SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20509
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act
March 11, 2002
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Date of Report
(Date of Earliest Event Reported)
SANGUINE CORPORATION
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(Exact Name of Registrant as Specified in its Charter)
Nevada 0-24480 95-4347608
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(State or other juris- (Commission File No.) (IRS Employer
diction of incorporation) I.D. No.)
101 East Green Street, #11
Pasadena, California 91105
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(Address of Principal Executive Offices)
(626) 405-0079
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Registrant's Telephone Number
Item 5. Other.
(a) On February 15, 2002, Sanguine Corporation ("Sanguine") entered
into an Exclusive License Agreement (the "Exclusive License Agreement") with
Ascendiant-Asia, LLC, a Nevada limited liability corporation
("Ascendiant-Asia"), whereby Sanguine granted to Ascendiant-Asia an exclusive
license to PHER-02, the licensed products, the licensed process and all
proprietary, formula, developmental, technological, intellectual property and
patent rights, and all other applications of the above in certain countries in
Asia, including the People's Republic of China, Thailand, Laos, Cambodia,
Vietnam, Singapore, Malaysia, Indonesia, North Korea, Burma, Mongolia and
Taiwan (the "Territory").
The parties, in order to maintain and preserve the rights granted
in the Exclusive License Agreement, agreed to certain minimum levels of annual
production of the licensed products after completion of all clinical tests,
studies and trials: 500,000 units produced the first 12 months, 1,000,000
units produced the second 12 months and 1,000,000 units produced every year
thereafter. A unit produced consists of 200 milliliters of the licensed
product that is ready for commercial use. If these minimums are not achieved,
Ascendiant-Asia will pay a royalty to Sanguine as if the minimum production
levels were achieved. A royalty payment is equal to $5.00 for each and every
200 milliliter unit produced and is to be paid quarterly. If not paid,
Sanguine may terminate the Exclusive License Agreement. The Exclusive License
Agreement has a term of 25 years from February 15, 2002, with a possible
extension of 10 years after the expiration of the original term.
The Exclusive License Agreement also has miscellaneous provisions,
among others, for the parties to keep reports and records, to maintain the
requisite patent or patents, action regarding infringement of the patent or
patents and to indemnify and hold each other harmless against certain
applicable claims.
These are the material terms and provisions of the Exclusive
License Agreement that is attached hereto and incorporated herein. Further
information can be obtained by reviewing the actual instrument that is
described below under Item 7.
(b) On February 20, 2002, Sanguine also executed and delivered three
Warrants under which they granted to Richard H. Walker, Mark Bergendahl and
Bradley J. Wilhite warrants to acquire 1,000,000 shares each of common stock
of Sanguine at an exercise price of $0.15 per share (the "Warrants").
Each of the Warrants provided, among other things, for:
the issuance of 1,000,000 Warrants convertible into shares
of our common stock;
the Warrants to expire on February 21, 2005;
protection against dilution in certain events, including the
payment of dividends or splits or in the event of any merger
where we are not the survivor, or any reclassification or
capital reorganization;
the granting of "registration rights" covering the exercise
of the Warrants, through registration with the Securities
and Exchange Commission; and
The Warrants are "callable" at any time the common stock
of the Company trades at a price of no less than $1.00 for
ten consecutive trading days, based upon the resolutions of
the Board of Directors that approved the Warrants.
These are the material terms and provisions of the Warrants that
are attached hereto and incorporated herein. Further information can be
obtained by reviewing the actual instruments that are described below under
Item 7.
