UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
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| þ | | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| | | For the fiscal year ended December 31, 2005 |
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| or |
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o | | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934 |
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| | | For the transition period from to |
Commission file number: 000-27729
Zap.Com Corporation
(Exact name of Registrant as specified in its charter)
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Nevada | | 74-0571159 |
(State or other jurisdiction of
incorporation or organization) | | (I.R.S. Employer
Identification No.) |
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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 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 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 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 No o
The aggregate market value of the voting stock held by non-affiliates of the registrant as of June 30, 2005 (the last business day of the registrant’s most recently completed second fiscal quarter) was $432,175. 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 February 28, 2006, 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, 2006, are incorporated by reference in Part III (Items 10, 11, 12, 13 and 14) of this Form 10-K.
TABLE OF CONTENTS
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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” 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
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| Item 1. | Description of 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
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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 atwww.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 it’s own website.
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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 it’s 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 States, Federal, and local laws, rules, regulations and acts once it commences 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.
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.
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| 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.
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| 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.
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| 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.
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| 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.
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| 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
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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.
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| 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.
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| 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):
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| | • | the bid and offer price quotes in and for the “penny stock,” and the number of shares to which the quoted prices apply, |
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| | • | the brokerage firm’s compensation for the trade, and |
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| | • | the compensation received by the brokerage firm’s sales person for the trade. |
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| | • | 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
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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.
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| 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, Malcolm Glazer, who is the father of our President and Chief Executive Officer, Avram Glazer, controls and beneficially owns approximately 51 percent of Zapata’s outstanding common stock. As a result, these executive officers have 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.
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| 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.
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| 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.”
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| 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
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beneficial to our stockholders. This could adversely affect the market price of our common stock. These provisions include:
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| | • | the elimination of the right to act by written consent by stockholders after Zapata no longer holds a controlling interest in us; |
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| | • | 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; |
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| | • | the creation of a staggered board of directors; and, |
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| | • | 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. |
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| 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.
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| Item 1B. | Unresolved Staff Comments |
None.
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.
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None.
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| Item 4. | Submission of Matters to a Vote of Security Holders |
None.
PART II
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| Item 5. | Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
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:
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| | 12/31/05 | | 9/30/05 | | 6/30/05 | | 3/31/05 | | 12/31/04 | | 9/30/04 | | 6/30/04 | | 3/31/04 |
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High bid | | $ | 0.170 | | | $ | 0.130 | | | $ | 0.130 | | | $ | 0.100 | | | $ | 0.081 | | | $ | 0.070 | | | $ | 0.110 | | | $ | 0.200 | |
Low bid | | | 0.130 | | | | 0.120 | | | | 0.100 | | | | 0.080 | | | | 0.060 | | | | 0.070 | | | | 0.060 | | | | 0.060 | |
As of February 24, 2006, there were approximately 1,400 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.
The following table sets forth information as of December 31, 2005, with respect to compensation plans under which equity securities of the Company are authorized for issuance:
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| | | | | | Number of Securities Remaining |
| | Number of Securities to be | | Weighted-Average | | Available for Future Issuance |
| | Issued Upon Exercise of | | Exercise Price of | | Under Equity Compensation |
| | Outstanding Options, | | Outstanding Options, | | Plans (Excluding Securities |
| Plan Category | | Warrants and Rights | | Warrants and Rights | | Reflected in Column (a)) |
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| 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 | |
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| 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.
