| [X] | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2009  |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------|
| [ ] | 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

| TABLE OF CONTENTS                                                                                           |   |
|-------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                        |   |
| PART I. FINANCIAL INFORMATION                                                                               |   |
|                                                                                                        |   |
| ITEM 1. FINANCIAL STATEMENTS                                                                                |   |
|                                                                                                        |   |
| Unaudited Consolidated Financial Statements                                                                 | F-1    |
|                                                                                                        |   |
|   Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008                           | F-1    |
|                                                                                                        |   |
|   Consolidated Statements of Operations for the three and six months ended June 30, 2009 and 2008 | F-2    |
|                                                                                                        |   |
|   Consolidated Statement of Stockholders’ Deficit for the six months ended June 30, 2009    | F-3    |
|                                                                                                        |   |
|   Consolidated Statements of Cash Flows for the six months ended June 30, 2009 and 2008           | 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-8    |
|                                                                                                        |   |
| 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. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                 | II-1   |
|                                                                                                        |   |
| ITEM 6. EXHIBITS                                                                                            | II-1   |
|                                                                                                        |   |
| SIGNATURES                                                                                                  | II-2   |
|                                                                                                        |   |
| CERTIFICATIONS                                                                                              | II-3   |

----

Table of Contents

ITEM  1.   FINANCIAL STATEMENTS 

| BLUEGATE CORPORATION                                                                                                                                                                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                                                                                                                                                                                      |   |
| UNAUDITED                                                                                                                                                                                                                                                        |   |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                             |   | June 30, |   |   | December 31, |   |
|                                                                                                                                                                                                                                                             |   | 2009 |   |   | 2008 |   |
| ASSETS                                                                                                                                                                                                                                                           |   |   |   |   |   |   |
| Current assets:                                                                                                                                                                                                                                                  |   |   |   |   |   |   |
| Cash and cash equivalents                                                                                                                                                                                                                                        |   | $ | 34,014 |   |   | $ | 11,283 |   |
| Accounts receivable, net                                                                                                                                                                                                                                         |   |   | 361,707 |   |   |   | 502,631 |   |
| Prepaid expenses and other                                                                                                                                                                                                                                       |   |   | 15,896 |   |   |   | 22,498 |   |
| Total current assets                                                                                                                                                                                                                                             |   |   | 411,617 |   |   |   | 536,412 |   |
| Property and equipment, net                                                                                                                                                                                                                                      |   |   | 27,653 |   |   |   | 44,381 |   |
| Total assets                                                                                                                                                                                                                                                     |   | $ | 439,270 |   |   | $ | 580,793 |   |
| LIABILITIES AND STOCKHOLDERS’ DEFICIT                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |
| Current liabilities:                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                 |   | $ | 135,655 |   |   | $ | 230,325 |   |
| Accounts payable to related party                                                                                                                                                                                                                                |   |   | 3,000 |   |   |   | 10,750 |   |
| Accrued liabilities                                                                                                                                                                                                                                              |   |   | 60,398 |   |   |   | 139,046 |   |
| Notes payable                                                                                                                                                                                                                                                    |   |   | 12,800 |   |   |   | 12,800 |   |
| Notes payable to related parties                                                                                                                                                                                                                                 |   |   | 1,369,079 |   |   |   | 1,169,079 |   |
| Accrued liabilities to related parties                                                                                                                                                                                                                           |   |   | 124,282 |   |   |   | 178,655 |   |
| Deferred revenue                                                                                                                                                                                                                                                 |   |   | 123,423 |   |   |   | 194,472 |   |
| Derivative liabilities                                                                                                                                                                                                                                           |   |   | 88,000 |   |   |   | - |   |
| Total current liabilities                                                                                                                                                                                                                                        |   |   | 1,916,637 |   |   |   | 1,935,127 |   |
| Stockholders’ deficit:                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |
| Undesignated preferred stock, $.001 par value, 9,999,952 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, 2009 and December 31, 2008; $12,500 per share liquidation preference ($600,000 aggregate liquidation preference at June 30, 2009) |   |   | - |   |   |   | - |   |
| Common stock, $.001 par value, 50,000,000 shares authorized, 26,033,565 shares issued and outstanding at June 30, 2009 and December 31, 2008                                                                                                                     |   |   | 26,034 |   |   |   | 26,034 |   |
| Additional paid-in capital                                                                                                                                                                                                                                       |   |   | 21,642,854 |   |   |   | 26,240,785 |   |
| Accumulated deficit                                                                                                                                                                                                                                              |   |   | (23,146,255 | ) |   |   | (27,621,153 | ) |
| Total stockholders’ deficit                                                                                                                                                                                                                                |   |   | (1,477,367 | ) |   |   | (1,354,334 | ) |
| Total liabilities and stockholders’ deficit                                                                                                                                                                                                                |   | $ | 439,270 |   |   | $ | 580,793 |   |
|                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |

