaining 386,800
shares of Sanguine Corporation (California) through the issuance of 840,195
shares of common stock.  As of that date, Sanguine Corporation (California)
became a 100% owned subsidiary.

9.     Commitments

Operating Leases

The Company leases office space under an operating lease agreement.  Future
minimum rental payments under the noncancellable operating lease as of
December 31, 2001 is approximately as follows:

           Year Ending December 31,                         Amount
                   2002                                      21,318
                   2003                                      21,900
                   2004                                       7,364

                      Total future minimum rental payments  $50,582

Rent expense related to operating leases was approximately $21,000 and $13,000
for the years ended December 31, 2001 and 2000, respectively.

At the present time the Company's President reimburses the Company $596 each
month for space he utilizes for non company purposes.

Employment Agreements

As of December 31, 2001, the Company has two employment agreements with
officers. The agreements provide for the payment of salaries, stock and stock
options and have terms which shall continue until January 2007.
                               F-18
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

10.     Stock Options and Warrants

Pursuant to the Agreement and Plan of Reorganization dated June 14, 1993, the
Company issued an option to an officer of the Company to purchase 470,642
shares of its common stock at $.1275 per share.   The option expires on
September 22, 2006.  The option issued by Sanguine Corporation (Nevada
Corporation) replaced options issued by the California Corporation to an
officer as part of his compensation for services.  When the option was issued
by the Company the shares of the Company had no market value.

In connection with the Company's September 2000 private placement, 1,799,567
warrants to purchase the common stock were issued.  The warrants are
exercisable at $0.35 per share, and expire August 29, 2004.  At December 31,
2001 all of the warrants remain outstanding.

The following table summarized information about stock options and warrants
outstanding at December 31, 2001:

                           Outstanding                   Exercisable
                                 Weighted
                                  Average   Weighted                 Weighted
            Range                Remaining  Average                  Average
           Exercise    Number   Contractual Exercise    Number   Excercisable
            Prices  Outstanding     Life      Price  Exercisable      Price
            $.1275     470,642    4.7 years  $.1275   470,642      $.1275
             .35     1,799,567    2.7 years   .35   1,799,567       .35

         $.1275-.35  2,270,209    3.1 years  $.30   2,270,209      $.30

11.    Fair Value of Financial Instruments

The Company's financial instruments consist of cash and payables. The carrying
amount of cash and payables approximates fair value because of the short-term
nature of these items.
                                    F-19
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000

12.    Subsequent Events

On March 11, 2002, the Company entered into the following transactions:

In order to engage the services of certain individuals and entities for their
assistance in capital raising activities the Company entered into the
following transactions:

*    The Company entered into an exclusive license agreement with an entity by
     granting the exclusive license rights to its PHER-02 product and
     associated processes and technologies.  This entity has been granted this
     exclusive license for Asia, including the People's Republic of China,
     Thailand, Laos, Cambodia, Vietnam, Singapore, Malaysia, Indonesia, North
     Korea, Burma, Mongolia and Taiwan.

*    The Company issued three warrants to purchase an aggregate of 3,000,000
     shares of the Company's common stock to individuals related to the entity
     that received the exclusive license rights of the Company's PHER-02
     product in Asia.  The warrants are exercisable at a price of $0.15 per
     share and expire February 21, 2005.  The warrants also have a call
     provision, which the Company can exercise and require the holders of the
     warrants to exercise their warrants if at any time the Company's common
     stock trades for an amount equal to or greater than $1.00 per share for
     10 consecutive trading days.  The Company estimates the issuance of these
     warrants for services will result in approximately $330,000 of expenses
     in the first quarter of 2002.

