UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q/A

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

1-4219
(Commission file number)

ZAPATA CORPORATION
(Exact name of Registrant as specified in its charter)

STATE OF NEVADA
(State or other jurisdiction of C-74-1339132
incorporation or organization) (I.R.S. Employer
Identification No.)

100 MERIDIAN CENTRE,
SUITE 350
ROCHESTER, NY
(Address of principal 14618
executive offices) (Zip Code)

(716) 242-2000
(Registrant's telephone number, including area code)

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 [x] No [ ]

Number of shares outstanding (less treasury shares) of the
Registrant's Common Stock, par value $0.01 per share, on August 1, 2001:
2,390,849

ZAPATA CORPORATION

TABLE OF CONTENTS

PAGE
----

PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 2001 (Unaudited) and
December 31, 2000 3
Unaudited Condensed Consolidated Statements of Operations for the Three
and Six Months Ended June 30, 2001 and 2000 4
Unaudited Condensed Consolidated Statements of Cash Flows for the
Six Months Ended June 30, 2001 and 2000 5
Notes to Unaudited Condensed Consolidated Financial Statements 6

Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14

Item 3. Quantitative and Qualitative Disclosures about Market Risk 19

PART II. OTHER INFORMATION
Item 1. Legal Proceedings 20
Item 2. Changes in Securities and Use of Proceeds 20
Item 3. Defaults upon Senior Securities 20
Item 4. Submission of Matters to a Vote of Security Holders 20
Item 5. Other Information 20
Item 6. Exhibits and Reports on Form 8-K 21

SIGNATURES 22

EXHIBITS 23

Explanatory Note:
- -----------------

This amendment to Zapata Corporation's quarterly report on Form 10-Q for
the three and six months periods ended June 30, 2001 includes changes from the
previous report to reflect Omega Protein Corporation's re-characterization of a
second quarter charge as a selling, general and administrative expense as
opposed to a component of inventory production cost as previously reported.
This expense was recorded to appropriately value receivables due from Omega
Protein's insurer as a result of that insurer's recent bankruptcy. No attempt
has been made in this Form 10Q-A to modify or update other disclosures as
presented in the original Form 10-Q except as required to reflect the effects
of this restatement.

PART I. FINANCIAL INFORMATION

In January 2001, the Company completed a one-for-ten reverse stock split.
Accordingly, share and per share amounts have been retroactively restated for
the reverse split.

ITEM 1. FINANCIAL STATEMENTS AND NOTES

ZAPATA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)

JUNE 30,
2001
(UNAUDITED DECEMBER 31,
and RESTATED) 2000
------------- ----

ASSETS
Current assets:
Cash and cash equivalents ............................................. $ 63,929 $ 19,237
Short-term investments ................................................ 20,077 55,384
Accounts receivable, net .............................................. 8,779 11,971
Inventories, net ...................................................... 35,691 37,032
Prepaid expenses and other current assets ............................. 1,846 2,150
--------- ---------
Total current assets ................................................ 130,322 125,774
--------- ---------
Investments and other assets:
Long-term investments, available-for-sale ............................. 5,380 13,396
Other assets .......................................................... 34,328 33,315
--------- ---------
Total investments and other assets .................................. 39,708 46,711
Property and equipment, net .............................................. 85,230 89,374
--------- ---------
Total assets ........................................................ $ 255,260 $ 261,859
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt .................................. $ 1,267 $ 1,227
Accounts payable ...................................................... 2,097 2,766
Accrued liabilities ................................................... 22,895 21,153
--------- ---------
Total current liabilities ........................................... 26,259 25,146
--------- ---------
Long-term debt ........................................................ 14,254 14,827
Other liabilities ..................................................... 4,678 4,820
Minority interest ..................................................... 51,776 52,071
--------- ---------
Total liabilities ................................................... 96,967 96,864
--------- ---------
Commitments and contingencies
Stockholders' equity:
Preferred stock, ($.01 par), 200,000 shares authorized, 0 shares issued
and outstanding as of June 30, 2001 and December 31, 2000 ........... -- --
Preference stock, ($.01 par), 1,800,000 shares authorized, 0 shares
issued and outstanding as of June 30, 2001 and December 31, 2000 .... -- --
Common stock, ($0.01 par), 16,500,000 shares authorized; 3,069,859 and
3,067,718 shares issued; and 2,390,849 and 2,388,708 shares
outstanding on June 30, 2001 and December 31, 2000 .................. 31 31
Capital in excess of par value ........................................ 161,785 161,755
Retained earnings ..................................................... 28,244 39,389
Treasury stock, at cost, 679,010 shares at June 30, 2001 and December
31, 2000 ............................................................ (31,668) (31,668)
Accumulated other comprehensive loss .................................. (99) (4,512)
--------- ---------
Total stockholders' equity .......................................... 158,293 164,995
--------- ---------
Total liabilities and stockholders' equity .......................... $ 255,260 $ 261,859
========= =========

