|   | [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2010 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _ to _ |
|--------|------------------------------------------------------------------------------------------------------------------------------------|

| Nevada                          | 76-0640970                |
|---------------------------------|---------------------------|
| (State or other jurisdiction of | (I.R.S. Employer          |
| incorporation or organization)  |  Identification No.) |
|                            |                      |

| 701 North Post Oak Road, Suite 600, Houston,Texas | 77024                        |
|---------------------------------------------------|------------------------------|
| (Address of principal executive offices)          | (Zip Code)                   |
|                                              |                         |
| voice:  713-686-1100                    | fax:  713-682-7402 |
| Issuer's telephone number                         |

| Large accelerated filer | [ ] | Accelerated filer         | [ ] |
|-------------------------|-----|---------------------------|-----|
| Non-accelerated filer   | [ ] | Smaller reporting company | [X] |

----

| TABLE OF CONTENTS                                                                                           |   |
|-------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                        |   |
| PART I. FINANCIAL INFORMATION                                                                               |   |
|                                                                                                        |   |
| ITEM 1. FINANCIAL STATEMENTS                                                                                |   |
|                                                                                                        |   |
| Unaudited Consolidated Financial Statements                                                                 | F-1    |
|                                                                                                        |   |
|   Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009                           | F-1    |
|                                                                                                        |   |
|   Consolidated Statements of Operations for the three and six months ended June 30, 2010 and 2009 | F-2    |
|                                                                                                        |   |
|   Consolidated Statement of Stockholders’ Deficit for the six months ended June 30, 2010    | F-3    |
|                                                                                                        |   |
|   Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009           | F-4    |
|                                                                                                        |   |
|   Notes to Consolidated Financial Statements                                                      | F-5    |
|                                                                                                        |   |
| ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS               | I-1    |
|                                                                                                        |   |
| ITEM 4T. CONTROLS AND PROCEDURES                                                                            | I-5    |
|                                                                                                        |   |
| PART II. OTHER INFORMATION                                                                                  |   |
|                                                                                                        |   |
| ITEM 1. LEGAL PROCEEDINGS                                                                                   | II-1   |
|                                                                                                        |   |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                         | II-1   |
|                                                                                                        |   |
| ITEM 4. OTHER INFORMATION                                                                                   | II-1   |
|                                                                                                        |   |
| ITEM 5. EXHIBITS                                                                                            | II-1   |
|                                                                                                        |   |
| SIGNATURES                                                                                                  | II-2   |
|                                                                                                        |   |
| CERTIFICATIONS                                                                                              | II-3   |

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| BLUEGATE CORPORATION                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                                                                                                                                                                                                             |   |
| UNAUDITED                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | June 30, |   |   | December 31, |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | 2010 |   |   | 2009 |   |
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| Current assets:                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                               |   | $ | 30,234 |   |   | $ | 27,084 |   |
| Accounts receivable, net                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 3,303 |   |   |   | 92,469 |   |
| Prepaid expenses and other                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 23,649 |   |   |   | 41,064 |   |
| Total current assets                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $ | 57,186 |   |   | $ | 160,617 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $ | 31,921 |   |   | $ | 37,036 |   |
| Accounts payable to related party                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 91,675 |   |   |   | 95,764 |   |
| Accrued liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 5,014 |   |   |   | 40,693 |   |
| Note payable to related party                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   | 1,200,000 |   |   |   | 1,200,000 |   |
| Accrued liabilities to related parties                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 70,481 |   |   |   | 73,337 |   |
| Deferred revenue                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 7,295 |   |   |   | 12,142 |   |
| Derivative liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 20,000 |   |   |   | 25,000 |   |
| Total current liabilities                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,426,386 |   |   |   | 1,483,972 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Stockholders’ deficit:                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   |   |   |   |   |   |   |
| Undesignated preferred stock, $.001 par value, 9,999,942 shares authorized, none issued and outstanding                                                                                                                                                                                                                                                                                                                                                 |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |
| Series C Convertible Non-Redeemable preferred stock, $.001 par value, 48 shares authorized, issued and outstanding at June 30, 2010 and December 31, 2009; $12,500 per share liquidation preference ($600,000 aggregate liquidation preference at June 30, 2010)                                                                                                                                                                                   |   |   | - |   |   |   | - |   |
| Series D Convertible Non-Redeemable preferred stock, $.001 par value, 10 and -0-  shares authorized, issued and outstanding at June 30, 2010 and December 31, 2009, respectively; $8,725 per share liquidation preference ($87,250 aggregate liquidation preference at June 30, 2010)  Common stock, $.001 par value, 50,000,000 shares authorized, 26,033,565 shares issued and outstanding at June 30, 2010 and December 31, 2009 |   |   | 26,034 |   |   |   | 26,034 |   |
| Additional paid-in capital                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 22,160,286 |   |   |   | 22,075,546 |   |
| Accumulated deficit                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | (23,555,520 | ) |   |   | (23,424,935 | ) |
| Total stockholders’ deficit                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | (1,369,200 | ) |   |   | (1,323,355 | ) |
| Total liabilities and stockholders’ deficit                                                                                                                                                                                                                                                                                                                                                                                                       |   | $ | 57,186 |   |   | $ | 160,617 |   |

