##### Table of Contents



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
_____________________


FORM 10-Q

|       |  |                                                                                        
|------ |  | ---------------------------------------------------------------------------------------
|(XBOX) |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2001

OR

|      |  |                                                                                         
|----- |  | ----------------------------------------------------------------------------------------
|(BOX) |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934



Commission file number: 0-27729

ZAP.COM CORPORATION

(Exact name of Registrant as specified in its charter)


|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|State of Nevada                                                |  | C-76-0571159                        
|(State or other jurisdiction of
incorporation or organization) |  | (I.R.S. Employer
Identification No.)
|                                                              
|                                                              
|                                                              
|                                                              
|                                                               |  |                                     
|                                                              
|                                                              
|                                                              
|                                                              
|100 Meridian Centre, Suite 350                                 |  |                                     
|Rochester, NY                                                  |  | 14618                               
|(Address of principal executive offices)                       |  | (Zip Code)                          

Registrants telephone number, including area code: (716) 242-2000
_________________

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes   (XBOX)      No   (BOX).

Number of shares outstanding (less treasury shares) of the Registrants common
stock, par value $0.001 per share, on November 1, 2001: 50,004,474





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TABLE OF CONTENTS



|                                       |                                                                                                |                                                   |  |  |  |  |  | 
|-------------------------------------- | ---------------------------------------------------------------------------------------------- | ------------------------------------------------- |  |  |  |  |  | 
|PART I                                
|                                       | Item 1. Financial Statements and Notes                                                        
|                                       |                                                                                                | CONDENSED BALANCE SHEETS                         
|                                       |                                                                                                | UNAUDITED CONDENSED STATEMENTS OF OPERATIONS     
|                                       |                                                                                                | UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS     
|                                       |                                                                                                | NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
|                                       | ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|                                       | ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                            
|PART II.  OTHER INFORMATION          
|                                       | Item 1. LEGAL PROCEEDINGS                                                                     
|                                       | Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS                                             
|                                       | Item 3. DEFAULTS UPON SENIOR SECURITIES                                                       
|                                       | Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                   
|                                       | Item 5. OTHER INFORMATION                                                                     
|                                       | Item 6. EXHIBITS AND REPORTS ON FORM 8-K                                                      
|SIGNATURES                            
|EX-11: STATEMENT REGARDING COMPUTATION



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##### Table of Contents



ZAP.COM CORPORATION
TABLE OF CONTENTS

|                                                                                              |                                                                                                                     |  |    |   | 
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------- |  | -- | - | 
|PART I. FINANCIAL INFORMATION                                                                 |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 1. Financial Statements                                                                  |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Condensed Balance Sheets as of September 30, 2001 (Unaudited) and
December 31, 2000                                 |  |    | 3 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Unaudited Condensed Statements of Operations for the
Three Months and Nine Months
Ended September 30, 2001 and 2000 |  |    | 4 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              | Unaudited Condensed Statements of Cash Flows for the Nine
Months Ended
September 30, 2001 and 2000                  |  |    | 5 | 
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
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|                                                                                             
|                                                                                              | Notes to Unaudited Condensed Financial Statements                                                                   |  |    | 6 | 
|                                                                                             
|                                                                                             
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|                                                                                              |                                                                                                                     |  |    |  
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|                                                                                             
|Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations |                                                                                                                     |  | 9  |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
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|                                                                                             
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |                                                                                                                     |  | 13 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
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|                                                                                             
|PART II. OTHER INFORMATION                                                                    |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 1. Legal Proceedings                                                                     |                                                                                                                     |  | 13 |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
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|                                                                                             
|Item 2. Changes in Securities and Use of Proceeds                                             |                                                                                                                     |  | 13 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 3. Defaults upon Senior Securities                                                       |                                                                                                                     |  | 13 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Item 4. Submission of Matters to a Vote of Security Holders                                   |                                                                                                                     |  | 13 |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
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|                                                                                             
|Item 5. Other Information                                                                     |                                                                                                                     |  | 13 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
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|                                                                                             
|                                                                                             
|Item 6. Exhibits and Reports on Form 8-K                                                      |                                                                                                                     |  | 13 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
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|                                                                                             
|Signatures                                                                                    |                                                                                                                     |  | 14 |  
|                                                                                             
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|                                                                                             
|                                                                                             
|                                                                                              |                                                                                                                     |  |    |  
|                                                                                             
|                                                                                             
|                                                                                             
|                                                                                             
|Exhibits                                                                                      |                                                                                                                     |  | 15 |  

