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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 31, 2006
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to

Commission file number: 000-27729

Zap.Com Corporation

(Exact name of Registrant as specified in its charter)


Nevada		74-0571159
(State or other jurisdiction of incorporation or organization)		(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

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

None.

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

TITLE OF EACH CLASS:

Common Stock, $0.001 par value

Indicate by check mark if the registrant is a well-know seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o or No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o or No þ

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 þ or No o.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer þ

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes þ or No o

The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2006 (the last business day of the registrant’s most recently completed second fiscal quarter) was $176,800. For the sole purpose of making this calculation, the term “non-affiliate” has been interpreted to exclude directors, corporate officers and holders of 10% or more of the Company’s common stock. As of March 1, 2007, the Registrant had outstanding 50,004,474 shares common stock, $0.001 par value.

Documents Incorporated By Reference:

Portions of the Company’s Information Statement to be delivered to the Company’s shareholders in connection with the Company’s 2006 Annual Meeting of Stockholders, which the Company plans to file with the Securities and Exchange Commission pursuant to regulation 14C promulgated under the Securities Exchange Act of 1934, on or prior to May 1, 2007, are incorporated by reference in Part III (Items 10, 11, 12, 13 and 14) of this Form 10-K.

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 “believes,” “expects,” “intends,” “anticipates,” “plans,” “seeks,” “estimates,” “projects,” “may,” “could” or similar expressions. The ability of the Company to predict results or the actual effect of future plans or strategies is inherently uncertain. Important factors which may cause actual results to differ materially from the forward-looking statements contained herein or in other public statements by the Company are described, among other places, under the caption of this report titled “Part I — Item 1A. Risk Factors” and other risks identified from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”), press releases and other communications. The Company assumes no obligation to update forward-looking statements or to update the reasons actual results could differ from those projected in the forward-looking statements.

PART I


Item 1.	*Business*

General

Zap.Com Corporation (“Zap.Com” or the “Company”) was founded by Zapata Corporation (“Zapata”) (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. 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 $10.1 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 the NASD’s OTC Bulletin Board (“OTCBB”) 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. Zap.Com terminated all salaried employees and all third party contractual relationships entered into in connection with its Internet business.

Since ceasing its Internet operations, the Company has had no existing business operations, other than to comply with its reporting requirements under the Securities Exchange Act of 1934. In the future Zap.Com may acquire an operating company. Zap.Com may also consider developing a new business suitable for its situation.

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, unless it can be serviced by cash flow from the new business; the handicap of not having actively traded stock to use to procure this business; the requirement that, after launch, the new business should not need a significant capital investment to fund its initial operations unless this can be accomplished through cash flow from the new business; and the requirement that the new business should produce a positive cash flow in the near term.

The SEC has recently adopted rule changes governing the use of Form 8-K and Form S-8 by shell companies which became effective for the most part on August 22, 2005. The Company is categorized as a “shell company” as that term is used in the SEC’s rule changes. The principal rule changes are to prohibit the use of Form S-8 by a shell company, and to amend Form 8-K so as to require a shell company to report the same type of information that would be required if it were filing to register a class of securities under the Exchange Act whenever the shell company is reporting the event that caused it to cease being a shell company. The effect of the rule changes may adversely impact the Company’s ability to offer its stock to officers, directors and consultants, and thereby make it more difficult to attract and retain qualified individuals to perform services for the Company, and it will likely increase the costs of registration compliance following the completion of a business combination.

Available Information

The Company files annual, quarterly and current reports and other information with the SEC. The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to these reports filed under the Exchange Act, as well as Section 16 filings by officers and directors, are available free of charge at www.sec.gov as soon as reasonably practicable after they are filed with the SEC. The Company will provide a copy of these documents to stockholders upon request. The Company does not maintain a website.

In addition, the public may read and copy any materials filed by the Company with the SEC at the SEC’s Public Reference Room at 450 Fifth Street, NW., Washington, DC 20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC at its website.

The Company has adopted a Code of Ethics and Business Conduct that applies to all of the Company’s directors and key employees, including the Company’s principal executive officer, principal accounting officer or controller, or persons performing similar functions. The Company will provide without charge, upon request, a copy

of the Code of Business Conduct and Ethics. Anyone wishing to obtain a copy should write to Zap.Com Corporation Investor Relations, 100 Meridian Centre Suite 350, Rochester, NY 14618.

Financial Information About Industry Segments

The Company follows the provisions of Statement of Financial Accounting Standards (“SFAS”) No. 131, “Disclosures about Segments of an Enterprise and Related Information,” which establishes standards for the way companies report information about operating segments in annual financial statements. It also establishes standards for related disclosures about products and services, geographic areas and major customers. The Company has determined that it does not have any separately reportable business segments.

Competition

Numerous companies throughout the United States will compete vigorously with Zap.Com for target acquisition candidates. Venture capital companies as well as established corporations and entities, most of which have greater resources than the Company does, will vie for such acquisition candidates.

Intellectual Property

Zap.Com owns certain intellectual property rights related to the ZapBox and the ZapNetwork. In connection with the foregoing rights, Zap.Com currently has a patent application pending before the United States Patent and Trademark Office for a business process patent which is directed to a unique Internet-based commerce method and system underlying the business model. Zap.Com also owns a federal registration for the trademarks ZAP.COM and Z design.

Regulatory Matters

The Company does not yet know what business it will enter as this is dependent on which target acquisition it determines to purchase; however, all industries have generally become increasingly regulated in recent years. The Company is likely to be subject to the various State, Federal, and local laws, rules, regulations and acts once it pursues an acquisition and commences active business operations.

Employees

Since terminating its Internet operations, Zap.Com has had two employees, Avram Glazer, President and CEO, and Leonard DiSalvo, VP-Finance and Chief Financial Officer. Neither Mr. Glazer nor Mr. DiSalvo receive a salary or bonus from Zap.Com and currently devote a significant portion of their business time to Zapata, where they hold the same offices. Both of these officers, however, will devote such time to Zap.Com’s affairs as is required to perform their duties to Zap.Com.


Item 1A.	*Risk Factors*

We have limited assets and no source of revenue.

We have limited assets and have had no significant revenue since inception, nor will we receive any operating revenues until we complete an acquisition, reorganization, merger or successfully develop a new business. We can provide no assurance that any acquired business will produce any material revenues for the Company or its stockholders or that any such business will operate on a profitable basis.

We have not selected a specified industry in which to acquire or develop a business.