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

ZAPATA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
2001 2000 2001 2000
(RESTATED) (RESTATED)
-------- -------- -------- --------

Revenues ...................................... $ 19,053 $ 20,873 $38,099 $40,261
Cost of sales ................................. 17,011 21,005 35,024 39,495
-------- -------- -------- --------
Gross Profit (Loss) ...................... 2,042 (132) 3,075 766

Operating Expense:
Product development ........................ -- 971 -- 1,494
Selling, general and administrative ........ 3,824 3,966 6,804 8,185
Consulting (income) expense ................ -- (1,078) -- 1,057
Contract termination settlement ............ -- -- (403) --
-------- -------- -------- --------
Total Operating Expenses ............. 3,824 3,859 6,401 10,736
-------- -------- -------- --------
Operating Loss ................................ (1,782) (3,991) (3,326) (9,970)
-------- -------- -------- --------

Other Income (Expense):
Interest income, net ....................... 700 2,575 1,670 3,933
Realized loss on non-investment grade
securities ............................... (10,006) -- (10,923) --
Impairment of long-lived assets ............ (232) -- (232) --
Other (expense) income, net ................ (12) 115 9 (4)
-------- -------- -------- --------
(9,550) 2,690 (9,476) 3,929
-------- -------- -------- --------
Loss Before Income Taxes and Minority Interest (11,332) (1,301) (12,802) (6,041)
-------- -------- -------- --------

Benefit from income taxes ..................... 1,213 462 1,362 2,112
Minority interest in net (loss) income of
consolidated subsidiary .................... 173 429 336 846
-------- -------- -------- --------
Net Loss ...................................... $ (9,946) $ (410) $(11,104) $(3,083)
======== ======== ======== ========

Per Share Data (Basic and Diluted):
Net Loss Per Share ......................... $ (4.16) $ (0.17) $ (4.65) $(1.29)
======== ======== ======== ========
Weighted Average Common Shares and Common Share
Equivalents Outstanding ....................... 2,391 2,389 2,390 2,389
======== ======== ======== ========

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

ZAPATA CORPORATION
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

SIX MONTHS ENDED
JUNE 30,
2001 2000
(RESTATED)
-------- --------

Cash flows provided by operating activities:
Net loss ............................................. $(11,104) $ (3,083)
-------- --------
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization ........................ 4,997 5,053
(Gain) loss on disposal of assets .................... (132) 94
Minority interest in net loss of consolidated
subsidiary ......................................... (336) (846)
Deferred income taxes ................................ (1,662) --
Consulting expense ................................... -- 1,057
Impairment of long-lived assets ...................... 232 --
Realized loss on non-investment grade securities ..... 10,923 --
Changes in assets and liabilities:
Accounts receivable, net ........................... 3,192 8,385
Inventories ........................................ 1,341 (1,133)
Prepaid expenses and other current assets .......... 304 (112)
Accounts payable and accrued liabilities ........... 1,073 1,716
Other assets and liabilities ....................... (870) (4,207)
-------- --------
Total adjustments ................................ 19,062 10,007
-------- --------
Net cash provided by operating activities .......... 7,958 6,924
-------- --------
Cash flows provided by investing activities:
Proceeds from production payment receivable .......... -- 1,673
Proceeds from disposition of assets .................. 290 --
Purchase of long-term investments .................... -- (22,683)
Proceeds of sale of long-term investments ............ 2,172 --
Proceeds of maturities of short-term investments ..... 55,384 44,370
Purchase of short-term investments ................... (20,077) (13,701)
Capital expenditures ................................. (502) (6,495)
-------- --------
Net cash provided by investing activities .......... 37,267 3,164
-------- --------
Cash flows used in financing activities:
Net repayments of long-term obligations .............. (533) (578)
-------- --------
Net cash used in financing activities .............. (533) (578)
-------- --------
Net increase in cash and cash equivalents ............... 44,692 9,510
Cash and cash equivalents at beginning of period ........ 19,237 72,751
-------- --------
Cash and cash equivalents at end of period .............. $ 63,929 $ 82,261
======== ========

