SecProbe.io

CORRESP
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July 8, 2005

Via Facsimile 202-772-9205

and FEDEX Overnight Delivery

Securities and Exchange Commission

SEC Headquarters

100 F Street, NE

Washington, DC 20549

  ATTN:

  Larry Spirgel

  CC:

  Carlos Pacho

  Joe Cascarano

  RE:

  INTAC International, Inc.

  Forms 10-K and 10-K/A for the fiscal year ended
  December 31, 2004

  Filed March 16, 2005 and May 9, 2005, respectively

  Form 10-Q for the quarter ended March 31, 2005

  Filed May 10, 2005

  (File No. 0-32621)

Dear Mr. Spirgel:

In regard to your letter dated June 16, 2005, INTAC
International, Inc. (the “Company” or “we,” “us” or “our”) respectfully submits
the following responses to your inquiry:

Forms 10-K and 10-K/A for
the year ending December 31, 2004

Item 9A – Controls and
Procedures

Disclosure Controls and
Procedures, page 69

Inquiry:

1.             Please
give us your basis for concluding that your disclosure controls and procedures
were effective given your inability to complete an assessment of your internal
controls over financial reporting in accordance with Section 404 for the year .ended
December 31, 2004, as you state on page 70.

Response:

Pursuant
to item 601(b)(31) of Regulation S-K, the Company’s Chief Executive and Chief
Financial Officers executed certifications under Section 302 of the
Sarbanes-Oxley Act of 2002 (“SOX”) that such officers have designed such
disclosure controls and procedures, or caused such disclosure controls and
procedures to be designed under their supervision, to ensure that material
information relating to the Company, including its consolidated subsidiaries,
is made known to such officers by others within the Company in its consolidated
subsidiaries.   Under the

heading
“Disclosure Controls and Procedures” in the Company’s Form 10-K for the year
ended December 31, 2004 (the “2004 Form 10-K”), the Company has stated that its
Chief Executive Officer and Chief Financial Officer have concluded that the
Company’s disclosure controls and procedures were effective.  The bases for this conclusion is set forth
below.

The
personnel responsible for the financial reporting at each operating subsidiary
currently produce monthly reporting packages and complete financial and
non-financial consideration checklists for each operating subsidiary.  These packages include information necessary
to complete our quarterly and annual reporting and maintain an effective
control environment to ensure that the Company’s financial reporting and the
preparation of the Company’s financial statements for external purposes are in
accordance with generally accepted accounting principles and that all
information required to be disclosed in our periodic reports is communicated to
appropriate Company management.

The
Chief Financial Officer and Controller analyze each subsidiaries’ monthly package
and request additional information as necessary to address any questions
regarding the financial statements and necessary disclosures.  In addition, questions may be asked by
management or the Audit Committee which are subsequently answered.  Further to this, sub-certifications are
prepared by all principal accounting personnel, in consultation with
appropriate operating management personnel, in regards to their understanding
and belief that the necessary information is provided to conclude that the disclosure
controls and procedures are effective.

As
noted on page 70 in the 2004 Form 10-K, our inability to complete an assessment
of our internal controls over financial reporting in accordance with SOX
Section 404 as of December 31, 2004, was based on our erroneous belief
that the Company was not required to comply with SOX Section 404 until our year
ending December 31, 2005.  This belief
was based on legal advice from our prior counsel.   On or about March 1, 2005, we became aware
that we were required to comply with Section 404 for our fiscal year ended
December 31, 2004.  As a result of our
erroneous belief as to when we were first required to comply with Section 404,
we had not completed the implementation of the framework necessary to perform
an assessment of internal control over financial reporting in accordance with
Section 404 that would permit us to obtain the report of KBA Group LLP (“KBA”),
our independent auditors, on our assessment as of December 31, 2004.  Notwithstanding our failure to be able to
perform the assessment as required by Section 404, KBA issued an unqualified
opinion on our financial statements contained within the 2004 Form 10-K,
and we do not believe that our failure to be able to perform the assessment in
accordance with Section 404, in and of itself, impacts the overall
effectiveness of the disclosure controls and procedures that we have in
place.  Note, also, that even prior to
learning that we were required to comply with Section 404 for our year ending
December 31, 2004, we had begun the process of implementing the framework
necessary to enable us to complete our assessment of our internal control over
financial reporting for the year ending December 31, 2005, in accordance with
Section 404 and, as described in response no. 2 below, based on discussions
with the Division of Corporate Finance of the Securities and Exchange
Commission (the “Commission”), we have accelerated these efforts to be able to
perform such assessment as of September 30, 2005.