To date, we have not identified any particular industry or business in which to concentrate our acquisition efforts. Accordingly, the Company’s current stockholders and prospective investors have no basis to evaluate the comparative risks and merits of investing in the industry or business in which we may acquire. To the extent that we may acquire a business in a high-risk industry, the Company will become subject to those risks. Similarly, if we acquire a financially unstable business or a business that is in the early stages of development, the Company will become subject to the numerous risks to which such businesses are subject. Although management intends to

consider the risks inherent in any industry and business in which it may become involved, there can be no assurance that it will correctly assess such risks.

There is an absence of substantive disclosure relating to prospective new businesses.

Because we have not yet identified any assets, property or business that we may acquire or develop, our current stockholders and potential investors in the Company have virtually no substantive information about any such new business upon which to base a decision whether to invest in the company. We can provide no assurance that any investment in the Company will ultimately prove to be favorable. In any event, stockholders and potential investors will not have access to any information about any new business until such time as a transaction is completed and we have filed a report with the Securities and Exchange Commission disclosing the nature of such transaction and/or business.

If an acquisition is consummated, stockholders will not know its structure and will likely suffer dilution.

Our management has had no contact or discussions regarding, and there are no present plans, proposals or arrangements to acquire any specific assets, property or business. Accordingly, it is unclear whether such an acquisition would take the form of an exchange of capital stock, a merger or an asset acquisition. However, because we have limited resources as of the date hereof, such acquisition is likely to involve the issuance of our stock.

We currently have 1,500,000,000 authorized shares of common stock and 150,000,000 authorized shares of preferred stock. As of the date of this report, we have 50,004,474 shares of common stock outstanding and no outstanding preferred stock. We will be able to issue significant amounts of additional shares of common stock without obtaining stockholder approval, provided we comply with the rules and regulations of any exchange or national market system on which our shares are then listed. As of the date of this report, we are not subject to the rules of any exchange that would require stockholder approval. To the extent we issue additional common stock in the future, existing stockholders will experience dilution in percentage ownership.

As of the date of this report, we have reserved 3,000,000 shares for options issued or to be issued pursuant to our 1999 Long-Term Incentive Plan. The outstanding options have a weighted average exercise price of $.08. The issuance of shares upon the exercise of the above securities may have a dilutive effect in the future on our common stock, which may adversely affect the price of our common stock.

Management devotes insignificant time to activities of the Company.

Members of the Company’s management are not required to and do not devote their full time to the affairs of the Company. Because of their time commitments to Zapata, as well as the fact that we have no business operations, our members of management anticipate that they will not devote a significant amount of time to the activities of the Company, except in connection with identifying a suitable acquisition target or business to develop.

Zapata and Zap.Com’s officers may have conflicts of interest.

Although we have not identified any potential acquisition target or new business opportunities, the possibility exists that we may acquire or merge with a business or company in which our executive officers, directors, beneficial owners or their affiliates may have an ownership interest. A transaction of this nature would present a conflict of interest for those parties with a managerial position and/or an ownership interest in both the Company and the acquired entity. An independent appraisal of the acquired company may or may not be obtained in the event a related party transaction is contemplated.

There is significant competition for acquisition candidates.

Our management believes that there are numerous companies, most of which have greater resources than the Company does, that are also seeking merger or acquisition transactions. These entities will present competition to Zap.com in its search for a suitable transaction candidate, and we make no assurance that we will be successful in that search.

There is no assurance of continued public trading market and being a low priced security may affect the market value of stock.

To date, there has been only a limited public market for our common stock. Our common stock is currently quoted on the OTCBB. As a result, an investor may find it difficult to dispose of, or to obtain accurate quotations as to the market value of our stock. Our stock is subject to the low-priced security or so called “penny stock” rules of the SEC that impose additional sales practice requirements on broker/dealers who sell such securities. Some of such requirements are discussed below.

A broker/dealer selling “penny stocks” must, at least two business (2) days prior to effecting a customer’s first transaction in a “penny stock,” provide the customer with a document containing information mandated by the SEC regarding the risks of investing in our stock, and the broker/dealer must receive a signed and dated written acknowledgement of the customer’s receipt of that document prior to effecting a customer’s first transaction in a “penny stock.”

Subject to limited exceptions, a broker/dealer must obtain information from a customer concerning the customer’s financial situation, investment experience and investment objectives and, based on the information and any other information known by the broker/dealer, the broker/dealer must reasonably determine that transactions in “penny stocks” are suitable for the customer, that the customer has sufficient knowledge and experience in financial matters, and that the customer reasonably may be expected to be capable of evaluating the risks of transactions in “penny stocks.” A broker/dealer must, at least two business (2) days prior to effecting a customer’s first purchase of a “penny stock” send a statement of this determination, together with other disclosures required by the SEC, to the customer, and the broker/dealer must receive a signed and dated copy of the statement prior to effecting the customer’s first purchase of a “penny stock.”

Subject to limited exceptions, a broker/dealer must also, at least two business (2) days prior to effecting a customer’s purchase of a “penny stock,” deliver to the customer an agreement to the transaction that sets forth the identity and quantity of the “penny stock” to be purchased, and the broker/dealer must receive the customer’s agreement to the transaction prior to effecting the transaction.

A broker/dealer must also, orally or in writing, disclose prior to effecting a customer’s transaction in a “penny stock” (and thereafter confirm in writing):


	•	the bid and offer price quotes in and for the “penny stock,” and the number of shares to which the quoted prices apply,

	•	the brokerage firm’s compensation for the trade, and

	•	the compensation received by the brokerage firm’s sales person for the trade.

	•	In addition, subject to limited exceptions, a brokerage firm must send to its customers trading in “penny stocks” a monthly account statement that gives an estimate of the value of each “penny stock” in the customer’s account.

Accordingly, the Commission’s rules may limit the number of potential purchasers of the shares of our common stock.

Resale restrictions on transferring “penny stocks” are sometimes imposed by some states, which may make transaction in our stock more difficult and may reduce the value of the investment. Various state securities laws pose restrictions on transferring “penny stocks” and as a result, investors in our common stock may have the ability to sell their shares of our common stock impaired.

There can be no assurance we will have market makers in our stock. If the number of market makers in our stock should decline, the liquidity of our common stock could be impaired, not only in the number of shares of common stock which could be bought and sold, but also through possible delays in the timing of transactions, and lower prices for the common stock than might otherwise prevail. Furthermore, the lack of market makers could result in persons being unable to buy or sell shares of the common stock on any secondary market.

Zapata’s control and the presence of interlocking directors and officers create potential conflicts of interest and could prevent a change of control.

As of the date of this report, Zapata owns approximately 98 percent of our outstanding common stock. As a result, Zapata’s directors and officers will be able to control the outcome of substantially all matters submitted to the stockholders for approval, including the election of directors and any proposed merger, liquidation, transfer or encumbrance of a substantial portion of its assets, or amendment to our charter to change our authorized capitalization. This concentration of ownership may also have the effect of delaying or preventing a change in control of Zap.Com even if it would be beneficial to our stockholders.