2



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##### Table of Contents






PART I




Item 1.Financial Statements and Notes

ZAP.COM CORPORATION




CONDENSED BALANCE SHEETS

|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |           | 
|------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ------------- | --------- | ------------ | ------ | ---------- | --------- | 
|                                      |                                                                                                                                                         |                                            |       | September 30, |           | December 31,
|                                      |                                                                                                                                                         |                                            |       | 2001          |           | 2000        
|                                      |                                                                                                                                                         |                                            |       |               |           |             
|                                      |                                                                                                                                                         |                                            |       | (Unaudited)   |           |              |        |           
|ASSETS:                               |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|Current assets:                       |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|                                      | Cash and cash equivalents                                                                                                                               |                                            | $     | 2,216,178     |           |              | $      | 2,761,169  |          
|                                     
|                                     
|                                     
|                                     
|                                      | Interest receivable                                                                                                                                     |                                            |       | 10,224        |           |              |        | 4,259      |          
|                                     
|                                     
|                                     
|                                     
|                                      | Prepaid assets and other receivables                                                                                                                    |                                            |       | 47,255        |           |              |        | 473,397    |          
|                                     
|                                     
|                                     
|                                     
|                                      | Amounts due from related parties                                                                                                                        |                                            |       |              |           |              |        | 1,912      |          
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|                                      |                                                                                                                                                         | Total current assets                       |       |               | 2,273,657 |              |        |            | 3,240,737 | 
|                                     
|                                     
|                                     
|                                     
|Property and equipment, net           |                                                                                                                                                         |                                            | 2,875 |               |           |              | 31,642 |           
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|                                      |                                                                                                                                                         | Total assets                               |       | $             | 2,276,532 |              |        | $          | 3,272,379 | 
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|LIABILITIES AND STOCKHOLDERS EQUITY: |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|Current liabilities:                  |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|                                      | Accounts payable                                                                                                                                        |                                            | $     | 795           |           |              | $      | 165,717    |          
|                                     
|                                     
|                                     
|                                     
|                                      | Accrued liabilities                                                                                                                                     |                                            |       | 117,290       |           |              |        | 757,546    |          
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|                                      |                                                                                                                                                         | Total current liabilities                  |       |               | 118,085   |              |        |            | 923,263   | 
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|Commitments & Contingencies           |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|Stockholders Equity:                 |                                                                                                                                                         |                                            |       |               |           |              |        |           
|                                     
|                                     
|                                     
|                                     
|                                      | Preferred stock, $0.01 par value, 150,000,000 shares authorized, 0 shares
issued and outstanding as of September 30, 2001 and December 31, 2000         |                                            |       |              |           |              |        |           |          
|                                     
|                                     
|                                     
|                                     
|                                      | Common stock, $.001 par value, 1,500,000,000 shares authorized, 50,004,474
shares issued and outstanding as of September 30, 2001 and
December 31, 2000 |                                            |       | 50,004        |           |              |        | 50,004     |          
|                                     
|                                     
|                                     
|                                     
|                                      | Additional paid in capital                                                                                                                              |                                            |       | 10,795,749    |           |              |        | 10,795,749 |          
|                                     
|                                     
|                                     
|                                     
|                                      | Accumulated deficit                                                                                                                                     |                                            |       | (8,687,306    | )         |              |        | (8,496,637 | )        
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|                                      |                                                                                                                                                         | Total stockholders equity                 |       |               | 2,158,447 |              |        |            | 2,349,116 | 
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          
|                                      |                                                                                                                                                         | Total liabilities and stockholders equity |       | $             | 2,276,532 |              |        | $          | 3,272,379 | 
|                                      |                                                                                                                                                         |                                            |       |               |           |              |        |            |          

The accompanying notes are an integral part of these condensed financial statements.

3



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##### Table of Contents



ZAP.COM CORPORATION




UNAUDITED CONDENSED STATEMENTS OF OPERATIONS

|                                                                                  |                            |                                  |            |                    |          |                    |            |          |          |  
|--------------------------------------------------------------------------------- | -------------------------- | -------------------------------- | ---------- | ------------------ | -------- | ------------------ | ---------- | -------- | -------- | -
|                                                                                  |                            |                                  |            | For the            |          | For the           
|                                                                                  |                            |                                  |            | Three Months Ended |          | Three Months Ended
|                                                                                  |                            |                                  |            | September 30,      |          | September 30,     
|                                                                                  |                            |                                  |            | 2001               |          | 2000              
|                                                                                  |                            |                                  |            |                    |          |                   
|Revenues                                                                          |                            | $                                |           |                    |          | $                  |           |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cost of revenues                                                                  |                            |                                  |           |                    |          |                    | 480,943    |         
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|                                                                                  | Gross loss                 |                                  |            |                   |          |                    |            | (480,943 | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Operating expense (income):                                                       |                            |                                  |            |                    |          |                    |            |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Product development        |                                  |            |                   |          |                    |            | 52,740   |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Sales and marketing        |                                  |            |                   |          |                    |            | 194,380  |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | General and administrative |                                  |            | 166,176            |          |                    |            | 472,012  |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Consulting income          |                                  |            |                   |          |                    |            | (844,602 | )       
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|                                                                                  |                            | Total operating expense (income) |            |                    | 166,176  |                    |            |          | (125,470 | )
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|                                                                                  |                            | Loss from operations             |            |                    | (166,176 | )                  |            |          | (355,473 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest income                                                                   |                            |                                  | 19,311     |                    |          |                    | 73,436     |         
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|Net loss                                                                          |                            | $                                | (146,865   | )                  |          | $                  | (282,037   | )       
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|Per share data (basic and diluted):                                               |                            |                                  |            |                    |          |                    |            |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net loss per share                                                                |                            | $                                | 0.00       |                    |          | $                  | (0.01      | )       
|                                                                                  |                            |                                  |            |                    |          |                    |            |         
|Weighted average number of common shares and
common share equivalents outstanding |                            |                                  | 50,004,474 |                    |          |                    | 50,000,000 |         
|                                                                                  |                            |                                  |            |                    |          |                    |            |         