----

| BLUEGATE CORPORATION                                  |   |
|-------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                 |   |
| THREE AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009     |   |
| UNAUDITED                                             |   |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
|                                                  |
|                                                  |   |   | 2010 |   |   |   | 2009 |   |   |   | 2010 |   |   |   | 2009 |   |
| Service revenue                                       |   | $ | 71,009 |   |   | $ | 81,810 |   |   | $ | 149,423 |   |   | $ | 188,255 |   |
| Cost of services                                      |   |   | 40,335 |   |   |   | 54,551 |   |   |   | 85,563 |   |   |   | 108,799 |   |
| Gross profit                                          |   |   | 30,674 |   |   |   | 27,259 |   |   |   | 63,860 |   |   |   | 79,456 |   |
| Selling, general and administrative expenses          |   |   | 61,655 |   |   |   | 13,918 |   |   |   | 114,959 |   |   |   | 44,277 |   |
| Compensation expense                                  |   |   | - |   |   |   | 300 |   |   |   | - |   |   |   | 13,469 |   |
| Income (loss) from operations                         |   |   | (30,981 | ) |   |   | 13,041 |   |   |   | (51,099 | ) |   |   | 21,710 |   |
| Interest expense                                      |   |   | (45,644 | ) |   |   | (49,171 | ) |   |   | (84,486 | ) |   |   | (113,205 | ) |
| Gain (loss) on derivative financial instruments       |   |   | 156,000 |   |   |   | 87,000 |   |   |   | 5,000 |   |   |   | (4,000 | ) |
| Net income (loss) from continuing operations          |   |   | 79,375 |   |   |   | 50,870 |   |   |   | (130,585 | ) |   |   | (95,495 | ) |
| Gain from discontinued operations                     |   |   | - |   |   |   | 49,652 |   |   |   | - |   |   |   | 54,393 |   |
| Net income (loss)                                     |   | $ | 79,375 |   |   | $ | 100,522 |   |   | $ | (130,585 | ) |   | $ | (41,102 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted earnings income (loss) per share    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Continuing operations                                 |   |  $ | 0.00 |   |   |  $ | 0.00 |   |   |  $ | (0.01 | ) |   |  $ | (0.00 | ) |
| Discontinued operations                               |   |   | 0.00 |   |   |   | 0.00 |   |   |   | 0.00 |   |   |   | 0.00 |   |
| Net income (loss)                                     |   |   | 0.00 |   |   |   | 0.00 |   |   |   | (0.01 | ) |   |   | (0.00 | ) |
|                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding |   |   | 26,033,565 |   |   |   | 26,033,565 |   |   |   | 26,033,565 |   |   |   | 26,033,565 |   |