In addition, our executive officers also are directors, officers or employees of Zapata and, in most cases, either own, or hold an option to purchase, equity securities of Zapata. In addition, the Malcolm I. Glazer Family Limited Partnership, controls and beneficially owns approximately 51 percent of Zapata’s outstanding common stock. As a result, these executive officers and the Malcolm I. Glazer Family Limited Partnership has inherent potential conflicts of interest when making decisions related to transactions between Zapata and us. Zapata’s ability to control matters listed above together with the potential conflicts of interest of its executive officers who also serve as executive officers of Zap.Com and our Chairman of the Board could adversely affect the trading price and liquidity of our common stock. These factors could limit the price that investors might be willing to pay for our common stock in the future.

We have liabilities as a member of Zapata’s consolidated tax group.

We have been, and expect to continue to be for the foreseeable future, a member of Zapata’s consolidated tax group under federal income tax law until the Zap.Com securities held by Zapata do not constitute either 80 percent or greater of the voting power or the market value of Zap.Com’s outstanding stock. Each member of a consolidated group for federal income tax purposes is jointly and severally liable for the federal income tax liability of each other member of the consolidated group. Similar rules may apply under state income tax laws. Although we have entered into a tax sharing and indemnity agreement with Zapata, if Zapata or members of its consolidated tax group (other than us) fail to pay tax liabilities arising prior to the time that we are no longer a member of Zapata’s consolidated tax group, we could be required to make payments in respect of these tax liabilities and these payments could materially adversely affect our financial condition.

Because we do not intend to pay any cash dividends on our common stock, holders of our common stock will not be able to receive a return on their shares unless they sell their shares.

We have paid no dividends on our common stock. We do not anticipate paying any cash dividends on our common stock in the foreseeable future. Unless we pay dividends, holders of our common stock will not be able to receive a return on their shares unless they sell them, which could be difficult unless a more active market develops in our stock. See Item 5 of Part II of this report titled, “Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.”

Our anti-takeover provisions in our corporate documents may have an adverse effect on the market price of our common stock.

If Zapata were ever to lose voting control over us, provisions within our charter and by-laws could make it more difficult for a third party to gain control of us. This would be true even if a change in control might be beneficial to our stockholders. This could adversely affect the market price of our common stock. These provisions include:


	•	the elimination of the right to act by written consent by stockholders after Zapata no longer holds a controlling interest in us;

	•	the elimination of the right to call special meetings of the stockholders by stockholders except that Zapata may do so as long as it holds a controlling interest in us;

	•	the creation of a staggered board of directors; and,


	•	the ability of the board of directors to designate, determine the rights and preferences of, and to issue preferred stock, without stockholder consent, which could adversely affect the rights of our common stockholders.

A substantial amount of our common stock is eligible for sale into the market and this could depress our stock price.

Sales of a substantial number of shares of our common stock in the future could cause the market price of our common stock to decline. As of the date of this document, we have outstanding 50,004,474 shares of common stock, of which Zapata owns 48,972,258 shares, Malcolm Glazer owns 707,907 shares, Avram Glazer owns 50,000 shares with the remainder owned by public stockholders. In addition, we have 3,000,000 shares of common stock reserved for issuance under our 1999 Long-Term Incentive Plan.

All of our shares distributed by Zapata to its stockholders on November 12, 1999 are freely tradable without restriction or further registration under the federal securities laws unless acquired by our “affiliates,” as that term is defined in Rule 144 under the Securities Act of 1933. All of the shares held by Zapata (other than 1,000,000 shares available for sale by Zapata under an effective registration statement), acquired by “affiliates” in Zapata’s distribution or by the Glazers in connection with their November 1999 investment are “restricted securities” under the Securities Act and available for resale upon compliance with Rule 144, including the one year holding period and the timing, manner and volume of sales of these shares. In the absence of Rule 144’s availability, these shares may only be publicly resold if they are registered or another exemption is available.

We have registered 1,000,000 shares of our common stock for resale by Zapata from time to time under a separate registration statement. We have also granted Zapata registration rights with respect to all of its shares. These registration rights effectively allow Zapata to register and publicly sell all of its shares at any time and to participate as a selling stockholder in future public offerings by Zap.Com.


Item 1B.	*Unresolved Staff Comments*

None.


Item 2.	*Properties*

Zap.Com’s headquarters are located in Rochester, New York, in space subleased to it by Zapata on a month-to-month basis. Zapata has advised Zap.Com that it has waived its rights to collect rent until future notice.


Item 3.	*Legal Proceedings*

None.


Item 4.	*Submission of Matters to a Vote of Security Holders*

None.

PART II


Item 5.	*Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities*

Market Information and Dividends

Zap.Com’s common stock began trading on November 30, 1999 on the OTCBB under the symbol “ZPCM.” The OTCBB is a regulated quotation service that displays real-time quotes, last-sale prices and volume information in over-the-counter equity securities. The OTCBB market quotations reflect inter-dealer prices, without retail mark up, mark down or commission, are not necessarily representative of actual transactions, and may not be indicative of the value of the common stock or the existence of an active market. Historically, the level of trading in the Company’s common stock has been sporadic and limited and there is no assurance that an active trading market will develop which will provide liquidity for the Company’s stockholders.

The following table presents quarterly high and low bid information for the Company’s common stock reported by the OTCBB for the quarter ended on:


	12/31/06		9/30/06		6/30/06		3/31/06		12/31/05		9/30/05		6/30/05		3/31/05

High bid	$	0.18	$	0.18	$	0.18	$	0.20	$	0.17	$	0.13	$	0.13	$	0.10
Low bid		0.18		0.18		0.18		0.13		0.13		0.12		0.10		0.08

As of March 1, 2007, there were approximately 1,370 holders of record of our common stock. This number does not include the stockholders for whom shares are held in a “nominee” or “street” name.

Zap.Com has never declared or paid cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. The payment of any future dividends will be at the discretion of the Board of Directors and will depend upon a number of factors including future earnings, the success of its business activities, capital requirements, the general financial conditions and future prospects of any business that is acquired, general business conditions and such other factors as the Board of Directors may deem relevant.

