-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SPYwdrQD26rLkvPf1HLv2kaNQsYodC0hlYJ7+HDcRxJrEIeFd/DtO900cWO3AcVh ASAhtG5caMApa82BKb/SYw== 0000944209-97-001258.txt : 19971001 0000944209-97-001258.hdr.sgml : 19971001 ACCESSION NUMBER: 0000944209-97-001258 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 19970930 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: GRAND PRIX ASSOCIATION OF LONG BEACH INC CENTRAL INDEX KEY: 0001014957 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-RACING, INCLUDING TRACK OPERATION [7948] IRS NUMBER: 952945353 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: S-3 SEC ACT: SEC FILE NUMBER: 333-36761 FILM NUMBER: 97688566 BUSINESS ADDRESS: STREET 1: 3000 PACIFIC AVE CITY: LONG BEACH STATE: CA ZIP: 90806 BUSINESS PHONE: 5629812600 MAIL ADDRESS: STREET 1: 3000 PACIFIC AVE CITY: LONG BEACH STATE: CA ZIP: 90806 S-3 1 FORM S-3 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______________________________ FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 GRAND PRIX ASSOCIATION OF LONG BEACH, INC. (Exact name of registrant as specified in it's charter) CALIFORNIA 95-2945353 (State or other jurisdiction (I.R.S. Employer of incorporation or organization) Identification Number) 3000 PACIFIC AVENUE, LONG BEACH, CA 90806 (562) 981-2600 (Address, including zip code, telephone number, including area code, of registrant's principal executive offices) CHRISTOPHER R. POOK, PRESIDENT WITH A COPY TO: GRAND PRIX ASSOCIATION OF LONG BEACH, INC. EDWARD S. GELFAND, ESQ. 3000 PACIFIC AVENUE GARTENBERG JAFFE GELFAND & STEIN LLP LONG BEACH, CA 90806 11755 WILSHIRE BLVD., SUITE 1230 (562)981-2600 LOS ANGELES, CA 90025 (310) 479-0044 (Name, address, including zip code, and telephone number, including area code, of agent for service) Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [_] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [_] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [_] CALCULATION OF REGISTRATION FEE
=============================================================================================================== Title of each class of Proposed maximum Proposed maximum securities to be Amount to be offering price per aggregate offering Amount of registered registered (1) share price registration fee (2) Common Stock $15.92 $3,980,000 No Par Value 250,000 shares $1,206.06 ===============================================================================================================
NOTES: (1) Plus such indeterminate number of additional shares of Common Stock as may be required in the event of a stock dividend, reverse stock split, combination of shares, recapitalization or any other change in the Company's capital stock. (2) The registration fee was calculated pursuant to Rule 457(c) based on the average bid and asked price for the stock on September 24, 1997. DELAYING AMENDMENT The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with section 8(a) of the Securities Act of 1933, or until the registration statement shall become effective on such date as the Commission, acting pursuant to said section 8(a), may determine. ******************************************************************************* Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This Prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. ******************************************************************************* SUBJECT TO COMPLETION, DATED SEPTEMBER 30, 1997 250,000 SHARES GRAND PRIX ASSOCIATION OF LONG BEACH, INC. COMMON STOCK This Prospectus has been prepared for use in connection with the proposed sale by EDMARJON-RONBREWDAVE, L.L.C. a Tennessee limited liability company (the "Selling Stockholder") of an aggregate of up to 250,000 shares (the "Shares") of the Company's common stock no par value per share (the "Common Stock"). EDMARJON-RONBREWDAVE, L.L.C. is the successor in interest by merger of Memphis International Motorsports Park, Inc. Memphis International Motorsports Park, Inc. was the entity which sold the Memphis Motorsports Park to the Company, for which it received, in partial consideration therefore, 250,000 shares of the Company's Series B Convertible Preferred Shares, which shares were converted into the Common Stock being registered in this Registration Statement. The members of the selling Stockholder are Brewster Harrington, Jimmy Chancellor, William F. Seagle, James T. Prothro Estate, Ed Gatlin, Brad Sidle, Susan Sutton, David Sutton, J. T. Davis, M.D., Warren E. Thompson, Marvin E. Bruce, John K. Thompson, Robert Dinklespiel, Ron Hubbard, Gerald J. Larkin, Alfred Cowles, and Marsha H. Lunn. The Shares may be offered and sold by the Selling Stockholder from time to time directly or through agents or to or through broker-dealers. The Shares may be sold in one or more transactions at a fixed price or prices, which may be changed, at market prices prevailing at the time of sale, at prices related to such prevailing market prices or at prices determined on a negotiated or competitive bid basis. Shares may be sold through a broker-dealer acting as agent or broker for the Selling Stockholder, or to a broker-dealer acting as principal. See "Plan of Distribution." Unless the context indicates or otherwise requires, references in this Prospectus to the "Company" are to Grand Prix Association of Long Beach, Inc., a California corporation, and its subsidiaries. The Common Stock is traded on the Nasdaq National Market System under the trading symbol GPLB. On September 25, 1997, the closing price for the Common Stock as reported by Nasdaq was 16 5/8. The Company will receive no portion of the proceeds from the sale of the Shares offered hereby. All selling and other expenses incurred by the Selling Stockholder in connection with the sale of the Shares will be paid by the Selling Stockholder or by the purchasers of the Shares, including the expenses of preparing and filing this Prospectus and the related Registration Statement with the Securities and Exchange Commission (up to a maximum of $10,000) and of registering or qualifying the Shares. See "Plan of Distribution" and "Selling Stockholder." SEE "RISK FACTORS," COMMENCING ON PAGE 6 OF THIS PROSPECTUS, FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES OFFERED HEREBY. The Shares have not been registered for sale under the securities laws of any state or jurisdiction as of the date of this Prospectus. Brokers or dealers effecting transactions in the Shares should confirm the existence of an exemption from registration or the registration thereof under the securities laws of the states in which such transactions occur. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of the Prospectus is September 30, 1997. 1 AVAILABLE INFORMATION The Company is subject to the information requirements of the Securities Exchange Act of 1934, as amended (the "1934 Act"), and in accordance therewith files periodic reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). The Registration Statement, as well as such reports, proxy statements and other information, may be inspected at the public reference facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. and should be available for inspection and copying at the regional offices of the Commission located at Seven World Trade Center, 13th Floor, New York, New York and Suite 1400, Citicorp Center, 500 West Madison Street, Chicago, Illinois. Copies of such material can be obtained at prescribed rates by writing to the Commission, Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. The Commission maintains a website that contains reports, proxy and information statements and other information regarding registrants that file electronically with the Commission. The Common Stock is listed on the Nasdaq National Market System, and the reports, proxy statements and certain other information filed by the Company may be obtained by calling the Nasdaq Public Reference Room Disclosure Information Group at (800) 638-8241 or (202) 728-8298. This Prospectus constitutes a part of the Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the "Registration Statement") filed by the Company under the Securities Act of 1933, as amended (the "1933 Act"). As permitted by the rules and regulations of the Commission, this Prospectus, which constitutes a part of the Registration Statement, does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. Statements contained in this Prospectus as to the contents of any agreement or other document referred to are not necessarily complete. The material terms of such documents are described herein. With respect to each such agreement or other document filed as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in all respects by such reference. 