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| BLUEGATE CORPORATION                                                         |   |
|------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT                              |   |
| SIX MONTHS ENDED JUNE 30, 2010                                               |   |
| UNAUDITED                                                                    |   |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   | ADDITIONAL |   |   |   |   |   |   |   |
|                                                                         |   | COMMON STOCK |   |   | PREFERRED STOCK |   |   | PAID-IN |   |   | ACCUMULATED |   |   |   |   |
|                                                                         |   | SHARES |   |   | CAPITAL |   |   | SHARES |   |   | CAPITAL |   |   | CAPITAL |   |   | DEFICIT |   |   | TOTAL |   |
| Balance at December 31, 2009                                                 |   |   | 26,033,565 |   |   | $ | 26,034 |   |   |   | 48 |   |   | $ | - |   |   | $ | 22,075,546 |   |   | $ | (23,424,935 | ) |   | $ | (1,323,355 | ) |
| Preferred stock issued for accrued interest on related party promissory note |   |   |   |   |   |   |   |   |   |   | 10 |   |   |   | - |   |   |   | 84,740 |   |   |   |   |   |   |   | 84,740 |   |
| Net loss                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (130,585 | ) |   |   | (130,585 | ) |
| Balance at June 30, 2010                                                     |   |   | 26,033,565 |   |   | $ | 26,034 |   |   |   | 58 |   |   | $ | - |   |   | $ | 22,160,286 |   |   | $ | (23,555,520 | ) |   | $ | (1,369,200 | ) |
|                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| BLUEGATE CORPORATION                                                                      |   |
|-------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                     |   |
| FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009                                           |   |
| UNAUDITED                                                                                 |   |
|                                                                                      |   |   |   |
|                                                                                      |   |   |   |
|                                                                                      |   | 2010 |   |   | 2009 |   |
| Cash flows from operating activities:                                                     |   |   |   |   |   |   |
| Net loss                                                                                  |   | $ | (130,585 | ) |   | $ | (41,102 | ) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                             |   |   | - |   |   |   | 16,728 |   |
| Common stock options issued for employee services                                         |   |   | - |   |   |   | 2,069 |   |
| Derivative (gain) loss                                                                    |   |   | (5,000 | ) |   |   | 4,000 |   |
| Amortization of debt issuance cost                                                        |   |   | - |   |   |   | 20,000 |   |
| Changes in operating assets and liabilities:                                              |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                       |   |   | 89,166 |   |   |   | 140,924 |   |
| Prepaid expenses and other current assets                                                 |   |   | 17,415 |   |   |   | 6,602 |   |
| Accounts payable and accrued liabilities                                                  |   |   | (40,794 | ) |   |   | (173,318 | ) |
| Accounts payable to related party                                                         |   |   | (4,089 | ) |   |   | (7,750 | ) |
| Accrued liabilities to related parties                                                    |   |   | 81,884 |   |   |   | (54,373 | ) |
| Deferred revenue                                                                          |   |   | (4,847 | ) |   |   | (71,049 | ) |
| Net cash provided by (used in) operating activities                                       |   |   | 3,150 |   |   |   | (157,269 | ) |
|   Cash flows from financing activities:                                         |   |   |   |   |   |   |   |   |
| Proceeds from related party short term debt                                               |   |   | - |   |   |   | 180,000 |   |
| Net cash provided by financing activities                                                 |   |   | - |   |   |   | 180,000 |   |
|   Net increase in cash and cash equivalents                                     |   |   | 3,150 |   |   |   | 22,731 |   |
| Cash and cash equivalents at beginning of period                                          |   |   | 27,084 |   |   |   | 11,283 |   |
| Cash and cash equivalents at end of period                                                |   | $ | 30,234 |   |   | $ | 34,014 |   |
|   Non Cash Transactions:                                                        |   |   |   |   |   |   |   |   |
| Derivative liability at January 1, 2009                                                   |   | $ | - |   |   | $ | 84,000 |   |
| Preferred stock issued for accrued interest on related party promissory note              |   |   | 84,740 |   |   |   | - |   |
| Supplemental information:                                                                 |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                                    |   |   | - |   |   |   | 112,918 |   |
|                                                                                      |   |   |   |   |   |   |   |   |