*    The Company has entered into a convertible note agreement providing for
     the receipt of $25,000 in exchange for a 5% convertible note and warrants
     to purchase 5,937,500 shares of common stock at an exercise price of the
     greater of $0.08 or 66 2/3% of the five-day trading average of the
     Company's common stock.  The note is convertible into common stock of the
     Company at the lesser of $0.08 or 66 2/3% of the five-day trading average
     of the Company's common stock.  The Company estimates the issuance of
     these warrants for services will result in approximately $712,000 of
     expenses in the first quarter of 2002.  In addtion, the beneficial
     conversion feature of the note is estimated to result in $25,000 in
     additional interest expense.

In order to pay for ongoing legal services, the Company entered into the
following transactions:

*    The Company has entered into an agreement whereby the Company has issued
     a warrant to an individual to acquire up to 500,000 shares of the
     Company's common stock for services.  The exercise price of the warrant
     is the lower of 50% of the average bid price of the Company's common
     stock for the five trading days prior to the exercise of the warrant or
     $0.08 per share.  The warrant expires March 11, 2005.  The Company
     estimates that the issuance of these warrants for services will result in
     approximately $60,000 of expense in the first quarter of 2002.

*    The Company has entered into a convertible note agreement providing for
     the receipt of $3,750 of legal services in exchange for a 5% convertible
     note.  The note is convertible into common stock of the Company at the
     lesser of $0.08 or 66 2/3% of the five-day trading average of the
     Company's common stock.
                               F-20
<PAGE>
                                                          SANGUINE CORPORATION
                                                 (A Development Stage Company)
                                    Notes to Consolidated Financial Statements

                                                    December 31, 2001 and 2000


13.    Recent Accounting Pronouncements

In July 2001, SFAS No. 141, "Business Combinations" and SFAS No. 142,
"Goodwill and Other Intangible Assets" were issued.  SFAS 142 addresses
financial accounting and reporting for acquired goodwill and other intangible
assets.  It requires, among other things, that companies no longer amortize
goodwill, but instead test goodwill for impairment at least annually.  SFAS
142 is required to be applied for fiscal years beginning after December 15,
2001.  Currently, the Company has no recorded goodwill and will assess how the
adoption of SFAS 141 and SFAS 142 will impact its financial position and
results of operations in any future acquisitions.

The FASB recently issued FASB Statement No. 143 Accounting for Asset
Retirement Obligations.  This Statement addresses financial accounting and
reporting for obligations associated with the retirement of tangible
long-lived assets and the associated asset retirement costs.  This Statement
applies to all entities.  It applied to legal obligations associated with the
retirement of long-lived assets that result from the acquisition,
construction, development and (or) the normal operation of a long-lived asset,
except for certain obligations of leases.  This Statement amends SFAS 19.  The
effective date for this Statement is June 15, 2002.  Currently, the Company
has no tangible long lived assets and will assess how the adoptions SFAS 143
will impact its financial position and future operations.

The FASB recently issued FASB Statement No. 144, Accounting for the Impairment
of Disposal of Long-Lived Assets.  The new guidance resolves significant
implementation issues related to FASB Statement No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of.
Statement 144 is effective for fiscal years beginning after December 15, 2001.
Management has not determined the potential impact on financial position or
results of operations.
                               F-21
<PAGE>
Item 8.  Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
---------------------

     The Company changed accountants, from Schvaneveldt and Company, due to
the death of its former principal accountant, Darrell T. Schvaneveldt, CPA, on
September 9, 2000.  The new accounting firm is Tanner + Company, Inc.  For
additional information on the change of accountants, see the Company's 8-K
Current Report dated September 18, 2000, which is incorporated herein by
reference.

                                 PART III

Item 9.  Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------

Identification of Directors and Executive Officers.
---------------------------------------------------

     The following table sets forth the names of all of our current directors
and executive officers.  These persons will serve until the next annual
meeting of the stockholders or until their successors are elected or appointed
and qualified, or their prior resignations or terminations.