|                                                                                  |                                 |                         |            |                   |          |                   |            |           |            |  
|--------------------------------------------------------------------------------- | ------------------------------- | ----------------------- | ---------- | ----------------- | -------- | ----------------- | ---------- | --------- | ---------- | -
|                                                                                  |                                 |                         |            | For the           |          | For the          
|                                                                                  |                                 |                         |            | Nine Months Ended |          | Nine Months Ended
|                                                                                  |                                 |                         |            | September 30,     |          | September 30,    
|                                                                                  |                                 |                         |            | 2001              |          | 2000             
|                                                                                  |                                 |                         |            |                   |          |                  
|Revenues                                                                          |                                 | $                       | 171        |                   |          | $                 |           |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cost of revenues                                                                  |                                 |                         |           |                   |          |                   | 949,503    |          
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|                                                                                  | Gross income (loss)             |                         |            | 171               |          |                   |            | (949,503  | )         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Operating expense (income):                                                       |                                 |                         |            |                   |          |                   |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Product development             |                         |            |                  |          |                   |            | 142,423   |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Sales and marketing             |                         |            | 18,222            |          |                   |            | 559,656   |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | General and administrative      |                         |            | 632,329           |          |                   |            | 1,921,629 |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Consulting expense              |                         |            |                  |          |                   |            | 212,122   |           
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Contract termination settlement |                         |            | (402,586          | )        |                   |            |          |           
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|                                                                                  |                                 | Total operating expense |            |                   | 247,965  |                   |            |           | 2,835,830  |  
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|                                                                                  |                                 | Loss from operations    |            |                   | (247,794 | )                 |            |           | (3,785,333 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Loss on disposal of assets                                                        |                                 |                         | (24,352    | )                 |          |                   |           |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest income                                                                   |                                 |                         | 81,477     |                   |          |                   | 251,577    |          
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|Net loss                                                                          |                                 | $                       | (190,669   | )                 |          | $                 | (3,533,756 | )        
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|Per share data (basic and diluted):                                               |                                 |                         |            |                   |          |                   |            |          
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net loss per share                                                                |                                 | $                       | 0.00       |                   |          | $                 | (0.07      | )        
|                                                                                  |                                 |                         |            |                   |          |                   |            |          
|Weighted average number of common shares and
common share equivalents outstanding |                                 |                         | 50,004,474 |                   |          |                   | 50,000,000 |          
|                                                                                  |                                 |                         |            |                   |          |                   |            |          

The accompanying notes are an integral part of these condensed financial statements.