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| | For the Year Ended December 31, |
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| | 2005 | | 2004 | | 2003 | | 2002 | | 2001 |
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Income Statement Data: | | | | | | | | | | | | | | | | | | | | |
| Revenues | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 171 | |
| Loss from operations | | | (132,279 | ) | | | (165,741 | ) | | | (125,214 | ) | | | (154,416 | ) | | | (352,399 | ) |
| Interest income | | | 53,784 | | | | 23,744 | | | | 21,603 | | | | 34,148 | | | | 95,713 | |
| Net loss | | | (78,495 | ) | | | (141,997 | ) | | | (103,611 | ) | | | (120,268 | ) | | | (256,686 | ) |
| Per share data (basic and diluted) | | | | | | | | | | | | | | | | | | | | |
| Net loss per share | | | (.00 | ) | | | (.00 | ) | | | (.00 | ) | | | (.00 | ) | | | (.01 | ) |
| 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, |
| |
|
| | 2005 | | 2004 | | 2003 | | 2002 | | 2001 |
| |
| |
| |
| |
| |
|
Balance Sheet Data: | | | | | | | | | | | | | | | | | | | | |
| Cash and cash equivalents | | $ | 1,758,501 | | | $ | 1,814,887 | | | $ | 1,910,345 | | | $ | 2,063,812 | | | $ | 2,167,133 | |
| Total assets | | | 1,765,676 | | | | 1,825,373 | | | | 1,953,622 | | | | 2,087,801 | | | | 2,202,046 | |
| Total liabilities | | | 67,271 | | | | 61,079 | | | | 60,783 | | | | 103,754 | | | | 109,521 | |
| Total stockholders’ equity | | | 1,698,405 | | | | 1,764,294 | | | | 1,892,839 | | | | 1,984,047 | | | | 2,092,525 | |
| |
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operation |
Overview
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. In December 2000, Zap.Com ceased all Internet operations. 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 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, 2005, Zap.Com recorded a net loss of $78,000. 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.
10
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.
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, 2005 were $132,000 as compared to $166,000 for the year ended December 31, 2004. This 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.
For the year ended December 31, 2004 as compared to the year ended December 31, 2003, operations consisted of the following:
Revenues. Zap.Com did not generate any revenues for years ended December 31, 2004 and 2003, nor does it presently have any business from which it may generate revenue in the future.
Cost of revenues. As a result of ceasing all Internet operations, Zap.Com incurred no cost of revenues for the years ended December 31, 2004 and 2003.
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, 2004 were $166,000 as compared to $125,000 for the year ended December 31, 2003. This change is primarily attributable to an increase in the cost for legal and annual report services as compared to 2003. Costs for these services increased by $22,000 and $13,000, 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, 2004 and 2003 was $24,000 and $22,000, respectively. The increased interest income for 2004 was primarily a result of sustained higher interest rates on short-term U.S. Government Agency securities as compared to rates in 2003.
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, 2005, Zap.Com’s cash and cash equivalents were $1.8 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 the years ended December 31, 2005, 2004, and 2003 the Company recorded approximately $13,000, $13,000 and $12,000, respectively, as contributed capital for these services. Zapata has renewed the waiver through December 31, 2006. 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, 2005 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.
11
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 $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.
Cash used in operating activities was $95,000 for the year ended December 31, 2004 as compared to $153,000 for the year ended December 31, 2003. The decrease in cash used in operating activities resulted from a decrease in payments of accounts payable and accrued liabilities. The decrease in these payments was attributable to timing differences.
For the years ended December 31, 2005, 2004 and 2003, the Company had no cash flows from investing or financing activities.
Recent Accounting Pronouncements
In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment”. SFAS No. 123R is a revision of SFAS No. 123, “Accounting for Stock Based Compensation”, and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards, in the financial statements. The Company currently expects to adopt SFAS 123R effective January 1, 2006, based on the new effective date announced by the SEC. The Company is in the process of reviewing the impact of the adoption of this statement and believes that the adoption of this standard will have a material effect on the Company’s financial position and results of operations.
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, 2005.
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
12
measurement requires management to estimate future cash flows and the fair value of long-lived assets. As of December 31, 2005, Zap.Com held approximately $300 in long-lived assets.
Off-Balance Sheet Arrangements
The Company does not have any off-balance sheet arrangements as of December 31, 2005 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 $1.8 million at December 31, 2005 as a hypothetical constant cash balance, an adverse change of 1% in interest rates would decrease interest income by approximately $18,000 during a twelve-month period.
13
| |
| 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, stockholders’ equity and cash flows present fairly, in all material respects, the financial position of Zap.Com Corporation at December 31, 2005 and December 31, 2004, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2005 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.
