UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended ~~September~~March 3031, ~~2011~~2012

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

For the transition period from __________ to __________

Commission File Number 000-24480

Sanguine Corporation

(Exact name of registrant as specified in its charter)

Nevada

95-4347608

(State or other jurisdiction of

(IRS Employer Identification No.)

incorporation or organization)

110 Founders Mill Ct., Roswell Georgia

30075

(Address of principal executive offices) (Zip Code)

(678) 352-9060

(Registrant’s telephone number, including area code)

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

Yes [X] No [ ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X] No [ ]

Yes [X] No [ ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large Accelerated filer ¨

Accelerated filer ¨

Non-accelerated filer ¨ (Do not check if a smaller reporting company)

Smaller reporting company x

company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes [ ] No [X]

Indicate the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date.

7,246,822 shares of $0.001 par value common stock on ~~November~~May 7, ~~2011~~2012

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements

Sanguine Corporation

FINANCIAL STATEMENTS

(UNAUDITED)

~~September~~March 3031, ~~2011~~2012

The financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. However, in the opinion of management, all adjustments (which include only normal recurring accruals) necessary to present fairly the financial position and results of operations for the periods presented have been made. These financial statements should be read in conjunction with the accompanying notes, and with the historical financial information of the Company.

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Consolidated Balance Sheets

		September 30, 2011 (Unaudited)		December 31, 2010
ASSETS
CURRENT ASSETS
Cash	$	934	$	1,195
Accounts receivable		-		28,000
Total Current Assets		934		29,195
PROPERTY AND EQUIPMENT, NET		328		463
TOTAL ASSETS	$	1,262	$	29,658
LIABILITIES AND SHAREHOLDERS’ DEFICIT
CURRENT LIABILITIES
Accounts payable	$	262,054	$	244,359
Accrued interest		7,947		2,330
Related party payable		308,141		182,675
Notes payable		166,200		29,700
Accrued compensation		-		6,075
Total Current Liabilities		744,342		465,139
Total Liabilities		744,342		465,139
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ DEFICIT
Preferred stock, 10,000,000 shares authorized of $0.001 par value, 75,000 and 150,000 shares issued and outstanding, respectively		75		150
Common stock, 200,000,000 shares authorized of $0.001 par value, 7,246,822 and 6,682,072 shares issued and outstanding, respectively		7,247		6,682
Additional paid in capital		9,727,714		8,697,935
Preferred stock subscribed		-		8,500
Deficit accumulated during the development stage		(10,478,116)		(9,148,748)
Total Shareholders’ Deficit		(743,080)		(435,481)
TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	1,262	$	29,658

ASSETS


		March 31, 2012		December 31, 2011
		(Unaudited)
CURRENT ASSETS


Cash	$	1,858	$	1,436

Total Current Assets		1,858		1,436

PROPERTY AND EQUIPMENT, NET		239		284


TOTAL ASSETS	$	2,097	$	1,720

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

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Consolidated ~~Statements~~Balance ofSheets ~~Operations~~ (~~Unaudited~~Continued)

		For the Three Months Ended September 30, 2011		For the Three Months Ended September 30, 2010		For the Nine Months Ended September 30, 2011		For the Nine Months Ended September 30, 2010		From Inception of the Development Stage on January 18, 1990 to September 30, 2011
REVENUES	$	-	$	4,970	$	-	$	4,970	$	224,732
COST OF SALES		-		6,600		-		6,600		18,297
GROSS PROFIT		-		(1,630)		-		(1,630)		206,435
OPERATING EXPENSES
Professional fees		48,109		65,999		166,101		210,321		5,581,883
Research and development		-		-		10,870		-		1,984,028
Stock based compensation		-		-		984,975		-		984,975
Selling, general and administrative		47,627		14,658		148,870		29,063		3,028,086
Total Operating Expenses		95,736		80,657		1,310,816		239,384		11,578,972
LOSS FROM OPERATIONS		(95,736)		(82,287)		(1,310,816)		(241,014)		(11,372,537)
OTHER INCOME (EXPENSE)
Interest income		-		-		-		-		40,195
Interest expense		(7,300)		(3,144)		(16,690)		(8,996)		(704,627)
Gain (loss) on foreign currency exchange		-		(9,603)		-		5,810		(9,099)
Loss on cash deposit		-		-		-		-		(10,020)
Gain (loss) on settlement of debt		(1,862)		-		(1,862)		-		1,577,972
Total Other Income (Expense)		(9,162)		(12,747)		(18,552)		(3,186)		894,421
NET LOSS BEFORE PROVISION FOR INCOME TAX		(104,898)		(95,034)		(1,329,368)		(244,200)		(10,478,116)
PROVISION FOR INCOME TAX		-		-		-		-		-
NET LOSS	$	(104,898)	$	(95,034)	$	(1,329,368)	$	(244,200)	$	(10,478,116)
BASIC AND DILUTED LOSS PER SHARE	$	(0.02)	$	(0.01)	$	(0.20)	$	(0.04)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING –BASIC AND DILUTED		6,872,050		6,682,072		6,758,457		6,682,072