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

ZAPATA CORPORATION
NOTES TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. SUMMARY OF OPERATIONS AND BASIS OF PRESENTATION

The unaudited condensed consolidated financial statements included
herein have been prepared by Zapata Corporation ("Zapata" or the "Company"),
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. The financial statements reflect all adjustments that are,
in the opinion of management, necessary to fairly present such information. All
such adjustments are of a normal recurring nature. Although Zapata believes that
the disclosures are adequate to make the information presented not misleading,
certain information and footnote disclosures, including a description of
significant accounting policies normally included in financial statements
prepared in accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations. These financial
statements should be read in conjunction with the financial statements and the
notes thereto included in Zapata's 2000 Annual Report on Form 10-K filed with
the Securities and Exchange Commission. The results of operations for the
periods from January 1, 2001 to June 30, 2001 are not necessarily indicative of
the results for any subsequent quarter or the entire fiscal year ending December
31, 2001.

BUSINESS DESCRIPTION

Zapata is a holding company which since April 1998 has, through its
subsidiaries, operated primarily in two industry segments: the food segment and
the Internet segment. Zapata operates its food related businesses indirectly
through its 61% owned subsidiary, Omega Protein Corporation ("Omega Protein" or
"Omega") (formerly known as Marine Genetics Corporation and Zapata Protein,
Inc.), and its 38% owned company, Viskase Corporation ("Viskase") (formerly
known as Envirodyne Industries, Inc.). Zapata has operated its Internet related
businesses directly and indirectly through its wholly owned subsidiary, Charged
Productions, Inc. ("Charged Productions") (formerly known as Zap Internet
Corporation), and its 98% owned subsidiary, Zap.Com Corporation ("Zap.Com").
Zap.Com was in the Internet industry and its stock is traded on the
over-the-counter market on the NASD's OTC Bulletin Board under the symbol
"ZPCM". Omega Protein is engaged in the marine protein business and its stock is
traded on the New York Stock Exchange ("NYSE") under the symbol "OME." Viskase
is engaged in the food packaging business and its stock is traded in the Pink
Sheets under the symbol "VCIC."

In April 1998, the Company acquired the Internet based magazines Word
and Charged. Subsequently, these webzines were consolidated into Charged
Productions, Inc., ("Charged Productions" or "Charged"), a multi-media
production company which operated www.charged.com, www.sissyfight.com and
www.pixeltime.com. During December 2000, the Company made a strategic decision
to cease the operations of Charged Productions. During April 2001, the Company
completed its sale of Charged Productions to Charged LLC (a limited liability
corporation comprised of former Charged Productions employees) whereby Charged
Productions received 20% of the outstanding equity of Charged LLC in exchange
for certain remaining assets of the company.

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 Zap.Com and its
stockholders to cease all Internet operations. Since that date, Zap.Com has
terminated all salaried employees, all signed agreements with web site owners
who joined the ZapNetwork, and all third party contractual relationships entered
into in connection with its Internet business.

NOTE 2. SIGNIFICANT ACCOUNTING POLICIES

INVENTORIES

Inventory is stated at the lower-of-cost-or market. Omega Protein's fishing
season runs from mid-April to the first of November in the Gulf of Mexico and
from the beginning of May into December in the Atlantic. Government regulations
preclude Omega from fishing during the off-season.