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| BLUEGATE CORPORATION                                   |   |
|--------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF OPERATIONS                  |   |
| UNAUDITED                                              |   |
|                                                   |   | Three Months EndedJune 30, |   |   | Six Months EndedJune 30, |   |
|                                                   |
|                                                   |   |   | 2009 |   |   |   | 2008 |   |   |   | 2009 |   |   |   | 2008 |   |
| Service revenue                                        |   | $ | 952,187 |   |   | $ | 1,022,405 |   |   | $ | 1,966,142 |   |   | $ | 2,064,932 |   |
| Cost of services                                       |   |   | 580,646 |   |   |   | 845,281 |   |   |   | 1,201,460 |   |   |   | 1,603,025 |   |
| Gross profit                                           |   |   | 371,541 |   |   |   | 177,124 |   |   |   | 764,682 |   |   |   | 461,907 |   |
| Selling, general and administrative expenses           |   |   | 104,269 |   |   |   | 174,328 |   |   |   | 228,207 |   |   |   | 412,420 |   |
| Compensation expense                                   |   |   | 201,430 |   |   |   | 308,364 |   |   |   | 453,606 |   |   |   | 1,414,555 |   |
| Income (loss) from operations                          |   |   | 65,842 |   |   |   | (305,568 | ) |   |   | 82,869 |   |   |   | (1,365,068 | ) |
| Interest expense                                       |   |   | (52,321 | ) |   |   | (32,108 | ) |   |   | (119,971 | ) |   |   | (59,428 | ) |
| Gain (loss) on derivative financial instruments        |   |   | 87,000 |   |   |   | - |   |   |   | (4,000 | ) |   |   | - |   |
| Net income (loss)                                      |   | $ | 100,521 |   |   | $ | (337,676 | ) |   | $ | (41,102 | ) |   | $ | (1,424,496 | ) |
| Net income (loss) per common share - basic and diluted |   | $ | 0.00 |   |   | $ | (0.01 | ) |   | $ | 0.00 |   |   | $ | (0.06 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic and diluted weighted average shares outstanding  |   |   | 26,033,565 |   |   |   | 24,783,565 |   |   |   | 26,033,565 |   |   |   | 23,153,400 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| BLUEGATE CORPORATION                                                                                                                                                        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENT OF STOCKHOLDERS' DEFICIT                                                                                                                             |   |
| SIX MONTHS ENDED JUNE 30, 2009                                                                                                                                              |   |
| UNAUDITED                                                                                                                                                                   |   |
|                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   | ADDITIONAL |   |   |   |   |   |   |   |
|                                                                                                                                                                        |   | COMMON STOCK |   |   | PREFERRED STOCK |   |   | PAID-IN |   |   | ACCUMULATED |   |   |   |   |
|                                                                                                                                                                        |   | SHARES |   |   | CAPITAL |   |   | SHARES |   |   | CAPITAL |   |   | CAPITAL |   |   | DEFICIT |   |   | TOTAL |   |
|                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2008                                                                                                                                                |   |   | 26,033,565 |   |   | $ | 26,034 |   |   |   | 48 |   |   | $ | - |   |   | $ | 26,240,785 |   |   | $ | (27,621,153 | ) |   | $ | (1,354,334 | ) |
| Cumulative effect of change in accounting principle - January 1, 2009 reclassification of embedded feature of equity-linked financial instruments to derivative liabilities |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (4,600,000 | ) |   |   | 4,516,000 |   |   |   | (84,000 | ) |
| Common stock options issued for employee services                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,069 |   |   |   |   |   |   |   | 2,069 |   |
| Net loss                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (41,102 | ) |   |   | (41,102 | ) |
| Balance at June 30, 2009                                                                                                                                                    |   |   | 26,033,565 |   |   | $ | 26,034 |   |   |   | 48 |   |   | $ | - |   |   | $ | 21,642,854 |   |   | $ | (23,146,255 | ) |   | $ | (1,477,367 | ) |
|                                                                                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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| BLUEGATE CORPORATION                                                                                             |   |
|------------------------------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                            |   |
| SIX MONTHS ENDED JUNE 30, 2009 AND 2008                                                                          |   |
| UNAUDITED                                                                                                        |   |
