Eric David & Sons Interviews Larry Simpson and Troy Griffin Of Sungold International Holdings Corp.

Eric David & Sons: Can you introduce our readers to your management team?

Larry Simpson: I am President and CEO of Horsepower® Broadcasting Network International Ltd., And Racing Unified Network which are subsidiary companies of Sungold. I have 27 years of experience in the Horseracing industry. This experience includes public relations, administrative, marketing, horse ownership, seminar management, fund raising and lecturing. I guess you can say that my industry experience is very well-rounded. I have been with the Horsepower® group now for nearly three years. A Board of Directors ably supports me. Donald Harris is our Chairman and he has actually been a Director of the Corporation since 1998 and Chairman of the Board since 1999. He is a successful businessman with a background in commercial real estate in Minneapolis , MN .

Art Cowie is the President of Sungold and also a Director of the Corporation. He is a distinguished landscape architect and a City Planner in the province of British Columbia

Dennis Hedtke is the Corporate Secretary and a Board member. He is the also CEO and owner of several large companies with international sales channels that he owns. Mr. Hedtke is also from the Minneapolis area.

We have just added another member to our Board, Roy Woodbridge. He has been a consultant to several Canadian businesses, Government and International organizations. You can see from our Board that we have a variety of different business interests and experience available, and it is of a North American ‘flavour’ as well. Troy Griffin is our Investor Relations Officer and Troy , maybe you could fill in a few details about yourself.

Troy Griffin : I have nine years experience in public relations management, marketing and technical writing. I have Canadian Federal Government experience in those fields and have translated it over to helping public corporations with their marketing, investor relations, corporate communications, and business plan implementation. I have been the Investor Relations Officer at Sungold for two years now and look after all investor enquiries for all three of the subsidiaries: Horsepower® Broadcasting, Racing Unified Network, and SafeSpending®, I also look after analyst enquires, broker enquires, as well as helping Sungold to put together various types of financing.

LS: I think we are very well diversified. Everyone brings to the table there own unique and various strengths, interests and passions. Mine, obviously, is horse racing and has been horse racing since I was a young boy. The Board brings together many positive attributes and Troy ‘kicks in’ with his own strengths and experience on the business and stock market side. I would say that Sungold has a very good team in place that certainly works well together and communicates well also.

EDS: Can you discuss the Horsepower® project, specifically what it does and how one can play?

LS: Horsepower® is a real time, pari-mutuel wagering system that has been custom developed for racing and extensively tested to exceed international standards. I guess the uniqueness of Horsepower® is that it has been designed to educate and bring new fans to racing. Racing has seen a waning interest in the past few years. We have lost people to other forms of entertainment, and to other forms of gaming. Racetrack owners have constantly mentioned that they need a product to get people excited about horseracing again, and we can deliver that product through Horsepower®. The racing industry in general has stressed the need to be able to offer a simplistic wager that can pay out larger payoffs then what race goers are used to seeing. Again, we can deliver this product! And people in general are used to forms of gaming that are quick, and I guess you could say requires minimal skill, like slot machines. They offer instant gratification. With Horsepower®, we offer a new randomly generated virtual horse race every ninety seconds. So it satisfies the desires of these people as well our mandate to “Bring the World to the Track” is exactly what Horsepower® is all about. It is a simplistic pari-mutuel wager that actually can be used by the tracks to educate people into becoming regular bettors. Horsepower® offers a Pick One and a Pick Six bet and with our races run in a greater frequency (every ninety seconds) our tickets are actually sold in strips of ten races per ticket. A Pick One is simply just a win bet where someone will pick their favorite number and have it for ten races. You know, historically one of racing’s greatest strengths have been to sell tickets in a more secure environment and quicker than even lotteries. By selling our Horsepower® tickets in strips of ten, we have actually taken this strength of racing and ‘bettered’ it 10 times! Our Pick Six or Quick Six wager is what you would call our multi million-dollar payoff bet. Someone will pick their favorite six horses out of a field of fourteen and they have these same six horses for ten races. If their virtual horses finish in that particular sequence, they win a multi-million dollar payoff. This is the first time ever that a product has been this simple to play and can offer multi million dollar payoffs to people on a daily basis. And because all the tracks participating in the Horsepower® network of races are playing into the same pool or what is referred to as a common pool, these eventual Horsepower® payoffs on the Pick Six could be the largest ever witnessed in horseracing, or even dog racing!