<TABLE>
<CAPTION>

Directors and Executive Officers.
---------------------------------

                                               Date of          Date of
                            Positions         Election or      Termination
  Name                      Held              Designation      or Resignation
  ----                      ----              -----------      --------------
<S>                         <C>                   <C>               <C>
Thomas C. Drees,            CEO                    6/93              *
Ph.D., MBA                  President              1/98              *
                            Chairman              11/95              *
                            Director               6/93              *

Anthony G. Hargreaves       Vice Chairman          9/00              *
                            Vice President         6/93              *
                            Secretary/             6/93              *
                            Treasurer              6/93              *
                            Director               6/93              *
                            Chief Financial        6/94             3/96
                            Officer

Rear Admiral (Retired)      COO                   10/00             6/01
Merton Dick Van Orden       Director              10/00             6/01

David E. Nelson, CPA        Director               3/96              *

                                20
<PAGE>
                            Chief Financial        3/96              *
                            Officer

Edward L. Kunkel, Esq.      Director               4/94              *

          *    These persons presently serve in the capacities
               indicated.
</TABLE>
Term of Office.
---------------

          The terms of office of the current directors shall continue until
the annual meeting of stockholders, which has been scheduled by the Board of
Directors to be held in June of each year. The annual meeting of the Board of
Directors immediately follows the annual meeting of stockholders, at which
executive officers for the coming year are elected.
<TABLE>

Medical Advisory and Applications Board of Directors.
-----------------------------------------------------

                                               Date of          Date of
                            Positions         Election or      Termination
  Name                      Held              Designation      or Resignation
  ----                      ----              -----------      --------------
<S>                          <C>                  <C>               <C>
Rear Admiral (Retired)      Chairman             10/00              6/01
Merton Dick Van Orden

Craig Morrison, M.D.        Member               10/00               *

William Regelson, M.D.      Member               10/00               *

Leon Cass Terry, M.D.,      Member               10/00               *
Ph.D.

Herbert J. Meiselman,       Member               10/00               *
Sc.D.

Joseph P. O'Malley, M.D.    Member               6/01                *
</TABLE>

Business Experience.
--------------------

     Thomas C. Drees, Ph.D., MBA, Chairman, President, CEO and a Director. Dr.
Drees, age 73, is the founder of Sanguine California.  Dr. Drees was Vice
President and General Manager of Abbott Scientific Products Division,
collector of blood plasma derivatives and manufacturer of human blood
derivatives from 1973 to 1978.  From 1978 to 1984, he was the President and
CEO of Alpha Therapeutics Corporation, a subsidiary of Green Cross Corporation
of Japan and the developer of Fluosol DA 20, the only FDA-approved synthetic
blood product.  For 29 years, Dr. Drees has been involved at top management
levels with the collection, manufacture and marketing of human blood plasma
derivatives.  He has written many publications on the subject, including the

                                21
<PAGE>
widely-acclaimed book "Blood Plasma: The Promise and the Politics," Ashley
Books, New York, 1983.

     Anthony G. Hargreaves, Vice Chairman, Vice President, Secretary/Treasurer
and Director.  Mr. Hargreaves is 74 years of age.  He is a former Royal Marine
Officer with long experience in marketing, trust department banking (with Bank
of America) and group insurance sales management (with the Connecticut General
Life Insurance Company).  His medical background includes service as General
Manager of VK Limited in Pasadena, California, where Mr. Hargreaves helped
secure funding for a wearable, continuously operating artificial kidney
machine. In the early 1980's, Mr. Hargreaves organized and scripted
telemarketing sales of various products to retail stores throughout the United
States.

     David E. Nelson, CPA, Chief Financial Officer and Director.  Mr. Nelson,
age 58, received a B.S. degree in accounting from the University of Utah in
1966.  He has over 20 years' experience in operations, finance and regulatory
compliance of stock brokerage firms.  He is the past President of Covey &
Company, Inc., a broker/dealer formerly registered with the Securities and
Exchange Commission.  Mr. Nelson has been a member of the NASD's Board of
Arbitrators, the American Institute of Certified Public Accountants and the
Utah Association of Certified Public Accountants.

