##### Table of Contents



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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

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 June 30, 2002

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

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

Registrants telephone number, including area code: (585) 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 August 1, 2002: 50,004,474





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TABLE OF CONTENTS



|                                            |                                                                                                |  |  |  |  |  |  | 
|------------------------------------------- | ---------------------------------------------------------------------------------------------- |  |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION             
|                                            | Item 1. Financial Statements and Notes                                                        
|                                            | 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                                                                 
|                                            | 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                                                                                    
|STATEMENT REGARDING COMPUTATION OF EARNINGS



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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 June 30, 2002 (Unaudited) and
December 31, 2001                                |  | 3 
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|                              |  | Unaudited Condensed Statements of Operations for the
Three Months and Six Months Ended June 30, 2002 and 2001 |  | 4 
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|                              |  | Unaudited Condensed Statements of Cash Flows for the Six
Months Ended June 30, 2002 and 2001                  |  | 5 
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|                              |  | Notes to Unaudited Condensed Financial Statements                                                             |  | 6 
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 2.                       |  | Managements Discussion and Analysis of Financial
Condition and Results of Operations                         |  | 8 
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 3.                       |  | Quantitative and Qualitative Disclosures about Market Risk                                                    |  | 11
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|PART II. OTHER INFORMATION    |  |                                                                                                              
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 1.                       |  | Legal Proceedings                                                                                             |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 2.                       |  | Changes in Securities and Use of Proceeds                                                                     |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 3.                       |  | Defaults upon Senior Securities                                                                               |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 4.                       |  | Submission of Matters to a Vote of Security Holders                                                           |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 5.                       |  | Other Information                                                                                             |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Item 6.                       |  | Exhibits and Reports on Form 8-K                                                                              |  | 12
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Signatures                    |  | 13                                                                                                           
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   
|                             
|                             
|                             
|                             
|Exhibits                      |  | 14                                                                                                           
|                             
|                             
|                             
|                             
|                              |  |                                                                                                               |  |   

2



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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1.Financial Statements and Notes

ZAP.COM CORPORATION

CONDENSED BALANCE SHEETS

|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |           | 
|---------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------ | ----- | ----------- | --------- | ------------ | ----- | ---------- | --------- | 
|                                                                             |                                                                                                                                                    |                                            |       | June 30,    |           | December 31,
|                                                                             |                                                                                                                                                    |                                            |       | 2002        |           | 2001        
|                                                                             |                                                                                                                                                    |                                            |       |             |           |             
|                                                                             |                                                                                                                                                    |                                            |       | (Unaudited) |           |              |       |           
|ASSETS:                                                                      |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Current assets:                                                              |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Cash and cash equivalents                                                                                                                          |                                            | $     | 2,107,837   |           |              | $     | 2,167,133  |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Interest receivable                                                                                                                                |                                            |       | 3,739       |           |              |       | 6,194      |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Prepaid assets                                                                                                                                     |                                            |       | 10,437      |           |              |       | 25,997     |          
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|                                                                             |                                                                                                                                                    | Total current assets                       |       |             | 2,122,013 |              |       |            | 2,199,324 | 
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Property and equipment, net of accumulated depreciation of $1,850 and $1,545 |                                                                                                                                                    |                                            | 2,418 |             |           |              | 2,722 |           
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|                                                                             |                                                                                                                                                    | Total assets                               |       | $           | 2,124,431 |              |       | $          | 2,202,046 | 
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|LIABILITIES AND STOCKHOLDERS EQUITY:                                        |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Current liabilities:                                                         |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Accounts payable                                                                                                                                   |                                            | $     |            |           |              | $     | 6,115      |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Accrued liabilities                                                                                                                                |                                            |       | 122,167     |           |              |       | 103,501    |          
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|                                                                             |                                                                                                                                                    | Total current liabilities                  |       |             | 122,167   |              |       |            | 109,616   | 
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|Commitments & Contingencies                                                  |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|Stockholders Equity:                                                        |                                                                                                                                                    |                                            |       |             |           |              |       |           
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Preferred stock, $0.01 par value, 150,000,000 shares authorized, 0 shares
issued and outstanding as of June 30, 2002 and December 31, 2001         |                                            |       |            |           |              |       |           |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Common stock, $.001 par value, 1,500,000,000 shares authorized; 50,004,474
shares issued and outstanding as of June 30, 2002 and December 31, 2001 |                                            |       | 50,004      |           |              |       | 50,004     |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Additional paid in capital                                                                                                                         |                                            |       | 10,052,515  |           |              |       | 10,052,515 |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Additional paid in capital  warrants                                                                                                              |                                            |       | 743,234     |           |              |       | 743,234    |          
|                                                                            
|                                                                            
|                                                                            
|                                                                            
|                                                                             | Accumulated deficit                                                                                                                                |                                            |       | (8,843,489  | )         |              |       | (8,753,323 | )        
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|                                                                             |                                                                                                                                                    | Total stockholders equity                 |       |             | 2,002,264 |              |       |            | 2,092,430 | 
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          
|                                                                             |                                                                                                                                                    | Total liabilities and stockholders equity |       | $           | 2,124,431 |              |       | $          | 2,202,046 | 
|                                                                             |                                                                                                                                                    |                                            |       |             |           |              |       |            |          