Securities Authorized for Issuance under Equity Compensation Plans

The following table sets forth information as of December 31, 2006, with respect to compensation plans under which equity securities of the Company are authorized for issuance:


	Number of Securities to be		Weighted-Average		Number of Securities Remaining
	Issued Upon Exercise of		Exercise Price of		Available for Future Issuance Under
	Outstanding Options,		Outstanding Options,		Equity Compensation Plans (Excluding
Plan Category	Warrants and Rights		Warrants and Rights		Securities Reflected in Column (a))

Equity compensation plans approved by security holders		511,300	$	0.08		2,488,700
Equity compensation plans not approved by security holders		—		—		—
Total		511,300	$	0.08		2,488,700

Performance Graph

The Commission requires a five-year comparison of the cumulative total return of the Company’s Common Stock with that of (1) a broad equity market index and (2) a published industry or line-of-business index, or index of peer companies with similar market capitalization. Pursuant to the Commission’s rules, the graph presented below includes comparisons of the performance (on a cumulative total return basis) of the Company’s Common Stock with the Russell 2000 Index and the RDG Internet Composite.

The stock price performance on the following graph does not necessarily indicate of future performance. The stock performance graph shall not be deemed incorporated by reference by any general statement incorporating by reference the Information Statement into any filing under the Securities Act of 1933 or under the Securities Exchange Act of 1934, except to the extent that the Company specifically incorporates this graph by reference, and it shall not otherwise be deemed filed.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among ZAP.COM Corporation, The Russell 2000 Index
And The RDG Internet Composite Index


*	$100 invested on 12/31/01 in stock or index-including reinvestment of dividends. Fiscal year ending December 31.


	12/01		12/02		12/03		12/04		12/05		12/06
ZAP.COM Corporation		100.00		21.05		84.21		42.11		89.47		94.74
Russell 2000		100.00		79.52		117.09		138.55		144.86		171.47
RDG Internet Composite		100.00		74.19		104.93		116.40		114.29		126.71


Item 6.	*Selected Financial Data*

The following tables set forth certain selected financial data derived from Zap.Com’s financial statements for the periods and as of the dates presented. The following information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto included in Item 7 of this report.


	For the Year Ended December 31,
	2006			2005			2004			2003			2002

Income Statement Data:
Revenues	$	—		$	—		$	—		$	—		$	—
Loss from operations		(133,135	)		(132,279	)		(165,741	)		(125,214	)		(154,416	)
Interest income		83,947			53,784			23,744			21,603			34,148
Net loss		(49,188	)		(78,495	)		(141,997	)		(103,611	)		(120,268	)
Per share data (basic and diluted) Net loss per share		(.00	)		(.00	)		(.00	)		(.00	)		(.00	)
Weighted average common shares and common share equivalents outstanding		50,004,474			50,004,474			50,004,474			50,004,474			50,004,474


	December 31,
	2006		2005		2004		2003		2002

Balance Sheet Data:
Cash and cash equivalents	$	1,724,351	$	1,758,501	$	1,814,887	$	1,910,345	$	2,063,812
Total assets		1,728,350		1,765,676		1,825,373		1,953,622		2,087,801
Total liabilities		52,618		67,271		61,079		60,783		103,754
Total stockholders’ equity		1,675,732		1,698,405		1,764,294		1,892,839		1,984,047


Item 7.	*Management’s Discussion and Analysis of Financial Condition and Results of Operation*

Overview

The following discussion of the financial condition and results of operations of Zap.Com should be read in conjunction with the financial statements and notes thereto included elsewhere in this report. This discussion contains forward-looking statements which involve risks and uncertainties. The Company’s actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including, but not limited to, those set forth under “Part 1 — Item 1A. Risk Factors.”

Results of Operations

For the year ended December 31, 2006, Zap.Com recorded a net loss of $49,000. Since inception (which commenced on April 2, 1998), Zap.Com has incurred a cumulative net loss of $9.2 million, primarily for costs associated with the development and implementation of the ZapNetwork, the ZapBox, and the public registration of Zap.Com’s common stock.

For the year ended December 31, 2006 as compared to the year ended December 31, 2005, operations consisted of the following:

Revenues. Zap.Com did not generate any revenues for years ended December 31, 2006 and 2005.

Cost of revenues. As a result of ceasing all Internet operations, Zap.Com incurred no cost of revenues for the years ended December 31, 2006 and 2005.

General and administrative. General and administrative expenses consist primarily of legal and accounting services, insurance premiums, printing and filing costs, costs allocated by Zapata pursuant to a services agreement, and various other costs. General and administrative expenses for the year ended December 31, 2006 were $133,000 as compared to $132,000 for the year ended December 31, 2005. Though general and administrative services held relatively constant, in 2006 the Company experienced $13,000 in stock-based compensation charges after implementing SFAS 123(R), offset by a decrease of $12,000 in insurance premiums and auditing fees.

Interest income. Interest income is generated on cash reserves which are invested in short-term U.S. Government Agency securities. Interest earned for the year ended December 31, 2006 and 2005 was $84,000 and $54,000, respectively. The increased interest income for 2006 was primarily a result of sustained higher interest rates on short-term U.S. Government Agency securities as compared to rates in 2006.

For the year ended December 31, 2005 as compared to the year ended December 31, 2004, operations consisted of the following:

Revenues. Zap.Com did not generate any revenues for years ended December 31, 2005 and 2004.

Cost of revenues. As a result of ceasing all Internet operations, Zap.Com incurred no cost of revenues for the years ended December 31, 2005 and 2004.

change is primarily attributable to a decrease in insurance premiums and the cost for legal services as compared to 2004. Costs for these services decreased by $26,000 and $7,000, respectively.

Interest income. Interest income is generated on cash reserves which are invested in short-term U.S. Government Agency securities. Interest earned for the year ended December 31, 2005 and 2004 was $54,000 and $24,000, respectively. The increased interest income for 2005 was primarily a result of sustained higher interest rates on short-term U.S. Government Agency securities as compared to rates in 2004.

Liquidity and Capital Resources

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 from Zapata Corporation and two Zapata directors, and thereafter, the interest income generated on cash reserves invested in short-term US Government Agency securities. As of December 31, 2006, Zap.Com’s cash and cash equivalents were $1.7 million.

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. For each of the years ended December 31, 2006, 2005, and 2004 the Company recorded approximately $13,000, respectively, as contributed capital for these services. Zapata has renewed the waiver through December 31, 2007. However, should Zapata not renew its waiver, Zap.Com may incur future cash payments under the shared services agreement.

The Company does not have any contractual obligations as of December 31, 2006 that have or are reasonably likely to have a current or future material effect on the Company’s financial position, results of operations or cash flows.

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 general and administrative expenses incurred in connection with maintaining its status as a publicly traded company. The Company has no commitments for capital expenditures and foresees none, except for possible future acquisitions. 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.