Omega Protein's inventory cost system considers all costs associated with
an annual fish catch and its processing, both variable and fixed and including
both costs incurred during the off-season and during the fishing season. Omega's
costing system allocates cost to inventory quantities on a per unit basis as
calulated by a formula that considers total estimated inventoriable costs for a
fishing season (including off-season costs) to total estimated fish catch and
the relative fair market value of the individual products produced. Omega
Protein adjusts the cost of sales, off-season costs and inventory balances at
the end of each quarter based on revised estimates of total inventoriable costs
and fish catch. Omega Protein's lower-of-cost-or market-value analyses at
year-end and at interim periods compares the total estimated per unit production
cost of Omega's expected production to the projected per unit market prices of
the products. The impairment analyses involve estimates of, among other things,
future fish catches and related costs, and expected commodity prices for the
fish products. These estimates, which Omega Protein's management believes are
resonable and supportable, involve estimates of future activities and events
which are inherently imprecise and for which actual results may differ.

During the off-seasons, in connection with the upcoming fishing seasons,
Omega incurs costs (i.e. plant and vessel related labor, utilities, rent and
depreciation) that are directly related to Omega's infrastructure. These costs
accumulate in inventory and are applied as elements of the cost of production
of Omega's products throughout the fishing season ratably based on Omega's
monthly fish catch and the expected total fish catch for the season.

RECLASSIFICATION

During the period ended June 30, 2001, reclassifications of prior
period information have been made to conform to the current year presentation.

NOTE 3. UNCONSOLIDATED AFFILIATES

Pursuant to the asset purchase agreement between Charged Productions
and Charged LLC, Charged Productions accounts for its investment in Charged LLC
under the cost method as it does not exercise significant influence over the
operations of Charged LLC. However, as Charged Productions is unsure of Charged
LLC's ability to generate positive cash flows from its operations, the
investment was written down to zero during the second quarter of 2001.

In August 1995, Zapata acquired 4,189,298 shares of Viskase common
stock, representing 31% of the then outstanding common stock of Viskase, for
$18.8 million. In June and July 1996, Zapata purchased 1,688,006 additional
shares of Viskase common stock. As a result of these transactions, Zapata
currently owns approximately 38% of the outstanding shares of Viskase common
stock.

Because Zapata has not guaranteed any obligations and is not
committed to provide any financial support to Viskase, Zapata only recorded its
equity in Viskase's loss to the extent that it reduced Zapata's net investment
in Viskase to zero. At June 30, 2001, the fair value of Zapata's investment in
Viskase was approximately $8.8 million based on the closing price of Viskase on
that day. This calculation does not consider any discount that may be incurred
if the Company sold a large block of Viskase stock.

NOTE 4. STOCKHOLDERS' EQUITY

On January 30, 2001, the Company effected a one-for-ten reverse split
of its outstanding shares of common stock resulting in there then being
approximately 2.4 million common shares outstanding. In addition, the Company's
authorized shares were reduced to approximately 16.5 million common shares,
200,000 preferred shares and 1.8 million preference shares. The preferred stock
and preference shares are undesignated "blank check" shares. All share and per
share amounts herein have been retroactively restated for the reverse split.

NOTE 5. COMMITMENTS AND CONTINGENCIES

LITIGATION

On April 30, 1999, a state district court in Houston, Texas entered a
judgment against Zapata in a lawsuit brought by a former employee that was
commenced on April 1, 1998. The former employee claims that he was entitled to
the value of options for approximately 240,000 shares (24,000 shares subsequent
to the reverse stock split effected January 30, 2001) of Zapata stock, which he
alleges should have been issued to him in 1998 pursuant to his employment
agreement with Zapata. The judgment against Zapata was for approximately $3.45
million, which includes prejudgment interest. Zapata secured a letter of credit
as a post judgment security and on July 29, 1999 perfected its appeal with the
Court of Appeal, for the Fourteenth District of Texas at Houston. On March 15,
2001, the Court of Appeals for the Fourteenth District at Houston issued an
opinion reversing the jury verdict in favor of the former employee and rendering
judgment in favor of the Company. On April 16, 2001, the former employee filed a
motion for a rehearing The Company has responded to the motion and it is
currently under review by the Court of Appeals. The Company continues to believe
that it has a meritorious defense to all or a substantial portion of the
plaintiff's claim. However, there can be no assurance that the Company will be
successful with respect to the Court of Appeals' determination of the motion for
a rehearing or if the decision is further appealed and the Texas Supreme Court
decides to hear the appeal.

