10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: December 31, 2019

Commission file number: 0-21271

SANGUI BIOTECH INTERNATIONAL, INC.

(Exact name of registrant as specified in its charter)

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

Neuer Wall 54, 20354 Hamburg, Germany

(Address of principal executive offices)

011-49-40-46093120

(Registrant's telephone number, including area code)

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

Title of each class	Trading Symbol	Name of exchange on which registered
None	N/A	N/A

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                                            Yes [X]       No [ ] 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files).                      Yes [X]       No [  ]

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

Large Accelerated Filer   [  ]	Accelerated Filer   [  ]
Non-Accelerated Filer   [X]	Smaller Reporting Company   [X]
Emerging Growth Company   [  ]

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                                                                            Yes [  ]       No [X] 

As of February 13, 2020, there were 202,783,598 shares of the issuer's Common Stock, no par value, issued and 202,729,842 shares outstanding. 

SANGUI BIOTECH INTERNATIONAL, INC.

Quarterly Report on Form 10-Q

For the Quarterly Period Ended December 31, 2019

INDEX

PART I – FINANCIAL INFORMATION
Item 1	Financial Statements ..............................................................................................................................	1
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations ................	13
Item 3.	Quantitative and Qualitative Disclosure About Market Risk ................................................................	16
Item 4.	Controls and Procedures ........................................................................................................................	16
PART II – OTHER INFORMATION
Item 1.	Legal Proceedings.................................................................................................................................	17
Item 1A.	Risk Factors...........................................................................................................................................	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds ..............................................................	17
Item 3.	Defaults Upon Senior Securities ...........................................................................................................	17
Item 5.	Other Information..................................................................................................................................	17
Item 6.	Exhibits..................................................................................................................................................	18

ii

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements

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

Our unaudited condensed consolidated balance sheet as of December 31, 2019 and the audited balance sheet as of June 30, 2019, our unaudited condensed consolidated statements of operations and comprehensive loss for the three - and six-month period ended December 31, 2019, and 2018, our stockholders’ equity (deficit) for the three - and six-month periods ended December 31, 2019, and 2018 and our unaudited condensed consolidated statements of cash flows for the six - month period ended December 31, 2019, and 2018 are attached hereto.

1

SANGUI BIOTECH INTERNATIONAL, INC.
Condensed Consolidated Balance Sheets
ASSETS
			December 31,		June 30,
			2019		2019
				(unaudited)
CURRENT ASSETS
	Cash		$	15,395	$	27,453
	Prepaid expenses and other assets			16,583		9,470
	Tax refunds receivable			5,517		6,852
	Accounts receivable, net			14,508		29,525
	Note receivable, related party			985		5,671
		Total Current Assets		52,988		78,971
PROPERTY AND EQUIPMENT, Net
	Operating lease right-of-use asset			3,002		-
		TOTAL ASSETS	$	55,990	$	78,971
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
	Accounts payable and accrued expenses		$	125,435	$	164,145
	Accrued interest  - related party			34,783		28,458
	Notes payable - related party			538,358		478,357
	Operating lease liability			3,002		-
		Total Current Liabilities		701,578		670,960
STOCKHOLDERS' DEFICIT
	Preferred stock, no par value; 10,000,000 shares
	authorized, -0- shares issued and outstanding		$	-	$	-
	Common stock, no par value; 250,000,000 shares authorized
	201,533,598 and 199,295,503 shares issued and
	201,479,842 and 199,241,747 shares outstanding respectively			33,012,261		32,967,499
	Additional paid-in capital			4,513,328		4,513,328
	Treasury stock, at cost			(19,387)		(19,387)
	Accumulated other comprehensive income			92,212		91,447
	Accumulated deficit			(37,600,416)		(37,503,684)
	Total Sangui Biotech International, Inc's stockholders' equity (defict)			(2,002)		49,203
	Non-controlling interest			(643,586)		(641,192)
		Total Stockholders' Deficit		(645,588)		(591,989)
		TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$	55,990	$	78,971
The accompanying notes are an integral part of these condensed consolidated financial statements.

2

SANGUI BIOTECH INTERNATIONAL, INC.
Condensed Consolidated Statements of Operations and Comprehensive Loss
(unaudited)
		For the Three Months Ended				For the Six Months Ended
		December 31,				December 31,
		2019		2018		2019		2018
REVENUES
	License revenues	$	11,683	$	44,095	$	11,965	$	55,367
COST OF SALES			-		26		-		99
GROSS MARGIN			11,683		44,069		11,965		55,268
OPERATING EXPENSES
	Research and development		2,650		7,314		4,886		15,286
	Professional fees		37,666		53,282		79,418		103,216
	General and administrative		7,900		43,610		20,092		90,401
Total Operating Expenses			48,216		104,206		104,396		208,903
OPERATING LOSS			(36,533)		(60,137)		(92,431)		(153,635)
OTHER INCOME (EXPENSE)
	Loss on out of court settlement		-		-		(6,714)		-
	Gain (loss) on foreign exchange		(15,111)		5,395		6,709		6,457
	Interest expense		(3,477)		(2,525)		(6,690)		(6,216)
Total other income (expense)			(18,588)		2,870		(6,695)		241
LOSS BEFORE INCOME TAXESAND NON-CONTROLLING INTEREST			(55,121)		(57,267)		(99,126)		(153,394)
	Provision for income taxes		-		1,213		-		1,213
NET LOSS BEFORE NON-CONTROLLING INTEREST			(55,121)		(58,480)		(99,126)		(154,607)
	Less: Net loss attributable to non-controlling interest		1,138		2,124		2,394		8,288
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(53,983)	$	(56,356)	$	(96,732)	$	(146,319)
OTHER COMPREHENSIVE LOSS
	Foreign currency translation adjustments		(2,255)		(1,721)		765		(1,336)
COMPREHENSIVE LOSS		$	(57,376)	$	(60,201)	$	(98,361)	$	(155,943)
	BASIC AND DILUTED LOSS PER SHARE	$	(0.00)	$	(0.00)	$	(0.00)	$	(0.00)
	BASIC AND DILUTED WEIGHTED AVERAGE
	NUMBER OF SHARES OUTSTANDING		201,533,598		195,147,849		200,819,827		195,007,308
The accompanying notes are an integral part of these condensed consolidated financial statements.

3

SANGUI BIOTECH INTERNATIONAL, INC.
Condensded Consolidated Statements of Stockholders' Equity (Deficit)
(unaudited)
	Three-Month Period Ended December 31, 2018
								Accumulated
				Additional				Other		Non-
	Common Stock			Paid-In		Treasury		Comprehensive		controlling		Accumulated
	Shares	Amount		Capital		Stock		Income (Loss)		Interest		Deficit		Total
Balance, October 1, 2018	192,951,503	$	32,884,893	$	4,513,328	$	(19,387)	$	93,306	$	(628,418)	$	(37,270,071)		(426,349)
Common shares issued for Cash	5,500,000		63,954		-		-		-		-		-		63,954
Common stock issued for services	844,000		18,652		-		-		-		-		-		18,652
Currency translation adjustment	-		-		-		-		(1,721)		-		-		(1,721)
Net loss	-		-		-		-		-		(2,124)		(56,356)		(58,480)
Balance, December 31, 2018	199,295,503	$	32,967,499	$	4,513,328	$	(19,387)	$	91,585	$	(630,542)	$	(37,326,427)	$	(403,944)
SANGUI BIOTECH INTERNATIONAL, INC.
Condensded Consolidated Statements of Stockholders' Equity (Deficit)
(unaudited)
	Three-Month Period Ended December 31, 2019
								Accumulated
				Additional				Other		Non-
	Common Stock			Paid-In		Treasury		Comprehensive		controlling		Accumulated
	Shares	Amount		Capital		Stock		Income (Loss)		Interest		Deficit		Total
Balance, October 1, 2019	201,533,598	$	33,012,261	$	4,513,328	$	(19,387)	$	94,467	$	(642,448)	$	(37,546,433)	$	(588,212)
Currency translation adjustment	-		-		-		-		(2,255)		-		-		(2,255)
Net loss	-		-		-		-		-		(1,138)		(53,982)		(55,120)
Balance, December 31, 2019	201,533,598	$	33,012,261	$	4,513,328	$	(19,387)	$	92,212	$	(643,586)	$	(37,600,415)		(645,587)
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