2 DOCUMENTS INCORPORATED BY REFERENCE The following documents have been filed with the Commission and are incorporated herein by reference: (a) The Prospectus of Grand Prix Association of Long Beach, Inc. dated June 24, 1996, filed with the Securities and Exchange Commission pursuant to Rule 424(b) promulgated under the 1933 Act. (b) The Registrant's Form 8-K filed with the Securities and Exchange Commission on July 10, 1996, regarding the acquisition of Memphis Motorsports Park. (c) The Registrant's annual report on Form 10-KSB for fiscal year ended June 30, 1996, as filed with the Securities and Exchange Commission on November 14, 1996. (d) The Registrant's Form 8-K filed with the Securities and Exchange Commission on September 18, 1996, regarding the addition of Neil Matlins to the Board of Directors. (e) The Registrant's quarterly report on Form 10-QSB for fiscal quarter ended September 30, 1996, as filed with the Securities and Exchange Commission on November 14, 1996. (f) The Registrant's Form 8-K filed with the Securities and Exchange Commission on December 18, 1996, regarding the change of Registrant's fiscal year end to November 30. (g) The Registrant's annual report on Form 10-KSB for the transition period from July 1, 1996, through November 30, 1996, filed February 28, 1997, as amended by Form 10-KSB/A filed on April 8, 1997, and Form 10-KSB/A2 filed August 15, 1997. (h) The Registrant's quarterly report on Form 10-QSB for the fiscal quarter ended February 28, 1997, as filed with the Securities and Exchange Commission on April 11, 1997. (i) The Registrant's Form 8-K filed with the Securities and Exchange Commission on September 11, 1997, regarding the sale of 630,000 shares of its unregistered common stock. (j) The Registrant's quarterly report on Form 10-QSB for the fiscal quarter ended May 31, 1997, as filed with the Securities and Exchange Commission on July 15, 1997. (k) All other reports filed by the Registrant pursuant to Section 13(a) or 15(d) of the 1934 Act since fiscal year ended November 30, 1996. All documents filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the 1934 Act after the date hereof and prior to the filing of a post-effective amendment to this registration statement which indicates that all securities offered hereunder have been sold, or which deregisters all securities then remaining unsold under this registration statement, shall be deemed to be incorporated by reference in this registration statement and to be a part hereof from the date of filing of such documents. Any statement contained in a report or document shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in a subsequently filed document which also is or is deemed to be incorporated by reference in this Prospectus modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company undertakes to provide without charge to each person to whom a copy of this Prospectus is delivered, upon the written or oral request of such person, a copy of any or all of the documents referred to above which have been or may be incorporated by reference herein (other than exhibits to such documents unless such exhibits are specifically incorporated by reference in such documents). Requests for such copies should be directed to Grand Prix Association of Long Beach, Inc., 3000 Pacific Avenue, Long Beach, California 90806, Attn: Corporate Secretary [telephone (562) 981-2600]. 3 NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION AND REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING STOCKHOLDER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT. THE COMPANY Since its formation as a California corporation in 1974, the Grand Prix Association of Long Beach, Inc. (the "Company") has been in the business of organizing and promoting automobile racing events. The Company developed and, since 1975, has operated the Grand Prix of Long Beach (the "Grand Prix"), an annual temporary circuit professional motorsports event in Long Beach, California. The Grand Prix has the second highest paid attendance of any Indy car race, second only to the Indianapolis 500. The Grand Prix weekend has attracted in excess of 200,000 paid spectators in each of the past six years, and is currently televised to over 125 countries throughout the world. The Company's business strategy is to continue to maintain the Grand Prix as one of the motorsports industry's premier annual events, and to capitalize upon the experience and expertise of its senior management team through the development of other motorsports venues. In furtherance of this strategy, the Company seeks to locate, acquire, develop and operate venues which the Company believes are underdeveloped or underutilized; are located in major metropolitan areas; can be acquired, improved and developed at a reasonable cost; and can be operated as multi-purpose motorsports facilities. In November 1994, the Company acquired an existing 154 acre permanent motorsports facility, Gateway International Raceway, in Madison, Illinois (near St. Louis) with the plan to redevelop it into a "state of the art" multi-purpose racing and driver training facility. Since it acquired this facility, the Company has replaced most of the existing facility and put in place a new infrastructure, including electrical service, a sanitation system, a ground water drainage system, and ingress and egress roads for new parking facilities, as well as a new drag strip, oval track, and road course, a drag strip tower, an oval suite tower, walkways, concession stands and grandstands capable of presently hosting 45,000 spectators per event and eventually 85,000 per event. In June 1996, the Company acquired its second permanent motorsports facility, Memphis Motorsports Park, in Millington, Tennessee, with the intention to modify and improve it in order to bring the facility up to "today's" professional motorsports standards. The Memphis Motorsports Facility is an approximately 375 acre facility located approximately ten miles northeast of downtown Memphis, Tennessee. The Memphis Motorsports Facility, which was constructed in 1987, currently has a regulation NHRA drag strip, a road course and a 1/4 mile dirt track, eighteen corporate suites, 5,500 permanent grandstand seats and 14,238 portable grandstand seats. The Company is in the process of making needed improvements and expansions to Memphis Motorsports Park, including converting the old clay oval to a 3/4 mile paved oval, modifying the road course and increasing the seating capacity to enable this regional facility to be eligible to acquire additional nationally sanctioned motorsports events as well as to continue to host local and regional events. Both Gateway International Raceway and Memphis Motorsports Park are unique in that in addition to having the capability of hosting major stock car and Indy car races, both facilities have national caliber National Hot Rod Association ("NHRA") 1/4 mile drag strips. Memphis Motorsports Park currently hosts the NHRA Pennzoil Nationals, Presented by AutoZone. Gateway International Raceway currently hosts the NHRA Sears Craftsman Nationals, in addition to the Motorola 300 Championship Auto Racing Teams, Inc. ("CART") sanctioned Indy car event, the National Association for Stock Car Auto Racing, Inc. ("NASCAR") Busch Series Grand National Division race and an Automobile Racing Club of America ("ARCA") and United States Auto Club ("USAC") Silver Crown event. Although in past years the Company has derived the majority of its revenues from the Grand Prix, with the addition of the two new permanent facilities, its reliance on the Grand Prix as its primary revenue producer has diminished. However, the Company will continue to place great emphasis on its annual Grand Prix and the revenue it generates. 