UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2009  [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from __________ to ___________  Commission File Number 333-135852  BLUGRASS ENERGY, INC.(Exact name of small business issuer in its charter) Nevada20-4952339(State or other jurisdiction of(IRS Employer Identification No.)incorporation or organization)  730-1015-4th Street SW Calgary Alberta T2R 1J4 Address of principal executive offices) 403-830-7566(Telephone Number)  Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  [ X ] No  [ ]   Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes [ ]     No [ ]  Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  Large accelerated filer [ ] Accelerated Filer [ ]  Non-accelerated filer   [ ] Smaller reporting company [x]  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  [ ] No  [ x ]  There were 50,050,000 shares of Common Stock outstanding as of February 22, 2010, 2009.  PART I  FINANCIAL INFORMATION  Item 1.  Financial Statements (Unaudited) Page  Balance Sheets  December 31, 2009 and June 30, 2009 (Audited) F-1  Statements of Operations  - Three months ended December 31, 2009 and 2008 and From May 19, 2006(Inception) to December 31, 2009 F-2, F-3  Statements of Cash Flows  Six months ended December 31, 2009 and 2008 and From May 19, 2006 (Inception) to December 31, 2009 F-4  Notes to the Financial Statements  F-5  Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations  1  Item 3.  Quantitative and Qualitative Disclosures About Market Risk  Not Applicable  Item 4. Controls and Procedures 3  Item 4T.  Controls and Procedures 4  PART II  OTHER INFORMATION  Item 1.  Legal Proceedings Not Applicable 4  Item 1A. Risk Factors- Not Applicable 4  Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds 4 -Not Applicable  Item 3.  Defaults Upon Senior Securities  Not Applicable 5  Item 4.  Submission of Matters to a Vote of Security Holders  Not Applicable 5  Item 5.  Other Information  Not Applicable 5  Item 6.  Exhibits 5 SIGNATURES 6         Item 1.  Financial Statements   BLUGRASS ENERGY, INC.(A Development Stage Company)BALANCE SHEETS   December 31,June 30,20092009(Unaudited)(Audited)AssetsCurrent Assets:Cash$             8,483$             6,075Total Current Assets8,4836,075Exploration Property550,029-Total Assets$         558,512$             6,075Liabilities and Stockholders' DeficitCurrent liabilitiesAccounts payable$           54,333$           52,918Accrued interest28,17111,850Notes payable20,25041,250Accrued liabilities: related parties--Line of credit378,989130,960Property purchase agreement450,000-Convertible notes payable416,666416,666Total Current Liabilities1,348,409653,644Stockholders' EquityCommon stock, $0.001 par value; 75,000,000 sharesauthorized,50,050,000  shares issued and outstandingat December 31, 2009 and June 30, 2009, respectively50,05050,050Treasury shares4,0004,000Additional paid-in capital36,45036,450Deficit accumulated during the development stage(880,397)(738,069)Total Stockholders' Equity(789,897)(647,569)Total liabilities and stockholders' equity$         558,512$             6,075See the notes to these financial statements.  F-1 BLUGRASS ENERGY, INC.(A Development Stage Company)STATEMENTS OF OPERATIONS THREE MONTHS ENDED DECEMBER 31, 2009 AND 2008(Unaudited)  For the Three Months EndedDecember 31,20092008Revenue:$                       -$                       -Operational expenses:Leasing expenses-316,600Depreciation expense--Professional fees23,4839,448General and administrative expenses59,2509,548Total operational expenses82,733335,596Other Expense:Impairment of fixed assets-Interest expense(11,531)(1,876)(11,531)(1,876)Net loss$           (94,264)$         (337,472)Per share informationNet loss per common shareBasic*$                 *Fully diluted**Weighted average number of commonstock outstanding50,050,0003,600,000*  Less than $(0.01) per share.See the notes to these financial statements.        F-2  BLUGRASS ENERGY, INC.(A Development Stage Company)STATEMENTS OF OPERATIONSFOR THE SIX MONTHS ENDED DECEMEBER 31, 2009 AND 2008(Unaudited)  For the Six Months EndedMay 19, 2006December 31,(Inception) to20092008December 31, 2009Revenue:$                       -$                       -$                                 -Operational expenses:Leasing expenses-316,600451,036Depreciation expense--747Professional fees61,14913,812276,211General and administrative expenses64,85913,654120,809Total operational expenses126,008344,066848,803Other Expense:Impairment of fixed assets--(3,424)Interest expense(16,320)(1,876)(28,170)(16,320)(1,876)(31,594)Net loss$         (142,328)$         (345,942)$                   (880,397)Per share informationNet loss per common shareBasic*$                 *Fully diluted**Weighted average number of commonstock outstanding50,050,0003,600,000*  Less than $(0.01) per share.See the notes to these financial statements.        F-3  BLUGRASS ENERGY, INC.