(c) On March 11, 2002, the Board of Directors adopted resolutions
pursuant to which the Company entered into the following agreements with First
York Partners, Inc. ("First York Partners"), as described below:
A 5% Convertible Note for the sum of $25,000 convertible at
the lesser of (i) $.08; or (ii) sixty-six and two-thirds
percent (66-2/3%) of the average of the closing bid prices
as reported by the NASD OTC Bulletin Board, NASDAQ SmallCap
Market, NASDAQ National Market System, American Stock
Exchange, New York Stock Exchange or "Pink Sheets"
(whichever of the foregoing is at the time the principal
trading exchange or market for the common stock, the
"Principal Market"), or if not then trading on a Principal
Market, such other principal market or exchange where the
common stock is listed or traded for the five trading days
immediately preceding but not including a conversion date;
A Common Stock Purchase Warrant for the right to purchase
5,937,500 shares of common stock of the Company exercisable
at a purchase price of $.08, provided, however, the purchase
price shall be adjusted to be sixty-six and two-thirds
percent (66-2/3%) of the average of the closing bid prices
for the Common Stock as reported for the Principal Market
(as defined in Section 10(d) of this Warrant) for the five
trading days preceding but not including the effective date
of the registration statement referred to in Section
10.1(iv) of the Subscription Agreement. Except in
connection with other adjustments set forth in this Warrant
the Purchase Price will not be adjusted below $.08;
A related Subscription Agreement regarding the 5%
convertible note and the Common Stock Purchase Warrant,
granting, among other rights, registration rights of the
exercise and or conversion of any of the notes and/or
warrants described, protection against dilution in certain
events, including the payment of dividends or splits or in
the event of any merger where we are not the survivor, or
any reclassification or capital reorganization, and call
provisions for the benefit of the Company;
A related Fund Escrow Agreement respecting the disbursement
of the proceeds of the 5% convertible note and related
matters; and
A $3,750 5% convertible note to Barbara R. Mittman for legal
services rendered regarding all of the foregoing on behalf
of First York Partners convertible at the lesser of (i)
$.08; or (ii) sixty-six and two-thirds percent (66-2/3%) of
the average of the closing bid prices as reported by the
NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ
National Market System, American Stock Exchange, New York
Stock Exchange or "Pink Sheets" (whichever of the foregoing
is at the time the principal trading exchange or market for
the common stock, the "Principal Market"), or if not then
trading on a Principal Market, such other principal market
or exchange where the common stock is listed or traded for
the five trading days immediately preceding but not
including a conversion date.
Copies of the Subscription Agreement regarding a 5% Convertible Note
convertible into shares of the Company's $0.001 par value common stock; the
related Common Stock Purchase Warrants; the related Convertible Note; and the
related Funds Escrow Agreement; and the related Subscription Agreement are
attached hereto and incorporated herein by reference. See Item 7.
(d) On March 11, 2002, the Board of Directors also adopted
resolutions pursuant to which the Company approved an Engagement Letter to
engage Leonard W. Burningham, Esq. to perform certain legal services for the
Company and that included the granting of certain warrants to Mr. Burningham
(the "Burningham Warrant"). Copies of the Engagement Letter and the
Burningham Warrant are attached hereto and incorporated herein by reference.
See Item 7.
The Company authorized the grant to Mr. Burningham of a warrant to
acquire 500,000 shares of common stock of the Company at an exercise price of
50% of the bid price for the five trading days prior to the date of exercise
at the end of any monthly billing cycle or $0.08 (Eight Cents) per share,
whichever is lower, payable in cash or services, to expire on March 11, 2005,
and approved the "registration rights" contained in the Burningham Warrant.
The terms of the Burningham Warrant are substantially identical to those of
the Warrants granted to Messrs. Walker, Bergendahl and Wilhite that are
described above under subparagraph (b) of this Item, with the exception of the
exercise price and the fact that the Burningham Warrant can be exercised and
paid through the performance of services.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial Statements of Businesses Acquired.
None; not applicable.
(b) Pro Forma Financial Information.
None; not applicable.
Exhibits.
Exhibit
Number Description
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10.1 Exclusive License Agreement
10.2 Subscription Agreement
Exhibit A-Form of Note
Exhibit B-Form of Legal Opinion
Exhibit C-Form of Warrant
Schedule 2(d)-Additional Issuances
Schedule 2(t)-Capitalization
10.3 Funds Escrow Agreement
10.4 Engagement Letter
99.1 Warrant of Richard H. Walker
99.2 Warrant of Mark Bergendahl
99.3 Warrant of Bradley J. Wilhite
99.4 Warrant of Leonard W. Burningham, Esq.
99.5 Press Release dated February 21, 2002
99.6 Minutes of Special Meeting of the Board of Directors
on March 11, 2002, regarding the foregoing.
Item 9. FD Disclosure
Please see Exhibit 99.5, which is the Press Release regarding the
certain of the matters reported in Item 5.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by
the undersigned hereunto duly authorized.
SANGUINE CORPORATION
Date: 3/25/02 By:/s/Thomas C. Drees
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Thomas C. Drees, Ph.D.
CEO, President and Chairman of the Board of
Directors