|                                                                                                             |   | 2009 |   |   | 2008 |   |
| Cash flows from operating activities:                                                                            |   |   |   |   |   |   |
| Net loss                                                                                                         |   | $ | (41,102 | ) |   | $ | (1,424,496 | ) |
| Adjustments to reconcile net loss to net cash used in operating activities:                                      |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                                    |   |   | 16,728 |   |   |   | 29,214 |   |
| Common stock options issued for employee services                                                                |   |   | 2,069 |   |   |   | 255,344 |   |
| Common stock warrants issued to borrow funds from related party                                                  |   |   | - |   |   |   | 109,028 |   |
| Common stock issued for compensation                                                                             |   |   | - |   |   |   | 535,500 |   |
| Derivative loss                                                                                                  |   |   | 4,000 |   |   |   | - |   |
| Amortization of debt issuance cost                                                                               |   |   | 20,000 |   |   |   | - |   |
| Changes in operating assets and liabilities:                                                                     |   |   |   |   |   |   |   |   |
| Accounts receivable                                                                                              |   |   | 140,924 |   |   |   | 184,113 |   |
| Prepaid expenses and other current assets                                                                        |   |   | 6,602 |   |   |   | 6,873 |   |
| Accounts payable and accrued liabilities                                                                         |   |   | (173,318 | ) |   |   | (184,810 | ) |
| Accounts payable to related party                                                                                |   |   | (7,750 | ) |   |   | 63,907 |   |
| Accrued liabilities to related parties                                                                           |   |   | (54,373 | ) |   |   | 114,712 |   |
| Deferred revenue                                                                                                 |   |   | (71,049 | ) |   |   | 101,946 |   |
| Net cash used in operating activities                                                                            |   |   | (157,269 | ) |   |   | (208,669 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                            |   |   |   |   |   |   |   |   |
| Purchase of property and equipment                                                                               |   |   | - |   |   |   | (12,870 | ) |
| Net cash used in investing activities                                                                            |   |   | - |   |   |   | (12,870 | ) |
|                                                                                                             |   |   |   |   |   |   |   |   |
| Cash flows from financing activities:                                                                            |   |   |   |   |   |   |   |   |
| Proceeds from related party short term debt                                                                      |   |   | 180,000 |   |   |   | 200,000 |   |
| Payments on related party short term debt                                                                        |   |   | - |   |   |   | (42,492 | ) |
| Common stock and warrants issued for cash                                                                        |   |   | - |   |   |   | 95,000 |   |
| Net cash provided by financing activities                                                                        |   |   | 180,000 |   |   |   | 252,508 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |
| Net increase in cash and cash equivalents                                                                        |   |   | 22,731 |   |   |   | 30,969 |   |
| Cash and cash equivalents at beginning of period                                                                 |   |   | 11,283 |   |   |   | 43,703 |   |
| Cash and cash equivalents at end of period                                                                       |   | $ | 34,014 |   |   | $ | 74,672 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |
| Non Cash Transactions:                                                                                           |   |   |   |   |   |   |   |   |
| Issuance of common stock for conversion of related party accounts payable, accrued expenses and accrued interest |   | $ | - |   |   | $ | 305,000 |   |
| Derivative liability at January 1, 2009                                                                          |   |   | 84,000 |   |   |   | - |   |
| Supplemental information:                                                                                        |   |   |   |   |   |   |   |   |
| Cash paid for interest                                                                                           |   |   | 112,918 |   |   |   | 59,478 |   |
|                                                                                                             |   |   |   |   |   |   |   |   |