The Company is involved in litigation to claims arising out of its
past and current operations in the normal course of its business. The Company
maintains coverage against such potential ordinary course claims in an amount
that it believes to be adequate. While the results of any ultimate resolution
can not be predicted, in the opinion of the Company's management, based on
discussion with counsel, any losses resulting from these matters will not have a
material adverse effect on Zapata's results of operations, cash flows or
financial position.

ENVIRONMENTAL

The Company is subject to various possible claims and lawsuits
regarding environmental matters. Management believes that costs, if any, related
to these matters will not have a material adverse effect on the results of
operations, cash flows or financial position of the Company.

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment is summarized as follows:

JUNE 30, 2001 DECEMBER 31, 2000
(UNAUDITED)
------------- -----------------
(IN THOUSANDS)

Land $ 5,390 $ 5,390
Plant assets 69,524 69,772
Fishing vessels 72,925 72,933
Furniture and fixtures 2,178 2,466
Other 460 --
-------- --------
Total property and equipment 150,477 150,561
Less: accumulated depreciation 65,247 61,187
-------- --------
Property and equipment, net $ 85,230 $ 89,374
-------- --------

NOTE 7. INVENTORY

Inventory is summarized as follows:

JUNE 30, 2001 DECEMBER 31, 2000
(UNAUDITED
and RESTATED)
------------- -----------------
(IN THOUSANDS)

Fish meal $10,541 $19,474
Fish oil 5,708 7,590
Fish solubles 769 938
Off season cost 13,813 3,982
Materials and supplies 4,860 5,048
------- -------
Total inventory $35,691 $37,032
======= =======

During the third and fourth quarter of Fiscal 2000, the Company provided
$18.1 million in write-downs of the carrying value of its fish meal and fish oil
product inventories. Those inventory write-downs were made necessary due to
market prices the Company either had received or expected to receive for its
products which had declined to a level below the Company's cost basis in those
products. Product inventories at June 30, 2001 were stated at the lower of cost
or market and no further write-downs were required.

NOTE 8. LONG-TERM INVESTMENTS -- AVAILABLE FOR SALE

As of June 30, 2001, the Company held approximately $5.4 million in
available for sale corporate debt. These bonds are considered non-investment
grade and were purchased at a large discount to par value. The risk of default
on the bonds is considered high. Available for sale securities consist of the
following at June 30, 2001 and December 31, 2000:

JUNE 30, 2001 AMORTIZED MARKET VALUE UNREALIZED
COST BASIS JUNE 30, 2001 GAIN (LOSS)
---------- ------------- -----------

Decora Industries, Inc. $ 509 $ 509 $ --
Pueblo Xtra, Inc. 3,984 3,984 --
Franks Nursery & Crafts, Inc. 220 220 --
Newcor, Inc 667 667 --
------ ------ -----
Total $5,380 $5,380 $ --
====== ====== =====

DECEMBER 31, 2000 AMORTIZED MARKET VALUE UNREALIZED
COST BASIS DECEMBER 31, 2000 GAIN (LOSS)
---------- ----------------- -----------

Decora Industries, Inc. $ 1,273 $ 1,273 $ --
Pueblo Xtra, Inc. 12,589 8,854 (3,735)
Franks Nursery & Crafts, Inc. 368 394 26
Newcor, Inc. 1,954 1,250 (704)
Davel Communications, Inc. 1,625 1,625 --
-------- -------- --------
Total $ 17,809 $ 13,396 $ (4,413)
======== ======== ========

As of December 31, 2000, management deemed the decline in the fair
value of the Company's investment in Decora Industries Inc. ("Decora") to be
"other than temporary" following Decora's announcement that it had filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. In connection with this
impairment, the Company recognized an additional loss on the investment during
the first quarter of 2001 of approximately $764,000 resulting in a remaining
book value of approximately $509,000. As the market value of this investment was
unchanged as of June 30, 2001, no additional impairment charges were incurred
during the second quarter. A valuation allowance on the deferred tax asset for
anticipated future tax deductions associated with realized losses on this
investment has been established as it is more likely than not that there will be
insufficient capital gains such that the Company will be able to deduct these
capital losses in future periods or that this investment will be sold on a
timely basis to benefit from a capital loss carryback.