LIABILITIES AND SHAREHOLDERS’ DEFICIT


		March 31, 2012		December 31, 2011
		(Unaudited)
CURRENT LIABILITIES

Accounts payable	$	254,371	$	261,814
Accrued interest		20,059		14,539
Related party payable		407,641		357,641
Convertible promissory notes payable, net of debt discounts of $49,778 and $64,461, respectively		157,422		121,739

Total Current Liabilities		839,493		755,733

Total Liabilities		839,493		755,733

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ DEFICIT

Preferred stock, 10,000,000 shares authorized of $0.001 par value, 75,000 and 150,000 shares issued and outstanding, respectively		75		75
Common stock, 200,000,000 shares authorized of $0.001 par value, 7,246,822 issued and outstanding, respectively		7,247		7,247
Additional paid in capital		9,820,611		9,817,416
Deficit accumulated during the development stage		(10,665,329)		(10,578,751)

Total Shareholders’ Deficit		(837,396)		(754,013)

TOTAL LIABILITIES AND SHAREHOLDERS’ DEFICIT	$	2,097	$	1,720

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

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of ~~Cash Flows (Unaudited)~~Operations

		For the Nine Months Ended September 30, 2011		For the Nine Months Ended September 30, 2010		From Inception of the Development Stage on January 18, 1990 to September 30, 2011
Statement of Cash Flow
Net loss	$	(1,329,368)	$	(244,200)	$	(10,478,116)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		135		209		6,668
Common stock issued for services		-		-		3,365,446
Contributed capital for operating activities		9,756		8,289		27,896
Stock options granted		1,002,258		-		1,002,258
Stock warrants granted		-		-		8,650
Interest on beneficial conversion feature		-		-		25,000
Legal expense related to beneficial conversion feature		-		-		3,750
Note payable issued for services		-		-		727,950
(Gain)/Loss on extinguishments of debt		1,862		-		(179,891)
Gain on conversions of debt to equity		-		-		(1,398,081)
Recognition of expenses prepaid with common stock		-		-		456,184
Warrant extension		-		-		34,493
Gain (loss) on exchange of foreign currency		-		(5,810)		9,099
Changes in assets and liabilities:
Decrease in accounts receivable		28,000		-		-
Decrease in prepaid expense		-		134,109		1,198,717
Increase in accounts payable and related party payables		143,161		44,177		933,750
Increase in accrued interest payable		6,935		706		556,545
Increase in accrued liabilities		-		-		10,125
Increase in customer deposits		-		-		45,000
Increase in accrued salaries		-		3,587		987,661
Net Cash Used by Operating Activities		(137,261)		(58,933)		(2,656,896)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets		-		-		(6,995)
Net Cash Used by Investing Activities		-		-		(6,995)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from warrant conversion		-		-		524,700
Proceeds from notes payable and notes payable-related party		137,000		27,500		396,800
Payments on notes payable and notes payable –related party		-		(7,500)		(22,900)
Proceeds from issuance of convertible debentures		-		-		40,000
Contributed capital		-		-		750
Preferred stock subscription		-		83,500		33,500
Preferred stock issued for cash		-		-		125,000
Common stock issued for cash		-		-		1,566,975
Net Cash Provided by Financing Activities		137,000		103,500		2,664,825
NET INCREASE (DECREASE) IN CASH		(261)		44,567		934
CASH AT BEGINNING OF PERIOD		1,195		1,928		-
CASH AT END OF PERIOD	$	934	$	46,495	$	934
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
CASH PAID FOR:
Interest	$	-	$	-	$	-
Income taxes	$	-	$	800	$	2,500
NON-CASH ACTIVITIES
Common stock issued for debt conversion	$	-	$	-	$	9,600
Contributed capital for interest contributed	$	9,756	$	8,289	$	27,896
Interest on beneficial conversion feature	$	-	$	-	$	25,000
Legal expense related to beneficial conversion feature	$	-	$	-	$	3,750
Common stock issued for prepaid services	$	-	$	-	$	585,019
Common stock issued for debt and accrued expenses	$	20,055	$	-	$	2,842,122

(Unaudited)


		For the Three Months Ended March 31,				From Inception of the Development Stage on January 18, 1990 through March 31,
		2012		2011		2012
REVENUES	$	-	$	-	$	224,732

COST OF SALES		-		-		18,297

GROSS PROFIT		-		-		206,435

OPERATING EXPENSES
Professional fees		19,929		54,186		5,619,171
Research and development		-		10,870		1,991,260
Stock based compensation		-		984,975		986,775
Selling, general and administrative		43,250		42,087		3,113,748

Total Operating Expenses		63,179		1,092,118		11,710,954

LOSS FROM OPERATIONS		(63,179)		(1,092,118)		(11,504,519)