SANGUI BIOTECH INTERNATIONAL, INC.
Condensed Consolidated Statements of Stockholders' Equity (Deficit)
	Six-Month Period Ended December 31, 2018
								Accumulated
				Additional				Other		Non-
	Common Stock			Paid-In		Treasury		Comprehensive		controlling		Accumulated
	Shares	Amount		Capital		Stock		Income (Loss)		Interest		Deficit		Total
Balance, July 1, 2018	191,951,503	$	32,864,356	$	4,513,328	$	(19,387)	$	92,921	$	(622,254)	$	(37,180,108)		(351,144)
Common shares issued for Cash	6,500,000		84,491		-		-		-		-		-		84,491
Common stock issued for services	844,000		18,652		-		-		-		-		-		18,652
Currency translation adjustment	-		-		-		-		(1,336)		-		-		(1,336)
Net loss	-		-		-		-		-		(8,288)		(146,319)		(154,607)
Balance, December 31, 2018	199,295,503	$	32,967,499	$	4,513,328	$	(19,387)	$	91,585	$	(630,542)	$	(37,326,427)	$	(403,944)
SANGUI BIOTECH INTERNATIONAL, INC.
Condensed Consolidated Statements of Stockholders' Equity (Deficit)
	Six-Month Period Ended December 31, 2019
								Accumulated
				Additional				Other		Non-
	Common Stock			Paid-In		Treasury		Comprehensive		controlling		Accumulated
	Shares	Amount		Capital		Stock		Income (Loss)		Interest		Deficit		Total
Balance, July 1, 2019	199,295,503	$	32,967,499	$	4,513,328	$	(19,387)	$	91,447	$	(641,192)	$	(37,503,684)	$	(591,989)
Common stock issued for services	2,238,095		44,762		-		-		-		-		-		44,762
Currency translation adjustment	-		-		-		-		765		-		-		765
Net loss	-		-		-		-		-		(2,394)		(96,732)		(99,126)
Balance, December 31, 2019	201,533,598	$	33,012,261	$	4,513,328	$	(19,387)	$	92,212	$	(643,586)	$	(37,600,416)		(645,588)
The accompanying notes are an integral part of these condensed consolidated financial statements.

5

SANGUI BIOTECH INTERNATIONAL, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
				For the Six Months Ended
				December 31,
				2019		2018
CASH FLOWS FROM OPERATING ACTIVITIES
	Net loss			$	(99,126)	$	(154,607)
	Adjustments to reconcile net loss to net cash
	used by operating activities:
		Common stock issued for services			-		18,652
		Common stock issued for obtaining out-of-court settlement			6,714		-
		Foreign currency exchange transactions			(6,709)		(6,457)
		Amortization of right to use asset			(3,532)		-
	Changes in operating assets and liabilities
		Trade accounts receivable			14,418		(5,211)
		Prepaid expenses and other current assets			(11,781)		747
		Tax refunds receivable			1,002		(5,735)
		Accounts payable and accrued expenses			4,386		(2,700)
		Related party advances			5,527		6,160
		Related party accounts payable			6,693		3,948
		Operationg lease liability			3,532		-
			Net Cash Used in Operating Activities		(78,876)		(145,203)
CASH FLOWS FROM FINANCING ACTIVITIES
		Proceeds from related party note payable			66,342		720,341
		Repayment of related party note payable			-		(604,756)
		Proceeds from common stock issued for cash			-		84,491
		Repayment of notes payable			-		(37,971)
			Net Cash Provided by Financing Activities		66,342		162,105
EFFECTS OF EXCHANGE RATES ON CASH					476		(1,602)
	NET CHANGES IN CASH				(12,058)		15,300
	CASH AT BEGINNING OF PERIOD				27,453		20,943
	CASH AT END OF PERIOD			$	15,395	$	36,243
	CASH FLOW INFORMATION
	CASH PAID FOR:
		Interest		$	-	$	2,509
		Income Taxes		$	-	$	-
	NON - CASH INVESTING AND FINANCING ACTIVITIES
		Right of use operating lease assets obtained in exchange for lease liabilities		$	6,504	$	-
		Stock issued in settlement of liability		$	44,762	$	-
	The accompanying notes are an integral part of these condensed consolidated financial statements.

6

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States of America and rules of the Securities Exchange Commission for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements and notes should, therefore, be read in conjunction with the consolidated financial statements and notes thereto in the Company's Form 10-K for the year ended June 30, 2019. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation, have been included. The results of operations for the three - and six-month period ended December 31, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2020.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Sangui Biotech International, Inc., (Sangui or the Company) was incorporated in Colorado in 1995 and conducts business through its 90% owned subsidiary, Sangui BioTech GmbH (Sangui GmbH) and its 99.8% owned subsidiary Sangui Know-how und Patentverwertungsgesellschaft mbH & Co. KG (Sangui KG). Sangui GmbH, which is headquartered in Hamburg, Germany, is engaged in the development of artificial oxygen carriers (external applications of hemoglobin, blood substitutes and blood additives) as well as in the development, marketing and sales of cosmetics and wound management products. Sangui KG is a limited partnership that holds the license rights under the various agreements that the Company enters into from time to time.

Consolidation

The consolidated financial statements include the accounts of Sangui BioTech International, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation

Assets and liabilities of the Company's foreign operations are translated into U.S. dollars at period-end exchange rates. Net exchange gains or losses resulting from such translation are excluded from net loss but are included in comprehensive loss and accumulated in a separate component of stockholders' equity (deficit). Income and expenses are translated at average exchange rates for the period.

Exchanges rates used for the preparation of the consolidated balance sheet as of December 31, 2019 and June 30, 2019 and our unaudited consolidated statements of operations for the three - and six-month periods ended December 31, 2019 and 2018, were calculated as follows:

The Company accounts for the transactions denominated in foreign currencies in the Parent Company’s books as transaction gains (losses) recognized in Other income.

 

7

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

Risk and Uncertainties

The Company's line of future pharmaceutical products (artificial oxygen carriers or blood substitute and additives) and medical products (wound dressings and other wound management products) being developed by Sangui GmbH, are deemed as medical devices or biologics, and as such are governed by the Federal Food and Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. The pharmaceuticals, under development in Germany, will be subject to more stringent regulatory requirements, because they are in vivo products for humans. The Company and its subsidiaries have no experience in obtaining regulatory clearance on these types of products. Therefore, the Company will be subject to the risks of delays in obtaining or failing to obtain regulatory clearance.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has accumulated deficit of $37,600,416 as of December 31, 2019. The Company incurred a net loss before non-controlling interest of $99,126 for the six months ended December 31, 2019 and used cash in operating activities of $78,876 during the six months ended December 31, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from issuance of the financial statements. The Company expects to continue to incur significant capital expenses in pursuing its business plan to market its products and expand its product line, while obtaining additional financing through stock offerings or other feasible financing alternatives. In order for the Company to continue its operations at its existing levels, the Company will require significant additional funds over the next twelve months. Therefore, the Company is dependent on funds raised through equity or debt offerings. Additional financing may not be available on terms favorable to the Company, or at all. If these funds are not available, the Company may not be able to execute its business plan or take advantage of business opportunities. The ability of the Company to obtain such additional financing and to achieve its operating goals is uncertain. In the event that the Company does not obtain additional capital, is not able to collect its outstanding receivables, or is not able to increase cash flow through the increase of sales, there is a substantial doubt of its being able to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash and Cash Equivalents

The Company maintains its cash in bank accounts in Germany. Cash and cash equivalents include time deposits for which the Company has no requirements for compensating balances. The Company has not experienced any losses in its uninsured bank accounts.

Research and Development

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

Revenue Recognition

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

8

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Type of Revenue

The Company derives revenue primarily from licensing fees on sales of its wound spray product.

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic ASC 606 set forth below.

The Company’s licenses provide a right to use and create performance obligations satisfied at a point in time. The Company recognizes revenue from the license when the performance obligation is satisfied through the transfer of the license. The Company will recognize royalty revenue a) when the licensee makes the subsequent sales or use that trigger the royalty, or (b) the performance obligation to whichsome or all of the sales-based or usage-based royalties has been allocated has been satisfied.

Basic and Diluted Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted earnings (loss) per share give effect to all potential dilutive common shares outstanding during the period of compensation. The computation of diluted earnings (loss) per share does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. As of December 31, 2019, the Company had no potentially dilutive securities that would affect the loss per share if they were to be dilutive.

Comprehensive Loss

Total comprehensive loss represents the net change in stockholders' equity (deficit) during a period from sources other than transactions with stockholders and as such, includes net earnings (loss). For the Company, the components of other comprehensive loss are limited to the changes in the cumulative foreign currency translation adjustments, which is recorded as components of stockholders' equity (deficit).

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), ("ASC 842"). The objective of the guidance in ASC 842 is to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the balance sheet and disclosing key information. ASC 842 amends previous lease guidance to require a lessee to recognize a lease liability and a right-of-use asset on the entity’s balance sheet for all leases with terms that exceed one year. ASC 842 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASC 842 provides that lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. The Company elected a policy of not recording leases on its condensed balance sheets when the leases have term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The standard did not materially impact consolidated net income or liquidity.

9

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Litigation

The Company may, from time to time, be involved in various legal disputes resulting from the ordinary course of operating its business. Management is currently not able to predict the outcome of any such cases. However, management believes that the amount of ultimate liability, if any, with respect to such actions will not have a

material effect on the Company's financial position or results of operations.

At the time of reporting, no litigations are pending.

Indemnities and Guarantees

During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company's officers, under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheet.

Leases

Effective from June 30, 2019 the Company has closed the site in Witten and relocated its headquarters to Hamburg. The Company leases office facilities from an unrelated third party at 685 Euros per month. The office lease contract is maintained on a month-to-month basis.