     Edward L. Kunkel, Esq., Director.  Mr. Kunkel is 54 years of age.
He graduated with a Juris Doctor degree from the University of Southern
California in 1973.  From 1973 to 1978, he practiced law with the firm of
Karns & Karabian in Los Angeles, California.  From 1978 to the present, he has
practiced educational law, real estate law and general business law in his own
firm.  Mr. Kunkel is a member of the State Bar of California, the Los Angeles
County Bar Association and the National School Board Attorneys' Association.
He has also been a licensed real estate broker since 1979.

     Craig Morrison, M.D., Advisory Board Member, is 59 years of age, and
practices at the Brigham Young Student Health Center.  He has been an
attending and consulting staff general surgeon since 1978 at the following
hospitals: Utah Valley Regional Medical Center, Orem Community Hospital,
Colombia Mountain View Hospital and Central Valley Hospital.  Dr. Morrison
received his Doctor of Medicine Degree from the University of Oregon Medical
School in 1970, followed by a pediatric internship and surgical residency at
the University of Southern California-Los Angeles County Hospital and the
Huntington Memorial Hospital in 1975.

     William Regelson, M.D., Advisory Board Member, is 76 years of age, an
active Professor of Medicine at the Virginia Commonwealth University, College
of Medicine since 1967, and a leading researcher in the field of aging.  Dr.
Regelson received his Doctor of Medicine Degree from the New York State
University College of Medicine in 1952. He is particularly suited to positions
of research and discovery having authored or co-authored over 200 papers on
numerous medical subjects.  Dr. Regelson's studies are at the forefront of
current aging research.  He has written or edited many books and texts that
are available currently in the published market, focusing his research on the
causes of the decline of the human body.  Some of Dr. Regelson's publications
are the following:  "Dehydroepiandrosterone, 1999"; "The Superhormone Promise:
Nature's Antidote to Aging. 1997"; "The Melatonin Miracle: Nature's Age-

                                22
<PAGE>
Reversing, Disease-Fighting, Sex-Enhancing, 1995"; and "Intervention in the
Aging Process: Proceedings of the International Symposium on Intervention in
the Aging Process, Boston, Mass, Nov 5-6, 1982."

     Leon Cass Terry, M.D., Ph.D., Advisory Board Member, is 60 years of age,
and joined the Medical College of Wisconsin as a Professor of Neurology and
Professor of Physiology in 1989; he is currently teaching, in addition to his
practice at the University Medical Center.  Focusing on his professorial
duties, Dr. Terry recently stepped down from his position as the Chairman of
Neurology, which he held from June of 1989 to May, 2000.  During his tenure,
Dr. Terry was the Associate Dean for Ambulatory Care from January, 1997 to
March, 1998, and was the Chief of Staff from January, 1997 to January, 1999.
He also held previous teaching and professional positions as a Research
Scientist for the University of Michigan, Institute of Gerontology; Professor
of Neurology and Associate Professor of Physiology and Neurology at the
University of Michigan; and Associate Professor of Neurology at the University
of Tennessee Center for Health Sciences.  Dr. Terry earned his Doctorate of
Pharmacology from the University of Michigan, his Doctor of Medicine from
Marquette University Medical School, his Ph.D. in Experimental Medicine from
McGill University Medical School and his Master of Business Administration
from the University of South Florida.  Dr. Terry has authored over 100 peer-
reviewed articles, abstracts and book chapters in well known and respected
publications.  He was also principal or co-investigator on over 30 grants from
the National Institute of Health, various pharmaceutical companies,
philanthropic donations and others.  He has also conducted clinical trials in
various neurologic disorders.