4 A further business strategy of the Company has been to maximize the productivity of both its employees and the race-related operating equipment it has acquired over the years to enable it to meet the requirements of annually hosting in excess of 200,000 paying spectators at the Grand Prix, by renting its temporary structures and electrical equipment to other event operators and providing consulting and marketing services to other entities. While both Gateway International Raceway and Memphis Motorsports Park need a relatively limited amount of temporary equipment to meet peak demands, the Company intends to enter the equipment rental business in those markets as well as to continue in the Southern California market. In addition to rental of temporary structures and electrical services for other special events, the Company will continue to provide marketing and promotional services for other entities, as well as media production services and merchandise/souvenirs for all three of its venues - Long Beach, Gateway and Memphis. On August 8, 1997, the Company signed Stock Purchase Agreements with Midwest Facility Investments, Inc. ("MFI"), a wholly owned subsidiary of International Speedway Corporation, and Penske Motorsports, Inc. ("PMI"), (the "Stock Purchase Agreements") for the purchase by each of 315,000 shares of the Company's unregistered Common Stock for a purchase price of $12.34 per share. This purchase resulted in MFI and PMI each owning 7.2% of the Company's outstanding Common Stock. The Stock Purchase Agreements provide that the funds received by the Company from the sale of stock to MFI and PMI must be used only for capital expenditures for Board approved improvement projects that are intended to enhance the Company's ability to promote additional motor racing events at its Gateway International Raceway and Memphis Motorsports Park facilities; and give MFI and PMI certain preemptive rights for up to four years. In connection with the Stock Purchase Agreements, the Company agreed to cause its Board of Directors to be increased by two and to use its best efforts to cause one nominee of MFI and one nominee of PMI to be elected to the board to fill the new positions. MFI and PMI also agreed (until the earlier of (i) six years or (ii) or the date Christopher R. Pook ceases to serve as Chief Executive Officer unless a successor approved by MFI and PMI has been appointed within 120 days, (iii) there is a tender offer for the Company's shares or, the Company enters into a merger or other agreement pursuant to which the Company's current shareholders would own less than 50% of the surviving corporation's capital stock) not to (a) purchase additional shares of the Company's stock without Board approval, (b) conduct a proxy contest to obtain control of the Board or (c) enter into any non-market transaction to sell the Company's stock to anyone who does not agree to be bound by the same aforementioned stand still provisions, except they may each purchase up to 5% of the Company's outstanding Common Stock, and purchase shares from other shareholders who are subject to a Right of First Refusal Agreement between MFI and PMI and that shareholder. Concurrent therewith, the same parties signed Registration Rights Agreements, pursuant to which the Company agreed, for a period of three years, providing MFI and PMI the right to demand that the Company register the shares acquired by MFI and PMI concurrent with the registration of shares for any other security holder (other than on a form S-4 or S-8 or in connection with the registration of the Common Stock issued upon the conversion of its Series B Convertible Preferred shares if the same is filed prior to September 30, 1997) as long as MFI and PMI own at least 1% of the outstanding shares of the Company's Common Stock. The Company also agreed, not later than June 30, 1998, to file a Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415 of the Securities Act covering the 630,000 shares collectively purchased pursuant to the Stock Purchase Agreements by MFI and PMI. Further to the Stock Purchase Agreements and Registration Rights Agreements, MFI and PMI entered into A Right of First Refusal Agreement with certain shareholders of the Company, which shareholders collectively control 38% of Company's outstanding shares (assuming such shareholders exercise all conversion rights, exercise all options and warrants held by them). The Selling Stockholder agreed to subject 45,000 of its Shares to this Right of First Refusal Agreement. Exercise of their rights of first refusal pursuant to these agreements could result in MFI and/or PMI acquiring over 40% of the Company's Common Stock. The Company's headquarters are located at 3000 Pacific Avenue, Long Beach, California 90806. Its telephone number is (562)981-2600. 5 RISK FACTORS An investment in the securities offered hereby is highly speculative and involves a high degree of risk. Prospective investors should carefully consider all of the information contained in this Prospectus, and in particular, the following factors which could materially and adversely affect the operations and prospects of the Company or an investment therein, before making a decision to purchase any securities offered hereby. This Prospectus contains forward looking statements which involve risks and uncertainties. The Company's actual results could differ materially from those articulated in these forward looking statements as a result of certain factors, including those set forth in the "Risk Factors" section and elsewhere in this Prospectus. WEATHER AND CONSTRUCTION DELAYS Adverse weather conditions have caused construction delays and could cause further delays in construction at both the Company's Gateway International Raceway and Memphis Motorsports Park facilities. Delays in construction of improvements at Memphis Motorsports Park have resulted in one event which was scheduled to be hosted at Memphis Motorsports Park being rescheduled to be held at Gateway International Raceway. Future construction delays could result in the cancellation of an event scheduled to be held at one or both facilities. Weather conditions could also cause the cancellation or postponement of one or more events. The Company's inability to host scheduled events could have a material adverse effect on its business, revenues and financial condition. IMPORTANCE OF SANCTIONING CONTRACTS The success of the Company depends in large part on its ability to attract and retain national racing events sanctioned by motorsports' principal governing bodies, particularly at its permanent facilities. To date, the Company has been able to secure three such events for Gateway International Raceway and two for Memphis Motorsports Park. The Company entered into a four year agreement with CART for annual events starting in 1997, a three year lease with NHRA for national events starting in 1997 with options for an additional 10 years, and a one year agreement with NASCAR for a 1997 event at Gateway International Raceway. With respect to Memphis Motorsports Park, the Company has two years remaining on its agreement with the NHRA for annual national events (1997 and 1998). Memphis Motorsports Park had a one year agreement with ARCA for a national championship stock car event which was transferred to Gateway International Raceway due to construction delays, and it also has a three year agreement with USAC for Silver Crown Championship series annual events, the 1997 event was rescheduled and held at Gateway International Raceway due to construction delays. The Company has one year remaining on its sanction agreement with CART for the Grand Prix at Long Beach with options through the year 2000. The inability of the Company to obtain further sanction agreements and to maintain sanction agreements at this level would likely result in lower than anticipated revenues for the Company from admissions, promotions, sponsorships, hospitality, concessions, and merchandise, which could have a material adverse effect on the Company's business, financial condition, and results of operations. COMPETITION The Company's racing events compete with other sports and recreational events scheduled on the same dates, as well as with motorsports racing events sanctioned by various other racing bodies. Racing events sanctioned by different organizations are often held on the same dates at different tracks. The Company competes with other track owners for the patronage of motor racing spectators as well as for promotions and sponsorships. The Company's agreement with CART grants it the exclusive right to conduct a CART-sanctioned Indy car race