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BASIS

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|                 |         |                                                                                                         |                |         |         |         |         |   |                |         |    |   |
|----------------------|--------------|--------------------------------------------------------------------------------------------------------------|---------------------|--------------|--------------|--------------|--------------|--------|---------------------|--------------|---------|--------|
|                 |    |                June 30, 2009 |
|                 |    | Level 1                                                                                                      |           | Level 2      |    | Level 3 |    | Total  |
| Embedded derivatives |    |                                                                                                         | —   |    | $       | 88,000       |    |   | —   |    | $  | 88,000 |
|                 |    |                                                                                                         |                |    |         |         |    |   |                |    |    |   |

| 3.   | NOTES PAYABLE |
|----------------|---------------|

| Notes payable at June 30, 2009 and December 31, 2008 are summarized below:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | 6/30/2009 |      |   | 12/31/2008 |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|-----------|--------|------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      |      |   |       |   |
| Unsecured notes payable:                                                                   10% note payable due upon demand                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | $         | 12,800    |   |       | $      | 12,800 |   |
| Notes payable to related parties:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |      |      |   |       |   |   |   |
| 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, to borrow up to $500,000. On February 28, 2008, the line of credit agreement with SAIC was amendedto 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 amendedto 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 our CEO, Stephen Sperco, 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 capitalneeds 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, theline 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) Sperco Technology Group, Inc. all past due amounts. On February 23, 2009, the line of credit agreement with SAICwas 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.Note payable to SAI Corporation due on demand |   | $         | 1,300,000 |   |       | $      | 1,100,000 |   |
| Unsecured notes payable to related parties: During 2006, the Company entered into a line of credit agreement with Manfred Sternberg ("MS"), Chief Strategy Officer and William Koehler ("WK"), former President and COO, for Bluegate to borrow up to $500,000 from each of them. As of June30, 2009, the interest rates on the underlying credit cards pertaining to funds borrowed from MS and WK were 17.24% and 17.23%, respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |      |      |   |       |   |   |   |
| Notes payable to William Koehler due on demand                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |      | 34,628    |   |       |   | 34,628 |   |
| Notes payable to Manfred Sternberg due on demand                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |      | 34,451    |   |       |   | 34,451 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |      |      |   |       |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | $         | 1,369,079 |   |       | $      | 1,169,079 |   |

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|    |   |     |                         |   |   |                                |   |     |   |        |   |   |                                |
|---------|--------|----------|------------------------------|--------|--------|-------------------------------------|--------|----------|--------|-------------|--------|--------|-------------------------------------|
|    |   |     |                         |   |   |                                |   |     |   |        |   |   |                                |
|    |   | Exercise |                         | Fair   |   | Expiration                          |   | Vesting  |   | 2009        |
| Options |   | Price    |                         | Value  |   | Date                                |   | Period   |   | Expense     |
| 50,000  |   | $        |     0.10 |   | $      |      1,769 |   | 3/4/2012 |   | Immediately |   | $      |      1,769 |