OTHER INCOME (EXPENSE)
Interest income		-		-		40,195
Interest expense		(23,399)		(4,352)		(759,858)
Gain (loss) on foreign currency exchange		-		-		(9,099)
Loss on cash deposit		-		-		(10,020)
Gain on settlement of debt		-		-		1,577,972

Total Other Income (Expense)		(23,399)		(4,352)		839,190

NET LOSS BEFORE PROVISION FOR INCOME TAX		(86,578)		(1,096,470)		(10,665,329)

PROVISION FOR INCOME TAX		-		-		-

NET LOSS	$	(86,578)	$	(1,096,470)	$	(10,665,329)

BASIC AND DILUTED LOSS PER SHARE	$	(0.01)	$	(0.16)

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING –BASIC AND DILUTED		7,246,822		6,693,322

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

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of Cash Flows

(Unaudited)


		For the Three Months Ended March 31,				From Inception of the Development Stage on January 18, 1990 through March 31,
		2012		2011		2012
Net loss	$	(86,578)	$	(1,096,470)	$	(10,665,329)
Adjustments to reconcile net loss to net cash used by operating activities:
Depreciation and amortization		45		45		6,757
Common stock issued for services		-		-		3,365,446
Contributed capital		3,195		3,324		32,692
Stock based compensation		-		987,525		1,002,259
Stock warrants granted		-		-		8,650
Amortization of debt discounts		14,683		-		63,322
Legal expense related to beneficial conversion feature		-		-		3,750
Note payable issued for services		-		-		727,950
Gain on extinguishments of debt		-		-		(181,753)
Gain on conversions of debt to equity		-		-		(1,396,219)
Recognition of expenses prepaid with common stock		-		-		456,184
Warrant extension		-		-		34,493
Gain (loss) on foreign currency exchange		-		-		9,099
Changes in assets and liabilities:
(Increase) decrease in accounts receivable		-		28,000		-
(Increase) decrease in prepaid expense		-		-		1,198,717
Increase in accounts payable and related party payables		42,557		53,148		1,025,567
Increase in accrued interest payable		5,520		1,030		568,657
Increase in accrued liabilities		-		-		10,125
Increase in customer deposits		-		-		45,000
Increase in accrued salaries		-		-		987,661
Net Cash Used by Operating Activities		(20,578)		(23,398)		(2,696,972)
CASH FLOWS FROM INVESTING ACTIVITIES
Cash paid for fixed assets		-		-		(6,995)
Net Cash Used by Investing Activities		-		-		(6,995)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from warrant conversion		-		-		524,700
Proceeds from notes payable and notes payable- related party		21,000		37,000		437,800
Payments on notes payable and notes payable – related party		-		-		(22,900)
Proceeds from issuance of convertible debentures		-		-		40,000
Contributed capital		-		-		750
Preferred stock subscription		-		-		33,500
Preferred stock issued for cash		-		-		125,000
Common stock issued for cash		-		-		1,566,975
Net Cash Provided by Financing Activities		21,000		37,000		2,705,825
NET INCREASE (DECREASE) IN CASH		422		13,602		1,858
CASH AT BEGINNING OF PERIOD		1,436		1,195		-
CASH AT END OF PERIOD	$	1,858	$	14,797	$	1,858

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

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Consolidated Statements of Cash Flows (Continued)

(Unaudited)


		For the Three Months Ended March 31,				From Inception of the Development Stage on January 18, 1990 through March 31,
		2012		2011		2012
SUPPLEMENTAL SCHEDULE OF CASH FLOW ACTIVITIES
CASH PAID FOR:
Interest	$	-	$	-	$	-
Income taxes	$	-	$	800	$	2,500

NON-CASH FINANCING ACTIVITIES
Common stock issued for debt conversion	$	-	$	-	$	9,600
Equity instruments issued for services rendered	$	-	$	-	$	3,236,641
Contributed capital for interest contributed	$	3,195	$	3,324	$	32,692
Interest on beneficial conversion feature	$	14,683	$	-	$	63,322
Legal related to beneficial conversion feature	$	-	$	-	$	3,750
Notes payable issued for services	$	-	$	-	$	727,950
Common stock issued for prepaid services	$	-	$	-	$	585,019
Common stock issued for debt	$	-	$	6,075	$	2,842,123
Conversion of preferred stock to common stock	$	-	$	-	$	500
Stock subscription converted to note payable	$	-	$	-	$	8,500

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

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011

NOTE 1 -

BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its December 31, ~~2010~~2011 Annual Report on Form 10-K. Operating results for the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2011~~2012.

NOTE 2 -

ORGANIZATION AND DESCRIPTION OF BUSINESS

Sanguine Corporation, (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 oxygen carriers 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.

From 1974 to 1980, the Company engaged in several business ventures. These business activities resulted in the loss of all Company assets. Because of the search for a new business venture, the Company has entered into the “development stage company” status again. The Company is a development stage company and these financial statements are presented as those of a development stage company effective January 18, 1990, coinciding with the incorporation date of Sanguine Corporation.