in Southern California; however, the agreement allows CART to grant a CART- sanctioned event to California Speedway recently constructed approximately 60 miles from Long Beach in Fontana, California, as long as such CART-sanctioned Indy car race is not held within a period of several months before or after the Grand Prix, which is traditionally held in April. The California Speedway secured a CART-sanctioned Indy car event for September, 1997, and November 1998, hosted a NASCAR sanctioned event in 1997 and is scheduled to host a NASCAR event in 1998. Furthermore, it was recently announced that NHRA will host a national event in late May, 1998 at the Route 66 Raceway, a new track under construction 23 miles southwest of Chicago, Illinois. The conduct of such competing events could have a material impact on attendance, sponsorships and other revenues from the Grand Prix and events held at Gateway International Raceway and Memphis Motorsports Park. 6 SEASONALITY Historically, most of the Company's revenues have been derived from the annual Grand Prix held each April, in the Company's second fiscal quarter. The Company anticipates that the addition of revenues from operations at Gateway International Raceway and Memphis Motorsports Park will result in significant revenues in its third and fourth quarters as well; however, because Gateway International Raceway and Memphis Motorsports Park will have very limited, if any, racing during the winter season, it is anticipated that during the period from November through February the Company will continue to have minimal revenues resulting in significant operating losses during its first fiscal quarter. GOVERNMENT APPROVALS Operation of the Grand Prix is dependent upon obtaining a permit from the City of Long Beach allowing the Company to hold the race on city streets. The Company has such a permit through the year 2010. Traditionally, the city has been cooperative in working with the Company with respect to the terms of the permit and in extending the term thereof; however, there is no assurance that the City of Long Beach will extend the permit after the year 2010. SPONSORSHIP CONTRACTS The Company derives a substantial portion of its annual revenues from sponsorship agreements, including title sponsorship of its various events, sponsorship of its permanent venues, and "official product" sponsorships. The Company's title sponsorship agreements include a contract with Toyota Motor Sales U.S.A. for title sponsorship of the Grand Prix through the year 2000; a one-year agreement with Motorola for title sponsorship of Gateway International Raceway's CART Indy car race in May 1997, with renewal options; a three year agreement with NHRA for Sears Craftsman to be the sponsor of the NHRA event at Gateway International Raceway; and an agreement with the NHRA for Pennzoil to be the sponsor of the NHRA event at Memphis Motorsports Park through the 1998 event. Loss of these title sponsorship or other major sponsorship agreements or failure to secure such sponsorship agreements in the future could have a material adverse affect on the Company's revenues. GOVERNMENT REGULATION OF SPONSORS The Company derives a significant portion of its revenue each year from sponsorship and advertising by various companies. Tobacco and liquor companies have traditionally sponsored motorsports events. In August 1995, the U.S. Food and Drug Administration announced proposed regulations which, if implemented, could potentially restrict tobacco industry sponsorship of sporting events. Furthermore, recent tobacco litigation and settlements between tobacco companies and several states could have an impact on the tobacco industry's ability and/or desire to engage in motorsports sponsorship and advertising activities. Government regulations and restrictions on advertising by tobacco, liquor and other potential sponsors could adversely impact the Company's revenues, as well as that of the motorsports industry as a whole, and there is no assurance that alternate sponsors could be obtained. 7 RELIANCE ON THE GRAND PRIX OF LONG BEACH Traditionally the Company has obtained in excess of 80% of its annual revenues from the Grand Prix. In 1996, the Grand Prix accounted for approximately 72% of the Company's revenues. Once Gateway International Raceway and Memphis Motorsports Park are fully operational and have completed one racing season, the impact of those facilities contribution on the Company's revenue could prove to be significant. Until that time, the Company expects that the Grand Prix will continue to account for a significant portion of its revenues and operating income. Although the Company has operated a racing event on the streets of Long Beach for 22 years, there can be no assurance that the Grand Prix will continue to be successful. Although the Company has an agreement with the City of Long Beach to operate the Grand Prix through 2010, and with CART to sanction the Grand Prix Indy car race through 1998, which may be extended to 2000 at the option of the Company, the loss or cancellation of either of these agreements could have a material adverse effect on the financial viability of the Company. INSURANCE The Company maintains insurance policies that provide coverage within limits that are sufficient, in the opinion of management, to protect the Company from material financial loss incurred in the ordinary course of business. The Company also purchases special event insurance for motorsports events to protect against race related liability. The Company maintains "key man" insurance on its key corporate executives. However, there can be no assurance that such insurance will be adequate at all times and in all circumstances. If the Company is held liable for damages beyond the scope of its insurance coverage, its business, financial condition and results of operations could be materially and adversely affected. LIABILITY FOR PERSONAL INJURIES Motorsports can be dangerous to participants and to spectators. The Company maintains insurance policies that provide coverage within limits that are sufficient, in the judgment of management, to protect the Company from material financial loss due to liability for personal injuries sustained by persons on the Company's premises in the ordinary course of the Company's business. Throughout the year the Company maintains commercial general and automobile liability insurance with a combined single limit of $5,000,000 per occurrence. During the weekend of the Grand Prix, the Company increases its insurance coverage to $20,000,000 per occurrence to encompass the heightened risks associated with running a race on city streets. However, there can be no assurance that such insurance will be adequate at all times and in all circumstances. If the Company is held liable for personal injuries beyond the scope of its insurance coverage, its business, financial condition and results of operations could be materially and adversely affected. PATENTS, TRADEMARKS, COPYRIGHTS The Company has registered the following trademarks: "Long Beach Grand Prix", "U.S. Grand Prix West", "200 MPH Beach Party", "LBGP" and others and regularly copyrights its artwork, including poster art and artwork for clothing and souvenirs sold at the Grand Prix, Gateway International Raceway and Memphis Motorsports Park. The Company recently patented a safety barrier. Although the Company takes care to protect its intellectual property, the loss of any of these trademarks, copyrights or patents would not, in the opinion of management, have a material adverse effect on the revenues of the Company. STATUS OF GATEWAY LAW ENFORCEMENT DRIVING SCHOOL In its initial public offering Prospectus, the Company disclosed that it expected to apply approximately $1,500,000 of the net proceeds from its initial public offering to establish and equip the Gateway Law Enforcement Driving School. Because the Company was able to obtain major event sanctions for Gateway International Raceway earlier than anticipated, it had to accelerate redevelopment of Gateway International Raceway in order to permit it to host those major events in 1997. The cost of redeveloping and improving Gateway International Raceway at an accelerated rate has exceeded the initial redevelopment estimates, and the portion of the proceeds used for the redevelopment of Gateway International Raceway has exceeded the estimate set forth in the Prospectus. Therefore, the Company anticipates that it will not have sufficient proceeds from the initial public offering remaining after completion of the Gateway redevelopment to enable it to establish and equip the Gateway Law Enforcement Driving School from that source of funds. However, the Company does intend to go forward with the law enforcement driving school on the schedule anticipated in its initial public offering prospectus, and believes that the cash flow from earnings generated from major events which have and can be hosted at the redeveloped Gateway International Raceway will be sufficient to complete this goal. The Company's inability to direct sufficient funds from other sources to establish and equip the Gateway Law Enforcement Driving School could have a material adverse effect on the Company's business and financial condition. 