Cash Flows

Cash used in operating activities was $34,000 for the year ended December 31, 2006 as compared to $56,000 for the year ended December 31, 2005. The decrease in cash used in operating activities resulted primarily from a year over year decrease net loss recognized by the Company, partially offset by the timing of payments of accrued liabilities during the current year as compared to the prior year.

Cash used in operating activities was $56,000 for the year ended December 31, 2005 as compared to $95,000 for the year ended December 31, 2004. The decrease in cash used in operating activities resulted from a decrease in payments of accrued liabilities and prepaid assets. The decrease in accrued liabilities was attributable to timing differences and the decrease in prepaid assets was attributable to decreases in insurance premiums as compared to the prior year.

For the years ended December 31, 2006, 2005 and 2004, the Company had no cash flows from investing or financing activities.

Recent Accounting Pronouncements

interpretation also provides guidance on the related derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company does not expect the effect of this pronouncement to have a material effect on its financial statements.

Critical Accounting Policies

The discussion and analysis of Zap.Com’s financial condition and results of operations are based upon financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these 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 Company believes that the critical judgments impacting the financial statements include:

Valuation allowances for deferred income taxes. The Company reduces its deferred tax assets to an amount that it believes is more likely than not to be realized. In so doing, the Company estimates future taxable income in determining if any valuation allowance is necessary. As a result, the Company had a full valuation allowance against the deferred tax assets as of December 31, 2006.

Impairment of long-lived assets. Zap.Com reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on Zap.Com’s ability to recover the carrying value of the asset from the expected future cash flows. If these cash flows are less than the carrying amount of the asset, an impairment loss is recognized for the difference between estimated fair value and carrying value. The measurement requires management to estimate future cash flows and the fair value of long-lived assets. As of December 31, 2006, Zap.Com’s long-lived assets had no net value.

Off-Balance Sheet Arrangements

The Company does not have any off-balance sheet arrangements as of December 31, 2006 that have or are reasonably likely to have a current or future material effect on the Company’s financial position, results of operations or cash flows.


Item 7A.	*Quantitative and Qualitative Disclosures About Market Risk*

Market risks relating to the Company’s operations result primarily from changes in interest rates. The Company invests its cash and cash equivalents in short-term U.S. 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. However, changes in interest rates do affect the investment income the Company earns on its cash equivalents and marketable securities and, therefore, impacts its cash flows and results of operations. Accordingly, there is inherent roll-over risk for the Company’s investment grade securities as they mature and are renewed at current market rates. Using the investment grade security balance of $1.7 million at December 31, 2006 as a hypothetical constant cash balance, an adverse change of 1% in interest rates would decrease interest income by approximately $17,000 during a twelve-month period.


Item 8.	*Financial Statements and Supplementary Data*

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

of Zap.Com Corporation:

In our opinion, the accompanying balance sheets and the related statements of operations, shareholders’ equity and cash flows present fairly, in all material respects, the financial position of Zap.Com Corporation at December 31, 2006 and 2005, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2006 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

As described in Note 2 — Significant Accounting Policies to the consolidated financial statements, as of January 1, 2006, the Company adopted Statement of Financial Accounting Standards No. 123(R), Share Based Payment.

PricewaterhouseCoopers

Rochester, New York

March 13, 2007

ZAP.COM CORPORATION

BALANCE SHEETS


	December 31,			December 31,
	2006			2005

ASSETS:
Current assets:
Cash and cash equivalents	$	1,724,351		$	1,758,501
Other receivables		3,151			5,235
Prepaid assets		848			1,638

Total current assets		1,728,350			1,765,374
Property and equipment, net of accumulated depreciation of $4,267 and $3,965		—			302

Total assets	$	1,728,350		$	1,765,676


LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable	$	10,018		$	21
Accrued liabilities		42,600			67,250

Total current liabilities		52,618			67,271

Commitments & Contingencies
Stockholders’ Equity:
Preferred stock, $0.01 par value, 150,000,000 shares authorized, 0 shares issued and outstanding		—			—
Common stock, $0.001 par value, 1,500,000,000 shares authorized; 50,004,474 shares issued and outstanding		50,004			50,004
Additional paid in capital		10,872,515			10,846,000
Accumulated deficit		(9,246,787	)		(9,197,599	)

Total stockholders’ equity		1,675,732			1,698,405

Total liabilities and stockholders’ equity	$	1,728,350		$	1,765,676

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

ZAP.COM CORPORATION

STATEMENTS OF CASH FLOWS


	For the			For the			For the
	Year Ended			Year Ended			Year Ended
	December 31,			December 31,			December 31,
	2006			2005			2004

Cash flows from operating activities:
Net loss	$	(49,188	)	$	(78,495	)	$	(141,997	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		302			609			609
Contributed capital from Zapata for unreimbursed management services and rent		13,019			12,606			13,452
Stock-based compensation		13,496			—			—
Changes in assets and liabilities:
Other receivables		2,084			(4,032	)		7,204
Prepaid expenses		790			6,734			24,978
Accounts payable		9,997			(712	)		(1,752	)
Accrued liabilities		(24,650	)		6,904			2,048

Total adjustments		15,038			22,109			46,539

Net cash used in operating activities		(34,150	)		(56,386	)		(95,458	)

Net change in cash and cash equivalents		(34,150	)		(56,386	)		(95,458	)
Cash and cash equivalents at beginning of period		1,758,501			1,814,887			1,910,345

Cash and cash equivalents at end of period	$	1,724,351		$	1,758,501		$	1,814,887

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

ZAP.COM CORPORATION

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


					Additional					Total
	Common Stock				Paid In		Accumulated			Stockholders’
	Shares		Amount		Capital		Deficit			Equity

Balance, December 31, 2003		50,004,474	$	50,004	$	10,819,942	$	(8,977,107	)	$	1,892,839
Contributed capital from Zapata for unreimbursed management services and rent		—		—		13,452		—			13,452
Net loss		—		—		—		(141,997	)		(141,997	)

Balance, December 31, 2004		50,004,474	$	50,004	$	10,833,394	$	(9,119,104	)	$	1,764,294

Contributed capital from Zapata for unreimbursed management services and rent		—		—		12,606		—			12,606
Net loss		—		—		—		(78,495	)		(78,495	)

Balance, December 31, 2005		50,004,474	$	50,004	$	10,846,000	$	(9,197,599	)	$	1,698,405

Contributed capital from Zapata for unreimbursed management services and rent		—		—		13,019		—			13,019
Stock-based compensation		—		—		13,496		—			13,496
Net loss		—		—		—		(49,188	)		(49,188	)

Balance, December 31, 2006		50,004,474	$	50,004	$	10,872,515	$	(9,246,787	)	$	1,675,732

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

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS


Note 1.	Business and Organization

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 $10.1 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 the NASD’s OTCBB under the symbol “ZPCM,” establishing Zap.Com as a separate public company.

