NOTE 2 – Business Operations

Dover Motorsports, Inc. is a public holding company that is a marketer and promoter of motorsports entertainment in the United States. Through our subsidiaries, we own and operate Dover International Speedway® in Dover, Delaware and Nashville Superspeedway® near Nashville, Tennessee. Our Dover facility was scheduled to promote the following six events during 2020, all of which would be under the auspices of the premier sanctioning body in motorsports - the National Association for Stock Car Auto Racing (“NASCAR”):

2 NASCAR Cup Series events (May and August);

2 NASCAR Xfinity Series events (May and August);

1 NASCAR Gander RV & Outdoors Truck Series event (May); and

1 NASCAR ARCA Menards Series East event (August).

Due to the impacts of the COVID-19 pandemic, our May NASCAR weekend was postponed and the three events originally scheduled for that weekend were held in combination with our already scheduled August NASCAR weekend events. On July 25, 2020 Delaware state officials notified us that due to public safety and health concerns, they would not approve our request to host a limited number of fans at our August NASCAR Weekend. As a result, all of our 2020 events were held with no fans in attendance during the third quarter of 2020. A NASCAR Cup Series event, a NASCAR Xfinity Series event and a NASCAR Gander RV & Outdoors Truck Series event were held at Dover International Speedway during the second quarter of 2019. A NASCAR Cup Series event, a NASCAR Xfinity Series event and a NASCAR ARCA Menards Series East event were held at Dover International Speedway during the fourth quarter of 2019. There are no reliable estimates of how long the pandemic will last or how many people are likely to be affected by it. For that reason, we are unable to predict the long-term impact of the pandemic on our business at this time. The extent to which COVID-19 impacts our results will depend on future developments, but the continued spread of COVID-19 and associated economic impacts could have a material adverse effect on our future financial condition, liquidity, results of operations and cash flows.

We hosted the Firefly Music Festival (“Firefly”) on our property in Dover, Delaware for eight consecutive years and it was scheduled to return on June 18-21, 2020. Due to the COVID-19 pandemic, this year's event was cancelled. The inaugural three day festival with 40 musical acts was held in July 2012 and the 2019 event was held on June 21-23, 2019 with approximately 120 musical acts. In September 2014, Red Frog Events LLC formed RFGV Festivals LLC - a joint venture with Goldenvoice that promotes Firefly. Goldenvoice is a company of AEG Presents, LLC, a subsidiary of Anschutz Entertainment Group, Inc. AEG Presents, one of the world’s largest presenters of live music and entertainment events, announced on July 18, 2018 that it had acquired the remainder of RFGV Festivals LLC from Red Frog. Our amended agreement with RFGV Festivals LLC grants them two 5 year options to extend our facility rental agreement through 2032 in exchange for a rental commitment to secure our property. In addition to the facility rental fee, we also receive a percentage of the concession sales we manage at the events.

We have not promoted a major motorsports event at our Nashville Superspeedway since 2011. On June 3, 2020, we announced that we would be moving one of our NASCAR Cup Series events historically held at Dover International Speedway to Nashville Superspeedway beginning in 2021. We entered into a four-year sanction agreement to promote a NASCAR Cup Series event in Nashville for the 2021 to 2024 racing seasons. We also entered into a one-year sanction agreement to promote a NASCAR Cup Series event at Dover International Speedway for the 2021 season.

On August 17, 2017, we entered into an agreement with an entity owned by Panattoni Development Company (“buyer”) relative to the sale of approximately 147 acres of land at our Nashville property at a purchase price of $35,000 per acre. On March 2, 2018, we closed on the sale of the property with proceeds, less closing costs, of $4,945,000. Net proceeds after taxes were approximately $4,150,000 resulting in a gain of $2,512,000. On September 1, 2017, we also awarded to the buyer a three-year option for 88.03 additional acres at a purchase price of $55,000 per acre. That option agreement has been amended twice since: first, on February 9, 2018, to extend its term and to add additional acreage; and second, on June 25, 2019, in connection with the buyer's exercise of its option on two parcels, we adjusted the acreage and further extended the term of the option on a third parcel. On July 26, 2019, the buyer closed on the sale of the first two parcels, comprising approximately 133 acres, which yielded to us proceeds, less closing costs, of $6,397,000. Net proceeds after taxes were approximately $5,314,000 resulting in a gain of $4,186,000. On July 29, 2020, the buyer closed on the sale of the third parcel of approximately 97 acres at our Nashville property. Proceeds from the sale, less closing costs, were approximately $6,460,000. Net proceeds after taxes were approximately $5,290,000 resulting in a gain of approximately $4,843,000. The buyer had previously paid to us a $500,000 deposit that was credited to the purchase price. None of the acreage sold extends to the land on which our superspeedway is sited and we continue to hold approximately 1,000 acres of commercial real estate in Nashville, including the superspeedway.

On February 28, 2019, we entered into an agreement to sell 7.63 acres of land at our Nashville facility for proceeds, less closing costs, of $267,000. The sale closed in the first quarter of 2019 and resulted in a gain of $139,000, which we reported as gain on sale of land in our consolidated statements of operations and comprehensive loss for that period.

During September 2018, we entered into negotiations to sell a parcel of land we owned near St. Louis. The sale closed in the first quarter of 2019 with proceeds, less closing costs, of $531,000.