8 RESTRICTION ON USE OF FUNDS On August 8, 1997, the Company entered into Stock Purchase Agreements with MFI and PMI, for the purchase by each of 315,000 shares of the Company's unregistered Common Stock for which the Company was paid a total of $7,774,200. The Stock Purchase Agreements provide that the funds received by the Company from the sale of stock to MFI and PMI must be used only for capital expenditures for Board approved improvement projects that are intended to enhance the Company's ability to promote additional motor racing events at its Gateway International Raceway and Memphis Motorsports Park facilities. This restriction on the Company's use of proceeds could result in the Company having insufficient funds for ongoing operations and could have a material adverse effect on the Company's ability to meet current financial obligations. POTENTIAL FOR CHANGE IN CONTROL In accordance with the Right of First Refusal Agreement entered into between MFI and PMI and certain shareholders of the Company (which shareholders will collectively control 38% of the Company's outstanding shares, assuming such shareholders exercise all conversion rights, exercise all options and warrants held by them, after issuance of the shares purchased by MFI and PMI pursuant to the Stock Purchase Agreement), PMI and MFI have the right to purchase any shares offered by parties to the Right of First Refusal Agreement. In the Stock Purchase Agreement, MFI and PMI are allowed to each purchase up to 5% of the Company's outstanding Common Stock, and purchase shares from other shareholders who are subject to a Right of First Refusal Agreement between them and that shareholder. In the event that such purchases bring the total ownership of MFI or PMI to greater than 10%, each has the right to purchase sufficient Common Stock on the open market to bring the ownership interest of each up to 20.5% of the outstanding Common Stock of the Company. If they make such purchases, however, their rights under the Right of First Refusal Agreement are reduced on a share for share basis. Exercise of their rights of first refusal and other rights pursuant to these agreements could result in MFI and/or PMI acquiring over 40% of the Company's Common Stock. Furthermore, MFI and PMI will have the right pursuant to the Stock Purchase Agreements to collectively nominate two persons to the Board of Directors of the Company. Both MFI and PMI are SEC reporting companies and none of the control persons of the Company serve on the boards of directors of MFI, PMI or International Speedway Corporation ("ISC"). None of the control persons of MFI, PMI or ISC sit on the Board of Directors of the Company except MFI and PMI have the right to nominate one director each to sit on the Board of the Company. DEPENDENCE ON KEY PERSONNEL The Company's success depends largely on the availability and performance of its senior management team, particularly Christopher R. Pook, the Company's Chairman and Chief Executive Officer. Mr. Pook's reputation and experience within the motorsports industry, including his relationship with the various motorsports sanctioning bodies, will continue to be of considerable importance to the Company. The loss of any of the Company's key personnel or its inability to attract and retain key employees in the future could have a material adverse effect on the Company. In addition, the Company's agreement with Toyota is cancelable at the option of Toyota should Mr. Pook cease to be Chairman or Chief Executive Officer of the Company. In the Stock Purchase Agreements, if Christopher R. Pook ceases to serve as Chief Executive Officer unless a successor approved by MFI and PMI has been appointed within 120 days, the buyers agree not to (i) purchase additional shares of the Company's stock, (ii) conduct a proxy contest to obtain control of the Board or (iii) enter into any non- market transaction to sell the Company's stock to anyone who does not agree to be bound by the same aforementioned stand still provisions, except they may each purchase up to 5% of the Company's outstanding common stock, and purchase shares from other shareholders who are subject to a Right of First Refusal Agreement between them and that shareholder, would terminate. The loss of any of its senior management team members could have a material adverse effect on the business of the Company. MANAGEMENT OF GROWTH The acquisition of Gateway International Raceway and Memphis Motorsports Park has and will continue to place substantial burdens on the Company's management resources and financial controls. The Company's ability to manage its growth effectively will require it to continue to implement and improve its operational, financial and management information systems and controls, and to train, motivate and manage its employees. The Company's failure to manage its growth effectively could have a material adverse effect on the Company's business, financial condition and results of operations. 9 ABILITY TO MAKE ADVANTAGEOUS ACQUISITIONS The Company's ongoing strategy includes locating, acquiring and developing multi-purpose motorsports facilities. There can be no assurance that the Company will be able to identify suitable acquisition candidates or consummate advantageous acquisitions. The Company intends to continue to review and evaluate acquisition opportunities as they arise, but presently has no commitments with respect to any potential acquisition. If the Company does make one or more future acquisitions, these acquisitions may involve the use of substantial additional debt and may not be profitable or otherwise beneficial for the Company. Due to the restriction on use of the $7,774,200 proceeds from the recent sale of stock to MFI and PMI contained in the Stock Purchase Agreements, the Company would not have those funds available for the acquisition of other facilities. Investors will not have an advance opportunity to evaluate the merits and risks of any acquisitions undertaken by the Company. BLANK CHECK PREFERRED STOCK The Company's Board of Directors has total discretion in the issuance Preferred Stock and the determination of the rights and privileges associated with any shares of Preferred Stock which might be issued in the future, which rights and privileges may be detrimental to the holders of the Common Stock. The Company is authorized to issue 10,000,000 shares of Preferred Stock of which only two series, Series A Convertible Preferred Stock, representing 312,500 shares, and Series B Convertible Preferred Stock, representing 250,000 shares, has been designated to date. The Series B Convertible Preferred are the shares which were converted into the Shares being currently registered. The Series A Convertible Preferred shares were all previously converted into Common Stock. The issuance of Preferred Stock in the future could discourage or impede a tender offer, proxy contest or other similar transaction involving a potential change in control of the Company, which transaction might be viewed favorably by other shareholders. ANTI-TAKEOVER PROVISIONS In addition to provisions in the Company's Articles of Incorporation which authorize the issuance of "blank check" Preferred Stock, the Company's Bylaws provide for a staggered Board of Directors, and provisions in the employment agreements for each of Christopher R. Pook and James P. Michaelian provide for large severance payments to these individuals in the event of a change in control of the Company coupled with a