(A Development Stage Company)STATEMENT OF CASH FLOWS(Unaudited)  For the Three Months Ended(Inception) toDecember 31,December 31,200920082009Net Loss$        (142,328)$        (345,942)$               (880,397)net cash used by operating activities:Depreciation--747Common Stock for services--40,500Impairment of fixed assets--3,424in operating activities:Increase in accounts payable1,41512,18654,333Increase in accrued interest payable16,3211,15428,171Increase (decrease) in accrued liabilities, related party-1,876-Increase in notes payables for non-cash items--41,250(124,592)(330,726)(711,972)Purchase of office equipment--(4,171)Purchase oil & gas lease(550,029)-(550,029)(550,029)-(554,200)Proceeds from convertible promissory notes--416,666(Payment) of promissory note(21,000)-(21,000)Proceeds from line of credit248,029316,666378,989Proceeds from oil & gas property note450,000-450,000Proceeds from issuance of common stock--50,000677,029316,6661,274,6552,408(14,060)8,4836,07514,277-$              8,483$                 217$                     8,483Cash paid for interest expense$                     -$                     -$                             -Cash paid for income taxes$                     -$                     -$                               -   F-4    BLUGRASS ENERGY, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2009 (Unaudited) NOTE 1  BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Business BluGrass Energy, Inc. (the Company) was incorporated under the laws of the State of Nevada on May 19, 2006, as Coastal Media, Inc.  On October 1, 2008, the Company amended its Article of Incorporation to change its name from Coastal Media Inc. to BluGrass Energy, Inc., to reflect the change in direction of the Companys business to the Oil and Gas Industry. The Company was originally formed to engage in the business of manufacturing, marketing, distributing and selling its marine DVDs. In addition, on October 1, 2008, the Company amended its Articles of Incorporation to change its name from "Coastal Media Inc." to "Blugrass Energy, Inc.". As a result of the name of the change, the Companys trading symbol was changed to BLUG. On October 1, 2008, the Company affected a forward stock split of the issued and outstanding shares of common stock on a fifteen for one basis. Authorized capital remained at 75,000,000 common shares and par value remained at $.001 per share.  After the forward split the Company had 54,000,000 shares issued and outstanding. The Company is in the development stage. Its activities to date have been limited to capital formation, organization and development of its business plan.  The Company has commenced limited start up operations. Basis of Presentation  Development Stage Company  The Company has not earned significant revenues from planned operations.  Accordingly, the Companys activities have been accounted for as those of a Development Stage Company.  Among the disclosures required are that the Companys financial statements of operations, stockholders equity and cash flows disclose activity since the date of the Companys inception.  Interim Presentation  In the opinion of the management of the Company, the accompanying unaudited financial statements include all material adjustments, including all normal and recurring adjustments, considered necessary to present fairly the financial position and operating results of the Company for the periods presented.  The financial statements and notes do not contain certain information included in the Companys financial statements for the year ended June 30, 2009.  It is the Companys opinion that when the interim financial statements are read in conjunction with the June 30, 2009 Audited Financial Statements, the disclosures are adequate to make the information presented not misleading.  Interim results are not necessarily indicative of results for a full year or any future period.       F-5 BLUGRASS ENERGY, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2009 Significant Accounting Policies  Use of Estimates  The preparation of the financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods.  Actual results could differ from those estimates.  Cash and Cash Equivalents  The Company considers all highly liquid investments with an original maturity of three months or less and money market instruments to be cash equivalents.  Revenue Recognition  The Company recognizes revenue when it is earned and expenses are recognized when they occur.  Loss Per Share  Earnings per Share requires dual presentation of basic and diluted earnings or loss per share (EPS) with a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS computation.  Basic EPS excludes dilution.  Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity.  Income Taxes A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carryforwards.  Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion of all of the deferred tax assets will be realized.  Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment. Recent Accounting Pronouncements  In June 2009, the Financial Accounting Standards Board (FASB) issued Accounting Standards Codification (ASC) 105, Generally Accepted Accounting Principals (formerly Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles). ASC 105 establishes the FASB ASC as the single source of authoritative nongovernmental U.S. GAAP. The standard is effective for interim and annual periods ending after September 15, 2009. We adopted the provisions of the standard on December 31, 2009, which did not have a material impact on our financial statements.  F-6  BLUGRASS ENERGY, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2009  There were various other accounting standards and interpretations issued in 2009, none of which are expected to have a material impact on the Companys financial position, operations or cash flows.  NOTE 2  GOING CONCERN AND MANAGEMENTS PLAN  The Companys financial statements for the Six months ended December 31, 2009 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Company reported a net loss of $94,264 for the six months ended December 31, 2009, and an accumulated deficit during the development stage of $880,397 as at December 31, 2009.  