On March 7, 2008, the Company formed a wholly owned subsidiary called Sanguine Lifescience Corporation. As part of the formation of Sanguine Lifescience Corporation, the Company transferred $15,000 to a bank account for Sanguine Lifescience use. At this time, Sanguine Lifescience Corporation is not engaged in any business other than normal corporate matters.

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011

NOTE 3 -

GOING CONCERN

The Company’s financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

The Company’s management has taken certain steps to maintain its operating and financial requirements in an effort to continue as a going concern until such time as revenues are sufficient to cover expenses. Future plans include a debt or equity offering for between $1,000,000 - $1,500,000 ~~which~~that isshould ~~estimated to~~ enable the Company to complete the ~~initial~~ animal testing stage for FDA approval of its product. However, management cannot provide any assurance that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

March 31, 2012 and December 31, 2011

NOTE 4 -

STOCK WARRANTS AND OPTIONS

The Company had no outstanding stock warrants during the ~~nine~~three months ended ~~September~~March 3031, ~~2011~~2012, and the year ended December 31, ~~2010~~2011. During ~~the nine months ended September 30,~~ 2011, the Company granted 3,000,000 options to purchase the Company’s common stock for an exercise price of $0.20 per share for a period of 60 months beginning in February 2011, and 59,283 options to purchase the Company’s common stock for an exercise price of $0.10 per share for a period of 35 months beginning in February 2011. The options were granted as part of an employment agreement with Frank Marra entered into during the quarter. The Company valued the options using the Black-Scholes option-pricing model with the following assumptions: dividend yield of zero percent; expected volatility of 176.85%; risk-free interest rate of 2.39%; and expected life of 5 years. A summary of the status of the Company’s outstanding stock options as of ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011 and changes during the periods then ended is presented below:


	2012			2011
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding, beginning of year	3,760,716	$	.18	701,433	$	.10
Granted	-		-	3,059,283		.20
Expired/Cancelled	-		-	-		-
Exercised	-		-	-		-

Outstanding end of year	3,760,716	$	.18	3,760,716	$	.18

Exercisable	3,760,716	$	.18	3,760,716	$	.18


		Outstanding				Exercisable
Range of Exercise Prices			Number outstanding at March 31, 2011	Weighted Average Remaining Contractual Life	Number Exercisable at March 31, 2011
$	.10-.20		3,760,716	3.44	3,760,716
			3,760,716		3,760,716

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011

NOTE 4 - STOCK WARRANTS AND OPTIONS (continued)

	2011			2010
	Shares	Weighted Average Exercise Price		Shares	Weighted Average Exercise Price
Outstanding, beginning of year	701,433	$	.10	701,433	$	.10
Granted	3,059,283		.20	-		-
Expired/Cancelled	-		-	-		-
Exercised	-		-	-		-
Outstanding end of year	3,760,716	$	.18	701,433	$	.10
Exercisable	3,760,716	$	.18	701,433	$	.10

		Outstanding				Exercisable
Range of Exercise Prices			Number outstanding at September 30, 2011	Weighted Average Remaining Contractual Life	Number Exercisable at September 30,2011
$	.10-.20		3,760,716	3.94	3,760,716
			3,760,716		3,760,716

NOTE 5 -

~~EQUITY~~NOTES ~~TRANSACTIONS~~PAYABLE

During ~~the current year~~2011, the Company ~~executed~~entered aninto ~~employment~~a convertible promissory note agreement with ~~the~~an ~~President~~investor for $20,000. The note carries an interest rate of 10% per annum. The term of the ~~Company~~loan ~~which~~is ~~provided~~18 ~~3,000,000~~months. The ~~options~~principal toand ~~purchase~~interest on the ~~Company’s~~note may be converted into shares of common stock ~~for~~at anthe ~~exercise~~lower ~~price~~ of $0.2016 ~~per~~or ~~share~~a ~~for~~price aequal 60to ~~month~~that ~~period~~of ~~beginning~~the inthirty ~~February~~day ~~2011. The~~moving ~~options~~average ~~were~~of ~~valued~~the ~~using~~adjusted closing price for the ~~Black-Scholes~~Company’s ~~option~~common ~~pricing~~stock. In ~~model,~~accordance with ~~the~~FASB ~~following~~ASC ~~assumptions:~~470 ~~dividend~~a ~~yield~~beneficial ofconversion ~~zero~~feature ~~percent;~~was ~~expected~~recognized ~~volatility~~as a debt discount of ~~176.85%;~~$5,000 ~~risk-free~~upon ~~interest~~the ~~rate~~issuance of ~~2.39%;~~this ~~and~~loan ~~expected~~which will be amortized over the life of 5the ~~years~~loan. ~~The~~ As ~~value~~of March 31, 2012, $1,389 of the ~~options~~discount had been amortized to interest expense. Accrued interest on this note was $~~984~~833 and $333 as of March 31,~~975~~ 2012 and ~~was~~December ~~expensed~~31, 2011, respectively.