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|                 |         |                                                                                                    |                |         |         |         |         |   |                |         |    |   |
|----------------------|--------------|---------------------------------------------------------------------------------------------------------|---------------------|--------------|--------------|--------------|--------------|--------|---------------------|--------------|---------|--------|
|                 |    |                June 30, 2010 |
|                 |    | Level 1                                                                                                 |           | Level 2      |    | Level 3 |    | Total  |
| Embedded derivatives |    |                                                                                                    | —   |    | $       | 20,000       |    |   | —   |    | $  | 20,000 |
|                 |    |                                                                                                    |                |    |         |         |    |   |                |    |    |   |

----

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| Notes payable at June 30, 2010 and December 31, 2009 are summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | 6/30/2010 |      |   | 12/31/2009 |   |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|------------|--------|-----------|
| Secured note payable to related party: During 2007, the Company entered into a line of credit agreement with SAI Corporation ("SAIC"), a corporation controlled by our CEO, Stephen Sperco (“SS”), to borrow up to $500,000. On February 28, 2008, the line of credit agreement with SAIC was amended to increase the borrowing to $700,000 and on February 28, 2008, Bluegate borrowed the additional $200,000 from SAIC for working capital purposes. As condition to and as additional consideration for SAIC’s agreement to lend the funds to the Company, the Company granted SAIC a security interest in its assets as more specifically detailed in the Promissory Note and Security Agreement, and increased the interest rate from 12% to 15% per annum. On July 14, 2008, the line of credit agreement with SAIC was amended to increase the borrowing to $900,000 and on July 31, 2008, Bluegate borrowed the additional $200,000 from SAIC for working capital purposes. Upon Bluegate borrowing the additional $200,000, the Company agreed to pay (1) SAIC a $40,000 origination fee and (2) Sperco Technology Group, Inc. (“STG”), a corporation controlled by SS, all past due amounts totaling $104,972. On August 14, 2008, the Company entered into a short term unsecured loan with SAIC to meet its working capital needs to borrow $65,000. Upon borrowing the $65,000, the Company agreed to pay SAIC a $6,500 origination fee and to repay SAIC with the first available funds once the August 15, 2008 payroll and medical insurance premium was paid. The Company paid the $65,000 loan and $6,500 fee on August 15, 2008. On August 28, 2008, the Company borrowed $50,000 from SAIC and agreed to pay SAIC a $5,000 origination fee. The Company paid the $50,000 funds borrowed and $5,000 fee on September 11, 2008. On October 16, 2008, the line of credit agreement with SAIC was amended to increase the borrowing to $1,100,000 and on October 21, 2008, Bluegate borrowed the additional $200,000 from SAIC for working capital purposes. Upon Bluegate borrowing the additional $200,000, the Company agreed to pay (1) SAIC a $20,000 origination fee and (2) STG all past due amounts totaling $56,837. On February 23, 2009, the line of credit agreement with SAIC was amended to increase the borrowing to $1,300,000 and on February 26, 2009, Bluegate borrowed the additional $200,000 from SAIC for working capital purposes. Upon Bluegate borrowing the additional $200,000, the Company agreed to pay SAIC a $20,000 origination fee. The note payable to SAIC is due on demand and pursuant to the terms of the note; SAIC made a demand for payment during 2009.  Thirty days elapsed since SAIC made demand for payment and we were unable to repay SAIC and, as a result, this debt was in default in the principal amount of $1,300,000. Effective November 7, 2009, as a result of the Company entering into an Asset Sale and Purchase Agreement to sell certain Bluegate Corporation Medical Grade Network (“MGN”) and Healthcare Information Management Systems (“HIMS”) assets to Sperco, LLC (a company controlled by Stephen Sperco) and SAIC, respectively, the principal amount of the SAIC debt was reduced to $1,200,000 and SAIC rescinded its demand for payment. Additionally, interest on the note payable to SAIC was suspended from November 1, 2009 through February 28, 2010. Effective May 22, 2010, we sold 10 shares of Series D Preferred Stock to SAIC. SAIC agreed to grant a concession to the Company for the purchase of the 10 shares of a newly created Series D Convertible non-Redeemable Preferred Stock, par value $.001, by modifying the existing Promissory Note and Security Agreement as follows: (i) SAIC's waiver of accrued interest of $84,740 for the period from February 1, 2010 through May 22, 2010, and (ii) SAIC's waiver of any applicable interest payments for the period from May 23, 2010 through December 31, 2010 (estimated to be up to $109,973 without any present value effect).  |   | $         | 1,200,000 |   |       | $      | 1,200,000 |   |