| |
| | PricewaterhouseCoopers LLP |
Rochester, New York
March 14, 2006
14
ZAP.COM CORPORATION
BALANCE SHEETS
| | | | | | | | | | | |
| | December 31, | | December 31, |
| | 2005 | | 2004 |
| |
| |
|
| ASSETS: |
| Current assets: | | | | | | | | |
| | Cash and cash equivalents | | $ | 1,758,501 | | | $ | 1,814,887 | |
| | Other receivables | | | 5,235 | | | | 1,203 | |
| | Prepaid assets | | | 1,638 | | | | 8,372 | |
| | | |
| | | |
| |
| | | Total current assets | | | 1,765,374 | | | | 1,824,462 | |
| Property and equipment, net of accumulated depreciation of $3,965 and $3,356 | | | 302 | | | | 911 | |
| | | |
| | | |
| |
| | | Total assets | | $ | 1,765,676 | | | $ | 1,825,373 | |
| | | |
| | | |
| |
| |
| LIABILITIES AND STOCKHOLDERS’ EQUITY: |
| Current liabilities: | | | | | | | | |
| | Accounts payable | | $ | 21 | | | $ | 733 | |
| | Accrued liabilities | | | 67,250 | | | | 60,346 | |
| | | |
| | | |
| |
| | | Total current liabilities | | | 67,271 | | | | 61,079 | |
| | | |
| | | |
| |
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 | | | 10,846,000 | | | | 10,833,394 | |
| | Accumulated deficit | | | (9,197,599 | ) | | | (9,119,104 | ) |
| | | |
| | | |
| |
| | | Total stockholders’ equity | | | 1,698,405 | | | | 1,764,294 | |
| | | |
| | | |
| |
| | | Total liabilities and stockholders’ equity | | $ | 1,765,676 | | | $ | 1,825,373 | |
| | | |
| | | |
| |
The accompanying notes are an integral part of these financial statements.
15
ZAP.COM CORPORATION
STATEMENTS OF OPERATIONS
| | | | | | | | | | | | | | | |
| | For the Year | | For the Year | | For the Year |
| | Ended | | Ended | | Ended |
| | December 31, | | December 31, | | December 31, |
| | 2005 | | 2004 | | 2003 |
| |
| |
| |
|
| Revenues | | $ | — | | | $ | — | | | $ | — | |
| Cost of revenues | | | — | | | | — | | | | — | |
| | | |
| | | |
| | | |
| |
| | Gross profit | | | — | | | | — | | | | — | |
| Operating expenses: | | | | | | | | | | | | |
| | General and administrative | | | 132,279 | | | | 165,741 | | | | 125,214 | |
| | | |
| | | |
| | | |
| |
| | | Total operating expenses | | | 132,279 | | | | 165,741 | | | | 125,214 | |
| | | |
| | | |
| | | |
| |
| | | Loss from operations | | | (132,279 | ) | | | (165,741 | ) | | | (125,214 | ) |
| Interest income | | | 53,784 | | | | 23,744 | | | | 21,603 | |
| | | |
| | | |
| | | |
| |
| Loss before income taxes | | | (78,495 | ) | | | (141,997 | ) | | | (103,611 | ) |
| Income taxes (Note 5) | | | — | | | | — | | | | — | |
| | | |
| | | |
| | | |
| |
| Net loss | | $ | (78,495 | ) | | $ | (141,997 | ) | | $ | (103,611 | ) |
| | | |
| | | |
| | | |
| |
| Per share data (basic and diluted): | | | | | | | | | | | | |
| Net loss per share | | $ | (.00 | ) | | $ | (.00 | ) | | $ | (.00 | ) |
| | | |
| | | |
| | | |
| |
| | Weighted average number of common shares and common share equivalents outstanding | | | 50,004,474 | | | | 50,004,474 | | | | 50,004,474 | |
| | | |
| | | |
| | | |
| |
The accompanying notes are an integral part of these financial statements.