The Company also leases an automobile under an operating lease. The lease provides for a lease payment of 538 Euros per month beginning June 2018 expiring May 2020.  

The following table reconciles future minimum operating lease payments to the discounted lease liability as of June 30, 2019:

 

License Agreement

Pursuant to the contracts dated May 2, 2018 and November 11, 2018 between Sangui GmbH respectively Sangui KG and a former contractor, Sangui KG grants that contractor a license fee on the license income received by

10

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

Sangui for his previous services as a co-inventor. The license fee is 10% analogously to the remuneration regulation of the German Law on Employee Inventions (ArbnErfG).

NOTE 4 – DEBT

Notes Payable Related Parties

As of December 31, 2019, the Company had outstanding the following loans payable due to a Company Director:

 

On September 17, 209, on October 04, 2019 and on October 30, 2019 a Company Director advanced amount of 20,000 Euros ($22,432 as of December 31, 2019) each to the Company.  The loans are due on demand, accrue interest annually at 2% and are unsecured.  As of December 31, 2019, the notes have total interest accrued of $313.  

NOTE 5 – CAPITAL STOCK

Preferred Stock – The Company is authorized to issue 10,000,000 shares of preferred stock. No preferred stock has been issued to date. The authorized preferred shares are non-voting and the Board of Directors has not designated any liquidation value or dividend rates.

Common Stock – The Company is authorized to issue 250,000,000 shares of no - par value common stock. The holders of the Company's common stock are entitled to one vote for each share held of record on all matters to be voted on by those stockholders. As of December 31, 2019, and June 30, 2019, the Company had 201,533,598 shares and 199,295,503 shares of common stock issued and 201,479,842 and 199,241,747 shares outstanding, respectively.

During the six months ended December 31, 2019, the Company issued 2,238,095 shares of common stock to one individual for obtaining aa settlement in a patent matter at $44,762 ($0.0200 per share). The company recorded an accrual in the amount of $38,048 in the annual financial statements ended June 30, 2019. An additional loss of $6,714 was recorded during the six months ended December 31, 2019.

11

SANGUI BIOTECH INTERNATIONAL, INC.

Notes to the Condensed Consolidated Financial Statements

December 31, 2019 and June 30, 2019

(Unaudited)

Treasury Stock - The Company holds 53,756 of its common stock as treasury stock, which is valued at cost of $19,387 at December 31, 2019.

Stock – Based Compensation - On October 22, 2008 the Company adopted the 2008 Amended and Restated Long-Term Equity Incentive Plan, whereby the Board was authorized to issue up to 10,000,000 shares of common stock (including incentive stock options) to certain eligible employees, directors, and consultants of the Company or its subsidiaries. The term of the plan was 10 years. It expired in October 2018.

NOTE 6 – SUBSEQUENT EVENTS

Subsequent to December 31, 2019, a Company Director advanced 10,000 Euros ($11,216) to the Company. The loans are due on demand, accrues interest annually at 2% and are unsecured.

Subsequent to December 31, 2019, the Company sold 1,250,000 shares of its common stock for approximately       $11,055 in cash proceeds to one individual at price of approximately $ 0.009 per share.

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

12

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

Forward-looking Statements

The following discussion of our financial condition and results of operations should be read in conjunction with the consolidated financial statements and the related notes thereto included elsewhere in this quarterly report. Some of the information in this quarterly report contains forward-looking statements, including statements related to anticipated operating results, margins, growth, financial resources, capital requirements, adequacy of the Company's financial resources, trends in spending on research and development, the development of new markets, the development, regulatory approval, manufacture, distribution, and commercial acceptance of new products, and future product development efforts. Investors are cautioned that forward-looking statements involve risks and uncertainties, which may affect our business and prospects, including but not limited to, the Company's expected need for additional funding and the uncertainty of receiving the additional funding, changes in economic and market conditions, acceptance of our products by the health care and reimbursement communities, new development of competitive products and treatments, administrative and regulatory approval and related considerations, health care legislation and regulation, and other factors discussed in our filings with the Securities and Exchange Commission.

GENERAL

Our mission is the development of novel and proprietary pharmaceutical, medical and cosmetic products. We develop our products through our German subsidiary, Sangui GmbH. Currently, we are seeking to market and sell our products through partnerships with industry partners worldwide.

Our focus has been the development of oxygen carriers capable of providing oxygen transport in humans in the event of acute and/or chronic lack of oxygen due to arterial occlusion, anemia or blood loss whether due to surgery, trauma, or other causes, as well as in the case of chronic wounds. We have thus far focused our development and commercialization efforts on such artificial oxygen carriers by reproducing and synthesizing polymers out of native hemoglobin of defined molecular sizes. In addition, we have developed external applications of oxygen transporters in the medical and cosmetic fields in the form of sprays for the healing of chronic wounds and of gels and emulsions for the regeneration of the skin. A wound dressing that shows outstanding properties in the support of wound healing, is being distributed by SastoMed GmbH (Sastomed), a former joint venture company in which we had held a share of 25%, as global licensee under the Granulox brand name. Effective as of the end of the second quarter of our fiscal year 2016 we sold this stake to SanderStrohmann GmbH.

Sangui GmbH holds distribution rights for our Chitoskin wound pads for the European Union and various other countries. Additionally, a European patent has been granted for the production and use of improved Chitoskin wound pads.

Our current key business focuses are: (a) selling our existing cosmetics and wound management products by way of licensing through distribution partners, or by way of direct sale, to end users; (b) identifying additional industrial and distribution partners for our patents, production techniques, and products; and, (c) obtaining the additional certifications on our products in development.

Artificial Oxygen Carriers

Sangui GmbH develops several products based on polymers of purified natural porcine hemoglobin with oxygen carrying abilities that are similar to native hemoglobin. These are (1) oxygen carrying blood additives and (2) oxygen carrying blood volume substitutes.

According to regulatory requirements, all drugs must complete preclinical and clinical trials before approval (e.g. Federal Drug Administration approval) and market launch. The Company’s management believes that the European and FDA approval process will take at a minimum several years to complete.

Our most promising potential product in the area of artificial oxygen carriers, the blood additive, is still in an early development stage. In the pursuit of these projects we will need to obtain substantial additional capital to continue their development. As the Company has limited financial resources, we have suspended this project temporarily in order to focus our attention on our chronic wound research and the products developed in conjunction with their treatment.

13

Nano Formulations for the Regeneration of the Skin

Healthy skin is supplied with oxygen both from the inside as well as through diffusion from the outside. A lack of oxygen will cause degenerative alterations, ranging from premature aging, to surface damage, and even as extensive as causing open wounds. The cause for the lack of oxygen may be a part of the normal aging process, but it may also be caused by burns, radiation, trauma, or a medical condition. Impairment of the blood flow, for example caused by diabetes mellitus or by chronic venous insufficiency, can also lead to insufficient oxygen supply and the resulting skin damage.

In response, we developed nano-emulsion based cosmetic preparations that in their design are able to help support regeneration of the skin by improving its oxygen supply. Our line of cosmetic products was thoroughly tested by an independent research institute and received top marks for skin moisturizing, and enhanced skin elasticity, respectively. However, sales of this series have remained at a low level and during the first quarter of the 2016 financial year we decided to decrease our operations in this particular segment and to abandon the patent protection for this range of products.

Chitoskin Wound Pads

Usually, normal (“primary”) wounds tend to heal over a couple of days without leaving scars following a certain sequence of phases. Burns and certain diseases impede the normal wound healing process, resulting in large, hardly healing (“secondary”) wounds which only close by growing new tissue from the bottom. Wound dressings serve to safeguard the wound with its highly sensitive new granulation tissue from mechanical damage as well as from infection. Using the natural polymer chitosan, Sangui’s Chitoskin wound dressings show outstanding properties in supporting wound healing. Sangui GmbH holds various distribution rights for our Chitoskin wound pads, and it is the strategy of the company to find industry partners ready to acquire or license this product range as a whole.

Hemospray Wound Spray

Sangui GmbH has developed a novel medical technology supporting the healing of chronic wounds. Lack of oxygen supply to the cells in the wound ground is the main reason why those wounds lose their genuine healing power. Based on its concept of artificial oxygen carriers, the wound spray product we developed bridges the watery wound surface and permits an enhanced afflux of oxygen to the wound ground.

Sangui GmbH has granted SastoMed global distribution rights to this product. Distribution of the wound spray began in the European Union in April 2012 under the brand name “Granulox.”

In December 2012, product distribution was initiated in Mexico by Sastomed and their local distribution partner Bio-Mac Pharma. International distribution has been expanded since then through cooperation agreements with local distribution partners in the Benelux countries and South Eastern Europe.

Since December 2013, international distribution outside Germany in collaboration with local partners has occurred in more than 40 countries in Europe and Latin American.

On November 13, 2017, the Company announced that Infirst Healthcare Ltd has announced that the United States (US) Food and Drug Administration had granted Fast Track designation to Granulox for the treatment of diabetic foot ulcers. It is the first and only hemoglobin spray to receive the Fast Track designation - a process designed to facilitate the development, and expedite the review of, new therapies to treat serious conditions and fill an unmet medical need.