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 OPERATIONS

|                                                                                  |                            |                         |            |                    |         |                    |            |         |          |  
|--------------------------------------------------------------------------------- | -------------------------- | ----------------------- | ---------- | ------------------ | ------- | ------------------ | ---------- | ------- | -------- | -
|                                                                                  |                            |                         |            | For the            |         | For the           
|                                                                                  |                            |                         |            | Three Months Ended |         | Three Months Ended
|                                                                                  |                            |                         |            | June 30,           |         | June 30,          
|                                                                                  |                            |                         |            | 2002               |         | 2001              
|                                                                                  |                            |                         |            |                    |         |                   
|Revenues                                                                          |                            | $                       |           |                    |         | $                  |           |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cost of revenues                                                                  |                            |                         |           |                    |         |                    |           |        
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|                                                                                  | Gross income               |                         |            |                   |         |                    |            |        |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Operating expense:                                                                |                            |                         |            |                    |         |                    |            |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | General and administrative |                         |            | 58,533             |         |                    |            | 185,585 |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loss on disposal of assets |                         |            |                   |         |                    |            | 24,352  |         
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|                                                                                  |                            | Total operating expense |            |                    | 58,533  |                    |            |         | 209,937  |  
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|                                                                                  |                            | Loss from operations    |            |                    | (58,533 | )                  |            |         | (209,937 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest income                                                                   |                            |                         | 8,940      |                    |         |                    | 29,405     |        
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|Loss before income taxes                                                          |                            |                         | (49,593    | )                  |         |                    | (180,532   | )      
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income taxes                                                                      |                            |                         |           |                    |         |                    |           |        
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|Net loss                                                                          |                            | $                       | (49,593    | )                  |         | $                  | (180,532   | )      
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|Per share data (basic and diluted):                                               |                            |                         |            |                    |         |                    |            |        
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net loss per share                                                                |                            | $                       | 0.00       |                    |         | $                  | 0.00       |        
|                                                                                  |                            |                         |            |                    |         |                    |            |        
|Weighted average number of common shares and
common share equivalents outstanding |                            |                         | 50,004,474 |                    |         |                    | 50,004,474 |        
|                                                                                  |                            |                         |            |                    |         |                    |            |        