     Herbert J. Meiselman, Sc.D., Advisory Board Member, is 61 years of age.
He is an active Professor and Vice Chairman of the University of Southern
California School of Medicine, Department of Physiology and Biophysics.
Professor Meiselman graduated from Michigan Technical University with a BS
degree in 1962.  He received a Sc.D. degree from the Massachusetts Institute
of Technology in 1965.  As a Research Fellow at the California Institute of
Technology, he studied in-vivo microcirculatory blood flow from 1966 to 1968.
In 1968, he expanded his research studies to include in-vivo blood rheology, a
program jointly administered by the California Institute of Technology and the
University of Southern California Medical School.  Since 1972, Dr. Meiselman's
research at the University of Southern California has been concentrated in the
areas of blood rheology and the physical behavior of red blood cells and white
blood cells.  He has authored or co-authored over 300 papers on numerous
blood-related topics.

     Joseph P. O'Malley, M.D., Advisory Board Member, is 70 years of age.  Mr.
O'Malley graduated from Harvard Medical School, cum laude, served 25 years
with the National Institute of Health and the Federal Drug Administration and
15 years with the American Red Cross as Regulatory Head of blood services.

Family Relationships.
---------------------

     There are no family relationships between any of our directors or
executive officers.

Involvement in Certain Legal Proceedings.
-----------------------------------------
                                23
<PAGE>
     During the past five years, none of our present or former directors,
executive officers or persons nominated to become directors or executive
officers:

          (1)  Filed a petition under the federal bankruptcy laws or any state
insolvency law, nor had a receiver, fiscal agent or similar officer appointed
by a court for the business or property of such person, or any partnership in
which he was a general partner at or within two years before the time of such
filing, or any corporation or business association of which he was an
executive officer at or within two years before the time of such filing;

          (2)  Was convicted in a criminal proceeding or named subject of a
pending criminal proceeding (excluding traffic violations and other minor
offenses);

          (3)  Was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any court of competent
jurisdiction, permanently or temporarily enjoining him or her from or
otherwise limiting his involvement in any type of business, securities or
banking activities;

          (4)  Was found by a court of competent jurisdiction in a civil
action, by the Securities and Exchange Commission  or the Commodity Futures
Trading Commission to have violated any federal or state securities law, and
the judgment in such civil action or finding by the Securities and Exchange
Commission has not been subsequently reversed, suspended, or vacated.

Item 10. Executive Compensation.
         -----------------------

Cash Compensation.
------------------

     The following table shows the aggregate compensation that we have paid to
directors and executive officers for services rendered during the periods
indicated:

<TABLE>
<CAPTION>
                    SUMMARY COMPENSATION TABLE


                           Long Term Compensation

                    Annual Compensation   Awards  Payouts

(a)             (b)   (c)   (d)   (e)   (f)   (g)   (h)    (i)

                                              Secur-
                                              ities        All
Name and   Year or               Other  Rest- Under- LTIP  Other
Principal  Period   Salary Bonus Annual rictedlying  Pay- Comp-
Position   Ended      ($)   ($)  Compen-Stock Optionsouts ensat'n
-----------------------------------------------------------------
<S>         <C>       <C>   <C>   <C>   <C>    <C>   <C>  <C>
                                24
<PAGE>
Thomas C.
Drees, Ph.D,12/31/01    *     0     0     0      0     0   0
MBA, CEO,   12/31/00    *     0     0     0      0     0   0
President
and Chairman
of the Board

Anthony G.
Hargreaves, 12/31/01   72000  0     0      0     0     0   0
Vice Pres., 12/31/00   24000  0     0   300000   0     0   0
Sec./Tres.
and Director

David E.
Nelson, CPA 12/31/01    0     0     0      0     0     0   0
CFO and     12/31/00    0     0     0   100000   0     0   0
Director

Edward L.
Kunkel, Esq.12/31/01    0     0     0     0      0     0   0
Director    12/31/00    0     0     0     0      0     0   0
Merton Dick 12/31/01    0     0     0   50000    0     0   0
Van Orden,  12/31/00    0     0     0   25000    0     0   0
Director

</TABLE>

                *   See the heading "Employment Contracts and Termination of
                    Employment and Change-in-Control Arrangements" below.

Bonuses and Deferred Compensation.
----------------------------------

    See the heading "Employment Contracts and Termination of Employment and
Change-in-Control Arrangements" below.