As of June 30, 2001, management deemed the decline in the fair value of
the Company's investment in Pueblo Xtra, Inc. ("Pueblo") to be "other than
temporary" based on adverse financial trends and intense competitive pressures
on Pueblo. In connection with this impairment, the Company recognized a loss on
the investment of approximately $8.6 million resulting in a remaining book value
of approximately $4.0 million. A valuation allowance on the deferred tax asset
for anticipated future tax deductions associated with realized losses on this
investment has been established as it is more likely than not that there will be
insufficient capital gains such that the Company will be able to deduct these
capital losses in future periods or that this investment will be sold on a
timely basis to benefit from a capital loss carryback.

As of March 31, 2001, management deemed the decline in the fair value
of the Company's investment in Franks Nursery & Crafts, Inc. ("Franks" or Franks
Nursery") to be "other than temporary" following Franks Nursery's announcement
that it had filed for protection under Chapter 11 of the U.S. Bankruptcy Code.
In connection with this impairment, during the first quarter of 2001, the
Company recognized a loss on the investment of approximately $153,000 resulting
in a remaining book value of approximately $220,000. As the market value of
these investments was unchanged as of June 30, 2001, no additional impairment
charges were incurred during the

second quarter. A valuation allowance on the deferred tax asset for anticipated
future tax deductions associated with realized losses on this investment has
been established as it is more likely than not that there will be insufficient
capital gains such that the Company will be able to deduct these capital losses
in future periods or that this investment will be sold on a timely basis to
benefit from a capital loss carryback.

During June 2001, the Company entered into an agreement to sell its
investment in Newcor, Inc. This transaction was settled in July, 2001. In
connection with this sale, the Company recognized a loss of approximately $1.3
million during the quarter ended June 30, 2001 to write this investment down to
market value. The realized capital loss on sale of this investment will be
carried back to the fiscal 1998 tax return resulting in a benefit of
approximately $455,000.

In July 2000, the Company purchased participation interests in the
bank debt of Davel Communications, Inc. and Davel Financing, LLC ("Davel").
Davel's bank debt consists of a $245 million facility, including a $110 million
tranche A term loan, a $93.8 million tranche B term loan and a $ 45 million
revolving credit facility. The Company's participation interest consists of an
approximately 12.4% interest in the tranche A term loan, a 6.3% interest in the
tranche B term loan and a 12.4% interest in the revolving credit facility. The
Company paid or committed a total of approximately $5.2 million for its
participation interest in the Davel bank debt. On February 6, 2001 the Company
entered into an agreement to sell its interest in Davel for approximately $1.6
million. This transaction closed during the second quarter of 2001 resulting in
a capital loss of approximately $3.8 million. Approximately $3.7 million of this
amount was recognized in the fourth quarter of fiscal 2000 upon the Company's
agreement to sell this investment. The realized capital loss on sale of this
investment will be carried back to the fiscal 1998 tax return resulting in a
benefit of approximately $1.3 million.