Since ceasing its Internet operations, the Company has had no existing business operations, other than to comply with its reporting requirements under the Securities Exchange Act of 1934. Currently, Zap.Com’s principal activities are 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.

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

Note 2. Significant Accounting Policies

Basis of Presentation

General and administrative expenses reflected in the financial statements include allocations of certain corporate expenses from Zapata for management services and rent provided under a Shared Services Agreement. Management believes these allocations were made on a reasonable basis; however, they do not necessarily equal the costs that would have been or will be incurred by the Company prospectively. Zapata has waived its rights to receive these reimbursements since May 1, 2000. The Company records these waived amounts as contributed capital. See Note 8.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results reported in future periods could differ from these estimates.

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)

Cash and Cash Equivalents

The Company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. Cash and cash equivalents represent government debt instruments that are carried at cost, which approximates market.

Property and Equipment

Property and equipment is recorded at cost and depreciated over the estimated useful lives of the assets using the straight-line method. Estimated useful lives of assets acquired, determined as of the date of acquisition are 3-7 years. Replacements and major improvements are capitalized; maintenance and repairs are charged to expense as incurred. Upon sale or retirement, the costs and related accumulated depreciation are eliminated from the accounts. Any resulting gains or losses are included in the statement of operations.

Income Taxes

The Company utilizes the liability method to account for income taxes. This method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of existing temporary differences between the financial reporting and tax-reporting basis of assets and liabilities, and operating loss and tax credit carry forwards for tax purposes. The Company is included in Zapata’s consolidated U.S. federal income tax return. The Zap.Com income tax provision is calculated under the separate return method and allocated to the Company based on its stand-alone contribution of taxable income to consolidated taxable income.

A valuation allowance is provided to reduce deferred tax assets to a level which, more likely than not, will be realized. Primary factors considered by management to determine the size of the allowance include the estimated taxable income level for future years and the limitations on the use of such carry forwards and expiration dates.

Share Based Payment

At December 31, 2006, Zap.Com had one share-based compensation plan, which is described in more detail in Note 5. Prior to January 1, 2006, Zap.Com accounted for its plan under the recognition and measurement principles of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees” and adopted the disclosure-only provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, “Accounting for Stock-Based Compensation” and SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an Amendment of FASB Statement No. 123.” As a result, no stock-based employee compensation cost related to stock options was reflected in the Company’s statements of operations, as all options granted under the plan had an exercise price equal to or greater than the market value of the underlying common stock on the grant date. Accordingly, share-based compensation related to stock options was only included as a pro-forma disclosure in the financial statement footnotes.

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)

Had compensation expense for the Company’s stock option grants been recorded based on fair value at the grant date using the Black-Sholes option — pricing model, the Company’s pro forma net income and earnings per share (basic and diluted) would have been as follows:


	Year Ended December 31,
	2005			2004

Net loss, as reported	$	(78,495	)	$	(141,997	)
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards		(9,732	)		(1,622	)

Pro forma net loss	$	(88,227	)	$	(143,619	)

Earnings per share:
Basic and diluted — as reported	$	.00		$	.00

Basic and diluted — pro forma	$	.00		$	.00

Effective January 1, 2006, Zap.Com adopted SFAS No. 123R, “Share-Based Payment,” using the modified prospective application transition method. Under this transition method, compensation cost in 2006 includes the portion vesting in the period for (1) all share-based payments granted prior to, but not vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123 and (2) all share-based payments granted subsequent to January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS No. 123R. As share-based compensation expense recognized in the Company’s statement of operations for the year ended December 31, 2006 is based on awards ultimately expected to vest, it has been reduced for estimated forfeitures. In the Company’s pro forma information required under SFAS 123 for the periods prior to fiscal 2006, the Company accounted for forfeitures as they occurred. Under the modified prospective application transition method, no cumulative effect of change in accounting principle charge is required for the Company, and results for prior periods have not been restated. (See above chart for the pro forma disclosures related to the year ended December 31, 2005 and 2004). SFAS No. 123R also requires excess tax benefits be reported as a financing cash inflow rather than an operating cash inflow.

Recent Accounting Pronouncements

In June 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes.” The interpretation clarifies the accounting for uncertainty in income taxes recognized in a company’s financial statements in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Specifically, the pronouncement prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. The interpretation also provides guidance on the related derecognition, classification, interest and penalties, accounting for interim periods, disclosure and transition of uncertain tax positions. The interpretation is effective for fiscal years beginning after December 15, 2006. The Company does not expect the effect of this pronouncement to have a material effect on its financial statements.


Note 3.	Accrued Liabilities

Accrued liabilities consist of the following:


	December 31,		December 31,
	2006		2005

Accrued audit and legal costs	$	9,600	$	34,250
Accrued printing costs		33,000		33,000

Total accrued liabilities	$	42,600	$	67,250

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 4. Income Taxes

As a result of net operating losses, the Company has not recorded a provision for income taxes. The components of the deferred tax assets and related valuation allowance at December 31, 2006 and 2005 are as follows:


	December 31,			December 31,
	2006			2005

Deferred tax assets:
Net operating loss carryforwards	$	3,082,385		$	3,063,302

Total deferred tax assets		3,082,385			3,063,202
Less: valuation allowance		(3,082,385	)		(3,063,202	)

Net deferred taxes	$	—		$	—

The Company believes sufficient uncertainty exists regarding the realizability of the deferred tax assets such that a full valuation allowance is required. As of December 31, 2006 and 2005, Zap.Com had approximately $7.9 million of net operating loss carryforwards that will expire beginning in 2018 and through 2026. In the event there is a change of control in the ownership of Zap.Com, as defined by the Internal Revenue Code, the annual utilization of the net operating losses could be limited.

The Company has been, and expects to continue to be for the foreseeable future, a member of Zapata’s consolidated tax group. Although the Company has entered into a tax sharing and indemnity agreement with Zapata, if Zapata or members of its consolidated tax group (other than the Company) fail to pay tax liabilities arising prior to the time that the Company is no longer a member of Zapata’s consolidated tax group, the Company could be required to make payments in respect of these tax liabilities and these payments could materially adversely affect its financial condition.


Note 5.	Stock Options and Stock Issuance Plans

The Company’s 1999 Long-Term Incentive Plan (the “1999 Plan”) allows the Company to provide awards to existing and future officers, employees, consultants and directors of the Company from time to time. The 1999 Plan is intended to promote the long-term financial interests and growth of the Company by providing employees, officers, directors, and consultants of the Company with appropriate incentives and rewards to enter into and continue in the employment of, or relationship with, the Company and to acquire a proprietary interest in the long-term success of the Company.