Compensation Pursuant to Plans.
-------------------------------

     None.

Pension Table.
--------------

     None; not applicable.

Other Compensation.
-------------------

     Other than as discussed below, we have no other compensation arrangements
with any of our directors or executive officers or Advisory Board members.


                                25
<PAGE>
Compensation of Directors.
--------------------------

     Effective June 15, 1994, our Board of Directors adopted resolutions
providing for us to pay our directors $500 per month.  At the option of each
director, we may pay the fee in shares of "restricted securities" of our
common stock.  Directors shall also be reimbursed for direct out-of-pocket
expenses for attendance at Board meetings and for expenses incurred on our
behalf.

     Due to lack of funding, we have not made any payments pursuant to these
resolutions.  We will not make any payments to our directors until we have
received substantial additional funding for our operations.  We can not
guarantee that we will ever receive this funding.

     Effective October 1, 2000, while serving on the Advisory Board, Merton
Dick Van Orden were to receive 25,000 "unregistered" and "restricted" shares
of our common stock per quarter, and Messrs. Morrison, Meiselman, Regelsen and
Terry will receive 12,500 unregistered" and "restricted" shares of our common
stock per quarter, for service on the Medical Advisory and Applications Board
of Directors.  For services rendered prior to their designation to the
Advisory Board, Mr. Van Orden was issued an additional 25,000 shares; Messrs.
Morrison, Meiselman and Terry will each receive an additional 12,500 shares;
and Dr. Regelsen will receive an additional 37,500 shares.  Mr. Van Orden
resigned to pursue other activities on June 1, 2001.

Employment Contracts.
---------------------

     On September 23, 1993, our Board of Directors entered into Employment
Agreements with Dr. Drees and Mr. Hargreaves for a seven-year period beginning
on August 1, 1993.  These Employment Agreements have been extended through
January 22, 2007.

     The Employment Agreements call for a base salary of $120,000 to Dr. Drees
and $72,000 to Mr. Hargreaves annually.  We are to provide insurance benefits,
home office reimbursement and an automobile and to reimburse Dr. Drees and
Mr. Hargreaves for out of pocket expenses.  On June 2, 1994, Dr. Drees and Mr.
Hargreaves agreed to cancel all outstanding accruals for expenses under the
Employment Agreements and to accept as full satisfaction of all of their
claims against us the payments they received in November, 1993.  In addition
the Employment Agreements were modified to provide that for June, July, and
August of 1994, salary shall be paid at one fourth the amount specified by the
Employment Agreements.  Beginning September 1, 1994, Dr. Drees and Mr.
Hargreaves were entitled to receive one-half the salary specified until we
have raised $1,500,000 in debt or equity funding.   All funds raised since the
completion of our reorganization with Sanguine California are being counted
in arriving at this sum.

     As of December 31, 2000, a total of $584,000 in salaries had accrued; and
as of December 31, 2001, a total of $644,000 in salaries had accrued; Mr.
Hargreaves was paid $24,000 during fiscal 2000; and $72,000 in fiscal 2001.

     On June 10, 2000, 300,000 shares of common stock were issued to Mr.

                                26
<PAGE>
Hargreaves for additional services valued at $75,000.  These shares were
registered on Form S-8 of the Securities and Exchange Commission and were
subject to lock-up conditions prohibiting their public resale until May 7,
2001.

     Sanguine and Edward L. Kunkel, Esq., who is one of our directors,
executed an Employment Agreement on June 1, 1994.  The Employment Agreement
provided for Mr. Kunkel to receive $500 per month or $500 worth of our
"unregistered" and "restricted" common stock, provided that no compensation
was to be payable until we had received operating funds totaling at least
$1,000,000 cash.  We have been unable to get the funding and we have not yet
paid this compensation.  The Employment Agreement was for a one year term,
subject to renewal by the parties.  As of the date of this Report, we have not
renewed the Employment Agreement.