At December 31, 2009, the Company had a working capital deficit of $789,897 and the Company had no revenues from its activities during the six months ended December 31, 2009.  The Companys ability to continue as a going concern may be dependent on the success of managements plan discussed below. The financial statements do not include any adjustments relating to the recoverability and classification of assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.  During the 2010 fiscal year, the Company intends to continue its efforts to acquire, either by lease, farmout, or purchase, an interest in oil or gas prospects or properties for exploration, when available, with third parties. The Company intends to continue to raise funds to support the efforts through the sale of its equity securities.  To the extent the Companys operations are not sufficient to fund the Companys capital requirements, the Company may attempt to enter into a revolving loan agreement with financial institutions or attempt to raise capital through the sale of additional capital stock or through the issuance of debt. At the present time, the Company does not have a revolving loan agreement with any financial institution nor can the Company provide any assurance that it will be able to enter into any such agreement in the future or be able to raise funds through the further issuance of debt or equity in the Company.  NOTE 3.  NOTES PAYABLE  During the year ended June 30, 2009, the Company issued, its then Chief Executive Officer and Director, a 4% unsecured promissory note for $21,000 for owed compensation in connection with her services.  The promissory note had a due date of August 31, 2009.  In July 2009, the Company paid the note in full.  During the year ended June 30, 2009, the Company issued a former shareholder, a 5% unsecured commercial promissory note of $20,250 for services performed.  The promissory note had a due date of May 6, 2010.  At December 31, 2009, the Company owed principal of $20,250 and accrued interest of $506 in connection with the promissory note.  The Company has not made any payments on this promissory note.      F-7 BLUGRASS ENERGY, INC. (A Development Stage Company) NOTES TO THE FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED DECEMBER 31, 2009  NOTE 4.  LINE OF CREDIT  During the year ended June 30, 2009, entered in a Line of Credit Agreement to provide up to $250,000.  The Line of Credit has an interest rate of 6% per annum and a maturity date of December 31, 2011.  At December 31, 2009, the Company had received advances of $199,692 under the Line of Credit.  The Company has accrued interest of $11,982 during the six months ended in December 31, 2009 in connection with these funds.  At December 31, 2009, the Company had not made any payments on the Line of Credit.  NOTE 5.  CONVERTIBLE PROMISSORY NOTES During the year ended June 30, 2009, in exchange for funds of $416,666, the Company executed 6% unsecured convertible commercial promissory notes.  The promissory notes are due on February 27, 2009. The promissory notes are exchangeable for a total of 466,666 shares of the Companys restricted common stock.  During the six months ended December 31, 2009, the Company accrued interest of $16,087 in connection with the promissory notes. NOTE 6.  STOCKHOLDERS EQUITY (DEFICIT) During the three months ended December 31, 2009, the Company did not issue any shares of its restricted common stock. NOTE 7.  SUBSEQUENT EVENTS  On February 22, 2010 Blugrass amended the agreement pertaining to the acquisition of  the Robinhood L.L.C., (Marks and Garner Productions) properties and corporate assets, located in and around the Cave Pool Unit in Eddy County, New Mexico.  The Company has purchased a 100% working interest and other rights associated with the acreage in and around the Cave Pool Unit located in Eddy County, New Mexico, comprising approximately 2,800 acres held by Robinhood L.L.C., (Marks and Garner Productions). The Company will receive all operating rights with respect to the oil and gas leases owned by Robinhood L.L.C. (Marks and Garner Productions). This includes, all equipment used to produce and sell crude oil and natural gas on the acreage owned by Robinhood L.L.C.(Marks and Garner Productions).  The amended total consideration for this acquisition consists of cash in the amount of $100,000 to be used specifically for remediation and repairs and 200,000 restricted shares of Blugrass.  The Company has evaluated their activities subsequent to the quarter ended December 31, 2009 and there were no further subsequent events.       F-8  Item 2.  Managements Discussion and Analysis of Financial Condition and Results of Operations.  Forward-Looking Statements  This Quarterly Report on Form 10-Q contains forward-looking statements. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. The words believes, anticipates, plans, seeks, expects, intends and similar expressions identify some of the forward-looking statements. Forward-looking statements are not guarantees of performance or future results and involve risks, uncertainties and assumptions. The factors discussed elsewhere in this Form 10-Q could also cause actual results to differ materially from those indicated by the Companys forward-looking statements.  The Company undertakes no obligation to publicly update or revise any forward-looking statements.  Business and Plan of Operations  We had no operations prior to and we had no revenues during the year ended June 30, 2009.  We have minimal capital and minimal cash. We are illiquid and need cash infusions from investors or shareholders to provide capital, or loans from any sources.  