NOTE 9. CONTRACT TERMINATION SETTLEMENT

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

NOTE 10. COMPREHENSIVE LOSS

The components of other comprehensive loss are as follows:

FOR THE THREE FOR THE THREE
MONTHS ENDED MONTHS ENDED
JUNE 30, 2001 JUNE 30, 2000
(RESTATED)

(IN THOUSANDS)

Net loss $(9,946) $ (410)

Unrealized loss on securities -- (1,629)
------- -------
Total Comprehensive loss $(9,946) $(2,039)
======= =======

FOR THE SIX FOR THE SIX
MONTHS ENDED MONTHS ENDED
JUNE 30, 2001 JUNE 30, 2000
(RESTATED)
(IN THOUSANDS)

Net loss $(11,104) $ (3,083)
Unrealized loss on securities -- (2,274)
Minimum pension liability adjustment 5 --
-------- --------
Total Comprehensive loss $(11,099) $ (5,357)
======== ========

NOTE 11. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION

Zapata primarily operates in two industry segments: the food segment,
consisting of Omega Protein and Viskase, and the Company's Internet segment,
consisting of Charged Productions and Zap.Com. Subsequent periods' Internet
segment information will consist exclusively of any activities of Zap.Com.

OPERATING
INCOME TOTAL
REVENUES (LOSS) ASSETS
(RESTATED) (RESTATED)
-------- ------ ------

THREE MONTHS ENDED JUNE 30, 2001
Food $ 18,993 $ (652) $ 161,966
Internet 60 146 2,422
Corporate -- (1,276) 90,872
--------- --------- ---------
$ 19,053 $ (1,782) $ 255,260
========= ========= =========
THREE MONTHS ENDED JUNE 30, 2000
Food $ 20,873 $ (1,861) $ 175,893
Internet -- (1,149) 6,621
Corporate -- (981) 112,588
--------- --------- ---------
$ 20,873 $ (3,991) $ 295,102
========= ========= =========

OPERATING TOTAL
REVENUES LOSS ASSETS
(RESTATED) (RESTATED)
--------- --------- ---------

SIX MONTHS ENDED JUNE 30, 2001
Food $ 38,015 $ (1,150) $ 161,966
Internet 84 (450) 2,422
Corporate -- (1,726) 90,872
--------- --------- ---------
$ 38,099 $ (3,326) $ 255,260
========= ========= =========
SIX MONTHS ENDED JUNE 30, 2000
Food $ 40,260 $ (3,143) $ 175,893
Internet 1 (4,858) 6,621
Corporate -- (1,969) 112,588
--------- --------- ---------
$ 40,261 $ (9,970) $ 295,102
========= ========= =========

NOTE 12. ACCOUNTING PRONOUNCEMENTS

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

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

Note 13, Restatement
- --------------------

The Company's financial statements as of and for the three months and
six month periods ended June 30, 2001 have been restated from amounts previously
reported to reflect Omega's re-characterization of a second quarter charge as a
selling, general and administrative expense as opposed to a component of
Inventory production cost, as previously reported. This expense was recorded to
appropriately value receivables due from one of Omega's insurers as a result of
that insurer's recent bankruptcy. The following tables show the Condensed
Consolidated Statement of Operations and Balance Sheet line items that have been
restated.

<Table>
<Caption>
Condensed Consolidated Statement of Operations
Three Months Ended June 30, 2001
As Previously
Reported Restatements As Restated
----------------- ---------------- ---------------

Cost of sales $ 17,077 $ (66) $ 17,011
Selling, general and administrative 2,968 856 3,824
Benefit from income taxes 929 284 1,213
Minority interest in net loss
of consolidated subsidiary (27) 200 173
Net Loss (9,640) (306) (9,946)
Net Loss Per Share (Basic and Diluted) (4.03) (0.13) (4.16)
</Table>

<Table>
<Caption>
Condensed Consolidated Statement of Operations
Six Months Ended June 30, 2001
As Previously
Reported Restatements As Restated
----------------- ---------------- ---------------

Cost of sales $ 35,090 $ (66) $ 35,024
Selling, general and administrative 5,948 856 6,804
Benefit from income taxes 1,078 284 1,362
Minority interest in net loss
of consolidated subsidiary 136 200 336
Net Loss (10,798) (306) (11,104)
Net Loss Per Share (Basic and Diluted) (4.52) (0.13) (4.65)
</Table>

<Table>
<Caption>
Condensed Consolidated Balance Sheet
at June 30, 2001
As Previously
Reported Restatements As Restated
----------------- ---------------- ---------------