change in their job duties. Furthermore, the Company is a party to an agreement with MFI and PMI, each of which owns 315,000 shares of the Company's Common Stock, which give these shareholders certain preemptive rights. These provisions and agreements could discourage or impede a tender offer, proxy contest or other similar transaction involving a potential change in control of the Company which transaction might be viewed favorably by minority shareholders. ABILITY TO MEET PAYMENT OBLIGATIONS ON SWIDA LOAN In order to finance the redevelopment of Gateway International Raceway, the Company entered into a loan agreement with Southwestern Illinois Redevelopment Authority ("SWIDA"), which agreed to fund a loan to the Company by issuing municipal bonds in the aggregate principal amount of $21,500,000 designated as the "Taxable Sports Facility Revenue Bonds, Series 1996 - Gateway International Motorsports Corporation Project" (the "Bonds"). The Bonds are unconditionally guaranteed by the Company. The closing of the sale of the Bonds occurred on June 21, 1996. The Bonds were offered by SWIDA on a private placement basis in reliance upon an exemption from registration contained in Section 4(2) of the 1933 Act. SWIDA has loaned all of the proceeds from the Municipal Bond Offering to the Company for the purpose of the development, construction and expansion of Gateway International Raceway, and the funds so obtained are irrevocably committed to complete all planned construction of Gateway International Raceway to create a $2,550,000 interest reserve fund and to pay for the cost of issuance of the Bonds. The Bonds are enhanced by the moral obligation of the State of Illinois and have a 20-year maturity. The Company issued a 20-year $21,500,000 promissory note to SWIDA which bears interest at a rate of approximately 9.1% per annum (the "SWIDA Loan"). Payments of interest are made semi-annually, and began in February 1997, with interest payments through 10 February 1998 derived from an interest reserve fund described below, and principal payments will begin in February 2000. All proceeds from the SWIDA Loan are required to be dedicated by the Company to the redevelopment of Gateway International Raceway and debt service obligations with respect to the SWIDA Loan. As required pursuant to the financing arrangement, the Company has established a $2,550,000 interest reserve fund (from the proceeds of the SWIDA Loan). In addition, the Company has established a $2,300,000 debt service reserve fund from the net proceeds of its $2,500,000 private placement of its Series A Convertible Preferred Stock. Additionally, the Company is required to impose a 5% ticket surcharge on all nationally sanctioned motorsports events at Gateway International Raceway to establish an additional debt service reserve fund for the Bonds. Once $2,000,000 has been accumulated in this fund, excess funds then accumulating will be used to redeem Bonds annually commencing February 1, 2002. Although the Company's payment obligations for interest payments on the SWIDA Loan through February 1998, have been reserved out of the proceeds of the SWIDA Loan, and are being held in an interest reserve fund and will be used to make these payments, future payments on the SWIDA Loan are intended to be made primarily from the revenues from the operations of Gateway International Raceway. Although the Company is current on its obligation and expects to meet its future debt payment obligations out of the revenues from Gateway International Raceway, and although the Company will receive certain assistance from the City of Madison, Illinois in the form of a tax increment finance fund which should assist it in meeting its debt burdens, there can be no assurance that earnings from the future operations of Gateway International Raceway will be sufficient to meet the Company's debt service obligations. If the Company is unable to meet these obligations, the resulting default could result in the foreclosure on the assets of Gateway International Raceway, and the acceleration of the Company's obligation to make payment of the full principal amount and all interest due on the SWIDA Loan. USE OF PROCEEDS The Company will not receive any proceeds from the sale of the Shares registered by this Form S-3. The Shares being registered are Common Stock issued upon the conversion of the Company's Series B Convertible Preferred Stock on a share for share basis. Said Series B Convertible Preferred shares were issued to the seller of the Company's Memphis Motorsports Facility as part of the consideration for the purchase thereof. PLAN OF DISTRIBUTION The Selling Stockholder or its pledgees, donees, transferees or other successors in interest, may sell Shares in any of the following ways: (i) through dealers, (ii) through agents, (iii) or directly to one or more purchasers. The distribution of the Shares may be effected from time to time in one or more transactions (which may involve crosses or block transactions) (a) on the Nasdaq National Market System (or on such national stock exchanges upon which shares of Common Stock may be traded from time to time) in transactions pursuant to and in accordance with the rules of that system, (b) in the over-the-counter market, or (c) in transactions other than on that system or in the over-the-counter market, or a combination of those transactions. Any such transaction may be effected at market prices prevailing at the time of sale, at prices related to those prevailing market prices, at negotiated prices or at fixed prices. The Selling Stockholder, or its pledgees, donees, transferees or other successors in interest, may effect these transactions by selling Shares to or through broker- dealers, and those broker-dealers may receive compensation in the form of discounts, commissions, or commissions from the Selling Stockholder, or its pledgees, donees, transferees or other successors in interest, and/or commissions from purchasers of Shares for whom they may act as agent. The Selling Stockholder, or its pledgees, donees, transferees or other successors in interest, and any broker-dealers or agents that participate in the distribution of Shares by them might be deemed to be underwriters, and any discounts, commissions, or concessions received by any such broker-dealers or agents might be deemed to be underwriting discounts and commissions, under the 1933 Act. Affiliates of the Selling Stockholder, or its pledgees, donees, transferees or other successors in interest, may act as principal or agent in connection with the offer or sale of Shares by the Selling Stockholder, or its pledgees, donees, transferees or other successors in interest. In addition, any shares which qualify for sale pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather than pursuant to this Prospectus. The Company will not receive any of the proceeds from the sale of the Shares and the Selling Stockholder (up to a maximum of $10,000) will pay the expenses in preparing the Registration Statement and registering the Shares. The Selling Stockholder has been advised that it, and its pledge, donees, transferees or other successors in interest, are subject to the applicable provisions of the Securities Exchange Act of 1934, including without limitation Rules 10b-5, 10b-6, and 10b-7 thereunder. There can be no assurances that the Selling Stockholder will sell any or all of the Shares offered hereunder. 11 SELLING STOCKHOLDER EDMARJON-RONBREWDAVE, L.L.C. is the successor in interest by merger of Memphis International Motorsports Park, Inc. Memphis International Motorsports Park, Inc. was the entity which sold the Memphis Motorsports Park to the Company, for which it received, in partial consideration therefore, 250,000 shares of the Company's Series B Convertible Preferred Shares, which shares were converted into the Common Stock being registered in this Registration Statement. The following table sets forth the name of the Selling Stockholder, the number of shares of the Company's Common Stock beneficially owned by the Selling Stockholder, the number of shares that may be sold by the Selling Stockholder in this Offering, and the number of shares of Common Stock to be owned by the Selling Stockholder, and the percentage of Common Stock to be owned by the Selling Stockholder, assuming all of the shares of Common Stock are sold in this Offering.