~~The~~During 2010, the Company ~~issued~~entered ~~42,000~~into ~~shares~~a loan agreement with an investor. The note carried an interest rate of ~~common~~7% ~~stock~~per ~~during~~annum. During the ~~nine~~year ~~months~~ ended ~~September~~December 3031, 2011, the Company received $137,000 in proceeds from additional loans made under this agreement. ~~The~~Effective ~~stock~~August 1, 2011, a new agreement was ~~issued~~entered asinto converting the ~~result~~note ofto ~~the~~a ~~conversion~~senior ofconvertible ~~two~~promissory ~~notes~~note, ~~payable~~with ~~valued~~a atterm ~~$9,000~~of 18 months and ~~related~~an ~~accrued~~interest ~~interests~~rate of 10% per annum. The principal balance at that date was $1166,~~318~~200. The ~~stock~~principal ~~was~~and ~~issued~~interest on the note may be converted into shares of common stock at the lower of $0.2920 ~~per~~or ~~share~~a price equal to that of the thirty day moving average of the adjusted closing price for the Company’s common stock. In accordance with FASB ASC 470 a ~~total~~beneficial ~~value~~conversion feature was recognized as a debt discount of $1283,~~180~~100 upon entry into the new agreement to be amortized over the life of the loan. AAs ~~loss~~ of March 31, 2012, $136,~~862~~933 ~~was~~of ~~recognized~~the discount had been amortized to interest expense. In February 2012, the Company received $21,000 in proceeds from an additional loan made under this agreement. The terms remain the ~~transaction~~same with the due date being extended to February 28, 2013. The principal balance due was $187,200 and $166,200 at March 31, 2012 and December 31, 2011, respectively. Interest accrued on this note is $15,145 and $10,815 as of March 31, 2012 and December 31, 2011, respectively.

911

SANGUINE CORPORATION & SUBSIDIARY

(A Development Stage Company)

Notes to Consolidated Financial Statements

~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011

NOTE 5 -

EQUITY TRANSACTIONS (continued)

The Company issued 22,500 shares of common stock during the nine months ended September 30, 2011, as compensation to the members of the Board of Directors. The shares were valued at $0.35 per share for a total expense of $7,875.

During the nine months ended September 30, 2011, a holder of 75,000 shares of series A preferred stock exercised the conversion of that preferred stock. As a result the Company issued 500,250 shares of common stock to this stockholder. The number of common shares was determined at the conversion rate of 6 2/3 shares of common stock per share of preferred stock as specified in the conversion terms for the series A preferred shares.

NOTE 6 -

~~NOTES~~EQUITY ~~PAYABLE~~TRANSACTIONS

During ~~2010,~~ the ~~Company~~year ~~entered into a loan agreement with an investor. The note carried an interest rate of 7% per annum. During the nine months~~ ended ~~September~~December 3031, 2011, the Company ~~received~~executed ~~$137,000~~an inemployment ~~proceeds~~agreement ~~from~~with ~~additional~~the ~~loans~~President ~~made under this agreement. The balance~~ of ~~this~~the ~~loan~~Company atwhich ~~September~~provided 303, ~~2011 and December 31~~000,000 ~~2010,~~options ~~was~~to ~~$166,200~~purchase ~~and~~the ~~$20,700,~~Company’s ~~respectively,~~common ~~along~~stock ~~with~~for ~~accrued~~an ~~interest~~exercise price of $~~6,660 and $649, respectively~~0. ~~Effective~~20 ~~August~~per 1,share ~~2011,~~for a ~~new~~60 ~~agreement~~month ~~was~~period ~~entered~~beginning ~~into~~in ~~converting~~February ~~the note to a senior convertible promissory note, with a term of 18 months and an interest rate of 10% per annum~~2011. The ~~principal~~options ~~balance~~were atvalued ~~that~~using ~~date~~the ~~was~~Black-Scholes ~~$166,200. Interest~~option ~~payments~~pricing ~~of $4~~model,~~155~~ ~~are~~with ~~due on a quarterly basis. The principal and interest on~~ the ~~note~~following ~~may~~assumptions: bedividend ~~converted~~yield ~~into shares~~ of ~~common~~zero ~~stock~~percent; atexpected ~~the~~volatility ~~lower~~ of $0176.2085%; orrisk-free ainterest ~~price~~rate ~~equal to that~~ of ~~the~~2.39%; ~~thirty~~and ~~day~~expected ~~moving~~life ~~average~~ of ~~the~~5 ~~bid~~years. As The value of ~~September 30, 2011,~~ the ~~Company~~options ~~has~~was ~~not~~$984,975 ~~paid~~and ~~the~~was ~~quarterly interest payment due~~expensed.