EDS: The Company plans to have a 10% market penetration in 2005, what is the company’s goal for Horsepower® in the next three years?

LS: Presently, we are marketing the Horsepower® product to licensed racetracks and their affiliated off-track betting facilities in Canada, United States and the Caribbean. We have basically laid the groundwork to introduce Horsepower® to Thoroughbred tracks, Standardbred tracks, and Greyhound tracks as everyone has the same need to attract new fans to their facility and to get more people back wagering on their live product. We have also done some preliminary work in markets like Europe and Asia and by fall of this year we will be making some serious inroads into these markets. We are also negotiating to have Horsepower® up and operating in South America, Russia and other what I like to refer to as ancillary revenue markets. Horsepower® has the copyrights, patents, and trademarks in 105 countries presently and it is Sungold’s goal to have Horsepower® operating in 70% of these countries by the end of 2008. You could say that we are positioning ourselves to become the first and largest globally branded pari-mutuel wagering product ever.

EDS: How will Sungold International Holding Corp be paid for the Horsepower® deals?

LS: The way it works is like any other bet at a racetrack. We will retain 4% of every dollar bet on our Horsepower® product. So that 4% comes back to the company as a host fee. I guess the key point is that Horsepower® has the ability to be offered on a seven-day-per-week, twenty-four-hour-a-day cycle and that makes the potential number of people placing wagers on Horsepower® truly phenomenal. In the very near future this product will reach a worldwide platform and because everyone is betting into a common pool, you can well imagine our potential revenue. With 25,000 racetracks and off track betting facilities worldwide, you can truly get a pretty good picture of the massive revenue potential available to Horsepower®. We also will have additional revenue streams through our subsidiary company RUN [Racing Unified Network]. Since our racing sequences run every 90 seconds, you have a 45 second race followed by a 45 second advertising window that we can offer to corporate advertisers that want a contained market to advertise their products on a Regional, National and even International level. We will be charging an advertising or promotion fee to get their message into that window. We have already been approached by several large corporations who have shown a tremendous interest in advertising on the Horsepower® Broadcasting Network. The 4% margin from HBN is one revenue stream, but we also have an additional 2% from RUN and our corporate branding program. Not bad considering Ray Crock was only generating 5% margins from MacDonald’s Restaurants in it’s first decade of operation, and the difference is Horsepower® does not need to spend millions of dollars on building infrastructures, instead Horsepower® leverages on the existing track facilities.

EDS: Can you discuss the awards and recognition that Horsepower® has received thus far?

LS: We have been featured in several well-respected horse racing publications. We were on Thoroughbred Times Magazine’s front page. An article in Blood Horse Magazine in the United States Horsepower® was referred to as, ‘The Wave of the Future.’ We were part of the University of Arizona’s Racing and Gaming Symposium in Tucson, AZ for the last two years. At the most recent one held in December 2004, we gave a very well received feature presentation during their gaming night. We have also been featured in a very highly regarded horseracing magazine called TheHorsePlayerMagazine. And last summer, the company was the subjects of a thirteen-minute infomercial on Business Television out of Vancouver, an infomercial that went into over 40 million households around North America. From a regulatory standpoint, we are a recognized associate member of RCI, [Association of Racing Commissioners International] and NAPRA [North American Pari-Mutuel Regulators Association]. They are basically the people who say where we can place the product, at which tracks and when! We attend their meetings every year at which time we meet with the Racing Commissioners from all over the globe. Finally in 2002 we were awarded the International Gaming Innovators Award at the International Gaming Law Conference in Dublin, Ireland. So we have some International recognition as well.

EDS: Can you briefly discuss the Racing Unified Network (RUN)?

TG: Sungold has formed a 100% subsidiary company called Racing Unified Network [RUN]. It is a fully registered Canadian corporation and it is the sister company to Horsepower®. The purpose of forming RUN is to provide marketing, advertising and promotional services to racing of all breeds and its sponsors. Currently, the racing industry buys over $3 billion in advertising each year and as Horsepower® is committed to the worldwide branding, so too is RUN. They are going to brand to major corporate sponsors such as Coca-Cola, Chevrolet, etc. advertising through Racing Unified Network onto the Horsepower® Live Simulcast video feed. Horsepower®, through RUN, will offer advertising in two sequences. The first will be Regional advertisement and the second will be National brand advertisements. The National corporations will be attracted to Horsepower® because of the viewing capacity and market reach that we can offer. Corporations pay millions of dollars to advertise on television and on the Internet, but with Horsepower® they will receive maximum exposure to an established clientele worldwide through our network affiliates.