BEFORE OFFERING AFTER OFFERING ------------------------------ -------------------------- NUMBER OF NUMBER OF NUMBER OF SHARES SHARES TO SHARES PERCENT OF BENEFICIALLY BE SOLD IN BENEFICIALLY OUTSTANDING OWNED (1) OFFERING (3) OWNED SHARES ------------ ------------ ------------ ----------- EDMARJON-RONBREWDAVE, L.L.C. 250,000 250,000 -0- 0% (2)
(1) As of September 23, 1997, there were 4,648,286 shares of Common Stock outstanding including the Shares being registered hereby. (2) The members are Brewster Harrington, Jimmy Chancellor, William F. Seagle, James T. Prothro Estate, Ed Gatlin, Brad Sidle, Susan Sutton, David Sutton, J. T. Davis, M.D., Warren E. Thompson, Marvin E. Bruce, John K. Thompson, Robert Dinklespiel, Ron Hubbard, Gerald J. Larkin, Alfred Cowles, and Marsha H. Lunn. (3) 45,000 of the Shares are subject to the Right of First Refusal Agreement. See "The Company." EXPERTS The financial statements of the Company for the period ended November 30, 1996 incorporated by reference in this Prospectus and elsewhere in the registration statement have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their report with respect thereto, and are included herein in reliance upon the authority of said firm as experts in giving said reports. See "Documents Incorporated by Reference." DESCRIPTION OF COMMON STOCK The description of the Company's Common Stock to be offered pursuant to this Prospectus has been incorporated into this Registration Statement. See "Documents Incorporated by Reference." LEGAL MATTERS The validity of the Shares offered hereby will be passed upon for the Company by Gartenberg Jaffe Gelfand & Stein, LLP, Los Angeles, California. 12 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION These securities are being registered in accordance with the one time right of the holders of Series B Convertible Preferred stock of the Company to demand registration of the Common Stock to which their preferred shares were converted as set forth in the Agreement for Purchase and Sale of Assets between the Company and Memphis International Motorsports Park, Inc., successor in interest to EDMARJON-RONBREWDAVE, LLC, the Selling Shareholder (the "Agreement") (filed as Exhibit 10.8 to the Company's Form SB-2). Pursuant to the Agreement, the holders of the preferred shares must pay the first $10,000 in costs of this registration. SEC Registration fees $ 1,206.06 Transfer agent's fees $ 20.00 Printing & engraving $ 1,000.00 Legal fees & expenses $14,000.00 Accounting fees & expenses $ 3,500.00 Miscellaneous $ 500.00 Blue sky fees & expenses $ 500.00 ---------- Total fees & expenses of issuance: $20,726.06 ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Company's Articles of Incorporation and Bylaws contain provisions limiting the personal liability of directors to the Company or its shareholders and indemnifying directors, officers, employees and agents of the Company for actions, in their capacity as such, to the fullest extent permitted by law. In August, 1994 each of the then-existing non-employee directors of the Company entered into indemnification agreements with the Company pursuant to which the Company agreed to indemnify the non-employee directors against expenses incurred by a non-employee director arising out of any act or omission of the director arising out of his duties as a director of the Company. In September, 1996, the Company entered into similar agreements with two new non-employee directors. The Company has directors and officers liability insurance. Insofar as indemnification for liability arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, the Company has been advised that in the opinion of the Securities and Exchange Commission indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. At present there is no pending or threatened litigation involving a director, officer, employee or agent of the Company where indemnification will be required or permitted. The Company knows of no threatened litigation or proceeding which may result on a claim of indemnification by any director, officer, employee or agent. II-1 ITEM 16. EXHIBITS. The following exhibits are incorporated herein by reference except as otherwise stated: 5.2 Opinion of Counsel (filed herewith). 23.4 Consent of Counsel (included as part of Exhibit 5.2 and filed herewith). 23.5 Consent of Arthur Andersen LLP (filed herewith). 24.5 Power of Attorney (incorporated in signature page forming a part hereof). ITEM 17. UNDERTAKINGS. The undersigned Company hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement; (i) To include any Prospectus required by Section 10(a)(3) of the 1933 Act; (ii) To reflect in the Prospectus any facts or events which, individually or together, represent a fundamental change in the information set forth in the Registration Statement; (iii) To include any additional or changed material information on the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the registration statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the - ----------------- information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Company pursuant to section 13 or 15(d) of the 1934 Act that are incorporated by reference in this registration statement. (2) That, for the purpose of determining any liability under the 1933 Act, each post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned Company hereby undertakes that, for purposes of determining any liability under the 1933 Act, each filing of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act (and where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the 1934 Act) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the 1933 Act may be permitted to directors, officers and controlling persons of the Company pursuant to the Company's Articles of Incorporation, Bylaws or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the 1933 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Company of expenses incurred or paid by a director, officer or controlling person of the Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection which the securities being registered, the Company will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1933 Act and will be governed by the final adjudication of such issue. II-2 SIGNATURE Pursuant to the requirements of the Securities Act of 1933, the Company certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3, and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized in the City of Long Beach, State of California, on September 29, 1997. GRAND PRIX ASSOCIATION OF LONG BEACH, INC. By: /s/ Christopher R. Pook _______________________ Christopher R. Pook Chairman of the Board, Chief Executive Officer and President KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Christopher R. Pook and James P. Michaelian, and each of them, his attorney-in-fact with power of substitution for him in any and all capacities, to sign any amendments, supplements, subsequent registration statements relating to the offering to which this registration statement relates, or other instructions he deems necessary or appropriate, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that said attorney-in-fact or his substitute may do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the date indicated.
Signature Title Date --------- ----- ---- /s/ Christopher R. Pook Chairman of the Board, September 29, 1997 - ----------------------- President and Chief Executive CHRISTOPHER R. POOK Officer (Principal Executive Officer) /s/ James P. Michaelian Chief Operating Officer and September 29, 1997 - ----------------------- Director JAMES P. MICHAELIAN /s/ Ronald C. Shirley Chief Financial Officer September 29, 1997 - ----------------------- (Principal Financial Officer) RONALD C. SHIRLEY /s/ Daniel Gurney Director September 29, 1997 - ----------------------- DANIEL GURNEY
II-3
Signature Title Date --------- ----- ---- /s/ James Sullivan Director September 29, 1997 - ----------------------- JAMES SULLIVAN /s/ John R. Queen, III Director September 29, 1997 - ----------------------- JOHN R. QUEEN, III /s/Wayne Kees Director September 29, 1997 - ----------------------- WAYNE KEES /s/ George Pellin Director September 29, 1997 - ----------------------- GEORGE PELLIN /s/ Neil Matlins Director September 29, 1997 - ----------------------- NEIL MATLINS /s/ Joseph Ainge Director September 29, 1997 - ----------------------- JOSEPH AINGE
II-4 EXHIBIT INDEX The following exhibits to this Form S-3 are incorporated herein by reference except as otherwise stated:
EXHIBIT NO. EXHIBIT - ----------- ------- 1.1* Form of Underwriting Agreement 1.2* Form of Warrant to L.H. Friend, Weinress, Frankson & Presson, Inc. 3.1* Restated Articles of Incorporation of the Company 3.2* Certificate of Correction of Restated Articles of Incorporation 3.3* Bylaws of the Company 4.1* Form of Stock Certificate 5.1* Opinion letter of Law Offices of Edward S. Gelfand regarding the legality of the securities registered 5.2 Opinion letter of Gartenberg Jaffe Gelfand & Stein LLP relating to the legality of the securities registered on Form S-3 dated 9-29-97 (filed herewith) 10.1* Amended and restated Agreement dated September 15, 1996 between the Company and the City of Long Beach 10.2* Official Organizer/Promoter Agreement dated April 5, 1995 between the Company and Championship Auto Racing Teams, Inc. (Certain confidential portions of this agreement have been deleted) 10.3* Agreement dated August 2, 1995 between the Company and Toyota Motor Sales, U.S.A., Inc. (Certain confidential portions of this agreement have been deleted) 10.4* 1993 Stock Option Plan of the Company 10.5* 1996 Employee and Director Stock Incentive Plan 10.6* Employee Agreement dated as of May 16, 1996 between the Company and Christopher R. Pook 10.7* Employment Agreement dated as of May 16, 1996 between the Company and James P. Michaelian 10.8* Agreement dated as of May 6, 1996 between the Company and Memphis International Motorsports Park and amendment thereto 10.9* Moral Obligation of State of Illinois dated May 1, 1996 to the Southwestern Illinois Development Authority regarding Taxable Sports Facility Revenue Bonds, Series 1996 10.10* Redevelopment Agreement between the City of Madison, Illinois and the Company dated February 27, 1996 10.11* U.S. Small Business Administration ("SBA") "504" Note (loan number CDC-L-GP-489638-30-08-LA) in the principal amount of $750,000 made by the Company to Long Beach Local Development Corporation 10.12* Short Form Deed of Trust and Assignment of Rents dated July 20, 1992 (92-2037097) between the Company, as trustor, and Long Beach Local Development Corporation, as beneficiary, and Assignment of said Deed of Trust (92-2037098) to SBA 10.13* Development Company 504 Debenture dated December 16, 1992 in the principal amount of $750,000 made by Long Beach Local Development Corporation to fund the SBA loan to the Company 10.14* Loan Agreement dated June 20, 1992 made between Long Beach Development corporation and the Company with respect to SBA loan to the Company 10.15* Promissory Note dated June 30, 1992 made by the Company to Harbor Bank in the principal amount of $814,000 10.16* Deed of Trust dated June 30, 1992 (92-1214039) between the Company, as trustor, and Harbor Bank, as beneficiary, securing $814,000 note 10.17* Three Tier Bonus Plan of Company 10.18* Revolving Line of Credit Agreement with West Pointe Bank and Trust Company dated February 24, 1995, as amended by Extension/ Modification Agreement dated February 24, 1996 10.19* Memorandum of Understanding dated February 26, 1996 by and between the United States of American, Gateway International Motorsports Corporation and BBJJ Land Trust 10.20* Form of Stock Option Agreement for 1993 Stock Option Plan 10.21* Lease Agreement dated as of June 12, 1996 by and between Helen M. Bergfield, trustee and Gateway International Motorsports Corporation 10.22* Lease Agreement dated as of April 1, 1996 by and between Ruth C. Franke and Gateway International Motorsports Corporation 10.23* Lease Agreement dated as of June 1, 1996 by and between Joseph E. Trover and Gateway International Motorsports Corporation
10.24* Form of Loan Agreement by and between Southwestern Illinois Development Authority and Gateway International Motorsports Corporation 10.25* Form of Guaranty Agreement made by the Company and Automotive Safety & Transportation Systems, Inc. to Magna Trust Company, Trustee, dated as of May 1, 1996 10.26* Form of Mortgage and Security Agreement by and between Gateway International Motorsports Corporation, as mortgagor and Southwestern Illinois Development Authority, as mortgagee dated as of May 1, 1996 10.27* Indenture of Trust dated as of May 1, 1996 by Southwestern Illinois Development Authority, as mortgagee dated as of May 1, 1996 10.28* Form of Tax Escrow Agreement to be entered into between the City of Madison, Illinois, Magna Trust Company, as escrow agent and Gateway International Motorsports Corporation 10.29*** Sanction Application and Agreement Form - NASCAR Busch Series, Grand National Division between the National Association for Stock Car Racing, Inc. and Applicant, dated December 17, 1996, 10.30*** Official Sanction Application Under the Rules and Regulations of USAC, between United States Auto Club and Applicant, dated November 18, 1996 10.31*** Sanction Agreement Application for National Championship Stock Cars between Automobile Racing Club of America and Applicant, dated November 25, 1996 10.32**** Stock Purchase Agreement, dated August 8, 1997, between Midwest Facility Investments, Inc., and Grand Prix Association of Long Beach, Inc. 10.33**** Registration Rights Agreement, dated August 8, 1997, between Midwest Facility Investments, Inc., and Grand Prix Association of Long Beach, Inc. 10.34**** Stock Purchase Agreement, dated August 8, 1997, between Penske Motorsports, Inc., and Grand Prix Association of Long Beach, Inc. 10.35**** Registration Rights Agreement, dated August 8, 1997, between Penske Motorsports, Inc., and Grand Prix Association of Long Beach, Inc. 10.36**** Right of First Refusal Agreement, dated August 8, 1997 between Midwest Facility Investments, Inc., Penske Motorsports, Inc. and various shareholders. 21.* Subsidiaries of Registrant 23.4** Consent of Counsel 23.5 Consent of Arthur Andersen LLP (filed herewith)
- --------------------- * Incorporated herein by reference to the Company's Registration Statement on Form SB-2 filed with the Commission on May 17, 1996, as amended on June 24, 1996. ** Included as part of Exhibit 5.2 filed herewith. *** Incorporated herein by reference to the Company's Form 10-KSB/A filed April 8, 1997. **** Incorporated herein by reference to the Company's Form 8-K filed September 11, 1997. EX-5.2 2 OPINION OF COUNSEL EXHIBIT 5.2 [LETTERHEAD OF GARTENBERG JAFFE GELFAND & STEIN LLP] September 29, 1997 Christopher R. Pook President and Chief Executive Officer Grand Prix Association of Long Beach, Inc. 3000 Pacific Avenue Long Beach, CA 90806 Re: Form S-3 Registration Statement Dear Mr. Pook: This opinion is furnished to Grand Prix Association of Long Beach, Inc. (the "Company") in connection with the registration statement on Form S-3 (the "Registration Statement") to be filed with the Securities and Exchange Commission ("SEC") registering 250,000 shares of the common stock, no par value (the "Shares") of the Company. In our capacity as counsel to the Company, we have participated in the preparation of the Registration Statement. In so acting, we have examined copies of agreements, exhibits to the Registration Statement, corporate documents and records of the Company, representations of officers and representatives of the Company and others and such other documents, records and papers as we have deemed relevant and necessary in order to give the opinion hereinafter set forth. In our examinations, we have assumed, without investigation, the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies. We have relied upon the aforesaid writings with respect to the accuracy of material factual matters stated therein without independent investigation. Based upon the foregoing, in our opinion the Shares have been duly authorized and, when issued, will be validly issued, fully paid and nonassessable. Christopher R. Pook September 29, 1997 Page 2 We hereby consent to the filing of this opinion as an exhibit to the Registration Statement on Form S-3 to be filed by the Company with the SEC under the Securities Act of 1933, as amended, and we further consent to the reference to our firm under the caption "Legal Matters" in the prospectus which constitutes a part thereof. The opinion expressed in this letter is solely for the Company's benefit and may not be relied upon by any other person or used in any manner or for any purpose except as specifically provided for in this opinion. Very truly yours, GARTENBERG JAFFE GELFAND & STEIN, LLP By: /s/ Edward S. Gelfand --------------------- Edward S. Gelfand ESG:emc cc: Val deMartino, Esq. EX-23.5 3 CONSENT OF ARTHUR ANDERSEN LLP EXHIBIT 23.5 [LETTERHEAD OF ARTHUR ANDERSEN LLP] CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement on Form S-3 of our report dated February 27, 1997 included in Grand Prix Association of Long Beach, Inc.'s Form 10-KSB for the period ended November 30, 1996 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP ----------------------- ARTHUR ANDERSEN LLP Los Angeles, California September 24, 1997 -----END PRIVACY-ENHANCED MESSAGE-----