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Inquiry:

2.             As
you have not completed your assessment of the effectiveness of your internal
control over financial reporting and your independent registered public
accounting firm’s attestation report on this assessment, as required by Item
308 of Regulation S-K, tell us your estimated timetable for completing these
requirements and amending your Form 10-K to include these reports.

Response:

Under Section 404 of the
Sarbanes-Oxley Act of 2002 (“SOX”), the assessment of internal control over
financial reporting must be made “as of” the end of the Company’s fiscal year-
December 31, 2004, in the case of the 2004 Form 10-K.  As noted in response no. 1 above, based on
the Company’s belief that it was not required to comply with SOX Section 404
until its fiscal year ended December 31, 2005, the Company had not completed
sufficient steps to enable management to assess and report on the effectiveness
of the Company’s internal control over financial reporting in accordance with
SOX Section 404 as of December 31, 2004.
The Company has engaged in in-depth discussions with KBA to determine
whether there existed any possibility of performing management’s assessment of
internal control over financial reporting and obtaining the necessary related
report from KBA “as of” December 31, 2004, such that the 2004 Form 10-K could
be amended to include a report of management’s assessment and KBA’s
corresponding report, absent a disclaimer opinion.  Although it is theoretically possible that
under a literal interpretation of SOX Section 404 and related PCAOB standards
and rules, testing of internal control over financial reporting as of
December 31, 2004, may be done after the fact, the Company has concluded
that this framework can not be subsequently put into place and the required
testing completed such that the 2004 Form 10-K can be amended to comply with
Section 404 “as of” the date of that report.
The Company’s determination on this matter was reached after giving due
consideration to the following:

•                                          before management’s testing can be completed,
an appropriate framework, including the necessary documentation of existing
internal controls and resultant plan must be completed (which currently is
underway with respect to the planned compliance for fiscal 2005, but which
would require modification to be applied as of December 31, 2004);

•                                          based on our discussions with KBA it would be
impracticable to complete all testing and assessments of controls, of which a
portion involves observation, as of December 31, 2004;

•                                          the result of the foregoing is that
significant resources would be allocated to establishing a framework and plan
for December 31, 2004, that carries a high probability of not being able to be
completed in any event.  These efforts
would further detract from the Company’s efforts to move forward with its
current SOX Section 404 compliance plan, as described below; and

•                                          based on the foregoing, it is impracticable,
if not impossible, to achieve SOX Section 404 compliance for the fiscal year ended
December 31, 2004 (and, in any

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event, the timeframe for
completion if it were possible would be similar to the proposal set forth
below).

As noted in the 2004 Form
10-K, the Company originally was proceeding to complete the implementation of
the framework necessary to enable management to complete its assessment of the
Company’s internal control over financial reporting for the year ending
December 31, 2005.  However, based on discussions with David Lynn,
Jonathan Ingram and Paula Dubberly of the Division of Corporate Finance of the
Commission during the week of June 6, 2005, the Company has determined that it can
change its fiscal year end to September 30 and complete the establishment of a
sufficient framework and testing plan to enable management to perform an
assessment of internal control over financial reporting as of September 30,
2005.  This will enable management and
KBA to provide the necessary attestations and file a complete Form 10-K for the
fiscal year ending September 30, 2005 with the Commission no later than
December 14, 2005.  We have communicated
to Jonathon Ingram that we intend to pursue this course of action and Mr.
Ingram has confirmed that if the Company completes the required assessment and
obtains the required auditor’s report on the assessment and files these
materials in the Form 10-K for the fiscal year ending September 30, 2005, then
the Commission will reinstate the Company’s eligibility to use a Form S-3
registration statement.

Item 8.  Financial Statements and Supplementary Data

Reports of Independent
Registered Accounting Firm, page F-1

Inquiry:

3.             We
note that your audit report was signed by an audit firm based in Texas.  We also note that you conduct almost all of your
operations, generate substantially all your revenues and locate your assets in
China. After asking your auditor, please tell us where the majority of the
audit work was conducted and how they concluded that it is appropriate to have
an audit report issued by an auditor licensed in Texas.