16
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, |
| | 2005 | | 2004 | | 2003 |
| |
| |
| |
|
| Cash flows from operating activities: | | | | | | | | | | | | |
| | Net loss | | $ | (78,495 | ) | | $ | (141,997 | ) | | $ | (103,611 | ) |
| | Adjustments to reconcile net loss to net cash used in operating activities: | | | | | | | | | | | | |
| | | Depreciation and amortization | | | 609 | | | | 609 | | | | 593 | |
| | | Contributed capital from Zapata for unreimbursed management services and rent | | | 12,606 | | | | 13,452 | | | | 12,403 | |
| | | Changes in assets and liabilities: | | | | | | | | | | | | |
| | | | Other receivables | | | (4,032 | ) | | | 7,204 | | | | (6,531 | ) |
| | | | Prepaid assets | | | 6,734 | | | | 24,978 | | | | (13,350 | ) |
| | | | Accounts payable | | | (712 | ) | | | (1,752 | ) | | | (14,745 | ) |
| | | | Accrued liabilities | | | 6,904 | | | | 2,048 | | | | (28,226 | ) |
| | | |
| | | |
| | | |
| |
| | | | | Total adjustments | | | 22,109 | | | | 46,539 | | | | (49,856 | ) |
| | | |
| | | |
| | | |
| |
| | | Net cash used in operating activities | | | (56,386 | ) | | | (95,458 | ) | | | (153,467 | ) |
| | | |
| | | |
| | | |
| |
| Net change in cash and cash equivalents | | | (56,386 | ) | | | (95,458 | ) | | | (153,467 | ) |
| Cash and cash equivalents at beginning of period | | | 1,814,887 | | | | 1,910,345 | | | | 2,063,812 | |
| | | |
| | | |
| | | |
| |
| Cash and cash equivalents at end of period | | $ | 1,758,501 | | | $ | 1,814,887 | | | $ | 1,910,345 | |
| | | |
| | | |
| | | |
| |
The accompanying notes are an integral part of these financial statements.
17
ZAP.COM CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
| | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | |
| | Common Stock | | Additional | | | | Total |
| |
| | Paid In | | Accumulated | | Stockholders’ |
| | Shares | | Amount | | Capital | | Deficit | | Equity |
| |
| |
| |
| |
| |
|
Balance, December 31, 2002 | | | 50,004,474 | | | $ | 50,004 | | | $ | 10,807,539 | | | $ | (8,873,496 | ) | | $ | 1,984,047 | |
| Contributed capital from Zapata for unreimbursed management services and rent | | | — | | | | — | | | | 12,403 | | | | — | | | | 12,403 | |
| Net loss | | | — | | | | ��� | | | | — | | | | (103,611 | ) | | | (103,611 | ) |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
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 | |
| | | |
| | | |
| | | |
| | | |
| | | |
| |
The accompanying notes are an integral part of these financial statements.
18
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.
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. 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 |
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 9.
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.
19
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 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.
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 and its income tax effects are allocated to the Company in proportion to its 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.
The Company accounts for its employee stock-based compensation plans under Accounting Principles Board (“APB”) No. 25, “Accounting for Stock Issued to Employees.” Accordingly, no recognition of compensation expense is required for stock options granted to employees for which the exercise price equals or exceeds the fair market value of the stock at the grant date. The Company has adopted the required disclosure provisions under SFAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure, an amendment of the Financial Accounting Standards Board (“FASB”) Statement No. 123.” SFAS No. 148 amends SFAS No. 123, “Accounting for Stock-Based Compensation.”
20
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
Had compensation expense for the 1999 Plan been determined based on fair value at the grant date consistent with SFAS No. 123, the Company’s net loss and net loss per share (basic and diluted) would have been as follows:
| | | | | | | | | | | | | | |
| | |
| | Year Ended December 31, |
| |
|
| | 2005 | | 2004 | | 2003 |
| |
| |
| |
|
| Net loss, as reported | | $ | (78,495 | ) | | $ | (141,997 | ) | | $ | (103,611 | ) |
| 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 | ) | | $ | (103,611 | ) |
| | | |
| | | |
| | | |
| |
| Earnings per share: | | | | | | | | | | | | |
| | Basic and diluted — as reported | | $ | .00 | | | $ | .00 | | | $ | .00 | |
| | | |
| | | |
| | | |
| |
| | Basic and diluted — pro forma | | $ | .00 | | | $ | .00 | | | $ | .00 | |
| | | |
| | | |
| | | |
| |
During 2004, the Company issued stock options to its sole director, corporate secretary and certain Zapata employees. See Note 6.
| |
| Recent Accounting Pronouncements |
In December 2004, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 123R, “Share-Based Payment”. SFAS No. 123R is a revision of SFAS No. 123, “Accounting for Stock Based Compensation”, and supersedes APB 25. Among other items, SFAS 123R eliminates the use of APB 25 and the intrinsic value method of accounting, and requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards, in the financial statements. The Company currently expects to adopt SFAS 123R effective January 1, 2006, based on the new effective date announced by the SEC. The Company is in the process of reviewing the impact of the adoption of this statement and believes that the adoption of this standard will have a material effect on the Company’s financial position and results of operations.