     Mr. Kunkel's Employment Agreement irrevocably granted to Mr. Kunkel the
option to purchase 10,000 "unregistered" and "restricted" shares of our common
stock, exercisable in whole or in part until May 31, 1997.  This date has been
extended to May 31, 2002.  The exercise price is the average low bid price per
share as quoted on the OTC Bulletin Board of the NASD on June 1, 1994.  As of
the date of this Report, Mr. Kunkel had not exercised the option in whole
or in part.

Termination of Employment and Change of Control Arrangements.
-------------------------------------------------------------

     We have no special arrangements involving any change of control of our
company or termination of any director, executive officer or Advisory Board
member.

Compliance with Section 16(a) of the Exchange Act.
--------------------------------------------------

     To our knowledge, during our past fiscal year and since then, all filings
required to be made by members of management or others pursuant to Section
16(a) of the Exchange Act, have been duly filed.  However, the following
filings were filed later than their due dates:
<TABLE>
<CAPTION>

                                            Date Report        Date Report
Filer                 Transaction               Due               Filed
-----                 -----------               ---               -----

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

Thomas C. Drees       Disposition of            4/01           6/12/01
Ph.D.                 1,000,000 shares

</TABLE>

Item 11. Security Ownership of Certain Beneficial Owners and Management.
         ---------------------------------------------------------------


                                27
<PAGE>
     The following tables set forth the share holdings of our directors and
executive officers and those persons who own more than five percent of our
common stock as of the date of the Report:

                     DIRECTORS AND EXECUTIVE OFFICERS
                     --------------------------------

<TABLE>
<CAPTION>

                                         Number of Shares        Percent
Name and Address                        Beneficially Owned       of Class (1)
----------------                        ------------------       --------
<S>                                          <C>                   <C>

Thomas C. Drees, Ph.D., MBA                    9,289,133            27.9%
101 East Green Street, #11
Pasadena, California  91105

Anthony G. Hargreaves                          1,701,979             5.1%
101 East Green Street, #11
Pasadena, California  91105

David E. Nelson, CPA                                 150              .0%
528 14th Avenue
Salt Lake City, Utah  84103

Edward L. Kunkel, Esq.                            60,000              .2%
16 N. Marengo Ave, #517
Pasadena, California  91103
                                              __________            ______
All directors and officers as a group
(five persons)                                11,151,262            33.5%
</TABLE>
                         FIVE PERCENT STOCKHOLDERS
                         -------------------------

<TABLE>
<CAPTION>

                                         Number of Shares         Percent
Name and Address                        Beneficially Owned       of Class *
----------------                        ------------------       --------
<S>                                           <C>                   <C>
Thomas C. Drees, Ph.D., MBA                    9,389,133            27.9%
101 East Green Street, #11
Pasadena, California  91105

Anthony G. Hargreaves                          1,701,979             5.1%
101 East Green Street, #11
Pasadena, California  91105

                                              __________            ______
Total of all five percent                     11,091,112            33.3%
stockholders
                                28
<PAGE>
</TABLE>

         *     Based upon 30,723,607 shares of outstanding common stock, and
               assumes that the following shares of common stock underlying
               options or warrants are outstanding: an option granted to Mr.
               Hargreaves to acquire 470,642 shares without registration
               rights at a price of $0.1275 per share, exercisable until
               September 22, 2001; and an option granted to Mr. Kunkel to
               acquire 10,000 shares without registration rights at an
               exercise price of the average low bid price per share as quoted
               on the OTC Bulletin Board of the NASD on June 1, 1994,
               exercisable until May 31, 2002.

Changes in Control.
-------------------

     To our knowledge, there are no present arrangements or pledges of our
securities that may result in a change in control of our company.

Item 12. Certain Relationships and Related Transactions.
         -----------------------------------------------

Transactions with Management and Others.
----------------------------------------

     Except as outlined under the caption "Executive Compensation," during the
past two years, there have been no material transactions, series of similar
transactions or currently proposed transactions, to which our company or any
of our subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to us to own of record or beneficially more than
five percent of our common stock, or any member of the immediate family of any
of the foregoing persons, or any promoter or founder had a material interest.