|                                                                                  |                                 |                         |            |                  |          |                  |            |          |          |  
|--------------------------------------------------------------------------------- | ------------------------------- | ----------------------- | ---------- | ---------------- | -------- | ---------------- | ---------- | -------- | -------- | -
|                                                                                  |                                 |                         |            | For the          |          | For the         
|                                                                                  |                                 |                         |            | Six Months Ended |          | Six Months Ended
|                                                                                  |                                 |                         |            | June 30,         |          | June 30,        
|                                                                                  |                                 |                         |            | 2002             |          | 2001            
|                                                                                  |                                 |                         |            |                  |          |                 
|Revenues                                                                          |                                 | $                       |           |                  |          | $                | 171        |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Cost of revenues                                                                  |                                 |                         |           |                  |          |                  |           |         
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|                                                                                  | Gross income                    |                         |            |                 |          |                  |            | 171      |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Operating expense (income):                                                       |                                 |                         |            |                  |          |                  |            |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Sales and marketing             |                         |            |                 |          |                  |            | 18,222   |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | General and administrative      |                         |            | 108,054          |          |                  |            | 466,153  |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Loss on disposal of assets      |                         |            |                 |          |                  |            | 24,352   |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                  | Contract termination settlement |                         |            |                 |          |                  |            | (402,586 | )       
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|                                                                                  |                                 | Total operating expense |            |                  | 108,054  |                  |            |          | 106,141  |  
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|                                                                                  |                                 | Loss from operations    |            |                  | (108,054 | )                |            |          | (105,970 | )
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Interest income                                                                   |                                 |                         | 17,888     |                  |          |                  | 62,166     |         
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|Loss before income taxes                                                          |                                 |                         | (90,166    | )                |          |                  | (43,804    | )       
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Income taxes                                                                      |                                 |                         |           |                  |          |                  |           |         
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|Net loss                                                                          |                                 | $                       | (90,166    | )                |          | $                | (43,804    | )       
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|Per share data (basic and diluted):                                               |                                 |                         |            |                  |          |                  |            |         
|                                                                                 
|                                                                                 
|                                                                                 
|                                                                                 
|Net loss per share                                                                |                                 | $                       | 0.00       |                  |          | $                | 0.00       |         
|                                                                                  |                                 |                         |            |                  |          |                  |            |         
|Weighted average number of common shares and
common share equivalents outstanding |                                 |                         | 50,004,474 |                  |          |                  | 50,004,474 |         
|                                                                                  |                                 |                         |            |                  |          |                  |            |         

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         
|                                                 |                                                                             |                                                 |                                            |                   |         | Six Months Ended |           | Six Months Ended
|                                                 |                                                                             |                                                 |                                            |                   |         | June 30,         |           | June 30,        
|                                                 |                                                                             |                                                 |                                            |                   |         | 2002             |           | 2001            
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|Cash flows used in operating activities:         |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|                                                
|                                                
|                                                
|                                                
|                                                 | Net loss                                                                    |                                                 | $                                          | (90,166           | )       |                  | $         | (43,804          | )       
|                                                
|                                                
|                                                
|                                                
|                                                 | Adjustments to reconcile net loss to
net cash used in operating activities: |                                                 |                                            |                   |         |                  |           |                  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Depreciation and amortization                   |                                            |                   | 304     |                  |           |                  | 4,263    |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             | Loss on disposal of assets                      |                                            |                   |        |                  |           |                  | 24,352   |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                                 | Changes in assets and liabilities:         |                   |         |                  |           |                  |          |          |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                                 | Decrease (increase) in interest receivable |                   |         | 2,455            |           |                  |          | (6,528   | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                                 | Decrease in prepaid expenses               |                   |         | 15,560           |           |                  |          | 256,299  |         
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                                 | Decrease in accounts payable               |                   |         | (6,115           | )         |                  |          | (150,840 | )       
|                                                
|                                                
|                                                
|                                                
|                                                 |                                                                             |                                                 | Increase (decrease) in accrued liabilities |                   |         | 18,666           |           |                  |          | (655,624 | )       
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|                                                 |                                                                             |                                                 |                                            | Total adjustments |         |                  | 30,870    |                  |          |          | (528,078 | )
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|                                                 |                                                                             | Net cash used in operating activities           |                                            |                   | (59,296 | )                |           |                  | (571,882 | )       
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|Cash flows provided by financing activities:     |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|                                                
|                                                
|                                                
|                                                
|                                                 | Amounts due to stockholder and affiliates                                   |                                                 |                                            |                  |         |                  |           | 1,912            |         
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|                                                 |                                                                             | Net cash flows provided by financing activities |                                            |                   |        |                  |           |                  | 1,912    |         
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|Net change in cash and cash equivalents          |                                                                             |                                                 | (59,296                                    | )                 |         |                  | (569,970  | )               
|                                                
|                                                
|                                                
|                                                
|Cash and cash equivalents at beginning of period |                                                                             |                                                 | 2,167,133                                  |                   |         |                  | 2,761,169 |                 
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 
|Cash and cash equivalents at end of period       |                                                                             | $                                               | 2,107,837                                  |                   |         | $                | 2,191,199 |                 
|                                                 |                                                                             |                                                 |                                            |                   |         |                  |           |                 