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ITEM  2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 

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| -   | Access and content providers, such as AOL, Microsoft, EarthLink and Time Warner; |
|---------------|----------------------------------------------------------------------------------|

| -   | Professional Service organizations, such as IBM, CSC, Perot Systems, and EDS; |
|---------------|-------------------------------------------------------------------------------|

| -   | Regional, national and international telecommunications companies, such as AT&T, Verizon, Qwest, and Sprint; |
|---------------|------------------------------------------------------------------------------------------------------------------|

| -   | On-line services offered by incumbent cable providers such as Comcast and Cox; |
|---------------|--------------------------------------------------------------------------------|

| -   | DSL providers such as the RBOC’s and CLEC’s. |
|---------------|----------------------------------------------------------|

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|                               |   | Six Months Ended June 30, |       |
|------------------------------------|--------|---------------------------|------------|
|                               |   | 2009                      |       |   | 2008 |   |
|                               |   |                      |       |   |   |   |
| Net loss                           |   | $                         | (41,102    | ) |   | $ | (1,424,496 | ) |
| Negative cash flow from operations |   |                      | (157,269   | ) |   |   | (208,669 | ) |
| Negative working capital           |   |                      | (1,505,020 | ) |   |   | (1,243,245 | ) |
| Stockholders' deficit              |   |                      | (1,477,367 | ) |   |   | (1,189,289 | ) |

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|   | - Our ability to locate sources of debt or equity funding to meet current commitments and near-term future requirements. |
|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | - Our ability to achieve profitability and ultimately generate sufficient cash flow from operations to sustain our continuing operations. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|                                         |   |                        |    |   |                |   |      |   |   |   |           |   |   |           |     |
|----------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|-----------|--------|--------|--------|----------------|--------|--------|----------------|----------|
|                                         |   | Three Months Ended June 30, |    |   | Increase (Decrease) |   |
|                                         |   | 2009                        |    |   | 2008                |   |      | 2007   |   |   | 2009 from 2008 |   |   | 2008 from 2007 |     |
| Service revenue                              |   | $                           | 952,187 |   |                | $      | 1,022,405 |   |   | $      | 1,807,255      |   |   | $              | (70,218  | ) |   | $ | (784,850 | ) |
| Cost of services                             |   |                        | 580,646 |   |                |   | 845,281   |   |   |   | 1,232,302      |   |   |           | (264,635 | ) |   |   | (387,021 | ) |
| Gross profit                                 |   |                        | 371,541 |   |                |   | 177,124   |   |   |   | 574,953        |   |   |           | 194,417  |   |   |   | (397,829 | ) |
| Selling, general and administrative expenses |   |                        | 104,269 |   |                |   | 174,328   |   |   |   | 413,619        |   |   |           | (70,059  | ) |   |   | (239,291 | ) |
| Compensation expense                         |   |                        | 201,430 |   |                |   | 308,364   |   |   |   | 1,240,031      |   |   |           | (106,934 | ) |   |   | (931,667 | ) |
| Income (loss) from operations                |   |                        | 65,842  |   |                |   | (305,568  | )      |   |   | (1,078,697     | )      |   |           | (371,410 | ) |   |   | (773,129 | ) |
| Interest expense                             |   |                        | (52,321 | )      |                |   | (32,108   | )      |   |   | (8,337         | )      |   |           | 20,213   |   |   |   | 23,771 |   |
| Deemed dividend on preferred stock           |   |                        | -       |   |                |   | -         |   |   |   | (600,000       | )      |   |           | -        |   |   |   | 600,000 |   |
| Gain on derivative financial instrument      |   |                        | 87,000  |   |                |   | -         |   |   |   | -              |   |   |           | 87,000   |   |   |   | - |   |
| Net income (loss)                            |   | $                           | 100,521 |   |                | $      | (337,676  | )      |   | $      | (1,687,034     | )      |   | $              | (438,197 | ) |   | $ | (1,349,358 | ) |
|                                         |   |                        |    |   |                |   |      |   |   |   |           |   |   |           |     |   |   |   |   |   |