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----

|                                          |   |  Six Months Ended June 30, |       |
|-----------------------------------------------|--------|---------------------------------|------------|
|                                          |   | 2010                            |       |   | 2009 |   |
| Net loss                                      |   | $                               | ( 130,585  | ) |   | $ | (41,102 | ) |
| Positive (negative) cash flow from operations |   |                            | 3,150      |   |   |   | (157,269 | ) |
| Negative working capital                      |   |                            | (1,369,200 | ) |   |   | (1,505,020 | ) |
| Stockholders’ deficit                   |   |                            | (1,369,200 | ) |   |   | (1,477,367 | ) |

|                                         |   | Three Months Ended June 30, |    |   | Increase (Decrease) |   |
|----------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|
|                                         |   | 2010                        |    |   | 2009                |   |   | 2008 |   |   | 2010 from 2009 |   |   | 2009 from 2008 |   |
| Service revenue                              |   | $                           | 71,009  |   |                | $      | 81,810 |   |   | $ | 170,888 |   |   | $ | (10,801 | ) |   | $ | (89,078 | ) |
| Cost of services                             |   |                        | 40,335  |   |                |   | 54,551 |   |   |   | 111,258 |   |   |   | (14,216 | ) |   |   | (56,707 | ) |
| Gross profit                                 |   |                        | 30,674  |   |                |   | 27,259 |   |   |   | 59,630 |   |   |   | 3,415 |   |   |   | (32,371 | ) |
| Selling, general and administrative expenses |   |                        | 61,655  |   |                |   | 13,918 |   |   |   | 42,592 |   |   |   | 47,737 |   |   |   | (28,674 | ) |
| Compensation expense                         |   |                        | -       |   |                |   | 300 |   |   |   | 119,388 |   |   |   | (300 | ) |   |   | (119,088 | ) |
| Income (loss) from operations                |   |                        | (30,981 | )      |                |   | 13,041 |   |   |   | (102,350 | ) |   |   | (44,022 | ) |   |   | 115,391 |   |
| Interest expense                             |   |                        | (45,644 | )      |                |   | (49,171 | ) |   |   | (26,828 | ) |   |   | (3,527 | ) |   |   | 22,343 |   |
| Gain on derivative financial instruments     |   |                        | 156,000 |   |                |   | 87,000 |   |   |   | - |   |   |   | 69,000 |   |   |   | 87,000 |   |
| Net income (loss) from continuing operations |   |                        | 79,375  |   |                |   | 50,870 |   |   |   | (129,178 | ) |   |   | 28,505 |   |   |   | 180,048 |   |
| Gain (loss) from discontinued operations     |   |                        | -       |   |                |   | 49,652 |   |   |   | (208,498 | ) |   |   | (49,652 | ) |   |   | 258,150 |   |
| Net income (loss)                            |   | $                           | 79,375  |   |                | $      | 100,522 |   |   | $ | (337,676 | ) |   | $ | (21,147 | ) |   | $ | 438,198 |   |