Despite the positive reviews of our product, Granulox sales have become more volatile.  We remain confident, however, that SastoMed will be able to considerably increase its sales along with more international markets entering actual distribution of the product.

In December 2010, Sangui GmbH established a joint venture company with SanderStrothmann GmbH of Georgsmarienhuette, Germany, under the name of SastoMed GmbH. This enterprise was in charge of obtaining the

14

CE mark certification authorizing the distribution of one of SGBI’s products in the member states of the European Union. Effective December 31, 2015, Sangui GmbH sold its stake in Sastomed GmbH to SanderStrohmann GmbH.

On or about June 18, 2018, Sangui GmbH together with Sastomed GmbH founded Sangui Know-How- und Patentverwertungsgesellschaft mbH & Co. KG (“Sangui KG”). Sangui KG is a limited partnership. On June 22, 2018, Sangui KG acquired all the rights in the license agreement made on December 17, 2010, between Sastomed GmbH and Sangui GmbH.

Pursuant to the contracts dated May 2, 2018 and November 11, 2018 between Sangui GmbH respectively Sangui KG and a former contractor Sangui KG grants that contractor a license fee on the license income received by Sangui for his previous services as a co-inventor. The license fee is 10% analogously to the remuneration regulation of the German Law on Employee Inventions (ArbnErfG).

Given the Company’s business strength is primarily in research and product development, we have decided to partner with established distribution entities who license our marketable products, or those products that are close to market entry, for sale to end users. In pursuit of this strategy we have licensed the most promising product, a hemoglobin based wound spray technology to Sastomed GmbH, a former joint venture of SGBI, for distribution in several European, Latin American and Asian countries. In addition, we are entering the preclinical testing of hemoglobin based artificial oxygen carriers aiming at the remediation of ischemic conditions in human patients.

FINANCIAL POSITION

During the six months ended December 31, 2019, our total assets decreased $22,981 from $78,971 at June 30, 2019 to $55,990 at December 31, 2019. A decrease of accounts receivables and a decrease of cash from June 30, 2019 to December 31, 2019, of $15,017 and $12,058 respectively were primarily responsible for the decrease in the total assets.

We funded our operations primarily through our existing cash reserves and cash received from the issuance of shares of common stock and notes payables from related parties. Our stockholders’ equity (deficit) increased by $53,599 from ($591,989) at June 30, 2019 to ($645,588) at December 31, 2019. The primary factor behind this was net loss attributable to common stockholders of $96,732 offset by the issuance of stock, valued at $44,762 in connection to the out-of-court settlement.

RESULTS OF OPERATIONS

For the three-month and six-month period December 31, 2019 and 2018:

REVENUES – Revenues reported were $11,683and $44,095 for the three months ended December 31, 2019 and 2018 respectively. For the six months ended December 31, 2019 and 2018 revenues were $11,965 and $55,367. Revenues decreased by $32,412 for the three months ended December 31, 2019 and 2018 and decreased by $43,402 for the six months ended December 31, 2019 and 2018. The decrease of $32,412 and $43,402 respectively can be traced back to a decrease in royalties from the licensing agreement with SastoMed. Cost of sales were $0 and $99 for the six months ended December 31, 2019 and 2018 respectively.

RESEARCH AND DEVELOPMENT – Research and development expenses decreased by $4,664 to $2,650 from $7,314 for the three-month periods ending December 31, 2019 and 2018.  Research and development expenses decreased $10,400 to $4,886 in the first half-year of our 2020 financial year from $15,286 in the comparable period of the previous year. This decrease is mainly attributed to lower fees for patents.

GENERAL AND ADMINISTRATIVE and PROFESSIONAL FEES –The combined accumulated general and administrative expenses and professional fees decreased $51,326 to $ 45,567 in the three months ended December 31, 2019, from $96,892 in the respective period of the previous year. Accumulated general and administrative expenses and professional fees decreased $94,107 to $99,510 in the half-year ended December 31,

15

2019, from $193,617 in the respective period of the previous year mainly due to lower personnel costs, lower rental expenses and lower professional fees.

INTEREST EXPENSE - interest expenses for the three-month period ended December 31, 2019 and 2018 were $3,477 and $2,525, an increase of $952. For the six months ended December 31, 2019 and 2018, interest expense increased by $474 to $6,690 from $6,216. The increase relates to the increase of interest - bearing debt financing.   

NET LOSS - As a result of the above factors, the net loss attributed to common shareholders decreased to $53,983 compared to a loss of $56,356 for the three months ended December 31, 2019 and 2018 respectively and a loss of $96,732 compared to a loss of $146,319 for the six month ended December 31, 2019 and 2018 respectively. The loss per share for both periods was $(0.00).

Our consolidated net loss before non-controlling interest was $55,121, or $(0.00) per common share, for the three months ended December 31, 2019, compared to $58,480 or $(0.00) per common share, during the comparable period in our 2019 financial year. Our consolidated net loss before non-controlling interest was $99,126 or $(0.00) per common share, for the six months ended December 31, 2019, compared to $154,607 or $(0.00) per common share, during the comparable period in our 2019 financial year.

LIQUIDITY AND CAPITAL RESOURCES

For the six months ended December 31, 2019, net cash used in operating activities decreases $66,327 to $(78,876), compared to $(145,203) in the corresponding period of the previous year. This is mainly due to a decrease of the operating loss of approximately $55,481 from a loss of $(154,607) in 2018 to a loss of $(99,126) in 2019.

The Company funded its business in the first six months ended December 31, 2019 by issuing note payables totaling 60,000Euros ($ 66,606).

We had a working capital deficit of approximately $648,590 at December 31, 2019, an increase of approximately $56,601from June 30, 2018.  

At December 31, 2019 compared to June 30, 2018, we had cash of $15,395 compared to $27,453, prepaid expenses of $16,583 compared to $9,470 and accounts receivable of $14,508 compared $29,525. We will need substantial additional funding to fulfill our business plan and we intend to explore financing sources for our future development activities.  No assurance can be given that these efforts will be successful.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

We are a smaller reporting company as defined by §229.10(f)(1) and are not required to provide the information under this item.

Item 4 - Controls and Procedures

Disclosure Controls and Procedures

As of the date of the end of the period covered by this report, our Chief Executive Officer and Chief Financial Officer conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as required by Exchange Act Rule 13a-15. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of the end of the period covered by this report to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the SEC’s rules and forms. 

Disclosure controls and procedures are controls and other procedures that are designed to ensure that  

16

information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. 

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant’s principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: 

(a)Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant; 

(b)Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and 

(c)Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant’s assets that could have a material effect on the financial statements. 

PART II - OTHER INFORMATION

Item 1 - Legal Proceedings

The Company is not aware of pending claims or assessments, which may have a material adverse impact on the Company’s financial position or results of operations. 

Item 1a - Risk Factors

We are a smaller reporting company as defined by §229,10(f)(1) and are not required to provide the information under this item. 

Item 2 - Unregistered Sales of Equity Securities and Use Of Proceeds

None

Item 3 - Defaults Upon Senior Securities

    None.

Item 5 - Other Information

None.  

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Item 6 – Exhibits

 1.           Financial Statements.  The unaudited condensed consolidated Balance Sheet of Sangui Biotech International, Inc. as of December 31, 2019 and the audited balance sheet as of June 30, 2019, the unaudited condensed consolidated Statements of Operations for the three and six - month periods ended December 31, 2019 and 2018, the condensed unaudited Statements of Stockholder’s Equity (Deficit) as of December 31. 2019 and 2018, and the unaudited condensed consolidated Statements of Cash Flows for the six-month period ended December 31, 2019 and 2018, together with the notes thereto, are included in this Quarterly Report on Form 10-Q.

2.           Exhibits. The following exhibits are either filed as a part hereof or are incorporated by reference. Exhibit numbers correspond to the numbering system in Item 601 of Regulation S-K.

Exhibit       

Number    Description of Exhibit

31.01	Certification of CEO Pursuant to Rule 13a-14(a) and 15d-14(a), filed herewith
31.02	Certification of principal financial officer Pursuant to Rule 13a-14(a) and 15d-14(a), filed herewith
32.01	Certification Pursuant to Section 1350 of Title 18 of the United States Code, filed herewith

SIGNATURES

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

SANGUI BIOTECH INTERNATIONAL, INC.

Dated: February 13, 2020/s/ Thomas Striepe          

By: Thomas Striepe 

Chief Executive Officer  

18

EX-32

Exhibit 32.01

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Sangui Biotech International, Inc. (the “Company”) on Form 10-Q for the period ending December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas Striepe, Chief Executive Officer and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief: 

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

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

Dated: February 13, 2019/s/ Thomas Striepe                                               

By: Thomas Striepe 

Chief Executive Officer and 

Chief Financial Officer 

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request. 