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##### Table of Contents



ZAP.COM CORPORATION




UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS

|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                   |            |          |         | 
|------------------------------------------------------ | --------------------------------------------------------------------------- | --------------------------------------------------------- | ------------------- | ----------------- | -------- | ----------------- | ---------- | ----------------- | ---------- | -------- | ------- | 
|                                                       |                                                                             |                                                           |                     |                   |          | For the           |            | For the          
|                                                       |                                                                             |                                                           |                     |                   |          | Nine Months Ended |            | Nine Months Ended
|                                                       |                                                                             |                                                           |                     |                   |          | September 30,     |            | September 30,    
|                                                       |                                                                             |                                                           |                     |                   |          | 2001              |            | 2000             
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|Cash flows used in operating activities:               |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Net loss                                                                    |                                                           | $                   | (190,669          | )        |                   | $          | (3,533,756        | )         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Adjustments to reconcile net loss to net cash used in
operating activities: |                                                           |                     |                   |          |                   |            |                   |           
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             | Depreciation and amortization                             |                     |                   | 4,415    |                   |            |                   | 171,307    |         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             | Consulting expense                                        |                     |                   |         |                   |            |                   | 212,122    |         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             | Stock bonus expense                                       |                     |                   |         |                   |            |                   | 12,731     |         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             | Loss on disposal of assets                                |                     |                   | 24,352   |                   |            |                   |           |         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             | Changes in assets and liabilities:                        |                     |                   |          |                   |            |                   |            |         
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             |                                                           | Interest receivable |                   |          | (5,965            | )          |                   |            | 40,910   |        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             |                                                           | Prepaid expenses    |                   |          | 426,142           |            |                   |            | 474,940  |        
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             |                                                           | Accounts payable    |                   |          | (164,922          | )          |                   |            | (13,568  | )      
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       |                                                                             |                                                           | Accrued liabilities |                   |          | (640,256          | )          |                   |            | (324,598 | )      
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                       |                                                                             |                                                           |                     | Total adjustments |          |                   | (356,234   | )                 |            |          | 573,844 | 
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                       |                                                                             | Net cash used in operating activities                     |                     |                   | (546,903 | )                 |            |                   | (2,959,912 | )       
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|Cash flows used in investing activities:               |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Capital additions for software development costs                            |                                                           |                     |                  |          |                   |            | (706,245          | )         
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                       |                                                                             | Net cash flows used in investing activities               |                     |                   |         |                   |            |                   | (706,245   | )       
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|Cash flows provided by (used in) financing activities: |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                      
|                                                      
|                                                      
|                                                      
|                                                       | Amounts received from (due to) stockholder and affiliates                   |                                                           |                     | 1,912             |          |                   |            | (9,650            | )         
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|                                                       |                                                                             | Net cash flows provided by (used in) financing
activities |                     |                   | 1,912    |                   |            |                   | (9,650     | )       
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|Net change in cash and cash equivalents                |                                                                             |                                                           | (544,991            | )                 |          |                   | (3,675,807 | )                
|                                                      
|                                                      
|                                                      
|                                                      
|Cash and cash equivalents at beginning of period       |                                                                             |                                                           | 2,761,169           |                   |          |                   | 7,579,363  |                  
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  
|Cash and cash equivalents at end of period             |                                                                             | $                                                         | 2,216,178           |                   |          | $                 | 3,903,556  |                  
|                                                       |                                                                             |                                                           |                     |                   |          |                   |            |                  

The accompanying notes are an integral part of these condensed financial statements.

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ZAP.COM CORPORATION




NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF OPERATIONS AND BASIS OF PRESENTATION

The unaudited condensed financial statements included herein have been
prepared by Zap.Com Corporation (Zap.Com or the Company) without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission
(SEC). The financial statements reflect all adjustments that are, in the
opinion of management, necessary to fairly present such information. All such
adjustments are of a normal recurring nature. Although Zap.Com believes that
the disclosures are adequate to make the information presented not misleading,
certain information and footnote disclosures, including a description of
significant accounting policies normally included in financial statements
prepared in accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations. These unaudited
condensed financial statements should be read in conjunction with the financial
statements and the notes thereto included in Zap.Coms latest Annual Report on
Form 10-K filed with the SEC. The results of the operations for the fiscal
period from January 1, 2001 to September 30, 2001 are not necessarily
indicative of the results for any subsequent period or the entire fiscal year
ending December 31, 2001.

Business Description

Zapata Corporation (Zapata) formed Zap.Com for the purpose of creating
and operating a global network of independently owned web sites. In April 1999,
Zap.Com announced its plan to establish the ZapNetwork by connecting web sites
through a proprietary multi-functional, portal-like Internet banner known as
the ZapBox. Zap.Com intended to distribute advertising and e-commerce
opportunities over this network.

In November 1999, Zapata and two of its directors invested $10 million of
equity in Zap.Com. On November 12, 1999, Zapata distributed to its
stockholders 477,742 shares of Zap.Com common stock, leaving Zapata as the
holder of approximately 98% of Zap.Coms outstanding common stock. On November
30, 1999, Zap.Coms stock began to trade on the NASDs OTC Bulletin Board under
the symbol ZPCM, establishing Zap.Com as a separate public company.

During 1999 and 2000, the Company engaged primarily in the research and
investigation of the Internet industry, the development of Zap.Coms business
model, the establishment of strategic relationships to provide Internet
connectivity and technology systems to support the ZapNetwork, the development
of the ZapBox and the Zap.Com homepage, the filing of patent and trademark
applications and the solicitation of web sites to join the ZapNetwork. Zap.Com
also registered shares with the SEC, and registered or qualified for offering
the shares for offering and sale in 18 states so that it could offer these
shares to web site owners as an incentive to join the ZapNetwork. Zap.Com also
registered 30,000,000 shares under a shelf registration statement for the
purpose of offering shares in business acquisitions.

During 2000, Zap.Com entered into agreements with 10 web sites to join its
network. The Company, however, did not recognize any material revenue during
2000 or establish a source of revenue. On December 15, 2000, the Zap.Com Board
of Directors concluded that Zap.Coms operations were not likely to become
profitable in the foreseeable future and therefore, it was in the best interest
of the Company and its stockholders to cease all Internet operations. Since
that date, Zap.Com has terminated all salaried employees, all signed agreements
with web site owners who joined the ZapNetwork, and all third party contractual
relationships entered into in connection with its Internet business.

