| 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. 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 September 30, 2019 and June 30, 2018 and our unaudited consolidated statements of operations for the three - month
period ended September 30, 2019 and 2018, were calculated as follows: As
of September 30, 2019 0.91679
As
of September 30, 2018 0.860475
July
1, 2019 through September 30, 2019 0.898656
July
1, 2018 through September 30, 2018 0.859996 The Company accounts for the transactions denominated in foreign
currencies in the Parent Company’s books as transaction gains (losses) recognized in Other income. 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 $ 37,546,433 as of September 30, 2019.
The Company incurred a net loss before non-controlling interest of $44,005 for the three months ended September 30, 2019 and used
cash in operating activities of $31,258 during the three months ended September 30, 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 September 30, 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 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 is limited to the changes in the cumulative foreign currency translation adjustments,
which is recorded as components of stockholders' equity. 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 month 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 standard if currently adopted would have a material effect on the accompanying consolidated financial statements. |
