Complex sentence: Sherman explained that he knew that something was not right when he saw the horse throw his head up in the homestretch, and speculated later that the sand and dirt of the racetrack caused pain in the open wound.
Split into simpler sentences: Sherman explained that he saw the horse throw his head up in the homestretch and knew that something was not right. He later speculated that the sand and dirt of the racetrack were causing pain in the open wound.