~~During~~The ~~2009, the~~ Company ~~entered~~issued ~~into loan agreements with investors for $9~~42,000~~. The~~ ~~notes~~shares ~~carried~~of ancommon ~~interest~~stock ~~rate~~during ofthe 7%year ~~and~~ended ~~were~~December ~~due~~31, ~~on demand~~2011. ~~During~~The ~~the~~stock ~~quarter~~was ~~ended~~issued ~~September~~as ~~30, 2011,~~ the ~~investors~~result ~~signed~~of athe ~~letter~~conversion of ~~agreement~~two tonotes ~~convert~~payable ~~the~~valued ~~notes~~at $9,000 ~~including~~and ~~any~~related accrued ~~interest,~~interests ~~into~~of 42$1,~~000~~318. The ~~shares~~stock ofwas ~~restricted~~issued ~~common~~at ~~stock~~$0. ~~Interest~~29 ~~expense~~per onshare ~~these notes~~ for ~~the~~a ~~quarter~~total ~~ended~~value ~~September~~of 30$12,180. A ~~2011~~loss ~~was~~of $~~315~~1,862 was recognized in the transaction.

The Company issued 22,500 shares of common stock during the year ended December 31, 2011, as compensation to the members of the Board of Directors. The shares were valued at $0.35 per share for a total expense of $7,875.

Also during the year ended December 31, 2011, a holder of 75,000 shares of series A preferred stock exercised the conversion of that preferred stock. As a result the Company issued 500,250 shares of common stock to this stockholder. The number of common shares was determined at the conversion rate of 6 2/3 shares of common stock per share of preferred stock as specified in the conversion terms for the series A preferred shares.

NOTE 7 -

RELATED PARTY TRANSACTION

Related party payables at ~~September~~March 3031, ~~2011~~2012 and December 31, ~~2010~~2011 represent amounts owed to officers of the Company for consulting fees and reimbursement of expenses paid of $~~308~~407,~~141~~641 and $~~182~~357,~~675~~640, respectively. Interest of 6% -15% was computed on the balance of the related party payable and recorded as $93,~~756~~195 ofas additional paid in capital and $~~1,287~~690 of accrued interest.

During the current year, the Company executed an employment agreement with the President of the Company. Under the terms of this agreement 3,000,000 options to purchase shares of common stock for $0.20 per share for a period of 60 months were granted to the President. Also, the President’s annual salary was set at $150,000 per year. The agreement expires in February 2013 unless it is extended by mutual agreement of the Company and the President.

NOTE 8 - SUBSEQUENT EVENTS

The Company has evaluated subsequent events per the requirements of ASC Topic 855 and has determined that there are no reportable subsequent events.

1012

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

Special Note Regarding Forward-Looking Statements

This periodic report contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 with respect to the Plan of Operations provided below, including information regarding the Company’s financial condition, results of operations, business strategies, operating efficiencies or synergies, competitive positions, growth opportunities, and the plans and objectives of management. The statements made as part of the Plan of Operations that are not historical facts are hereby identified as "forward-looking statements."

Critical Accounting Policies and Estimates

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the unaudited Financial Statements and accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. The Company believes there have been no significant changes during the three and nine month periods ended ~~September~~March 3031, ~~2011~~2012 and ~~2010~~2011, to the items disclosed as significant accounting policies since the Company’s last audited financial statements for the year ended December 31, ~~2010~~2011.

The Company’s accounting policies are more fully described in Note 1 of the consolidated financial statements. As discussed in Note 1, the preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions about the future events that affect the amounts reported in the consolidated financial statements and the accompanying notes. Management bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. Actual results could differ from these estimates under different assumptions or conditions. The Company believes that the following addresses the Company’s most critical accounting policies.

We recognize revenue in accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 104, “Revenue Recognition” (“SAB 104”). Under SAB 104, revenue is recognized at the point of passage to the customer of title and risk of loss, when there is persuasive evidence of an arrangement, the sales price is determinable, and collection of the resulting receivable is reasonably assured. We recognize revenue as services are provided. Revenues are reflected net of coupon discounts.

We account for income taxes in accordance with ASC Topic 740. Under ASC Topic 740, deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets will be reflected on the balance sheet when it is determined that it is more likely than not that the asset will be realized. A valuation allowance has currently been recorded to reduce our deferred tax asset to $0.

Plan of Operation.

We are moving forward with testing of our product and seeking industry partners to assist in defraying the costs of testing. Additionally, we are looking to start selling some of our product for use in research by labs around the country. These efforts will be dependent on additional financing. We have had communications with several labs and are in the process of investigating potential material supply contracts with such labs. These contracts will allow us to start receiving potential revenues which would then be applied to further development and testing of our proposed products.

Patents

Presently, we do not have any patents on our technology or processes. Our prior patents have not been renewed

1113

and we are in the process of filing new patents on the new processes and formulas. At this time, we cannot say if these applications will be successful. Additionally, without additional funding, we will not be able to complete the patent process.