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NOTE 4 - DEBT (Details) - USD ($)	Dec. 31, 2019	Oct. 30, 2019	Oct. 04, 2019	Sep. 17, 2019	Jun. 30, 2019	Jun. 21, 2019	May 09, 2019	Apr. 08, 2019	Mar. 20, 2019	Feb. 26, 2019	Jan. 21, 2019	Dec. 27, 2018	Oct. 04, 2018	Sep. 10, 2018	Jul. 16, 2018	Mar. 13, 2018	Jan. 19, 2018	Dec. 12, 2017	Mar. 06, 2015
Accrued interest - related party	$ 34,783				$ 28,458
Interest rate		2.00%	2.00%	2.00%		2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	5.00%
Director
Interest rate	2.00%
Director | Principal
Accrued interest - related party	$ 22,432
Director | Interest
Accrued interest - related party	$ 313

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Consolidated Statements of Cash Flows - USD ($)	6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (99,126)	$ (154,607)
Adjustments to reconcile net loss to net cash used by operating activities:
Common stock issued for services	0	18,652
Common stock issued for obtaining out-of-court settlement	6,714	0
Foreign currency exchange transactions	(6,709)	(6,457)
Amortization of right to use asset	(3,532)	0
Changes in operating assets and liabilities
Trade accounts receivable	14,418	(5,211)
Prepaid expenses and other current assets	(11,781)	747
Tax refunds receivable	1,002	(5,735)
Accounts payable and accrued expenses	4,386	(2,700)
Related party advances	5,527	6,160
Related party accounts payable	6,693	3,948
Operationg lease liability	3,532	0
Net Cash Used in Operating Activities	(78,876)	(145,203)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from related party note payable	66,342	720,341
Repayment of related party note payable	0	(604,756)
Proceeds from common stock issued for cash	0	84,491
Repayment of notes payable	0	(37,971)
Net Cash Provided by Financing Activities	66,342	162,105
EFFECTS OF EXCHANGE RATES ON CASH	476	(1,602)
NET CHANGES IN CASH	(12,058)	15,300
CASH AT BEGINNING OF PERIOD	27,453	20,943
CASH AT END OF PERIOD	15,395	36,243
CASH FLOW INFORMATION
Interest	0	2,509
Income Taxes	0	0
NON - CASH INVESTING AND FINANCING ACTIVITIES
Right of use operating lease assets obtained in exchange for lease liabilities	6,504	0
Stock issued in settlement of liability	$ 44,762	$ 0

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Consolidated Balance Sheets - USD ($)	Dec. 31, 2019	Jun. 30, 2019
CURRENT ASSETS
Cash	$ 15,395	$ 27,453
Prepaid expenses and other assets	16,583	9,470
Tax refunds receivable	5,517	6,852
Accounts receivable, net	14,508	29,525
Note receivable, related party	985	5,671
Total Current Assets	52,988	78,971
Operating lease right-of-use asset	3,002	0
TOTAL ASSETS	55,990	78,971
CURRENT LIABILITIES
Accounts payable and accrued expenses	125,435	164,145
Accrued interest - related party	34,783	28,458
Notes payable - related party	538,358	478,357
Operating lease liability	3,002	0
Total Current Liabilities	701,578	670,960
STOCKHOLDERS' DEFICIT
Preferred stock, no par value; 10,000,000 shares authorized, -0- shares issued and outstanding	0	0
Common stock, no par value; 250,000,000 shares authorized 201,533,598 and 199,295,503 shares issued and 201,479,842 and 199,241,747 shares outstanding respectively	33,012,261	32,967,499
Additional paid-in capital	4,513,328	4,513,328
Treasury stock, at cost	(19,387)	(19,387)
Accumulated other comprehensive income	92,212	91,447
Accumulated deficit	(37,600,416)	(37,503,684)
Total Sangui Biotech International, Inc's stockholders' equity (defict)	(2,002)	49,203
Non-controlling interest	(643,586)	(641,192)
Total Stockholders' Deficit	(645,588)	(591,989)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$ 55,990	$ 78,971

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Going Concern (Details) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Jun. 30, 2019
Details
Accumulated deficit	$ 37,600,416		$ 37,600,416		$ 37,503,684
NET LOSS BEFORE NON-CONTROLLING INTEREST	$ 55,121	$ 58,480	99,126	$ 154,607
Net Cash Used in Operating Activities			$ 78,876	$ 145,203

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NOTE 5 - CAPITAL STOCK

6 Months Ended

Dec. 31, 2019

Notes

NOTE 5 - CAPITAL STOCK

NOTE 5 – CAPITAL STOCK

Preferred Stock – The Company is authorized to issue 10,000,000 shares of preferred stock. No preferred stock has been issued to date. The authorized preferred shares are non-voting and the Board of Directors has not designated any liquidation value or dividend rates.

Common Stock – The Company is authorized to issue 250,000,000 shares of no - par value common stock. The holders of the Company's common stock are entitled to one vote for each share held of record on all matters to be voted on by those stockholders. As of December 31, 2019, and June 30, 2019, the Company had 201,533,598shares and 199,295,503 shares of common stock issued and 201,479,842 and 199,241,747shares outstanding, respectively.

During the six months ended December 31, 2019, the Company issued 2,238,095 shares of common stock to one individual for obtaining aa settlement in a patent matter at $44,762 ($0.0200 per share). The company recorded an accrual in the amount of $38,048 in the annual financial statements ended June 30, 2019. An additional loss of $6,714was recorded during the six months ended December 31, 2019.

Treasury Stock - The Company holds 53,756 of its common stock as treasury stock, which is valued at cost of $19,387 at December 31, 2019.

Stock – Based Compensation - On October 22, 2008 the Company adopted the 2008 Amended and Restated Long-Term Equity Incentive Plan, whereby the Board was authorized to issue up to 10,000,000 shares of common stock (including incentive stock options) to certain eligible employees, directors, and consultants of the Company or its subsidiaries. The term of the plan was 10 years. It expired in October 2018.

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NOTE 3 - COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Dec. 31, 2019

Tables/Schedules

Minimum Lease Payments Under Operating Leases

The following table reconciles future minimum operating lease payments to the discounted lease liability as of June 30, 2019:

Minimum Lease Payments Under Operating Leases
2020	$	3,017
Total Operating Lease Obligations	$	3,017
Less: Amount representing imputed interest	$	(15)
Present Value of minimum lease payments	$	3,002
Weighted average discount rate		2%

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NOTE 4 - DEBT

6 Months Ended

Dec. 31, 2019

Notes

NOTE 4 - DEBT

NOTE 4 – DEBT

Notes Payable Related Parties

As of December 31, 2019, the Company had outstanding the following loans payable due to a Company Director:

Date	Loan amount in EURO	Loan amount converted into USD	Interest rate	Interest  in USD	Due
March 06, 2015	100,000	112,158	5%	26,052	June 30, 2020
December 12, 2017	25,000	28,039	2%	1,151	on demand
January 19, 2018	25,000	28,039	2%	1,092	on demand
March 13, 2018	25,000	28,039	2%	1,011	on demand
July 16, 2018	25,000	28,039	2%	819	on demand
September 10, 2018	25,000	28,039	2%	733	on demand
October 04, 2018	25,000	28,039	2%	696	on demand
December 27, 2018	25,000	28,039	2%	567	on demand
January 21, 2019	15,000	16,824	2%	317	on demand
February 26, 2019	25,000	28,039	2%	473	on demand
March 20, 2019	25,000	28,039	2%	439	on demand
April 08, 2019	20,000	22,432	2%	328	on demand
May 09, 2019	30,000	33,647	2%	435	on demand
June 21, 2019	30,000	33,647	2%	356	on demand
September 17, 2019	20,000	22,432	2%	129	on demand
October 04, 2019	20,000	22,432	2%	108	on demand
October 30, 2019	20,000	22,432	2%	76	on demand

On September 17, 209, on October 04, 2019 and on October 30, 2019 a Company Director advanced amount of 20,000 Euros ($22,432 as of December 31, 2019) each to the Company.  The loans are due on demand, accrue interest annually at 2% and are unsecured.  As of December 31, 2019, the notes have total interest accrued of $313. 