Under the 1999 Plan, 3,000,000 shares of common stock are available for awards. As of December 31, 2006, there were 2,488,700 shares available for grant under the plan. The 1999 Plan provides for the grant of any or all of the following types of awards: stock options, stock appreciation rights, stock awards, cash awards, or other rights or interests. Allocations of awards are made by the Board of Directors at its sole discretion within the provisions of the 1999 Plan. As of December 31, 2006 and 2005, there were no cash awards or other rights or interest outstanding under the plan.

Stock appreciation rights are rights to receive, without payment to Zap.Com, cash or shares of common stock with a value determined by reference to the difference between the exercise or strike price of the stock appreciation rights and the fair market value or other specified valuation of the shares at the time of exercise. Stock appreciation rights may be granted in tandem with stock options or separately. As of December 31, 2006 and 2005, there were no stock appreciation rights outstanding.

Stock awards may consist of shares of common stock and may provide for voting rights and dividend equivalent rights. The Company may specify conditions for awards, including vesting service and performance conditions. Vesting conditions may include, without limitation, provision for acceleration in the case of a

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)

change-in-control of Zap.Com, vesting conditions and performance conditions, including, without limitation, performance conditions based on achievement of specific business objectives, increases in specified indices and attaining specified growth measures or rates. As of December 31, 2006 and 2005, there were no stock awards outstanding.

In November 2004, Zap.Com granted stock options to its sole director, corporate secretary and certain Zapata employees under the 1999 Plan. These options vest ratably during the first three years after issuance and have five-year terms. Vesting is contingent upon continued employment with the Company. These options were issued at market price on the date of grant. The Company used the Black-Scholes option-pricing model to determine fair value of each stock option granted with the following weighted average assumptions: risk free interest rate of 2.86%, 3 year expected life, expected volatility of 442%, and no expected dividends.

Net income for the year ended December 31, 2006 included $13,000 of share-based compensation costs included in selling, general and administrative expenses in the condensed statement of income. As of December 31, 2006, there was $11,000 of total unrecognized compensation cost related to nonvested share-based compensation that is expected to be recognized over a weighted average period of 0.8 years. Because of the Company’s loss position, a full valuation allowance has been recognized against the tax benefits associated with the adoption of this statement.

The Company had no share-based grants in the year ended December 31, 2006 or 2005. A summary of option activity as of December 31, 2006, and changes during the year then ended is presented below:


					Weighted
			Weighted		Average
			Average		Remaining		Aggregate
			Exercise		Contractual		Intrinsic
	Shares		Price		Term		Value

Outstanding at January 1, 2006		511,300	$	0.08
Granted		—		—
Exercised		—		—
Forfeited or expired		—		—

Outstanding at December 31, 2006		511,300	$	0.08		2.8	$	51,000

Exercisable at December 31, 2006		340,864	$	0.08		2.8	$	34,000

The weighted average fair value of the 2004 grants was $0.08 per stock option. No options were exercised during the years ended December 31, 2006, 2005 or 2004.

A summary of the status of the Company’s nonvested shares as of December 31, 2006 and changes during the year then ended is presented below:


			Weighted-Average
			Grant-Date
Nonvested Shares	Shares		Fair Value

Nonvested at January 1, 2006		340,869	$	0.08
Granted		—		—
Vested		170,433	$	0.08
Forfeited		—		—

Nonvested at December 31, 2006		170,436	$	0.08

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)

Note 6. Loss Per Share

Basic loss per share is computed by dividing the net loss by the sum of the weighted average number of shares of common stock outstanding. Diluted earnings per share is based on the potential dilution that would occur on exercise or conversion of securities into common stock. For the years ended December 31, 2006, 2005 and 2004, all outstanding stock options were excluded from the computation of diluted net loss per share because to do so would have an antidilutive effect.


Note 7.	Commitments and Contingencies

The Company has applied the disclosure provisions of FASB Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” to its agreements containing guarantee or indemnification clauses. These disclosure provisions expand those required by SFAS No. 5, “Accounting for Contingencies,” by requiring a guarantor to disclose certain types of guarantees, even if the likelihood of requiring the guarantor’s performance is remote. The following is a description of arrangements in which the Company is the guarantor.

Related to its 1999 Initial Public Offering, the Company entered into numerous transactions with third parties and with Zapata. Pursuant to certain of these transactions, the Company may be obligated to indemnify other parties to these agreements. These obligations include indemnifications for losses incurred by such parties arising out of the inaccuracy of representations of information supplied by the Company in connection with such transactions. These indemnification obligations were in effect prior to December 31, 2002 and are therefore grandfathered under the provisions of FIN No. 45. Accordingly, no liabilities have been recorded for the indemnification clauses in these agreements.


Note 8.	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 2000. The Company recorded approximately $13,000 as contributed capital for services rendered for the years ended December 31, 2006, 2005 and 2004, respectively.

In November 2004, Zap.Com granted stock options to its sole director, corporate secretary and certain Zapata employees under the 1999 Plan. This grant includes options to purchase 365,000 shares of common stock granted to Avram A. Glazer, sole director, President and Chief Executive Officer of the Company at an exercise price of $0.08 per share, which was approved by the Company’s stockholders at the 2005 annual meeting. Zap.Com accounted for the stock options granted to its director in accordance with FASB Interpretation No. 44, “Accounting for Certain Transactions Involving Stock Compensation (an interpretation of APB Opinion No. 25).” Because Zapata controls Zap.Com, the stock options granted to Zap.Com’s Corporate Secretary and grants to Zapata employees have been accounted for as a stock dividend from Zap.Com to Zapata under Emerging Issues Task Force Issue 00-23, “Issues Related to the Accounting for Stock Compensation under APB Opinion No. 25 and FASB Interpretation No. 44.” For options granted to the Company’s corporate secretary, Zapata will recognize compensation expense ratably over the three year vesting period.