During the remainder of 2001, Zap.Coms principal activities are expected
to be exploring methods to enhance stockholder value. Zap.Com is likely to
search for assets or businesses that it can acquire so that it can become an
operating company. Zap.Com may also consider developing a new business
suitable for its situation. Currently, Zap.Com does not have any existing
business operations, other than maintaining its status as a public entity.

In pursuing acquisitions, the Company will have broad discretion in
identifying and selecting both the industries and the possible acquisition
candidates within those industries which it will acquire. As of the date of
this filing, the Company has not identified a specific industry on which it
initially intends to focus and has no present plans, proposals, arrangements or
understandings with respect to the acquisition of any specific business. There
can

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be no assurance that Zap.Com will be able to identify or successfully complete
any acquisitions. Additionally, in order to effect an acquisition, Zap.Com may
need additional financing. There is no assurance that any such financing will
be available or available on terms favorable or acceptable to the Company.

Reclassifications

In order to conform to the 2001 presentation, certain amounts in the 2000
financial statements have been reclassified.

NOTE 2. STOCKHOLDERS EQUITY

The Company was incorporated on April 2, 1998 as a wholly-owned subsidiary
of Zapata, through the issuance of 1,000 shares of no par value common stock.
As of September 30, 2001 and December 31, 2000, the Company had an accumulated
deficit of $8.7 million and $8.5 million, respectively. As of December 2000,
the Company ceased operations and will therefore continue to incur losses in
the future.

In September 1999, Zapata advised the Company of the Zapata Boards
intention to declare a dividend, payable to its stockholders, of one share of
Zap.Com common stock for every 50 shares of Zapata common stock on a record
date to be determined. On October 26, 1999, a record date of November 5, 1999
was declared. The primary purpose of the distribution was the creation of a
public market for the Companys common stock and future access to public
markets.

In November 1999, the Company amended and restated its Articles of
Incorporation to revise its capital structure. Subsequent to the amendment,
Zap.Coms authorized capital stock consisted of: (1) 1,500,000,000 shares of
common stock, par value $.001 per share and (2) 150,000,000 shares of preferred
stock, par value $.01 per share. Also, the Company Board of Directors approved
a 49,450 for one stock split immediately prior to the distribution. All share
and per share information has been retroactively restated to reflect this
split.

On November 12, 1999, Zapata distributed 477,742 shares of Zap.Com common
stock to its stockholders. Also, on November 12, 1999, Zapata provided the
Company with $9,000,000, including $49,450 to meet the stated capital
requirements of Nevada law to effectuate the 49,450 for one stock split which
occurred immediately prior to the distribution. The contribution consisted of
$8,000,000 in cash and the forgiveness of $1,000,000 of inter-company debt. At
the same time, Malcolm Glazer and Avram Glazer contributed $1,100,000 in
exchange for 550,000 shares of Zap.Com common stock.

On March 3, 2000, the SEC declared the effectiveness of Zap.Coms shelf
registration statement on Form S-1, covering 20,000,000 shares of common stock,
$.001 par value per share to be issued under a stock bonus plan to ZapNetwork
members. This registration statement also covered up to an additional
30,000,000 shares of Zap.Coms common stock, $.001 par value per share to be
issued as payment for all or some portion of the purchase price for one or more
acquisitions of companies, businesses or assets complementary to Zap.Coms
existing business. Pursuant to the December 2000 decision to cease all
Internet operations, the Company deregistered the remaining 19,995,526 shares
under the plan on January 18, 2001.

NOTE 3. CONTRACT TERMINATION SETTLEMENT

Based on the Board resolution to terminate Internet operations, certain
contracts entered into by the Company during its development stage were deemed
to have no future value to the company. Accordingly, the Company recognized
the expenses and associated accrued liabilities in the fourth quarter of 2000.
In the first quarter of 2001, the Company favorably settled its disputes over
two of its contracts. The Company reversed previous accruals of $403,000 as
income resulting from the settlement amounts being less than the associated
accrued liabilities.

NOTE 4. RELATED PARTY TRANSACTIONS

Since its inception, the Company has utilized the services of the
management and staff of its majority shareholder, Zapata Corporation, under a
shared services agreement that allocated these costs on a percentage of time
basis. Zap. Com also subleases its office space in Rochester, New York from
Zapata Corporation. Under the sublease agreement, annual rental payments are
allocated on a cost basis. Zapata Corporation has waived its rights

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under the shared services agreement to be reimbursed for these expenses since
May 1, 2000. As a result, no allocations were made in the nine month period
ended September 30, 2001 and total allocations for the comparative period of
2000 were minimal.

On October 20, 1999, the Company granted to American Internetwork Sports
Company, LLC stock warrants in consideration for sports related consulting
services. American Internetwork Sports is owned by the siblings of Avram
Glazer, the Companys President and Chief Executive Officer. The Company
accounted for this transaction in accordance with EITF 96-18, which requires
the recognition of expense based on the then current fair value of the warrants
at the end of each reporting period with adjustment of prior period expense to
actual expense at each vesting date. Pursuant to the December 2000 decision to
cease the operations of the Company, these warrants became fully vested.