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Dec. 31, 2019

Tables/Schedules

Schedule of Foreign currency rates

The Company accounts for the transactions denominated in foreign currencies in the Parent Company’s books as transaction gains (losses) recognized in Other income.

as of December 31, 2019	0.891600
as of December 31, 2018	0.874245
July 1, 2019 through December 31, 2019	0.900817
July 1, 2018 through December 31, 2018	0.868118

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Foreign Currency Translation: Schedule of Foreign currency rates (Details)	Dec. 31, 2019	Dec. 31, 2018
Year End Rates
Foreign Currency Exchange Rate, Translation	0.891600	0.874245
Average Period Rates
Foreign Currency Exchange Rate, Translation	0.900817	0.868118

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NOTE 4 - DEBT: Notes Payable Related Parties (Details) - USD ($)	Oct. 30, 2019	Oct. 04, 2019	Sep. 17, 2019	Jun. 21, 2019	May 09, 2019	Apr. 08, 2019	Mar. 20, 2019	Feb. 26, 2019	Jan. 21, 2019	Dec. 27, 2018	Oct. 04, 2018	Sep. 10, 2018	Jul. 16, 2018	Mar. 13, 2018	Jan. 19, 2018	Dec. 12, 2017	Mar. 06, 2015	Dec. 31, 2019
Interest rate	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	5.00%
Due	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	on demand	June 30, 2020
Director
Interest rate																		2.00%
Director | Euro Member Countries, Euro
Loan amount in EURO	$ 20,000	$ 20,000	$ 20,000	$ 30,000	$ 30,000	$ 20,000	$ 25,000	$ 25,000	$ 15,000	$ 25,000	$ 25,000	$ 25,000	$ 25,000	$ 25,000	$ 25,000	$ 25,000	$ 100,000
Director | United States dollar (next day) (funds code)
Loan amount converted into USD	22,432	22,432	22,432	33,647	33,647	22,432	28,039	28,039	16,824	28,039	28,039	28,039	28,039	28,039	28,039	28,039	112,158
Interest in USD	$ 76	$ 108	$ 129	$ 356	$ 435	$ 328	$ 439	$ 473	$ 317	$ 567	$ 696	$ 733	$ 819	$ 1,011	$ 1,092	$ 1,151	$ 26,052

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NOTE 1 - BASIS OF PRESENTATION

6 Months Ended

Dec. 31, 2019

Notes

NOTE 1 - BASIS OF PRESENTATION

NOTE 1 - BASIS OF PRESENTATION

The accompanying condensed consolidated financial statements have been prepared without audit in accordance with accounting principles generally accepted in the United States of America and rules of the Securities Exchange Commission for interim financial information. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements and notes should, therefore, be read in conjunction with the consolidated financial statements and notes thereto in the Company's Form 10-K for the year ended June 30, 2019. In the opinion of management, all adjustments (consisting of normal and recurring adjustments) considered necessary for a fair presentation, have been included. The results of operations for the three - and six-month period ended December 31, 2019 are not necessarily indicative of the results that may be expected for the full fiscal year ending June 30, 2020.

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Consolidated Balance Sheets - Parenthetical - shares	Dec. 31, 2019	Jun. 30, 2019
Details
Preferred Stock, Shares Authorized	10,000,000	10,000,000
Preferred Stock, Shares Outstanding	0	0
Common Stock, Shares Authorized	250,000,000	250,000,000
Common Stock, Shares, Issued	201,533,598	199,295,503
Common Stock, Shares, Outstanding	201,479,842	199,241,747

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NOTE 6 - SUBSEQUENT EVENTS

6 Months Ended

Dec. 31, 2019

Notes

NOTE 6 - SUBSEQUENT EVENTS

NOTE 6 – SUBSEQUENT EVENTS

Subsequent to December 31, 2019, a Company Director advanced 10,000Euros ($11,216) to the Company. The loans are due on demand, accrues interest annually at 2% and are unsecured.

Subsequent to December 31, 2019, the Company sold 1,250,000 shares of its common stock for approximately        $11,055 in cash proceeds to one individual at price of approximately $ 0.009 per share.

In accordance with ASC 855-10, the Company’s management has reviewed all material events and there are no additional material subsequent events to report.

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NOTE 4 - DEBT (Tables)

6 Months Ended

Dec. 31, 2019

Tables/Schedules

Notes Payable Related Parties

As of December 31, 2019, the Company had outstanding the following loans payable due to a Company Director:

Date	Loan amount in EURO	Loan amount converted into USD	Interest rate	Interest  in USD	Due
March 06, 2015	100,000	112,158	5%	26,052	June 30, 2020
December 12, 2017	25,000	28,039	2%	1,151	on demand
January 19, 2018	25,000	28,039	2%	1,092	on demand
March 13, 2018	25,000	28,039	2%	1,011	on demand
July 16, 2018	25,000	28,039	2%	819	on demand
September 10, 2018	25,000	28,039	2%	733	on demand
October 04, 2018	25,000	28,039	2%	696	on demand
December 27, 2018	25,000	28,039	2%	567	on demand
January 21, 2019	15,000	16,824	2%	317	on demand
February 26, 2019	25,000	28,039	2%	473	on demand
March 20, 2019	25,000	28,039	2%	439	on demand
April 08, 2019	20,000	22,432	2%	328	on demand
May 09, 2019	30,000	33,647	2%	435	on demand
June 21, 2019	30,000	33,647	2%	356	on demand
September 17, 2019	20,000	22,432	2%	129	on demand
October 04, 2019	20,000	22,432	2%	108	on demand
October 30, 2019	20,000	22,432	2%	76	on demand

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NOTE 3 - COMMITMENTS AND CONTINGENCIES

6 Months Ended

Dec. 31, 2019

Notes

NOTE 3 - COMMITMENTS AND CONTINGENCIES

NOTE 3 - COMMITMENTS AND CONTINGENCIES

Litigation

The Company may, from time to time, be involved in various legal disputes resulting from the ordinary course of operating its business. Management is currently not able to predict the outcome of any such cases. However, management believes that the amount of ultimate liability, if any, with respect to such actions will not have a

material effect on the Company's financial position or results of operations.

At the time of reporting, no litigations are pending.

Indemnities and Guarantees

During the normal course of business, the Company has made certain indemnities and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the Company's officers, under which the Company may be required to indemnify such person for liabilities arising out of their employment relationship. The duration of these indemnities and guarantees varies and, in certain cases, is indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying consolidated balance sheet.

Leases

Effective from June 30, 2019 the Company has closed the site in Witten and relocated its headquarters to Hamburg. The Company leases office facilities from an unrelated third party at 685 Euros per month. The office lease contract is maintained on a month-to-month basis.

The Company also leases an automobile under an operating lease. The lease provides for a lease payment of 538 Euros per month beginning June 2018 expiring May 2020.  

The following table reconciles future minimum operating lease payments to the discounted lease liability as of June 30, 2019:

Minimum Lease Payments Under Operating Leases
2020	$	3,017
Total Operating Lease Obligations	$	3,017
Less: Amount representing imputed interest	$	(15)
Present Value of minimum lease payments	$	3,002
Weighted average discount rate		2%

License Agreement

Pursuant to the contracts dated May 2, 2018 and November 11, 2018 between Sangui GmbH respectively Sangui KG and a former contractor, Sangui KG grants that contractor a license fee on the license income received by Sangui for his previous services as a co-inventor. The license fee is 10% analogously to the remuneration regulation of the German Law on Employee Inventions (ArbnErfG).

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Consolidated Statements of Stockholders' Equity (Deficit) - USD ($)	Common Stock	Additional Paid-in Capital	Treasury Stock	AOCI Including Portion Attributable to Noncontrolling Interest	Noncontrolling Interest	Retained Earnings	Total
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Jun. 30, 2018	$ 32,864,356	$ 4,513,328	$ (19,387)	$ 92,921	$ (622,254)	$ (37,180,108)	$ (351,144)
Shares, Outstanding, Beginning Balance at Jun. 30, 2018	191,951,503
Common shares issued for Cash	$ 84,491	0	0	0	0	0	84,491
Stock Issued During Period, Shares, New Issues	6,500,000
Common stock issued for services	$ 18,652	0	0	0	0	0	18,652
Stock Issued During Period, Shares, Issued for Services	844,000
Currency translation adjustment	$ 0	0	0	(1,336)	0	0	(1,336)
Net loss	0	0	0	0	(8,288)	(146,319)	(154,607)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2018	$ 32,967,499	4,513,328	(19,387)	91,585	(630,542)	(37,326,427)	(403,944)
Shares, Outstanding, Ending Balance at Dec. 31, 2018	199,295,503
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2018	$ 32,884,893	4,513,328	(19,387)	93,306	(628,418)	(37,270,071)	(426,349)
Shares, Outstanding, Beginning Balance at Sep. 30, 2018	192,951,503
Common shares issued for Cash	$ 63,954	0	0	0	0	0	63,954
Stock Issued During Period, Shares, New Issues	5,500,000
Common stock issued for services	$ 18,652	0	0	0	0	0	18,652
Stock Issued During Period, Shares, Issued for Services	844,000
Currency translation adjustment	$ 0	0	0	(1,721)	0	0	(1,721)
Net loss	0	0	0	0	(2,124)	(56,356)	(58,480)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2018	$ 32,967,499	4,513,328	(19,387)	91,585	(630,542)	(37,326,427)	(403,944)
Shares, Outstanding, Ending Balance at Dec. 31, 2018	199,295,503
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Jun. 30, 2019	$ 32,967,499	4,513,328	(19,387)	91,447	(641,192)	(37,503,684)	(591,989)
Shares, Outstanding, Beginning Balance at Jun. 30, 2019	199,295,503
Common stock issued for services	$ 44,762	0	0	0	0	0	$ 44,762
Stock Issued During Period, Shares, Issued for Services	2,238,095						2,238,095
Currency translation adjustment	$ 0	0	0	765	0	0	$ 765
Net loss	0	0	0	0	(2,394)	(96,732)	(99,126)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2019	$ 33,012,261	4,513,328	(19,387)	92,212	(643,586)	(37,600,416)	(645,588)
Shares, Outstanding, Ending Balance at Dec. 31, 2019	201,533,598
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Beginning Balance at Sep. 30, 2019	$ 33,012,261	4,513,328	(19,387)	94,467	(642,448)	(37,546,433)	(588,212)
Shares, Outstanding, Beginning Balance at Sep. 30, 2019	201,533,598
Currency translation adjustment	$ 0	0	0	(2,255)	0	0	(2,255)
Net loss	0	0	0	0	(1,138)	(53,982)	(55,121)
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest, Ending Balance at Dec. 31, 2019	$ 33,012,261	$ 4,513,328	$ (19,387)	$ 92,212	$ (643,586)	$ (37,600,416)	$ (645,588)
Shares, Outstanding, Ending Balance at Dec. 31, 2019	201,533,598

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NOTE 3 - COMMITMENTS AND CONTINGENCIES (Details)	6 Months Ended
	Dec. 31, 2019
Office
Lessee, Operating Lease, Description	The Company leases office facilities from an unrelated third party at 685 Euros per month. The office lease contract is maintained on a month-to-month basis.
Automobile
Lessee, Operating Lease, Description	The Company also leases an automobile under an operating lease. The lease provides for a lease payment of 538 Euros per month beginning June 2018 expiring May 2020.