We are an oil and gas exploration and development company focused on creating a portfolio of North American assets that exhibit consistent, predictable, and long-lived production capabilities. We plan to build value for its shareholders through the acquisition and development of gas and oil assets that contain proven reserves in domestic areas where reserves can be economically produced at a low risk to us relying on joint venture partners to supply most of the funds needed to explore or develop these properties.  Our main emphasis will be to acquire production or revenue generating opportunities either by lease purchase or farm-out, when available, with third parties and industry partners.  Decisions regarding future participation in exploration wells or geophysical studies or other activities will be made on a case-by-case basis.  We may, in any particular case, decide to participate or decline participation.  If participating, we may pay our proportionate share of costs to maintain our proportionate interest through cash flow or debt or equity financing.  If participation is declined, we may elect to farmout, non-consent, sell or otherwise negotiate a method of cost sharing in order to maintain some continuing interest in the prospect.  On October 12, 2009, Blugrass has closed the acquisition of the Robinhood L.L.C., (Marks and Garner Productions) properties and corporate assets, located in and around the Cave Pool Unit in Eddy County, New Mexico.  The Company has purchased a 100% working interest and other rights associated with the acreage in and around the Cave Pool Unit located in Eddy County, New Mexico, comprising approximately 2,800 acres held by Robinhood L.L.C., (Marks and Garner Productions). The Company will receive all operating rights with respect to the oil and gas leases owned by Robinhood L.L.C. (Marks and Garner Productions). This includes, all equipment used to produce and sell crude oil and natural gas on the acreage owned by Robinhood L.L.C.(Marks and Garner Productions). Consideration for this acquisition consists of cash in the amount of $550,000, with terms consisting of incremental cash payments between October 2009 and February 2010.  On February 22, 2010 Blugrass amended the agreement pertaining to the acquisition of the Robinhood L.L.C., (Marks and Garner Productions) properties and corporate assets, located in and around the Cave Pool Unit in Eddy County, New Mexico.  The amended consideration for this acquisition consists of cash in the amount of $100,000 to be used specifically for remediation and repairs and 200,000 restricted shares of Blugrass, making the total purchase price $200,000 and 200,000 restricted shares, with $100,000 having already been paid.  We will need substantial additional capital to support our proposed future energy operations.  We have no revenues.  We have no committed source for any funds as of date here.  No representation is made that any funds will be available when needed.  In the event funds cannot be raised when needed, we may not be able to carry out our business plan, may never achieve sales or royalty income, and could fail in business as a result of these uncertainties.  Results of Operations  For the Six Months Ended December 31, 2009 compared to the Six Months Ended December 31, 2008  We are still in our development stage and have no revenues to date.  We incurred operating expenses of $126,008 and $344,600 for the six month periods ended December 31, 2009 and 2008, respectively.  The decrease of $288,592 is a result of the decrease in professional fees and general and administrative expenses over the prior period.  The decrease in our operating expenses for the six months ended June 30, 2009, was a result of decreased administrative expenses in connection with our efforts to acquire oil and gas properties.  During the six months ended December 31, 2009, we recognized a net loss of $142,328 compared to a net loss of $345,942 for the six months ended December 31, 2008.  The decrease was a result of the decrease in operational expenses as discussed above. Liquidity and Capital Resources  At December 31, 2009, we had total assets of $558,512 consisting of oil and gas properties of $550,000 and cash 8,483.  At December 31, 2009, we had total current liabilities of $1,348,409, consisting of accounts payable of $54,333, accrued interest of $28,171, 378,989 in a line of credit, 450,000 in oil and gas Property purchases and $416,666 in convertible promissory notes.  During the six months ended December 31, 2009, we used cash of $124,592 in operations.  During the three months ended December 31, 2008, we used $330,726 in operations.  During the six months ended December 31, 2009, net losses of $142,328 were not adjusted for any non-cash items.  During the six months ended December 31, 2008, net losses of $345,942 were not adjusted for any non-cash items.  During the six months ended December 31, 2009 and 2008, we did not have any cash flows from investment activities.  During the six months ended December 31, 2009, we received $677,029 from our financing activities.  During the six months ended December 31, 2008, we received $316,666 from our financing activities During the year ended June 30, 2009, the Company issued, its then Chief Executive Officer and Director, a 4% unsecured promissory note for $21,000 for owed compensation in connection with her services.  The promissory note had a due date of August 31, 2009.  In July 2009, the Company paid the note in full.    During the year ended June 30, 2009, entered in a Line of Credit Agreement to provide up to $250,000.  