NOTE 5. ACCOUNTING PRONOUNCEMENTS

In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 141 Business
Combinations and No. 142 Goodwill and Other Intangible Assets. SFAS No. 141
requires that all business combinations be accounted for under the purchase
method only and that certain acquired intangible assets in a business
combination be recognized as assets apart from goodwill. SFAS No. 142 requires
that ratable amortization of goodwill be replaced with periodic tests of the
goodwills impairment and that intangible assets other than goodwill be
amortized over their useful lives. SFAS No. 141 is effective for all business
combinations initiated after June 30, 2001. The provisions of SFAS No. 142 are
effective for all fiscal years beginning after December 15, 2001, and will
therefore be adopted by the Company January 1, 2002. The Company does not
believe the adoption of SFAS No. 141 and No. 142 will have a material effect on
the Companys financial position or its results of operations.

In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which, as amended, is effective for fiscal
years beginning after June 15, 2000. SFAS 133 establishes accounting and
reporting standards for derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives) and for hedging activities. SFAS No. 133 requires the recognition
of all derivatives as either assets or liabilities in the statement of
financial position and the measurement of those instruments at fair value. The
adoption of SFAS No. 133 did not have a material impact on the Companys
financial position or its results of operations.

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ITEM 2  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

INFORMATION CONCERNING FORWARD-LOOKING STATEMENTS

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995. This document contains
certain forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the Securities Act), and Section 21E of
the Securities Exchange Act of 1934, as amended (the Exchange Act). The
Company intends such forward-looking statements to be covered by the safe
harbor provisions for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995, and includes this statement for
purposes of such safe harbor provisions. Forward-looking statements, which are
based upon certain assumptions and describe future plans, strategies and
expectations of the Company, are generally identifiable by use of the words
like may, will, should, expect, anticipate, estimate, plan,
intend, believe, predicts, potential, continue and the negative of
such terms or other similar or comparable terminology. Although we believe that
the expectations reflected in the forward-looking statements are reasonable, we
cannot assure you that our expectations will be correct. These statements
involve known and unknown risks, uncertainties and other factors that may cause
our actual results, levels of activity, performance or achievements to be
materially different from any future results, levels of activity, performance,
or achievements expressed or implied by these forward-looking statements.
These risks are qualified in their entirety by cautionary language and risk
factors set forth in the Companys filings with the Securities and Exchange
Commission (SEC), including the Companys 2000 Annual Report on Form 10-K.

GENERAL

Zap.Com Corporation (Zap.Com or the Company) was founded by Zapata
Corporation (NYSE: ZAP) in April 1998 as a Nevada corporation. Zap.Coms
principal corporate offices are located at 100 Meridian Centre, Suite 350,
Rochester, New York 14618.

Zapata formed Zap.Com for the purpose of creating and operating a global
network of independently owned web sites. In April 1999, Zap.Com announced its
plan to establish the ZapNetwork by connecting web sites through a proprietary
multi-functional, portal-like Internet banner known as the ZapBox. Zap.Com
intended to distribute advertising and e-commerce opportunities over this
network.

In November 1999, Zapata and two of its directors invested $10 million of
equity in Zap.Com. On November 12, 1999, Zapata distributed to its
stockholders 477,742 shares of Zap.Com common stock, leaving Zapata as the
holder of approximately 98% of Zap.Coms outstanding common stock. On November
30, 1999, Zap.Coms stock began to trade on NASDs OTC Bulletin Board under the
symbol ZPCM, establishing Zap.Com as a separate public company.

During 1999 and 2000, Zap.Com engaged primarily in the research and
investigation of the Internet industry, the development of the Companys
business model, the establishment of strategic relationships to provide
Internet connectivity and technology systems to support the ZapNetwork, the
development of the ZapBox and the Zap.Com homepage, the filing of patent and
trademark applications and the solicitation of web sites to join the
ZapNetwork. Zap.Com also registered shares with the SEC, and registered or
qualified for offering the shares for offering and sale in 18 states so that it
could offer these shares to web site owners as an incentive to join the
ZapNetwork. Zap.Com also registered 30,000,000 shares under a shelf
registration statement for the purpose of offering shares in business
acquisitions.

During 2000, Zap.Com entered into agreements with 10 web sites to join its
network. The Company, however, did not recognize any material revenue during
2000 or establish a source of revenue. On December 15, 2000, the Zap.Com Board
of Directors concluded that Zap.Coms operations were not likely to become
profitable in the foreseeable future and therefore, it was in the best interest
of the Company and its stockholders to cease all Internet operations. Since
that date, Zap.Com has terminated all salaried employees, all signed agreements
with web site owners who joined the ZapNetwork, and all third party contractual
relationships entered into in connection with its Internet business.