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Table of Contents

|   |   |   |
|--------|--------|--------|

|                                                |   | Three Months Ended June 30, |    |   | Increase (Decrease) |   |
|-----------------------------------------------------|--------|-----------------------------|---------|--------|---------------------|--------|
|                                                |   | 2009                        |    |   | 2008                |   |   | 2007 |   |   | 2009 from 2008 |   |   | 2008 from 2007 |   |
| Net cash provided by (used in) operating activities |   | $                           | (45,434 | )      |                | $      | 41,279 |   |   | $ | (300,418 | ) |   | $ | (86,713 | ) |   | $ | (341,697 | ) |
| Net cash (used in) investing activities             |   |                        | -       |   |                |   | (3,500 | ) |   |   | (11,814 | ) |   |   | (3,500 | ) |   |   | (8,314 | ) |
| Net cash provided by (used in) financing activities |   |                        | -       |   |                |   | (2,890 | ) |   |   | 122,552 |   |   |   | (2,890 | ) |   |   | (125,442 | ) |
| Net increase (decrease) in cash                     |   | $                           | (45,434 | )      |                | $      | 34,889 |   |   | $ | (189,680 | ) |   | $ | (80,323 | ) |   | $ | 224,569 |   |
| Cash balance at end of period                       |   | $                           | 34,014  |   |                | $      | 74,672 |   |   | $ | 19,378 |   |   |   |   |   |   |   |   |   |
|                                                |   |                        |    |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

|                                         |   | Six Months Ended June 30, |      |   | Increase (Decrease) |   |
|----------------------------------------------|--------|---------------------------|-----------|--------|---------------------|--------|
|                                         |   | 2009                      |      |   | 2008                |   |   | 2007 |   |   | 2009 from 2008 |   |   | 2008 from 2007 |   |
| Service revenue                              |   | $                         | 1,966,142 |   |                | $      | 2,064,932 |   |   | $ | 3,168,322 |   |   | $ | (98,790 | ) |   | $ | (1,103,390 | ) |
| Cost of services                             |   |                      | 1,201,460 |   |                |   | 1,603,025 |   |   |   | 2,193,130 |   |   |   | (401,565 | ) |   |   | (590,105 | ) |
| Gross profit                                 |   |                      | 764,682   |   |                |   | 461,907 |   |   |   | 975,192 |   |   |   | 302,775 |   |   |   | (513,285 | ) |
| Selling, general and administrative expenses |   |                      | 228,207   |   |                |   | 412,420 |   |   |   | 1,263,217 |   |   |   | (184,213 | ) |   |   | (850,797 | ) |
| Compensation expense                         |   |                      | 453,606   |   |                |   | 1,414,555 |   |   |   | 2,827,701 |   |   |   | (960,949 | ) |   |   | (1,413,146 | ) |
| Income (loss) from operations                |   |                      | 82,869    |   |                |   | (1,365,068 | ) |   |   | (3,115,726 | ) |   |   | (1,447,937 | ) |   |   | (1,750,658 | ) |
| Interest expense                             |   |                      | (119,971  | )      |                |   | (59,428 | ) |   |   | (47,514 | ) |   |   | 60,543 |   |   |   | 11,914 |   |
| Deemed dividend on preferred stock           |   |                      | -         |   |                |   | - |   |   |   | (600,000 | ) |   |   | - |   |   |   | 600,000 |   |
| Loss on derivative financial instrument      |   |                      | (4,000    | )      |                |   | - |   |   |   | - |   |   |   | (4,000 | ) |   |   | - |   |
| Net loss                                     |   | $                         | (41,102   | )      |                | $      | (1,424,496 | ) |   | $ | (3,763,240 | ) |   | $ | (1,383,394 | ) |   | $ | (2,338,744 | ) |
|                                         |   |                      |      |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| $      | (1,512,000 | )      | decrease related to options issued for employee services                 |
|--------|------------|--------|--------------------------------------------------------------------------|
|   | (500,000   | )      | decrease related to the reduction in personnel                           |
|   | (143,000   | )      | decrease related to issuance of shares for employee compensation         |
|   | 519,000    |   | increase related to conversion of related party debt for common stock    |
|   | 109,000    |   | increase related to warrants issued to borrow funds from a related party |
|   | 17,000     |   | increase related to related party purchase of common stock for cash      |