| |
| Note 3. | Accrued Liabilities |
Accrued liabilities consist of the following:
| | | | | | | | | | |
| | December 31, | | December 31, |
| | 2005 | | 2004 |
| |
| |
|
| Accrued audit and legal costs | | $ | 34,250 | | | $ | 30,529 | |
| Accrued printing costs | | | 33,000 | | | | 29,817 | |
| | | |
| | | |
| |
| | Total accrued liabilities | | $ | 67,250 | | | $ | 60,346 | |
| | | |
| | | |
| |
| |
| Note 4. | Stockholders’ Equity |
In March 2000, the SEC declared the effectiveness of Zap.Com’s shelf registration statement on Form S-1, covering 20,000,000 shares of common stock, $.001 par value per share. This registration statement also covered up to an additional 30,000,000 shares of Zap.Com’s common stock, $.001 par value per share in connection with potential acquisitions and other transactions. In June 2003, the company filed a Post-Effective Amendment No. 3 to Form S-1 deregistering these 30,000,000 shares. The company had not issued any shares under this registration statement.
21
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
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, 2005 and 2004 are as follows:
| | | | | | | | | | | |
| | December 31, | | December 31, |
| | 2005 | | 2004 |
| |
| |
|
| Deferred tax assets: | | | | | | | | |
| | Net operating loss carryforwards | | $ | 3,063,202 | | | $ | 3,032,589 | |
| | | |
| | | |
| |
| | Total deferred tax assets | | | 3,063,202 | | | | 3,032,589 | |
| | Less: valuation allowance | | | (3,063,202 | ) | | | (3,032,589 | ) |
| | | |
| | | |
| |
| | | 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, 2005 and 2004, Zap.Com had approximately $7.9 million and $7.8 million of net operating loss carryforwards that expire in 2025 and 2024, respectively. 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 we are 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 our financial condition.
| |
| Note 6. | 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, 2005, 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, 2005 and 2004, 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, 2005 and 2004, 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
22
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, 2005 and 2004, 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. 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).” See “Note 1. — Stock Based Compensation” for the pro forma impact related to the stock options granted to the Company’s sole director. 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.” Because of Zap.Com’s retained deficit, these stock options had no impact on Zap.Com’s financial position, results of operations or pro forma results of operations. For options granted to the Company’s corporate secretary, Zapata will recognize approximately $1,000 of compensation expense ratably over the three year vesting period.
The stock options granted in 2004 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. The weighted average fair value of the 2004 grants was $0.08 per stock option.
A summary of the status of the Company’s stock options is presented below.
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | |
| | For the Year Ended December 31, |
| |
|
| | | | | | |
| | 2005 | | 2004 | | 2003 |
| |
| |
| |
|
| | | | Weighted | | | | Weighted | | | | Weighted |
| | | | Average | | | | Average | | | | Average |
| | Number | | Exercise | | Number of | | Exercise | | Number | | Exercise |
| | of Shares | | Prices | | Shares | | Prices | | of Shares | | Prices |
| |
| |
| |
| |
| |
| |
|
| Outstanding at beginning of year | | | 511,300 | | | $ | 0.08 | | | | 475,000 | | | $ | 2.00 | | | | 475,000 | | | $ | 2.00 | |
| Granted | | | — | | | | | | | | 511,300 | | | $ | 0.08 | | | | — | | | | | |
| Exercised | | | — | | | | | | | | — | | | | | | | | — | | | | | |
| Forfeited | | | — | | | | | | | | — | | | | | | | | — | | | | | |
| Expired | | | — | | | | | | | | (475,000 | ) | | $ | 2.00 | | | | — | | | | | |
| | | |
| | | | | | | |
| | | | | | | |
| | | | | |
| Outstanding at end of year | | | 511,300 | | | $ | 0.08 | | | | 511,300 | | | $ | 0.08 | | | | 475,000 | | | $ | 2.00 | |
| | | |
| | | | | | | |
| | | | | | | |
| | | | | |
| Exercisable at end of year | | | 170,431 | | | $ | 0.08 | | | | — | | | | | | | | 475,000 | | | $ | 2.00 | |
| | | |
| | | | | | | |
| | | | | | | |
| | | | | |
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, 2005, 2004 and 2003, all outstanding stock options were excluded from the computation of diluted net loss per share because to do so would have an antidilutive effect.