LS: If I could add something to this, I think that RUN can do for horse racing what NASCAR did for auto racing. The NASCAR people basically created a corporate brand for car racing and we can do the same for horse racing through RUN and Horsepower®. It can be any kind of racing, even Greyhounds. No one has really taken the ball and ran with it when it comes to creating a market brand for racing on a regular basis. I think this is just another reason why Horsepower® is such an exciting concept! It has this potential to become a worldwide brand for racing, which has never been accomplished before. You see the fantastic job that NASCAR has done and I think we could do the same thing through Horsepower®.

EDS: Can you discuss the SafeSpending® (SS) project?

TG: The SafeSpending® anonymous internet payment system is a totally anonymous pre-paid spending system that uses vouchers with a unique randomly generated encrypted PIN number that can be used to make anonymous online cash purchases of products and services. A recent Gartner survey reported that $1.3 billion in online sales was lost in 2004 due to fraud. This figure represents roughly 1.4% of a $1.8 trillion total market. This was 23 times that of offline fraud and also 9.2% of 1,000 online customers surveyed complained of credit card fraud and 4.9% complained of identity theft, which is a major concern these days. SafeSpending® has developed a system that will allow customers to pre-purchase spending vouchers that will allow them to make purchases without revealing any confidential information. SafeSpending® will have these vouchers generated in different increments, which they can choose depending on their spending needs. An example of the different markets we will be going into is the teenage consumer market that does not have access to credit cards. An example is the downloadable music market. We are offering them a solution to tap into the teen market and other marketing dilemmas they are having. Also, those who sell merchandise in online auctions could receive payment from bidders by providing SafeSpending® with an account number. Conversely, auction sites are looking for a solution to the fraud problems that their sites are now becoming infamous for. We are looking to include the expanding online drug prescription market where keeping information private is of paramount importance. SafeSpending® will also serve the multi billion-dollar online adult entertainment market where customers expect their personal information to be kept private and free from fraud. One last market that I will comment on is the online gambling market. SafeSpending® is the perfect solution for the growing billion dollar online gambling market. Most credit cards now reject any customer transactions for the purpose of internet gambling due to large amounts of charge backs they receive from credit card fraud. Online gamblers using SafeSpending® can also be guaranteed that their activities online will remain anonymous. Another positive aspect is that SafeSpending® authorized merchants can be guaranteed almost immediate payment and pay a smaller fee for the use of our payment system, than they would normally pay to a credit card company. A lot of work has been done on SafeSpending® to date. We have recently submitted another 20 patents to further encompass our market and protect our product. It is a very competitive business, but we are confident and excited about the niche market we are about to enter into with the SafeSpending® anonymous internet payment system. Sungold is planning a SafeSpending® introduction in late 2005.

EDS: Are you currently seeking financing for the company, if so, how much and what type?

TG: Right now we are in a position where Sungold International and its subsidiaries are debt free and we are almost 2/3 the way through our fiscal year. We have completed the R&D [Research and Development] stage and are now entering into a marketing and production stage. Everything has been paid for up to this point and at present we are financing the company internally now, mainly through private placements.

We will be doing that type of financing for the short term and in the next six months looking to do our first major financing. That will be somewhere in the $1- $1.50 range. We are presently researching several different investment institutions in order to retain one for our equity financing.

EDS: Do you anticipate income for the company in 2005, if so, approximately how much?