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

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##### Table of Contents



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 period
from January 1, 2002 to June 30, 2002 are not necessarily indicative of
the results for any subsequent quarter or the entire fiscal year ending
December 31, 2002.

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. From its inception on April 2, 1998 through
November 12, 1999, Zap.Com operated as a wholly owned subsidiary of Zapata. 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 percent of Zap.Coms outstanding common stock. On November
30, 1999, Zap.Coms stock began to trade on NASDs OTC Electronic 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.

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. The Company had no other
significant activities during 2001 and the first two quarters of 2002 other
than complying with its reporting requirements under the Securities Exchange
Act of 1934 and completing the termination of its Internet operations in 2001.

During the remainder of 2002, 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.

Management believes that the Company has sufficient resources to satisfy
its existing and contingent liabilities and its anticipated operating expenses
for at least the next twelve months.

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Reclassifications

In order to conform to the 2002 presentation, certain amounts in the 2001
financial statements have been reclassified.

NOTE 2. 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 March 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 3. RELATED PARTY TRANSACTIONS

Since its inception, the Company has utilized the services of the
management and staff of its majority stockholder, 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 under the
shared services agreement to be reimbursed for these expenses since May 1,
2000. As a result, no allocations were made in the three month and six month
periods ended June 30, 2002 and 2001. Due to the Companys ceasing Internet
operations in 2000, the costs that would have been incurred by the Company are
considered minimal.

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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 2001 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 capital 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 June 30, 2002, Zap.Com recorded a net loss of
$50,000 as compared to $181,000 for the three months ended June 30, 2001.
Since inception (which commenced on April 2, 1998), Zap.Com has incurred a
cumulative net loss of $8.8 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 six month periods ended June 30, 2002 as compared
to the three month and six month periods ended June 30, 2001, operations
consisted of the following:

Revenues  Zap.Com did not generate any significant revenue for the three
month and six month periods ended June 30, 2002 and 2001, 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 six month periods ended June 30, 2002
and 2001, the Company incurred no costs of revenue as a result of ceasing all
Internet operations.

Sales and marketing  Sales and marketing expenses consist primarily of
customer fulfillment and media relation costs. For the three month and six
month periods ended June 30, 2002, the Company incurred no sales and marketing
expenses, reflecting the decrease in these expenses as a result of ceasing all
Internet operations. The Company incurred $18,000 in sales and marketing
expenses during the six months ended June 30, 2001, and no sales and marketing
expenses during the three months ended June 30, 2001.

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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 various other costs. General and administrative
expenses for the quarter ended June 30, 2002 decreased $127,000 or 68% as
compared to the quarter ended June 30, 2001. For the six months ended June 30,
2002, general and administrative expenses decreased $358,000 or 77% as compared
to the six month period ended June 30, 2001. These decreases are a direct
result of ceasing all Internet operations and terminating 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.

Loss on disposal of assets  No assets were disposed of during the three
month and six month periods ended June 30, 2002. During the three month period
ended June 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. The Company incurred no additional losses on disposal of
assets during the six months ended June 30, 2002.

Contract Termination Settlement  During the first quarter of 2001, the
Company favorably settled its disputes over two of its contracts and reversed
previous accruals of $403,000 as income resulting from the settlement amounts
being less than the associated accrued liabilities. The original expenses and
accruals were recorded during the fourth quarter of 2000 after the Board
resolution to terminate Internet operations, and certain contracts entered into
by the Company during its development stage were deemed to have no future value
to the Company.