Results of Operations

The Company had no sales during the quarter ended ~~September~~March 3031, ~~2011~~2012. ~~The~~ ~~Company~~We ~~continues~~realized toa ~~focus~~net onloss of $86,578 for the ~~development~~three ofmonths ~~its~~ended ~~products. As~~March ~~such~~31, ~~the~~2012, ~~Company~~compared ~~has~~to ~~not~~a ~~had~~net ~~substantial~~loss ~~revenue~~of in$1,096,470 ~~either~~for the ~~quarter~~three months ended ~~September~~March 3031, 2011. Most orof ~~2010~~our expense for the three month period related to professional fees and selling, general and administrative expenses. WeFor ~~continue~~March to31, ~~focus~~2011, ona majority of the ~~research~~expenses ~~and~~were ~~development~~non ~~activities~~cash ~~related~~stock based compensation expenses of $984,975. Since we had no revenues, we have had to rely on stock sales and loans to fund our ~~PHER-O2~~operations and ~~are~~continue ~~focusing~~to ~~more~~increase onour ~~its~~payables ~~use~~since inwe ~~research~~do ~~labs~~not ~~around~~have the ~~world~~funds to pay all of our expenses.

WeAs ~~realized~~we amove ~~net~~more ~~loss~~to oftrying ~~$104,898~~to ~~and~~sell ~~$1,329,368~~products ~~for~~to ~~the~~labs ~~three~~around ~~and~~the ~~nine~~country, ~~months~~our ~~ended September 30~~selling, ~~2011,~~general ~~respectively~~and ~~compared~~administrative toexpenses ahave ~~net~~been ~~loss~~increasing. For ~~of $95,034 and $244,200 for~~ the three ~~and nine~~ months ended ~~September~~March 3031, ~~2010~~2012, ~~respectively. Most of~~ our ~~expense~~selling, ~~for~~general ~~the~~and ~~nine~~administrative ~~month~~expenses ~~period~~were ~~related~~$43,250 tocompared ~~non-cash expenses related~~ to ~~employment~~$42,087 ~~contracts~~for ~~with our management. In~~ the ~~nine~~same ~~months~~periods ~~ended~~in ~~September 30,~~ 2011,. We weare ~~entered~~hopeful ~~into~~these aselling ~~new~~efforts ~~employment~~are ~~contract~~paying ~~with~~off ~~our president~~ and ~~under~~hope ~~the~~to ~~Black-Scholes~~be ~~model~~able weto ~~recorded~~start anshipping ~~expense~~product ~~related~~ to ~~the~~labs ~~options~~around ofthe ~~$984,975. Without~~country ~~this~~in ~~non-cash expense, our loss would have been $344,393 for~~ the ~~nine~~upcoming ~~months ended September 30, 2011~~quarters. ~~Since~~ ~~we have limited revenues~~Presently, we have not had tomuch ~~rely~~success onin ~~stock~~selling ~~sales~~our ~~and~~products ~~loans~~ to ~~fund~~labs ~~our operations~~ and ~~continue~~are toevaluating ~~increase~~ our ~~payables~~current ~~since~~focus weto dosee ~~not~~if ~~have~~other ~~the~~avenues ~~funds~~for tosales ~~pay~~may ~~all~~be ~~of our expenses~~better.

As we move more to selling products to labs around the country, our selling, general and administrative expenses have been increasing. For the three and nine months ended September 30, 2011, our selling, general and administrative expenses were $47,627 and $148,870, respectively compared to $14,658 and $29,063, respectively for the same periods in 2010. We are hopeful these selling efforts are paying off and hope to be able to start shipping product to labs around the country in the upcoming quarters.

Liquidity and Capital Resources

As of ~~September~~March 3031, ~~2011~~2012, we had $~~934~~1,858 in cash and $~~744~~839,~~342~~493 in current liabilities. Our cash position is not sufficient to cover our accounts payable or other current liabilities with working capital at ~~September~~March 3031, ~~2011~~2012, of negative $~~743~~837,~~408~~635. As such we will be dependent on our ability to raise additional debt or equity capital to be able to cover current liabilities. Without additional equity or debt financing, it will be difficult for the Company to remain in business. During the quarter ended March 31, 2012, we borrowed an additional $21,000 from Wharton Capital, which is affiliated with our president, to pay ongoing expenses. In August 2011, we entered into a loan agreement with Wharton Capital, a company affiliated with our president, to provide additional financing which increased the outstanding balance payable to Wharton to $166,200 as of that time. The note combined all prior notes and advances between the Company and Wharton Capital into this one note. The term of the note is eighteen months and bears interest at ten percent (10%) per annum. Interest payments of $4,155 are due on a quarterly basis on the last day of each of the Company’s fiscal quarters. The note is convertible into shares of the Company’s common stock at the lower of twenty cents ($0.20) per share or a price equal to a thirty day moving average stock price as posted on Yahoo finance or other quotation mediums. Additionally, the note provides anti-dilution protection to Wharton Capital so that if the Company issued any equity, Wharton Capital will have the right, but not the obligation, to purchase additional shares of the Company’s common stock to maintain its current percentage of ownership in the Company. Even with the Wharteon note, the Company still needs additional funding in order to continue developing its products and paying past and ongoing obligations. At this time, the Company has no commitments for additional funding.

Off-balance sheet arrangements

We had no off-balance sheet arrangements during the quarter ended ~~September~~March 3031, ~~2011~~2012.

