SecProbe.io

CORRESP
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  1645
                         Pine Tree Ln, Suite 2

                         Sarasota,
                         FL 34236

                         keystarcorp.com

June
27, 2024

Division
of Corporation Finance

Office
of Trade & Services

U.S.
Securities& Exchange Commission

100
F Street, NE

Washington,
D.C. 20549

Attention:
Blaise Rhodes and Rufus Decker

    Re:
    KeyStar
    Corp.

    Form
    10-K for Fiscal Year Ended June 30, 2023

    Form
    10-Q for Fiscal Quarter Ended March 31, 2024

    File
    No. 000-56290

Gentlemen:

KeyStar
Corp. (the “Company,” “we” or “our”) submits this letter in response to comments
from the staff of the U.S. Securities and Exchange Commission (the “Staff”) contained in its letter dated June 18,
2024 (the “Staff’s Letter”) relating to the Company’s Form 10-K for the Fiscal Year Ended June 30, 2023
and the Company’s Form 10-Q for the Fiscal Quarter Ended March 31, 2024.

For
the Staff’s convenience, we have repeated below the Staff’s comments in their entirety in bold, followed by our corresponding
responses. The headings and numbered paragraphs correspond to the headings and numbered paragraphs in the Staff’s Letter.

Form
10-K for Fiscal Year Ended June 30, 2023

Consolidated
Financial Statements

Consolidated
Statements of Operations, page F-3

    1.
    Please
    revise the title of the gaming loss, net line item, so it is not confusingly similar to the net gaming loss line item. For example,
    if the gaming loss, net line item actually represents negative gaming revenues, so state. Also, disclose in a footnote the amounts
    of incentives awarded to users (discussed on page F-13) in each period presented, which were accounted for as a reduction in gaming
    revenues. Similarly revise your Forms 10-Q as well.

Response:
We respectfully acknowledge the Staff’s comment. In future filings, including the Company’s Form 10-K for Fiscal Year Ended
June 30, 2024, we will revise the title of the gaming loss, net line item to negative gaming revenues. We will also expand our disclosures
to include the amounts of any incentives awarded to users which were accounted for as a reduction in gaming revenues. To date, all negative
gaming revenues are solely the net of gaming wagers and payouts. For the periods referenced in this letter, as well as all prior periods,
all promotional bonuses awarded to users have been expensed as marketing expense. While we did not have the capabilities to provide incentives
to users to date, we may provide such incentives in the future. If we do, we will make sure to expand our disclosures to clearly describe
this activity.

We
respectfully submit that filing an amended Form 10-K for Fiscal Year Ended June 2023, as well as filing three subsequent Form 10-Q’s
for the interim periods of fiscal year ended June 30, 2024 (the “Current Reports”) is not necessary. We do not believe
that filing amendments to the Current Reports in order to add the above-described changes will materially alter or impact the disclosures
provided in the Current Reports. Please see the attached redlined version of our Consolidated Statements of Operations for the years
ended June 30, 2023 and 2022 and related footnotes. The attached reflects the only changes we would make to each of the Current Reports
if we were to file amendments, as well as the changes we will make to all future filings.

Note
1 - Overview and Organization & Summary of Significant Accounting Policies

Restatement
of Previously Issued Financials, page F-7

    2.
    An
    Item 4.02 Form 8-K was required to be filed within four business days of concluding that your previously issued financial statements
    as of and for the year ended June 30, 2022 should no longer be relied upon. Please file the required Item 4.02 Form 8-K. Refer to
    General Instruction B.1 and Item 4.02 of Form 8-K.U.S.

Response:
We have filed the required Item 4.02 Form 8-K.

Form
10-Q for Fiscal Quarter Ended March 31, 2024

Consolidated
Financial Statements

Note
1 - Overview and Organization & Summary of Significant Accounting Policies

Restatement
of Previously Issued Financials, page F-8

    3.
    An
    Item 4.02 Form 8-K was required to be filed within four business days of concluding that your previously issued financial statements
    as of and for the three and nine months ended March 31, 2023 should no longer be relied upon. Please file the required Item 4.02
    Form 8-K. Refer to General Instruction B.1 and Item 4.02 of Form 8-K.

Response:
We have filed the required Item 4.02 Form 8-K.

If
you have any questions or comments regarding these responses or require any additional information, please do not hesitate to contact
me at (704) 975-1273.