During the remainder of 2001, Zap.Coms principal activities are expected
to be exploring methods to enhance stockholder value. Zap.Com is likely to
search for assets or businesses that it can acquire so that it can become

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an operating company. Zap.Com may also consider developing a new business
suitable for its situation. Currently, Zap.Com does not have any existing
business operations, other than maintaining its status as a public entity.

In pursuing acquisitions, the Company will have broad discretion in
identifying and selecting both the industries and the possible acquisition
candidates within those industries that it will acquire. The Company has not
identified a specific industry on which it initially intends to focus and has
no present plans, proposals, arrangements or understandings with respect to the
acquisition of any specific business. There can be no assurance that the
Company will be able to identify or successfully complete any acquisitions.

The Company has no preference as a general matter as to whether to issue
shares of common stock or cash in making acquisitions and it may use either
shares of its common stock or cash, or a combination thereof. The form of the
consideration that the Company uses for a particular acquisition will depend
upon the form of consideration that the sellers of the business require and the
most advantageous way for the Company to account for, or finance the
acquisition. To the extent the Company uses common stock for all or a portion
of the consideration to be paid for future acquisitions, existing stockholders
may experience significant dilution.

In order to effect an acquisition, Zap.Com may need additional financing.
There is no assurance that any such financing will be available, or available
on terms favorable or acceptable to the Company. In particular, potential
third party equity investors may be unwilling to invest in Zap.Com due to
Zapatas voting control over Zap.Com and the significant potential for dilution
of a potential investors ownership in the Companys common stock. Zapatas
voting control may be unattractive because it makes it more difficult for a
third party to acquire the Company even if a change of control could benefit
the Companys stockholders by providing them with a premium over the then
current market price for their shares. If the Company raises additional funds
through the issuance of equity, equity-related or debt securities, these
securities may have rights, preferences or privileges senior to those of the
rights of Zap.Coms common stockholders, who would then experience dilution.

In general, any new business development is difficult, and the Companys
particular realities impose significant constraints that make such an
undertaking even more difficult. These constraints include the following: the
need to acquire or develop the business without paying substantial cash or
taking on significant debt; the handicap of not having actively traded stock to
use to procure this business; the requirement that, after launch, the business
will need a significant capital investment to fund its initial operations; and
the requirement that the new business immediately produce a positive cash flow.

RESULTS OF OPERATIONS

For the three months ended September 30, 2001, Zap.Com recorded a net loss
of $147,000 as compared to a net loss of $282,000 for the three months ended
September 30, 2000. Since inception (which commenced on April 2, 1998),
Zap.Com has incurred a cumulative net loss of $8.7 million, including $743,000
in non-cash charges associated with warrants issued to American Internetwork
Sports and all of the costs associated with the development and implementation
of the ZapNetwork, the ZapBox, and the public registration of Zap.Coms common
stock.

For the three month and nine month periods ended September 30, 2001 as
compared to the three month and nine month periods ended September 30, 2000,
operations consisted of the following:

Revenues  Zap.Com did not generate any significant revenue for three
month and nine month periods ended September 30, 2001 and 2000, nor does it
presently have any business from which it may generate revenue in the future.

Cost of revenues  Zap.Com records costs of revenues as those costs
associated with generating revenues, such as hosting, bandwidth,
communications, ad delivery, content license and capitalized software
amortization. For the three month and nine month periods ended September 30,
2001, the Company incurred no costs of revenue as a result of ceasing all
Internet operations. For the three month period and nine month period ended
September 30, 2000, the Company incurred $481,000 and $950,000, respectively in
cost of revenues resulting from the amortization of costs associated with the
deployment and maintenance of the ZapBox.

Product development  Product development expenses consist primarily of
website development and maintenance costs. For the three month and nine month
periods ended September 30, 2001, the Company incurred no

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product development expenses as a result of ceasing all Internet operations, as
compared to $53,000 and $142,000 in website development costs for the
comparative periods in 2000.

Sales and marketing  Sales and marketing expenses consist primarily of
customer fulfillment and media relation costs. The Company incurred no sales
and marketing expenses in the three months ended September 30, 2001, as
compared to $194,000 of sales and marketing expenses for the comparative
quarter of 2000. For the nine month period ended September 30, 2001, the
Company incurred $18,000 as compared to $560,000 for the comparative period in
2000. The significant decline in sales and marketing expenses was a result of
ceasing Internet operations.

General and administrative  General and administrative expenses consist
primarily of legal and accounting services, salaries and wages (including costs
allocated by Zapata pursuant to a services agreement), printing and filing
costs, depreciation and amortization, and various other costs. General and
administrative expenses for the quarter ended September 30, 2001 decreased
$306,000 or 65% as compared to the quarter ended September 30, 2000. For the
nine months ended September 30, 2001, general and administrative expenses
decreased $1.3 million or 67% as compared to the nine month period ended
September 20, 2000. These decreases are a direct result of the decision to
cease all Internet operations and terminate all salaried employees. General
and administrative expenses for 2001 were comprised of insurance expense and
payroll costs for an officer of the Company who was retained through the
closing process.

