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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
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<S> <C> <C> <C> <C>
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
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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.
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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.
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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.
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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.
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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].
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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.
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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.
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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.
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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.
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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
<PAGE>
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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
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
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
EDMARJON-RONBREWDAVE, L.L.C. 250,000 250,000 -0- 0%
(2)
</TABLE>
(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
<PAGE>
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
<PAGE>
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
<PAGE>
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.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/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
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/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
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
The following exhibits to this Form S-3 are incorporated herein by reference
except as otherwise stated:
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- ----------- -------
<S> <C>
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
</TABLE>
<PAGE>
<TABLE>
<C> <S>
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)
</TABLE>
- ---------------------
* 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.
<PAGE>
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.
<PAGE>
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.
<PAGE>
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