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Document and Entity Information - shares	6 Months Ended
	Dec. 31, 2019	Feb. 13, 2020
Details
Registrant CIK	0001104280
Fiscal Year End	--06-30
Registrant Name	SANGUI BIOTECH INTERNATIONAL INC
SEC Form	10-Q
Period End date	Dec. 31, 2019
Tax Identification Number (TIN)	84-1330732
Number of common stock shares outstanding		202,729,842
Filer Category	Non-accelerated Filer
Current with reporting	Yes
Interactive Data Current	Yes
Shell Company	false
Small Business	true
Emerging Growth Company	false
Document Quarterly Report	true
Entity File Number	0-21271
Entity Address, State or Province	CO
Entity Incorporation, State or Country Code	CO
Entity Address, Address Line One	Neuer Wall 54
Entity Address, Postal Zip Code	20354
Entity Address, City or Town	Hamburg
Entity Address, Country	DE
Country Region	49
City Area Code	40
Local Phone Number	46093120
Document Transition Report	false
Amendment Flag	false
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2

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NOTE 5 - CAPITAL STOCK (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2018	Jun. 30, 2019
Preferred Stock, Shares Authorized	10,000,000		10,000,000			10,000,000
Common Stock, Shares Authorized	250,000,000		250,000,000			250,000,000
Common Stock, Shares, Issued	201,533,598		201,533,598			199,295,503
Common Stock, Shares, Outstanding	201,479,842		201,479,842			199,241,747
Stock Issued During Period, Shares, Issued for Services			2,238,095
Common stock issued for services		$ 18,652	$ 44,762	$ 18,652	$ 38,048
LossOnOutOfCourtSettlement	$ 0	$ 0	$ 6,714	$ 0
Treasury Stock, Common, Shares	53,756		53,756
Treasury Stock, Value	$ 19,387		$ 19,387
2008 Amended And Restated Long Term Equity Incentive Plan
Share-based Compensation Arrangement by Share-based Payment Award, Description			the Board was authorized to issue up to 10,000,000 shares of common stock (including incentive stock options) to certain eligible employees, directors, and consultants of the Company or its subsidiaries. The term of the plan was 10 years. It expired in October 2018.

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Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($)	3 Months Ended		6 Months Ended
	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018
REVENUES
License revenues	$ 11,683	$ 44,095	$ 11,965	$ 55,367
COST OF SALES	0	26	0	99
GROSS MARGIN	11,683	44,069	11,965	55,268
OPERATING EXPENSES
Research and development	2,650	7,314	4,886	15,286
Professional fees	37,666	53,282	79,418	103,216
General and administrative	7,900	43,610	20,092	90,401
Total Operating Expenses	48,216	104,206	104,396	208,903
OPERATING LOSS	(36,533)	(60,137)	(92,431)	(153,635)
OTHER INCOME (EXPENSE)
Loss on out of court settlement	0	0	(6,714)	0
Gain (loss) on foreign exchange	(15,111)	5,395	6,709	6,457
Interest expense	(3,477)	(2,525)	(6,690)	(6,216)
Total other income (expense)	(18,588)	2,870	(6,695)	241
LOSS BEFORE INCOME TAXESAND NON-CONTROLLING INTEREST	(55,121)	(57,267)	(99,126)	(153,394)
Provision for income taxes	0	1,213	0	1,213
NET LOSS BEFORE NON-CONTROLLING INTEREST	(55,121)	(58,480)	(99,126)	(154,607)
Less: Net loss attributable to non-controlling interest	1,138	2,124	2,394	8,288
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	(53,983)	(56,356)	(96,732)	(146,319)
OTHER COMPREHENSIVE LOSS
Foreign currency translation adjustments	(2,255)	(1,721)	765	(1,336)
COMPREHENSIVE LOSS	$ (57,376)	$ (60,201)	$ (98,361)	$ (155,943)
BASIC AND DILUTED LOSS PER SHARE	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING	201,533,598	195,147,849	200,819,827	195,007,308

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NOTE 3 - COMMITMENTS AND CONTINGENCIES: Minimum Lease Payments Under Operating Leases (Details) - USD ($)	3 Months Ended
	Jun. 30, 2020	Dec. 31, 2019
Details
Operating Leases, Future Minimum Payments Due, Next Twelve Months		$ 3,017
Operating Leases, Future Minimum Payments Due	$ 3,017
Operating Leases, Rent Expense	(15)
Operating Lease, Liability	$ 3,002
Lessee, Operating Lease, Discount Rate		2.00%

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NOTE 6 - SUBSEQUENT EVENTS (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Mar. 31, 2020	Dec. 31, 2018	Dec. 31, 2019	Dec. 31, 2018	Dec. 31, 2018	Oct. 30, 2019	Oct. 04, 2019	Sep. 17, 2019	Jun. 21, 2019	May 09, 2019	Apr. 08, 2019	Mar. 20, 2019	Feb. 26, 2019	Jan. 21, 2019	Dec. 27, 2018	Oct. 04, 2018	Sep. 10, 2018	Jul. 16, 2018	Mar. 13, 2018	Jan. 19, 2018	Dec. 12, 2017	Mar. 06, 2015
Proceeds from related party note payable			$ 66,342	$ 720,341
Interest rate						2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	2.00%	5.00%
Stock Issued During Period, Shares, Issued for Services			2,238,095
Common stock issued for services		$ 18,652	$ 44,762	$ 18,652	$ 38,048
Common Stock
Stock Issued During Period, Shares, Issued for Services		844,000	2,238,095	844,000
Common stock issued for services		$ 18,652	$ 44,762	$ 18,652
Subsequent Event
Common stock issued for services	$ 11,055
Subsequent Event | Common Stock
Stock Issued During Period, Shares, Issued for Services	1,250,000
Shares Issued, Price Per Share	$ 0.009
Director
Interest rate			2.00%
Director | Subsequent Event
Proceeds from related party note payable	$ 11,216
Interest rate	2.00%

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Dec. 31, 2019

Notes

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Sangui Biotech International, Inc., (Sangui or the Company) was incorporated in Colorado in 1995 and conducts business through its 90% owned subsidiary, Sangui BioTech GmbH (Sangui GmbH) and its 99.8% owned subsidiary Sangui Know-how und Patentverwertungsgesellschaft mbH & Co. KG (Sangui KG). Sangui GmbH, which is headquartered in Hamburg, Germany, is engaged in the development of artificial oxygen carriers (external applications of hemoglobin, blood substitutes and blood additives) as well as in the development, marketing and sales of cosmetics and wound management products. Sangui KG is a limited partnership that holds the license rights under the various agreements that the Company enters into from time to time.

Consolidation

The consolidated financial statements include the accounts of Sangui BioTech International, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation

Assets and liabilities of the Company's foreign operations are translated into U.S. dollars at period-end exchange rates. Net exchange gains or losses resulting from such translation are excluded from net loss but are included in comprehensive loss and accumulated in a separate component of stockholders' equity (deficit). Income and expenses are translated at average exchange rates for the period.

Exchanges rates used for the preparation of the consolidated balance sheet as of December 31, 2019 and June 30, 2019 and our unaudited consolidated statements of operations for the three - and six-month periods ended December 31, 2019 and 2018, were calculated as follows:

The Company accounts for the transactions denominated in foreign currencies in the Parent Company’s books as transaction gains (losses) recognized in Other income.

as of December 31, 2019	0.891600
as of December 31, 2018	0.874245
July 1, 2019 through December 31, 2019	0.900817
July 1, 2018 through December 31, 2018	0.868118

Risk and Uncertainties

The Company's line of future pharmaceutical products (artificial oxygen carriers or blood substitute and additives) and medical products (wound dressings and other wound management products) being developed by Sangui GmbH, are deemed as medical devices or biologics, and as such are governed by the Federal Food and Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. The pharmaceuticals, under development in Germany, will be subject to more stringent regulatory requirements, because they are in vivo products for humans. The Company and its subsidiaries have no experience in obtaining regulatory clearance on these types of products. Therefore, the Company will be subject to the risks of delays in obtaining or failing to obtain regulatory clearance.