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 June 30, 2002 and 2001 was $9,000 and $29,000, respectively.
For the six months ended June 30, 2002 and 2001, interest income was $18,000
and $62,000, respectively. The decreased interest income for 2002 was
primarily a result of significantly lower interest rates on short-term U.S.
Government Agency securities as compared to rates in 2001, as well as declining
cash reserves available for investment.

LIQUIDITY AND CAPITAL RESOURCES

As of June 30, 2002, Zap.Com has not generated any significant revenue
since its inception. As a result, the Companys primary source of liquidity
has been its initial capitalization and thereafter the 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 47 percent 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.

Since its inception, the Company has utilized services of the management
and staff and office space of its majority stockholder, Zapata Corporation,
under a shared services agreement that allocated these costs. Effective May 1,
2000, Zapata has waived its rights under the services agreements to be
reimbursed these costs. Should Zapata not renew its waiver, Zap.Com may incur
future obligations under the shared services agreement.

Zap.Com currently has effective a shelf registration statement on Form
S-1, covering 30,000,000 shares 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 the 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 $59,000 for the six months ended
June 30, 2002 as compared to $572,000 for the same period in 2001. The
decrease in cash used in operating activities resulted from the net loss
partially offset by the timing of payments related to certain payables and
accrued liabilities.

Cash Flows From Financing Activities

For the six months ended June 30, 2002, the Company had no cash provided
by financing activities as compared to $2,000 for the same period in 2001. The
decrease in cash flows from financing activities in the current quarter
represents the lack of payments made by Zapata on behalf of Zap.Com as compared
to the previous period.

Critical Accounting Policies

The preparation of financial statements requires management to make
estimates and assumptions that affect amounts reported therein. The estimates
that require managements most difficult, subjective or complex judgments are
described below. The critical judgments impacting the financial statements
include valuation allowances for deferred income taxes and the impairment of
assets. In each situation, management is required to make estimates about the
effects of matters, or future events that are inherently uncertain.
Specifically, in its assessment of impairment of assets, management made
estimates of the fair values based upon forecasted revenues and operations. In
addition, as the Company does not anticipate generating revenues or taxable
income in the foreseeable future, management has reduced its deferred tax
assets to an amount that it believes is more likely than not to be realized.
The Company used what it believes are reasonable assumptions and where
applicable, established valuation techniques in making its estimates.




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
short-term US Government Agency securities with maturities generally not more
than 90 days. Due to the short duration and conservative nature of these instruments,
the Company does not believe that the value of these instruments have a material exposure to interest rate risk.

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PART II.  OTHER INFORMATION




Item 1. LEGAL PROCEEDINGS

None.




Item 2. CHANGES IN SECURITIES

None.




Item 3. DEFAULTS UPON SENIOR SECURITIES

None.




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

Zap.Com held an annual meeting of shareholders on May 21, 2002. Avram A.
Glazer, sole director of Zap.Com was re-elected to that position at the
meeting. Mr. Glazer received 48,972,258 votes for his election, none against
and no abstentions. The other matter voted on at the meeting was the
ratification of the Board of Directors selection of PricewaterhouseCoopers LLP
as Zap.Coms independent public accountants. That matter was ratified with
48,972,258 votes for, none against and no abstentions.




Item 5. OTHER INFORMATION

None.




Item 6. EXHIBITS AND REPORTS ON FORM 8-K

| |  |     |  |                      |  |                                                                                                                                      
| |  | --- |  | -------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------
| |  | (a) |  | Exhibits:            |  |                                                                                                                                      
|
|
|
|
| |  |     |  |                      |  |                                                                                                                                      
|
|
|
|
| |  |     |  | 11                   |  | Statement Regarding Computation of Per Share
Earnings                                                                                
|
|
|
|
| |  |     |  | 99.1                 |  | Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
| |  |     |  |                      |  |                                                                                                                                      
|
|
|
|
| |  | (a) |  | 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)
|              
|              
|              
|              
|               |  |                                            |  |                                             
|              
|              
|              
|              
|August 8, 2002 |  | By:                                        |  | /s/ LEONARD DISALVO                         
|               |  |                                            |  | (Vice President and
Chief Financial Officer)

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