23
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
| |
| Note 8. | 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 9. | 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. For the year ended December 31, 2005, the Company recorded approximately $13,000 as contributed capital for services rendered as compared to approximately $13,000 and $12,000 for the years ended December 31, 2004 and 2003, 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.
In October 1999, the Company granted to American Internetwork Sports Company, LLC stock warrants in consideration for sports related consulting services. American Internetwork Sports is owned by the siblings of Avram Glazer, the Company’s President and Chief Executive Officer. The Company accounted for this transaction in accordance with EITF 96-18, which requires the recognition of expense based on the then current fair value of the warrants at the end of each reporting period with adjustment of prior period expense to actual expense at each vesting date. Pursuant to the December 2000 decision to cease the operations of the Company, these warrants became fully vested. As a result, the Company recorded the entire cost of $743,000 for all 2,000,000 warrants at the then market value of the stock. These warrants expired in the fourth quarter of 2004.
24
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
| |
| Note 10. | Quarterly Financial Information (Unaudited) |
| | | | | | | | | | | | | | | | | |
| | |
| | Quarter Ended |
| |
|
| | March 31, 2005 | | June 30, 2005 | | September 30, 2005 | | December 31, 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 | |
| | | | | | | | | | | | | | | | | |
| | |
| | Quarter Ended |
| |
|
| | March 31, 2004 | | June 30, 2004 | | September 30, 2004 | | December 31, 2004 |
| |
| |
| |
| |
|
| Revenues | | $ | — | | | $ | — | | | $ | — | | | $ | — | |
| Gross loss | | | — | | | | — | | | | — | | | | — | |
| Total operating expenses | | | 42,256 | | | | 47,612 | | | | 38,025 | | | | 37,848 | |
| Loss from operations | | | (42,256 | ) | | | (47,612 | ) | | | (38,025 | ) | | | (37,848 | ) |
| Interest income | | | 4,549 | | | | 4,507 | | | | 6,076 | | | | 8,612 | |
| Net loss | | | (37,707 | ) | | | (43,105 | ) | | | (31,949 | ) | | | (29,236 | ) |
| 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, 2005 that has materially affected or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
25
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
Notwithstanding the foregoing, there can be no assurance that the Company’s disclosure controls and procedures will detect or uncover all failures of persons within the Company to disclose material information otherwise required to be set forth in the Company’s periodic reports. There are inherent limitations to the effectiveness of any system of disclosure controls and procedures, includes the possibility of human error and the circumvention or overriding of the controls and procedures. Accordingly, even effective disclosure controls and procedures can only provide reasonable, not absolute, assurance of achieving their control objectives.
| |
| Item 9B. | Other Information |
None.
PART III
| |
| Item 10. | Directors and Executive Officers of the Registrant |
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 and 406 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 Item 402 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 |
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 Item 404 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.
26
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
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. |
| |
| | Balance sheets as of December 31, 2005 and 2004. |
| |
| | Statements of operations for the years ended December 31, 2005, 2004, and 2003. |
| |
| | Statements of cash flows for the years ended December 31, 2005, 2004, and 2003. |
| |
| | Statements of changes in stockholders’ equity for the years ended December 31, 2005, 2004, and 2003. |
| |
| | Notes to financial statements. |
(2) Financial Statement Schedules
(3) Exhibits filed as part of this report. See (b) below.
The exhibit list attached to this report is incorporated herein in its entirety by reference as if fully set forth herein. The exhibits indicated by an asterisk (*) are incorporated by reference 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.
| | | | | |
| 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 |
27
ZAP.COM CORPORATION
NOTES TO FINANCIAL STATEMENTS — (Continued)
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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) |
| |
| |
|
| | Name: Avram Glazer |
| | Title: President and CEO |
Dated: March 14, 2006
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | | | | | | |
| | | | |
| Signatures | | Title | | Date |
| |
| |
|
| |
/s/ AVRAM GLAZER
Avram Glazer | | President and Chief Executive Officer (Principal Executive Officer) and Director | | March 14, 2006 |
| |
/s/ LEONARD DISALVO
Leonard DiSalvo | | Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | | March 14, 2006 |
28
INDEX TO EXHIBITS
| | | | | |
| Exhibit | | |
| No. | | |
| | |
| | 4 | .2 | | Amended and Restated 1999 Long-Term Incentive Plan of Zap.com |
| |
| | 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 |
29