----

|                                                |   | Three Months Ended June 30, |   |   | Increase (Decrease) |   |
|-----------------------------------------------------|--------|-----------------------------|--------|--------|---------------------|--------|
|                                                |   | 2010                        |   |   | 2009                |   |   | 2008 |   |   | 2010 from 2009 |   |   | 2009 from 2008 |   |
| Net cash provided by (used in) operating activities |   | $                           | 1,180  |   |                | $      | (45,434 | ) |   | $ | 41,279 |   |   | $ | 46,614 |   |   | $ | 86,713 |   |
| Net cash (used in) investing activities             |   |                        | -      |   |                |   | - |   |   |   | (3,500 | ) |   |   | - |   |   |   | (3,500 | ) |
| Net cash (used in) financing activities             |   |                        | -      |   |                |   | - |   |   |   | (2,890 | ) |   |   | - |   |   |   | 2,890 |   |
| Net increase (decrease) in cash                     |   | $                           | 1,180  |   |                | $      | (45,434 | ) |   | $ | 34,889 |   |   | $ | 46,614 |   |   | $ | (80,323 | ) |
| Cash balance at end of period                       |   | $                           | 30,234 |   |                | $      | 34,014 |   |   | $ | 74,672 |   |   |   |   |   |   |   |   |   |
|                                                |   |                        |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                            |   | Six Months Ended June 30, |     |   | Increase (Decrease) |   |
|-------------------------------------------------|--------|---------------------------|----------|--------|---------------------|--------|
|                                            |   | 2010                      |     |   | 2009                |   |   | 2008 |   |   | 2010 from 2009 |   |   | 2009 from 2008 |   |
| Service revenue                                 |   | $                         | 149,423  |   |                | $      | 188,255 |   |   | $ | 360,776 |   |   | $ | (38,832 | ) |   | $ | (172,521 | ) |
| Cost of services                                |   |                      | 85,563   |   |                |   | 108,799 |   |   |   | 243,825 |   |   |   | (23,236 | ) |   |   | (135,026 | ) |
| Gross profit                                    |   |                      | 63,860   |   |                |   | 79,456 |   |   |   | 116,951 |   |   |   | (15,596 | ) |   |   | (37,495 | ) |
| Selling, general and administrative expenses    |   |                      | 114,959  |   |                |   | 44,277 |   |   |   | 131,384 |   |   |   | 70,682 |   |   |   | (87,107 | ) |
| Compensation expense                            |   |                      | -        |   |                |   | 13,469 |   |   |   | 922,372 |   |   |   | (13,469 | ) |   |   | (908,903 | ) |
| Income (loss) from operations                   |   |                      | (51,099  | )      |                |   | 21,710 |   |   |   | (936,805 | ) |   |   | (72,809 | ) |   |   | (958,515 | ) |
| Interest expense                                |   |                      | (84,486  | )      |                |   | (113,205 | ) |   |   | (40,179 | ) |   |   | (28,719 | ) |   |   | 73,026 |   |
| Gain (loss) on derivative financial instruments |   |                      | 5,000    |   |                |   | (4,000 | ) |   |   | - |   |   |   | 9,000 |   |   |   | (4,000 | ) |
| Net income (loss) from continuing operations    |   |                      | (130,585 | )      |                |   | (95,495 | ) |   |   | (976,984 | ) |   |   | 35,090 |   |   |   | (881,489 | ) |
| Gain (loss) from discontinued operations        |   |                      | -        |   |                |   | 54,393 |   |   |   | (447,512 | ) |   |   | (54,393 | ) |   |   | 501,905 |   |
| Net income (loss)                               |   | $                         | (130,585 | )      |                | $      | (41,102 | ) |   | $ | (1,424,496 | ) |   | $ | 89,483 |   |   | $ | (1,383,394 | ) |