Response:

Based on discussions with
KBA, the majority of the field work was performed in Hong Kong and Beijing,
China by a firm (originally a firm affiliated with KBA through membership in
Polaris International) located in Hong Kong and working for and under the
direct supervision of KBA.  KBA
established the audit programs, scoped the audit fieldwork, and reviewed
substantially all of the working papers.

The majority of the
planning, supervision, and review work were performed in Dallas.  The partner in charge of the audit performed
some of the review on site in China, and the balance in Dallas.  KBA employs several Chinese speaking team members
who are fluent in reading and speaking Chinese and who assisted on this audit.  KBA estimates that approximately 40% of
billings on the audit were for work performed in Hong Kong and Beijing, 10%
were for work performed in Germany, and the remaining 50% of billings were for
work performed in Dallas.  Based on the
above, KBA determined that it was appropriate for the audit report to be issued
by an auditor licensed in Texas.

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Consolidated Balance
Sheets, page F-4

Inquiry:

4.             Tell
us the reason(s) for the decrease in the balance of minority interest in
consolidated joint venture from 2003 to 2004.

Response:

The balance of minority
interest in consolidated joint venture relates to our subsidiary, Beijing Intac
Purun Development Ltd. (“Intac Purun”).
We owned a 45% interest in Intac Purun from October 2003 (inception) to
June 2004, and subsequently increased our ownership interest to 60% in June
2004.

The total decrease in the
minority interest of $695,408 in 2004 results from two factors.  The first is the $366,715 loss (for the year
ended December 31, 2004) related to the minority interest in the Consolidated
Statement of Operations.  The remaining
$328,693 reduction in the balance is related to the purchase by the Company of
an additional 15% interest in Intac Purun in June 2004 for $1,500,000.  The incremental ownership acquired was
accounted for using the purchase method of accounting whereby the excess of the
purchase price over the net assets acquired (including the proportionate minority
interest) represents goodwill.

Note 1.  General and Summary of Significant Accounting
Policies – (B) Principals of Consolidation, page F-10

Inquiry:

5.             Please
tell us in detail how you determined whether or not Intac Purun was within the
scope or subject to the consolidation provisions of FIN 46R.

Response:

Intac Purun was determined
not to be a variable interest entity and therefore not within the scope of FIN
46R.  In arriving at this determination,
we considered whether (a) the equity at risk was sufficient to permit Intac
Purun to finance its own activities, (b) the group holders of the equity
investment at risk have the ability through voting or similar rights to make
decisions about Intac Purun’s activities that have a significant effect on the
success of the entity, and (c) the group of holders of equity investments at
risk have the right to receive Intac Purun’s expected returns.

With respect to clause (a)
above, we estimated the expected losses of Intac Purun and compared these
estimated losses of $1.70 million to the initial equity investment in Intac
Purun totaling $2.77 million.  Based on
this analysis, we concluded that Intac Purun’s investment at risk was greater
than expected losses.

With respect to clause (b)
above, we noted that all equity interest holders have the ability to make
decisions about Intac Purun’s activities through their respective voting
rights.  INTAC, as the 60% owner of Intac
Purun, controls day-to-day activities and appoints the majority of the board of
directors.

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Finally, with respect to
clause (c) above, other than for the 10% Ministry of Education in the People’s
Republic of China (“PRC”) ownership, all equity investors share in the income
and losses based on their respective ownership percentages.

Inquiry:

6.             Please
tell us in detail your consideration of EITF 96-16 in your decision to present
consolidated financial results for Intac Purun.
Specifically, tell us why the private investor group or the PRC does not
have substantive participating rights as defined in EITF 96-l6.

Response:

Intac Purun is owned 60% by
the Company, 30% by a private investor group and 10% by the Ministry of
Education in the PRC.  In considering the
appropriateness of consolidating Intac Purun, the provisions of EITF 96-16, “Investor’s
Accounting for an Investee When the Investor Has a Majority of the Voting
Interest but the Minority Shareholder of Shareholders Have Certain Approval or
Veto Rights,” were taken into consideration.
More specifically, the “protective and substantive participating rights,”
if any, of the minority shareholders were assessed.

The Intac Purun joint
venture agreement does not specify any protective rights of the minority
shareholders relating to participating in financial and operating decisions
including those made in the ordinary course of business.  In addition, the minority shareholders do not
have any participating rights as described in EITF 96-16.  The joint venture agreement designates INTAC
as the operating partner with sole discretion over all operations of Intac
Purun.  In addition, INTAC appoi