LS: We anticipate a revenue stream beginning in the last quarter of 2005. To put a figure down is difficult, but you can guesstimate a bit. During a typical live race day an average size racetrack combined with their authorized OTB [Off Track Betting] locations that offers Horsepower® could generate between $500,000 and one million dollars on the Horsepower® bets alone. We as the host would receive 4% of that total, which is between $20,000 to $40,000 just for one average size track. The key here is that the $20,000 to $40,000 is based on just an average track. If you get a larger venue, like Churchill Downs during the Kentucky Derby or a track that is hosting the Breeders’ Cup, you are obviously going to have more people playing Horsepower®. On a Kentucky Derby day, you have over 150,000 people just at one track (Churchill Downs) so it is going to change the dynamics and the revenue would be significantly higher. So to answer the question, we believe the revenue will begin in the second half of 2005, and actually we have already started the ball rolling and started legislating the product in several jurisdictions to bring the product to fruition expeditiously. Just to give you an idea of how massive the racing market is on a worldwide scale look at the Hong Kong Jockey Club, one of the largest horseracing facilities in Asia. They accepted more wagers last year than the legal sports book wagering of the NFL, NBA, and NHL combined in the same time period!

EDS: How many shares are outstanding and how many are in the public trade-able float?

TG: Currently, as of March 9, 2005, we have 113 million on a fully diluted basis. Out of that, I would say that there are about 3.5 million shares in the trade-able float. I have done this calculation based on what insiders hold, what is held by brokerage firms, what is held in long term 401K retirement plans and what is being held in certificate form by way of private placements. The float is very tight right now. We implemented a program in early 2004 where we encouraged many of our major shareholders to take home delivery of their share certificates. We therefore tightened the available float at the Depository Trust Company level therefore making the float that much smaller and tighter, while still maintaining a respectable level of liquidity.

The Board of Directors have voted yes to a mandate that says once our subsidiaries begin generating revenue, we will start to buy back up to 25% of our outstanding shares. We are initiating a buy back program now that will ensure investors that we will not be heavily diluting shares in the future. We will eventually cap off the outstanding shares and then we are going to implement the 25% share buy back once we have a significant revenue stream.

EDS: What percentage of stock do company insiders hold?

TG: Insiders currently hold roughly 25% of the outstanding stock.

EDS: Is there anything else you would like to add or to say about the company?

TG: I would like to mention a very important point for investors who would like to take a position in Sungold International and look at it from a long-term approach.

We have specifically set up Sungold Intl Holdings Corp to have three subsidiaries underneath its umbrella, Horsepower® Broadcasting Network, Racing Unified Network, and SafeSpending®. The way that it is set up is that each subsidiary, once it is established and generating revenue, will have the ability to do its own underwriting, IPO, and to assume their own corporate indemnities. Sungold will retain a partial ownership in all three subsidiaries and the shareholders of Sungold will receive a piece of these companies in the form of a new share dividend as they are spun off. Sungold Intl has a long-term vision of being a large conglomerate and incubator for cutting edge companies that offer products and services for the entertainment and e-commerce

Industries.

If you would like to find out more about Sungold and its subsidiaries you can go to our website at www.sungoldintl.com To view a play for fantasy demo of our Horsepower® World Pool game please visit us at www.horsepowerworldpool.com.

LS: I think the important fact with any new product is there has to be a market and additionally a need for a product to service that market. What everyone has been telling us is that there is a market; there is a need for a product like Horsepower®. Attendance has been dwindling at tracks for years because people do not feel confident enough to bet on racing anymore. And it hasn’t helped that racing has done a poor job marketing themselves to new fans. Unfortunately, we have made it very intimidating for people to come to the races for the very first time. They may come to the track once, but they do not usually come back because they either feel that it is an insider’s game or they cannot read a Racing Form, or even worse, they are not sure how to even make a bet. So what has happened is that we have lost people to alternative forms of gaming. Racing has lost the ambiance that we used to have as the Sport of Kings. It used to be a social event for people to go to the races and that is gone. We live in a society where people suffer from Attention Deficit Disorder and we need a product that is going to appeal to them. Horsepower®, we believe will attract new people to racing, bring people back to racing and give it the recognition again as the Sport of Kings. We have to offer a less intimidating product, which can offer multi-million dollar payouts. We are banking on this product being able to bring new people to the races and racetrack owners agree that something needs to be done to bring these people back. Horsepower® is that product.

For further information on Sungold International Holding Corp OTCBB: (SGIHF) Please contact investor relations at 613-249-9092

Interview conducted 18 March 2005 by Kristin Huffner, an independent consultant of Eric David & Sons.

Please view the disclaimer for SGIHF here

2004 © Eric, David & Sons, Inc. All Rights Reserved.

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