The Line of Credit has an interest rate of 6% per annum and a maturity date of December 31, 2011.  At December 31, 2009, the Company had received advances of $199,692 under the Line of Credit.  The Company has accrued interest of $11,982 during the six months ended in December 31, 2009 in connection with these funds.  At December 31, 2009, the Company had not made any payments on the Line of Credit.  Our auditors have expressed their doubt about our ability to continue as a going concern unless we are able to generate profitable operations.  Off-Balance Sheet Arrangements  We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.  Need for Additional Financing  We do not have capital sufficient to meet our cash needs.  We will have to seek loans or equity placements to cover such cash needs.  Once exploration commences, our needs for additional financing is likely to increase substantially.  No commitments to provide additional funds have been made by our management or other stockholders.  Accordingly, there can be no assurance that any additional funds will be available to us to allow it to cover our expenses as they may be incurred.  ITEM 3.  QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.  Not Applicable  Item 4.  Controls and Procedures  Evaluation of Disclosure Controls and Procedures  We have adopted and maintain disclosure controls and procedures (as such term is defined in Rules  13a 15(e) and 15d-15(e)  under the Securities  Exchange Act of 1934,  as  amended  (the  "Exchange  Act"))  that are  designed  to ensure  that information  required to be disclosed in our reports  under the Exchange Act, is recorded,  processed,  summarized and reported within the time periods  required under  the  SEC's  rules and forms  and that the  information  is  gathered  and communicated to our management, including our Chief Executive Officer (Principal Executive Officer) and Principal Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure.  As required by SEC Rule 15d-15(b), Mr. Berscht our Chief Executive Officer and Principal Accounting Officer, carried out an evaluation under the supervision and with the participation of our management, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 15d-14 as of the end of the period covered by this report.  Based on the foregoing evaluation,  Mr. Berscht has concluded that our disclosure controls and procedures  are  effective  in  timely  alerting  them to material  information required  to be  included  in  our  periodic  SEC  filings  and to  ensure  that information  required to be disclosed in our periodic SEC filings is accumulated and communicated to our management,  including our Chief Executive  Officer,  to allow  timely  decisions  regarding  required  disclosure  as a  result  of  the deficiency in our internal control over financial reporting discussed below. ITEM 4T. CONTROLS AND PROCEDURES  Managements Quarterly Report on Internal Control over Financial Reporting.  Our management is responsible for establishing and maintaining adequate internal control over financial reporting for the company in accordance with as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:  (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;  (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and  (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements.  Management's assessment of the effectiveness of the registrant's internal control over financial reporting is as of the three months ended December 31, 2009. We believe that internal control over financial reporting is effective. We have not identified any, current material weaknesses considering the nature and extent of our current operations and any risks or errors in financial reporting under current operations.  Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.  This annual report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this annual report.  There was no change in our internal control over financial reporting that occurred during the fiscal quarter ended December 31, 2009, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.            PART II  OTHER INFORMATION  Item 1. Legal Proceedings.  Blugrass Energy, Inc. is not currently involved in any legal proceedings and we are not aware of any pending or potential legal actions.  Item 1A.  Risk Factors.  Not applicable to smaller reporting companies.  Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.  There were no sales of unregistered securities during the period covered by this report.  Item 3.  Defaults Upon Senior Securities.  There were no defaults upon senior securities during the period covered by this report.  Item 4.  Submission of Matters to a Vote of Security Holders.  There were no matters submitted to a vote of security holders during the period covered by this report.  Item 5.  Other Information.  The Company changed its corporate address from 7609 Ralston Road, Arvada, CO 80002 to 730-1015-4th Street SW Calgary Alberta T2R 1J4  Item 6.  Exhibits.  Exhibits.  The following is a complete list of exhibits filed as part of this Form 10-Q.  Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.  Exhibit 31.1 Certification of Chief Executive and Principal Accounting Officer pursuant to Section 302 of the Sarbanes-Oxley Act  Exhibit 32.1 Certification of Principal Executive and Accounting Officer pursuant to Section 906 of the Sarbanes-Oxley Act     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.  February 22, 2010 BluGrass Energy, Inc. (Registrant)  By: /s/ John Kenney Berscht ______________________________ John Kenney Berscht, Chief Executive Officer and Principal Accounting Officer