| $      | (519,000 | ) | decrease related to conversion of related party debt for common stock    |
|--------|----------|---|--------------------------------------------------------------------------|
|   | (253,000 | ) | decrease related to options issued for employee services                 |
|   | (109,000 | ) | decrease related to warrants issued to borrow funds from a related party |
|   | (63,000  | ) | decrease related to the reduction in personnel                           |
|   | (17,000  | ) | decrease related to related party purchase of common stock for cash      |

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Table of Contents

|                                      |   | Six Months Ended June 30, |     |   | Increase (Decrease) |   |
|-------------------------------------------|--------|---------------------------|----------|--------|---------------------|--------|
|                                      |   | 2009                      |     |   | 2008                |   |   | 2007 |   |   | 2009 from 2008 |   |   | 2008 from 2007 |   |
| Net cash (used in) operating activities   |   | $                         | (157,269 | )      |                | $      | (208,669 | ) |   | $ | (1,073,458 | ) |   | $ | (51,400 | ) |   | $ | (864,789 | ) |
| Net cash (used in) investing activities   |   |                      | -        |   |                |   | (12,870 | ) |   |   | (29,101 | ) |   |   | (12,870 | ) |   |   | (16,231 | ) |
| Net cash provided by financing activities |   |                      | 180,000  |   |                |   | 252,508 |   |   |   | 865,816 |   |   |   | (72,508 | ) |   |   | (613,308 | ) |
| Net increase (decrease) in cash           |   | $                         | 22,731   |   |                | $      | 30,969 |   |   | $ | (236,743 | ) |   | $ | (8,238 | ) |   | $ | 267,712 |   |
| Cash balance at end of period             |   | $                         | 34,014   |   |                | $      | 74,672 |   |   | $ | 19,378 |   |   |   |   |   |   |   |   |   |
|                                      |   |                      |     |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

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Table of Contents

| -   | The cost of operating delivering the Medical Grade Network® services |
|---------------|---------------------------------------------------------------------------|

| -   | The cost of sales and marketing |
|---------------|---------------------------------|

| -   | The rate at which we expand our operations |
|---------------|--------------------------------------------|

| -   | Attractive acquisition opportunities |
|---------------|--------------------------------------|

| -   | The response of competitors |
|---------------|-----------------------------|

| -   | Capital expenditures |
|---------------|----------------------|

ITEM

|   | (a) Evaluation of disclosure controls and procedures. |
|--------|-------------------------------------------------------|

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ITEM

ITEM 2.                      UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 

ITEM

ITEM

| 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 ACCOUNTINGOFFICER |
|    |                                                                                                                                                                                                                                                                                                                                                                |
| 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 17, 2009 | /s/ | Stephen J. Sperco |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   | Stephen J. Sperco, |
|                                                                                                                                                                                     |   |   | Chief Executive Officer |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   |   |
| Bluegate Corporation                                                                                                                                                                     |
|                                                                                                                                                                                     |   |   |   |
| Date:                                                                                                                                                                                    | July 17, 2009 | /s/ | Charles E. Leibold |
|                                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                                     |   |   | Charles E. Leibold, |
|                                                                                                                                                                                     |   |   | Chief Financial Officer and Principal Accounting Officer |
|                                                                                                                                                                                     |   |   |   |