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|                                                |   | Six Months Ended June 30, |   |   | Increase (Decrease) |   |
|-----------------------------------------------------|--------|---------------------------|--------|--------|---------------------|--------|
|                                                |   | 2010                      |   |   | 2009                |   |   | 2008 |   |   | 2010 from 2009 |   |   | 2009 from 2008 |   |
| Net cash provided by (used in) operating activities |   | $                         | 3,150  |   |                | $      | (157,269 | ) |   | $ | (208,669 | ) |   | $ | (160,419 | ) |   | $ | (51,400 | ) |
| Net cash (used in) investing activities             |   |                      | -      |   |                |   | - |   |   |   | (12,870 | ) |   |   | - |   |   |   | (12,870 | ) |
| Net cash provided by financing activities           |   |                      | -      |   |                |   | 180,000 |   |   |   | 252,508 |   |   |   | (180,000 | ) |   |   | (72,508 | ) |
| Net increase in cash                                |   | $                         | 3,150  |   |                | $      | 22,731 |   |   | $ | 30,969 |   |   | $ | (19,581 | ) |   | $ | (8,238 | ) |
|                                                |   |                      |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash balance at end of period                       |   | $                         | 30,234 |   |                | $      | 34,014 |   |   | $ | 74,672 |   |   |   |   |   |   |   |   |   |

| (a)    | Evaluation of disclosure controls and procedures.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | The Company’s Chief Executive Officer and Principal Accounting Officer participated in an evaluation by management of the effectiveness of the Company’s disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2010.  Based on their participation in that evaluation, the Company’s Chief Executive Officer and Principal Accounting Officer concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2010 to ensure that required information is disclosed on a timely basis in its reports filed or furnished under the Exchange Act.  |
| (b)    | Changes in internal control over financial reporting.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|   | There was no change in the Company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) that occurred during the quarter ended June 30, 2010 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.                                                                                                                                                                                                                                                                                                                              |

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| Exhibit |                                                                                                                                                                                                                                                                                                                                                                 |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  | Name                                                                                                                                                                                                                                                                                                                                                                 |
|    |                                                                                                                                                                                                                                                                                                                                                                 |
| 31.1    | CERTIFICATION REQUIRED BY RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF  1934,  AS  ADOPTED  PURSUANT  TO  SECTION  302  OF  THE  SARBANES-OXLEY  ACT OF 2002 OF THE CHIEF EXECUTIVE OFFICER                                  |
|    |                                                                                                                                                                                                                                                                                                                                                                 |
| 31.2    | CERTIFICATION REQUIRED BY RULE 13a - 14(a) OR RULE 15d - 14(a) OF THE SECURITIES EXCHANGE ACT OF  1934,  AS  ADOPTED  PURSUANT  TO  SECTION  302  OF  THE  SARBANES-OXLEY  ACT OF 2002 OF THE CHIEF FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER |
|    |                                                                                                                                                                                                                                                                                                                                                                 |
| 32.1    | CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350), OF THE CHIEF EXECUTIVE OFFICER                                                                                                                                                                                                                                     |
|    |                                                                                                                                                                                                                                                                                                                                                                 |
| 32.2    | CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (18 U.S.C. SECTION 1350), OF THE CHIEF FINANCIAL OFFICER AND PRINCIPAL ACCOUNTING OFFICER                                                                                                                                                                                                    |

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| 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. |
|                                                                                                                                                                                     |   |   |   |
| Bluegate Corporation                                                                                                                                                                     |
|                                                                                                                                                                                     |   |   |   |
| Date:                                                                                                                                                                                    | July 23, 2010 | /s/ | Stephen J. Sperco |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   | Stephen J. Sperco, |
|                                                                                                                                                                                     |   |   | Chief Executive Officer |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   |   |
| Bluegate Corporation                                                                                                                                                                     |
|                                                                                                                                                                                     |   |   |   |
| Date:                                                                                                                                                                                    | July 23, 2010 | /s/ | Charles E. Leibold |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   | Charles E. Leibold, |
|                                                                                                                                                                                     |   |   | Chief Financial Officer and Principal Accounting Officer |
|                                                                                                                                                                                     |   |   |   |