Consulting (income)/ expense  On October 20, 1999, the Company granted to
American Internetwork Sports Company, LLC stock warrants in consideration for
sports related consulting services. Pursuant to the December 2000 decision to
cease Internet operations, these warrants became fully vested on December 15,
2000. As a result, the Company incurred no additional consulting expense for
the three months and nine months ended September 30, 2001. For the three
months ended September 30, 2000, the Company recognized $845,000 in income to
reflect the decline in the fair market value of the Companys common stock,
whereas for the nine months ended September 30, 2000 the Company recognized
$212,000 in expense to reflect an increase in the fair value of the Companys
stock.

Loss on disposal of assets  During the nine month period ended September
30, 2001, the Company disposed of certain computer equipment no longer needed
after ceasing Internet operations and recognized a loss on the disposal of
$24,000, recognized during the second quarter of 2001. No assets were disposed
of during the three month and nine month periods ended September 30, 2000.

Interest income  Interest income is generated on cash reserves which are
invested in short-term U.S. Government Agency securities. Interest earned for
the quarters ended September 30, 2001 and 2000 was $19,000 and $73,000,
respectively. For the nine months ended September 30, 2001 and 2000, interest
income was $81,000 and $252,000, respectively. As the Company has ceased
operations, cash reserves will continue to decline, causing a reduction in
interest income in future periods.

LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2001, Zap.Com has not generated any significant
revenue since its inception. As a result, the Companys primary source of
liquidity has been interest income generated on cash reserves invested in
short-term US Government Agency securities. In November 1999, Zapata
contributed to Zap.Com $8,000,000 in cash and forgave $1,000,000 in
inter-company debt. Also in November 1999, two Zapata directors, Malcolm
Glazer (who beneficially owns approximately 44% of Zapatas outstanding common
stock) and Avram Glazer, contributed $1,100,000 in cash as payment for 550,000
shares of Zap.Com common stock.

Zap.Com currently has effective a shelf registration statement on Form
S-1, covering 30,000,000 of common stock which Zap.Com may issue from time to
time as payment for all or some portion of the purchase price for one or more
acquisitions of companies, businesses or assets. In order to effect an
acquisition, however, Zap.Com may need additional financing. There is no
assurance that any such financing will be available or available on terms
favorable or acceptable to the Company.

Zap.Com believes that is has sufficient resources to satisfy its existing
and contingent liabilities and its anticipated operating expenses for the next
twelve months. Until such time as a business combination is consummated,
Zap.Com expects these expenses to consist mainly of legal and audit fees and
expenses incurred in connection with its filing obligations as a publicly
traded company. The Company has no commitments for capital expenditures and
foresees none, except for possible future acquisitions.

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Cash Flows From Operating Activities

Cash used in operating activities was $547,000 for the nine months ended
September 30, 2001 as compared to $3.0 million for the same period in 2000.
Cash used in operating activities was greater during the first nine months of
2000 because of the focus on growing the Internet operations of the Company.

Cash Flows From Investing Activities

The Company incurred no costs associated with investing activities for the
nine months ended September 30, 2001 as compared to $706,000 for the same
period in 2000. The decrease is a result of the Company incurring no further
capital additions in 2001 pursuant to the decision to cease all Internet
operations.

Cash Flows From Financing Activities

Cash provided by financing activities was $2,000 for the nine months ended
September 30, 2001, compared to cash used in financing activities of $10,000
for the same period in 2000. The decrease in cash flows from financing
activities represents the elimination of all intercompany receivables and
payables with affiliates.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risks relating to Zap.Coms operations result primarily from
changes in interest rates. Zap.Com invests its cash and cash equivalents in
U.S. Government Agency securities with maturities generally not more than 90
days. Therefore, Zap.Com does not believe that it has significant market
risks.




PART II.  OTHER INFORMATION




Item 1. LEGAL PROCEEDINGS

None.




Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.




Item 3. DEFAULTS UPON SENIOR SECURITIES

None.




Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.




Item 5. OTHER INFORMATION

None.




Item 6. EXHIBITS AND REPORTS ON FORM 8-K



| |  |  | (a)     Exhibits:                                           
| |  |  | ------------------------------------------------------------
|
| |  |  | 11     Statement Regarding Computation of Per Share Earnings
|
| |  |  | (b)     Reports on Form 8-K:                                
|
| |  |  | None.                                                       

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

|                 |  |                                  |  |                                                                  
|---------------- |  | -------------------------------- |  | -----------------------------------------------------------------
|                 |  | ZAP.COM CORPORATION
(Registrant)
|                
|                
|                
|                
|                 |  |                                  |  |                                                                  
|                
|                
|                
|                
|November 8, 2001 |  | By:                              |  | /s/ LEONARD DISALVO

(Vice President and
Chief Financial Officer)

14