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has accumulated deficit of $37,600,416as of December 31, 2019. The Company incurred a net loss before non-controlling interest of $99,126 for the six months ended December 31, 2019 and used cash in operating activities of $78,876during the six months ended December 31, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from issuance of the financial statements. The Company expects to continue to incur significant capital expenses in pursuing its business plan to market its products and expand its product line, while obtaining additional financing through stock offerings or other feasible financing alternatives. In order for the Company to continue its operations at its existing levels, the Company will require significant additional funds over the next twelve months. Therefore, the Company is dependent on funds raised through equity or debt offerings. Additional financing may not be available on terms favorable to the Company, or at all. If these funds are not available, the Company may not be able to execute its business plan or take advantage of business opportunities. The ability of the Company to obtain such additional financing and to achieve its operating goals is uncertain. In the event that the Company does not obtain additional capital, is not able to collect its outstanding receivables, or is not able to increase cash flow through the increase of sales, there is a substantial doubt of its being able to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash and Cash Equivalents

The Company maintains its cash in bank accounts in Germany. Cash and cash equivalents include time deposits for which the Company has no requirements for compensating balances. The Company has not experienced any losses in its uninsured bank accounts.

Research and Development

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

Revenue Recognition

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Type of Revenue

The Company derives revenue primarily from licensing fees on sales of its wound spray product.

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic ASC 606 set forth below.

The Company’s licenses provide a right to use and create performance obligations satisfied at a point in time. The Company recognizes revenue from the license when the performance obligation is satisfied through the transfer of the license. The Company will recognize royalty revenue a) when the licensee makes the subsequent sales or use that trigger the royalty, or (b) the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied.

Basic and Diluted Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted earnings (loss) per share give effect to all potential dilutive common shares outstanding during the period of compensation. The computation of diluted earnings (loss) per share does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. As of December 31, 2019, the Company had no potentially dilutive securities that would affect the loss per share if they were to be dilutive.

Comprehensive Loss

Total comprehensive loss represents the net change in stockholders' equity (deficit) during a period from sources other than transactions with stockholders and as such, includes net earnings (loss). For the Company, the components of other comprehensive loss are limited to the changes in the cumulative foreign currency translation adjustments, which is recorded as components of stockholders' equity (deficit).

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), ("ASC 842"). The objective of the guidance in ASC 842 is to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the balance sheet and disclosing key information. ASC 842 amends previous lease guidance to require a lessee to recognize a lease liability and a right-of-use asset on the entity’s balance sheet for all leases with terms that exceed one year. ASC 842 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASC 842 provides that lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. The Company elected a policy of not recording leases on its condensed balance sheets when the leases have term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The standard did not materially impact consolidated net income or liquidity.

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Dec. 31, 2019

Policies

Consolidation

Consolidation

The consolidated financial statements include the accounts of Sangui BioTech International, Inc. and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of the Company's foreign operations are translated into U.S. dollars at period-end exchange rates. Net exchange gains or losses resulting from such translation are excluded from net loss but are included in comprehensive loss and accumulated in a separate component of stockholders' equity (deficit). Income and expenses are translated at average exchange rates for the period.

Exchanges rates used for the preparation of the consolidated balance sheet as of December 31, 2019 and June 30, 2019 and our unaudited consolidated statements of operations for the three - and six-month periods ended December 31, 2019 and 2018, were calculated as follows:

The Company accounts for the transactions denominated in foreign currencies in the Parent Company’s books as transaction gains (losses) recognized in Other income.

as of December 31, 2019	0.891600
as of December 31, 2018	0.874245
July 1, 2019 through December 31, 2019	0.900817
July 1, 2018 through December 31, 2018	0.868118

Risks and Uncertainties

Risk and Uncertainties

The Company's line of future pharmaceutical products (artificial oxygen carriers or blood substitute and additives) and medical products (wound dressings and other wound management products) being developed by Sangui GmbH, are deemed as medical devices or biologics, and as such are governed by the Federal Food and Drug and Cosmetics Act and by the regulations of state agencies and various foreign government agencies. The pharmaceuticals, under development in Germany, will be subject to more stringent regulatory requirements, because they are in vivo products for humans. The Company and its subsidiaries have no experience in obtaining regulatory clearance on these types of products. Therefore, the Company will be subject to the risks of delays in obtaining or failing to obtain regulatory clearance.

Going Concern

Going Concern

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern, which contemplates, among other things, the realization of assets and satisfaction of liabilities in the normal course of business. The Company has accumulated deficit of $37,600,416as of December 31, 2019. The Company incurred a net loss before non-controlling interest of $99,126 for the six months ended December 31, 2019 and used cash in operating activities of $78,876during the six months ended December 31, 2019. These conditions raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from issuance of the financial statements. The Company expects to continue to incur significant capital expenses in pursuing its business plan to market its products and expand its product line, while obtaining additional financing through stock offerings or other feasible financing alternatives. In order for the Company to continue its operations at its existing levels, the Company will require significant additional funds over the next twelve months. Therefore, the Company is dependent on funds raised through equity or debt offerings. Additional financing may not be available on terms favorable to the Company, or at all. If these funds are not available, the Company may not be able to execute its business plan or take advantage of business opportunities. The ability of the Company to obtain such additional financing and to achieve its operating goals is uncertain. In the event that the Company does not obtain additional capital, is not able to collect its outstanding receivables, or is not able to increase cash flow through the increase of sales, there is a substantial doubt of its being able to continue as a going concern. The accompanying condensed consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Cash and Cash Equivalents

Cash and Cash Equivalents

The Company maintains its cash in bank accounts in Germany. Cash and cash equivalents include time deposits for which the Company has no requirements for compensating balances. The Company has not experienced any losses in its uninsured bank accounts.

Research and Development

Research and Development

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

Revenue Recognition

Revenue Recognition

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The new revenue recognition standard provides a five-step analysis of transactions to determine when and how revenue is recognized. The core principle is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic 606: 1) identify the contract, 2) identify separate performance obligations, 3) determine the transaction price, 4) allocate the transaction price among the performance obligations, and 5) recognize revenue as the performance obligations are satisfied.

Type of Revenue

The Company derives revenue primarily from licensing fees on sales of its wound spray product.

The Company recognizes revenue based on the five criteria for revenue recognition established under Topic ASC 606 set forth below.

The Company’s licenses provide a right to use and create performance obligations satisfied at a point in time. The Company recognizes revenue from the license when the performance obligation is satisfied through the transfer of the license. The Company will recognize royalty revenue a) when the licensee makes the subsequent sales or use that trigger the royalty, or (b) the performance obligation to which some or all of the sales-based or usage-based royalties has been allocated has been satisfied.

Basic and Diluted Loss per Common Share

Basic and Diluted Earnings (Loss) Per Common Share

Basic earnings (loss) per common share are computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding during the period of computation. Diluted earnings (loss) per share give effect to all potential dilutive common shares outstanding during the period of compensation. The computation of diluted earnings (loss) per share does not assume conversion, exercise or contingent exercise of securities that would have an antidilutive effect on earnings. As of December 31, 2019, the Company had no potentially dilutive securities that would affect the loss per share if they were to be dilutive.

Comprehensive Loss

Comprehensive Loss

Total comprehensive loss represents the net change in stockholders' equity (deficit) during a period from sources other than transactions with stockholders and as such, includes net earnings (loss). For the Company, the components of other comprehensive loss are limited to the changes in the cumulative foreign currency translation adjustments, which is recorded as components of stockholders' equity (deficit).

Segments of an Enterprise and Related Information

Recent Accounting Pronouncements

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), ("ASC 842"). The objective of the guidance in ASC 842 is to increase transparency and comparability among organizations by recognizing lease assets and liabilities in the balance sheet and disclosing key information. ASC 842 amends previous lease guidance to require a lessee to recognize a lease liability and a right-of-use asset on the entity’s balance sheet for all leases with terms that exceed one year. ASC 842 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. ASC 842 provides that lessees (for capital and operating leases) and lessors (for sales-type, direct financing, and operating leases) must apply a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The modified retrospective approach would not require any transition accounting for leases that expired before the earliest comparative period presented. The Company elected a policy of not recording leases on its condensed balance sheets when the leases have term of 12 months or less and the Company is not reasonably certain to elect an option to purchase the leased asset. The Company recognizes payments on these leases within selling, administrative and other expenses on a straight-line basis over the lease term. The standard did not materially impact consolidated net income or liquidity.

Management does not believe that any recently issued, but not yet effective, accounting standards if currently adopted would have a material effect on the accompanying consolidated financial statements.

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NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	Dec. 31, 2019
Sangui BioTech GmbH
Equity Method Investment, Ownership Percentage	90.00%