ZAP.COM CORPORATION

NOTES TO FINANCIAL STATEMENTS — (Continued)


Note 9.	Quarterly Financial Information (Unaudited)


	Quarter Ended
	March 31,			June 30,			September 30,			December 31,
	2006			2006			2006			2006

Revenues	$	—		$	—		$	—		$	—
Gross loss		—			—			—			—
Total operating expenses		29,383			44,435			38,106			21,211
Loss from operations		(29,383	)		(44,435	)		(38,106	)		(21,211	)
Interest income		18,641			20,928			22,218			22,160
Net (loss) income		(10,742	)		(23,507	)		(15,888	)		949
Net loss per share (basic and diluted)		.00			.00			.00			.00
Weighted average shares outstanding		50,004,474			50,004,474			50,004,474			50,004,474


	Quarter Ended
	March 31,			June 30,			September 30,			December 31,
	2005			2005			2005			2005

Revenues	$	—		$	—		$	—		$	—
Gross loss		—			—			—			—
Total operating expenses		29,562			35,376			48,289			19,052
Loss from operations		(29,562	)		(35,376	)		(48,289	)		(19,052	)
Interest income		10,195			12,261			14,289			17,039
Net loss		(19,367	)		(23,115	)		(34,000	)		(2,013	)
Net loss per share (basic and diluted)		.00			.00			.00			.00
Weighted average shares outstanding		50,004,474			50,004,474			50,004,474			50,004,474


Item 9.	*Changes in and Disagreements with Accountants on Accounting and Financial Disclosure*

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

An evaluation was performed under the supervision of the Company’s management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this report. Based on that evaluation, the Company’s management, including the CEO and CFO, concluded that the Company’s disclosure controls and procedures were effective to ensure that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms.

Changes in Internal Controls Over Financial Reporting

No significant changes in the Company’s internal controls over financial reporting occurred during the quarter ended December 31, 2006 that has materially affected or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III


Item 10.	*Directors, Executive Officers and Corporate Governance*

Pursuant to General Instruction G on Form 10-K, the information called for by Item 10 of Part III of Form 10-K is incorporated by reference to the information set forth in the Company’s Information Statement relating to its 2006 Annual Meeting of Stockholders (the “2006 Information Statement”) to be filed pursuant to Regulation 14C under the Exchange Act in response to Items 401, 405, 406, 407(c)(3), 407(d)(4) and 407(d)(5) of Regulation S-K under the Securities Act of 1933, as amended, and the Exchange Act (“Regulation S-K”).


Item 11.	*Executive Compensation*

Pursuant to General Instruction G of Form 10-K, the information called for by Item 11 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2006 Information Statement in response to Items 402 and 407 of Regulation S-K, excluding the material concerning the report on executive compensation and the performance graph specified by paragraphs (k) and (l) of such Item.


Item 12.	*Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters*

Pursuant to General Instruction G of Form 10-K, the information called for by Item 12 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2006 Information Statement in response to Item 403 of Regulation S-K.


Item 13.	*Certain Relationships and Related Transactions, and Director Independence*

Pursuant to General Instruction G of Form 10-K, the information called for by Item 13 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2006 Information Statement in response to Items 404 and 407(a) of Regulation S-K.


Item 14.	*Principal Accounting Fees and Services*

Pursuant to General Instruction G of Form 10-K, the information called for by Item 14 of Part III of Form 10-K is incorporated by reference to the information set forth in the 2006 Information Statement in response to Item 9(e) of Schedule 14A.

PART IV


Item 15.	*Exhibits, Financial Statement Schedules.*


(a)	List of Documents Filed

(1) Financial Statements


Financial statements, Zap.Com Corporation
Report of Independent Registered Public Accounting Firm			16
Balance sheets as of December 31, 2006 and 2005			17
Statements of operations for the years ended December 31, 2006, 2005, and 2004			18
Statements of cash flows for the years ended December 31, 2006, 2005, and 2004			19
Statements of changes in stockholders’ equity for the years ended December 31, 2006, 2005, and 2004			20
Notes to financial statements			21

(2) Financial Statement Schedules

None.

(3) Exhibits filed as part of this report. See (b) below.


(b)	Exhibits


Exhibit
No.			Description of Exhibits

	3	.1*	Restated Articles of Incorporation of Zap.Com (Exhibit No. 3.1)
	3	.2*	Amended and Restated By-laws of Zap.Com (Exhibit No. 3.2)
	4	.1*	Specimen Stock Certificate (Exhibit No. 4.1)
	4	.2**	Amended and Restated 1999 Long-Term Incentive Plan of Zap.Com
	10	.1*	Investment and Distribution Agreement between Zap.Com and Zapata (Exhibit No. 10.1)
	10	.2*	Services Agreement between Zap.Com and Zapata (Exhibit No. 10.2)
	10	.3*	Tax Sharing and Indemnity Agreement between Zap.Com and Zapata (Exhibit No. 10.3)
	10	.4*	Registration Rights Agreement between Zap.Com and Zapata (Exhibit No. 10.4)
	31	.1	Certification of CEO as required by Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	31	.2	Certification of CFO as required by Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
	32	.1	Certification of CEO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
	32	.2	Certification of CFO Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002


*		Incorporated by reference to the exhibit number referenced in parentheses and filed with Zap.Com’s Registration Statement on Form S-1 (File No. 333-76135) originally filed with the Securities and Exchange Commission on April 12, 1999, as amended.

**		Incorporated by reference to Exhibit 4.2 of Zap.Com’s Annual Report on Form 10-K for the Year Ended December 31, 2005 as filed with the Securities and Exchange Commission on March 14, 2006 (File No. 000-27729).

Signatures

/s/ Avram Glazer

Avram Glazer

President and Chief Executive Officer (Principal Executive Officer) and Director

March 13, 2007

/s/ Leonard DiSalvo

Leonard DiSalvo

Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

March 13, 2007


			Page

PART I
	Item 1.	Business		3
		General		3
		Available Information		4
		Financial Information about Industry Segments		5
		Competition		5
		Intellectual Property		5
		Regulatory Matters		5
		Employees		5
	Item 1A.	Risk Factors		5
	Item 1B.	Unresolved Staff Comments		9
	Item 2.	Properties		9
	Item 3.	Legal Proceedings		9
	Item 4.	Submission of Matters to a Vote of Security Holders		9

PART II
	Item 5.	Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		10
	Item 6.	Selected Financial Data		12
	Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		13
		Overview		13
		Results of Operations		13
		Liquidity and Capital Resources		14
		Recent Accounting Pronouncements		14
		Critical Accounting Policies		15
		Off-Balance Sheet Arrangements		15
	Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		15
	Item 8.	Financial Statements and Supplementary Data		16
	Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		28
	Item 9A.	Controls and Procedures		28
	Item 9B.	Other Information		28

PART III
	Item 10.	Directors, Executive Officers and Corporate Governance		28
	Item 11.	Executive Compensation		28
	Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		28
	Item 13.	Certain Relationships and Related Transactions, and Director Independence		28
	Item 14.	Principal Accounting Fees and Services		29

PART IV
	Item 15.	Exhibits, Financial Statement Schedules		29
EX-31.1: CERTIFICATION
EX-31.2: CERTIFICATION
EX-32.1: CERTIFICATION
EX-32.2: CERTIFICATION