Certain Business Relationships.
-------------------------------

     Except as outlined under the caption "Executive Compensation," during the
past two years, there have been no material transactions, series of similar
transactions or currently proposed transactions, to which our company or any
of our subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to us to own of record or beneficially more than
five percent of our common stock, or any member of the immediate family of any
of the foregoing persons, or any promoter or founder had a material interest.

Indebtedness of Management.
---------------------------

     Except as outlined under the caption "Executive Compensation," during the
past two years, there have been no material transactions, series of similar
transactions or currently proposed transactions, to which our company or any
of our subsidiaries was or is to be a party, in which the amount involved

                                29
<PAGE>
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to us to own of record or beneficially more than
five percent of our common stock, or any member of the immediate family of any
of the foregoing persons, or any promoter or founder had a material interest.

Parents of the Issuer.
----------------------

     Except and to the extent that Dr. Drees may be deemed to be a parent
of the Company by virtue of his substantial stock ownership, the Company has
no parents.

Transactions with Promoters.
----------------------------

     Except as outlined under the caption "Executive Compensation," during the
past two years, there have been no material transactions, series of similar
transactions or currently proposed transactions, to which our company or any
of our subsidiaries was or is to be a party, in which the amount involved
exceeded $60,000 and in which any director or executive officer, or any
security holder who is known to us to own of record or beneficially more than
five percent of our common stock, or any member of the immediate family of any
of the foregoing persons, or any promoter or founder had a material interest.

Item 13. Exhibits and Reports on Form 8-K.
         ---------------------------------

Reports on Form 8-K


Exhibits*

          (i)
                                          Where Incorporated
                                            in this Report
                                            --------------

Registration Statement on SB-2, as           Parts I, II and III
amended.**

8-K Current Report dated June 8, 2000,          Part I
respecting the Westbury Warrant
Agreement.**

8-KA-1 Current Report dated June 8, 2000,       Part I
respecting the Westbury Warrant Agreement**

8-KA-2 Current Report dated June 8, 2000,       Part I
respecting the Westbury Warrant Agreement.**

8-K Current Report dated September 1, 2000,     Part I
respecting the Laidlaw Private Offering.**

8-K Current Report dated September 18, 2000,    Part II
respecting the change in accountants.**
                                30
<PAGE>
8-K Current Report dated January 19, 2001,      Part I
respecting the IriSys Service Agreement.**

S-8 Registration Statement filed with the       Part I
Securities and Exchange Commission on
December 17, 2001**

8-K Current Report dated September 26, 2001,    Part I
respecting the acquisition of Sanguine
California**

8-K Current Report dated March 11, 2002,        Part I
respecting various matters**

          (ii)

Exhibit
Number
Description
------               -----------
 21           Subsidiaries of the Company


          *    Summaries of all exhibits contained within this
               Report are modified in their entirety by reference
               to these Exhibits.

          **   These documents and related exhibits have been
               previously filed with the Securities and Exchange
               Commission and are incorporated herein by reference.

                                31
<PAGE>
                                SIGNATURES

          Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, this Report has been signed below by the following persons on
behalf of the Company and in the capacities and on the dates indicated:

                                       SANGUINE CORPORATION



Date: April 5, 2002                   By /s/ Thomas C. Drees
      -------------                      -------------------------------------
                                         Thomas C. Drees, Ph.D., MBA
                                         CEO, President and Chairman of the
                                         Board of Directors



Date: April 4, 2002                   By /s/ Anthony G. Hargreaves
      -------------                      -------------------------------------
                                         Anthony G. Hargreaves, Vice
                                         President, Secretary/Treasurer and
                                         Director



Date: April 8, 2002                  By /s/ David E. Nelson
      -------------                     -------------------------------------
                                        David E. Nelson, CPA
                                        CFO and Director

                                32
<PAGE>