    Very
    truly yours,

    /s/
    James Mackey

    James
    Mackey

    Chief
    Financial Officer

    KeyStar
    Corp.

    2

KEYSTAR
CORP.

CONSOLIDATED
STATEMENTS OF OPERATIONS

    For the Years ended June 30,

    2023
    2022 (Restated)

    Gaming loss, netNegative gaming revenue, net
    $ (36,789 )
    $ -

    Cost of gaming revenue
      46,820
      -

    Net gaming loss
      (83,609 )
      -

    Operating expenses:

    Salaries and wages
      5,477,939
      264,212

    General and administrative
      1,880,658
      382,550

    Depreciation and amortization
      104,484
      -

    Impairment of common control intangible assets
      48,533
      -

    Sales and marketing
      276,783
      -

    Total operating expenses
      7,788,397
      646,762

    Other income (expense):

    Other income
      869
      -

    Loss on change in fair value of derivative
      (970,760 )
      -

    Loss on extinguishment of debt
      -
      (74,205 )

    Interest expense
      (31,887 )
      -

    Interest expense – related party
      (2,454,712 )
      (8,843 )

    Total other income (expense)
      (3,456,490 )
      (83,048 )

    Net loss from continuing operations, net of income taxes
      (11,328,496 )
      (729,810 )

    Net income (loss) from discontinued operations, net of income taxes
      (9,380 )
      13,836

    Net loss
    $ (11,337,876 )
    $ (715,974 )

    Less: deemed dividend from the purchase of Series C preferred stock
      (1,006,000 )
      -

    Net loss attributable to common stockholders
      (12,343,876 )
      (715,974 )

    Net loss per common share

 - basic and diluted

    $ (0.32 )
    $ (0.02 )

    Weighted average number of common shares outstanding

 - basic and diluted

      38,330,589
      29,800,000

The
accompanying notes are an integral part of these audited financial statements.

Revenue
Recognition

The
Company records revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”). ASC 606 requires
companies to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. In addition, the standard requires
more detailed disclosures to enable readers of the financial statements to understand the nature, amount, timing and uncertainty of revenue
and cash flows arising from contracts with customers.

The
Company determines revenue recognition through the following steps:

    ●
    Identify the contract, or contracts, with the customer;

    ●
    Identify the performance obligations in the contract;

    ●
    Determine the transaction price;

    ●
    Allocate the transaction price to performance obligations in the contract; and

    ●
    Recognize revenue when, or as, the Company satisfies performance obligations by transferring the promised good or services.

The
Company provides online sportsbook betting services with its technical infrastructure to its direct customers. Sportsbook or sports betting
involves a user wagering money on an outcome or series of outcomes occurring. When a user’s wager wins, the Company pays the user
a pre-determined amount known as fixed odds. Sportsbook revenue is generated by setting odds such that there is a built-in theoretical
margin in each sports wagering opportunity offered to users. Sportsbook revenue is generated from users’ wagers net of payouts
made on users’ winning wagers and incentives awarded to users. As of June 30, 2023 and 2022, incentives
in the amounts of $0 and $0 were awarded to users. Each wager placed by a user creates a single performance obligation for
the Company. The performance obligation is satisfied once the event wagered on has been completed. Any unsettled wagers are recorded
as a players balance liability. Net gaming revenue is the aggregate of gaming wins and losses based on results of each event that customers
wager bets on.

Results
of Operations

Fiscal
Year Ended June 30, 2023, Compared to Fiscal Year Ended June 30, 2022

Revenues
and Costs of Revenues

Net
Gaming Revenues (Loss) for the years ended June 30, 2023, and 2022 were $(36,789) and $-0-, respectively, which
included incentives awarded to users of $0 and $0, respectively.  Costs of
revenues for the years ended June 30, 2023, and 2022 were $46,820 and $-0-, respectively. Our gross gaming revenue loss and negative
gross margin for the year ended June 30, 2023 compared to June 30, 2022 is as a result of commencing of sports betting on June 8, 2023
compared to no sports betting operations during the year ended June 30, 2022. On September 15, 2022, we entered into an agreement to
assign all of the prior business’ (discontinued operations) rights including certain assets and liabilities to TopSight, a company
owned by Zixiao Chen, the Company’s former Chief Financial Offer.