Forward-looking Statements

Our Company and our representatives may from time to time make written or oral statements that are “forward-looking,” including statements contained in this Annual Report and other filings with the Securities and Exchange Commission and in reports to our Company’s stockholders. Management believes that all statements that express expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that

1214

expectations and projections with respect to future matters, as well as from developments beyond our Company’s control including changes in global economic conditions are forward-looking statements within the meaning of the Act. These statements are made on the basis of management’s ~~views and assumptions, as of the time the statements are made, regarding future events and business performance. There can be no assurance, however, that management’s~~ expectations will necessarily come to pass. Factors that may affect forward- looking statements include a wide range of factors that could materially affect future developments and performance, including the following:

Changes in Company-wide strategies, which may result in changes in the types or mix of businesses in which our Company is involved or chooses to invest; changes in U.S., global or regional economic conditions, changes in U.S. and global financial and equity markets, including significant interest rate fluctuations, which may impede our Company’s access to, or increase the cost of, external financing for our operations and investments; increased competitive pressures, both domestically and internationally, legal and regulatory developments, such as regulatory actions affecting environmental activities, the imposition by foreign countries of trade restrictions and changes in international tax laws or currency controls; adverse weather conditions or natural disasters, such as hurricanes and earthquakes, labor disputes, which may lead to increased costs or disruption of operations.

This list of factors that may affect future performance and the accuracy of forward-looking statements is illustrative, but by no means exhaustive. Accordingly, all forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

NA-Small Reporting Company

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our President and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, our President and Principal Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report were effective such that the information required to be disclosed by us in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our President and Principal Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Management believes, however, that our controls do provide reasonable assurances.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes of accounting principles generally accepted in the United States.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

Our management, with the participation of the President and Principal Financial Officer, evaluated the effectiveness of our internal control over financial reporting as of September 30, 2011. Based on this evaluation, our

management, with the participation of the President and Principal Financial Officer, concluded that, as of September 30, 2011, our internal control over financial reporting was effective.

Changes in internal control over financial reporting

~~During~~There the nine months ended September 30, 2011, the Company made changes in internal controls to addressed prior weaknesses. These changes focused on additional controls to improve the communication, control activities and monitoring components of the Company’s internal controls. These changes aimed at making the system of internal controls stronger for supporting on time reporting obligations and providing adequate time for the review processes. Except as indicated, there have been no changes in internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1. Legal Proceedings

None

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds

Recent Sales of Unregistered Securities

No additional sales of unregistered securities occurred during the ~~September~~March 3031, ~~2011~~2012 quarter, except for the addition of $21,000 in debt financing. In August 2011, we did issue a convertible promissory note to with Wharton Capital, a company affiliated with our CEO. The note is for a period of 18 months and bears interest at 10% per annum. The principal balance at the time of issuance was $166,200 with interest payments due and payable quarterly. The note is convertible into shares of the Company’s common stock at the lower of twenty cents ($0.20) per share or a price equal to a thirty day moving average stock price as posted on Yahoo finance or other quotation mediums. Please see our annual report on Form 10K for the year ended December 31, 2010 for all sales during the prior two years.

convertible into shares of the Company’s common stock at the lower of twenty cents ($0.20) per share or a price equal to a thirty day moving average stock price as posted on Yahoo finance or other quotation mediums. During the quarter ended March 31, 2012, the additional $21,000 in debt financing was received from Wharton Capital under the terms of the above note. Please see our annual report on Form 10K for the year ended December 31, 2011 for all sales during the prior two years.

Use of Proceeds of Registered Securities

None; not applicable.

Purchases of Equity Securities by Us and Affiliated Purchasers

During the three months ended ~~September~~March 3031, ~~2011~~2012, we have not purchased any equity securities nor have any officers or directors of the Company.

ITEM 3. Defaults Upon Senior Securities

We are not aware of any defaults upon senior securities.

ITEM 4. ~~Removed~~Mine ~~and~~Safety ~~Reserved~~Disclosure

NA – We are not engaged in any mining activity.

ITEM 5. Other Information.

None

ITEM 6. Exhibits

(a)

Exhibits.

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.

Exhibit

Number Description

Location

10.1

Loan Agreement – Wharton Capital, LC August 1, 2011

Incorporated by Reference

From June 30, 2011 10Q

31.1

302 Certification of CEO

This Filing

31.2

302 Certification of Principal Financial Officer

This Filing

906 Certification

This Filing

101.INS

XBRL Instance*

101.XSD

XBRL Schema*

101.CAL

XBRL Calculation*

101.DEF

XBRL Definition*

101.LAB

XBRL Label*

101.PRE

XBRL Presentation*

**XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Sanguine Corporation

(Registrant)

Date: ~~November~~May 914, ~~2011~~2012

By: /s/ Frank Marra

Frank Marra

CEO and Chairman of the

Board of Directors

Date: ~~November~~May 914, ~~2011~~2012

By: /s/ Frank Marra

Frank Marra

Principal Financial Officer and Director

1517

Filing Compare · SANGUINE CORP