Inventories, net $ 36,482 $ (791) $ 35,691
Other assets 34,043 285 34,328
Minority interest 51,976 (200) 51,776
Retained earnings 28,550 (306) 28,244
</Table>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Forward-looking statements in this Form 10-Q, future filings by the
Company with the Securities and Exchange Commission ("Commission"), the
Company's press releases and oral statements by authorized officers of the
Company are intended to be subject to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, including without
limitation those identified from time to time in press releases and other
communications with stockholders by the Company and the filings made with the
Commission by the Company, Omega Protein Corporation ("Omega Protein" or
"Omega"), ZAP.COM Corporation ("Zap.Com"), Viskase Companies, Inc. ("Viskase")
and the Company, such as those disclosed under the caption "Significant Factors
That Could Affect Future Performance and Forward-Looking Statements" appearing
in Item 2 "Management's Discussion and Analysis of Financial Condition and
Results of Operation" of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 2000 filed with the Commission or elsewhere in this
report. The Company believes that forward-looking statements made by it are
based on reasonable expectations. However, no assurances can be given that
actual results will not differ materially from those contained in such
forward-looking statements.

GENERAL
Zapata Corporation ("Zapata" or the "Company") is a holding company,
which since April 1998 has, through its subsidiaries, operated primarily in two
industry segments: the food segment and the Internet segment. Zapata operates
its food related businesses indirectly through its 61% owned subsidiary, Omega,
and its 38% owned company, Viskase. Zapata has operated its Internet related
businesses directly and indirectly through its wholly owned subsidiary, Charged
Productions, and its 98% owned subsidiary, Zap.Com.

In December 2000, the Company made a strategic decision to cease the
operations of Charged Productions, Inc. ("Charged Productions") a multi-media
production company that operated www.charged.com, www.sissyfight.com, and
www.pixeltime.com. During April 2001, the Company completed its sale of Charged
Productions to a company formed by former employees whereby the Company received
20% of the outstanding equity in that company in exchange for certain remaining
assets of Charged Productions.

On December 15, 2000, the Zap.Com Board of Directors concluded that
Zap.Com's operations were not likely to become profitable in the foreseeable
future and therefore, it was in the best interest of the Company and its
stockholders to cease all Internet operations. Since that date, Zap.Com has
terminated all salaried employees and all signed agreements with web site owners
who joined the ZapNetwork. In addition, Zap.Com has terminated all third party
contractual relationships entered into in connection with its Internet business.

RESULTS OF OPERATIONS

Three Months Ended June 30, 2001 and 2000

Zapata experienced a consolidated net loss of approximately $9.9
million for the quarter ended June 30, 2001 compared to net loss of
approximately $410,000 for the quarter ended June 30, 2000. The loss was
primarily attributable to other than temporary losses on non-investment grade
securities held by the Company and losses at Omega Protein.

Revenues. For the three-months ended June 30, 2001, Zapata's revenues
decreased approximately 8.7% from the quarter ended June 30, 2000. The decrease
in revenues was attributable to a 30.2% decrease in sale volumes for Omega
Protein's fish meal during the current quarter as compared to the quarter ended
June 30, 2000. Fish meal prices and fish oil prices increased 18.1% and 7.2%
respectively during the current quarter as compared to the quarter ended June
30, 2000.

Cost of Sales. Zapata's consolidated cost of sales for the quarter
ended June 30, 2001 was $17.0 million, a $4.0 million decrease from $21.0
million for the quarter ended June 30, 2000. Cost of sales primarily includes
Omega Protein's direct fishing and processing costs. As a percent of revenues,
cost of sales was 89.3% for the quarter ended June 30, 2001 as compared to
100.6% for the quarter ended June 30, 2000. The decrease in cost of sales as a
percent of revenues was due primarily to a 30.2% decrease in sales volumes for
the Omega Protein's fish meal, along with an 18.1% and 7.2% increase in the
Omega Protein's selling prices for fish meal and fish oil, respectively.
(RESTATED)

Product Development. There were no product development costs for the
three months ended June 30, 2001, as compared to $971,000 of such costs for the
three months ended June 30, 2000. This decrease is due to the decision to
terminate the Company's Internet operations in 2000.

Selling, General, and Administrative Expenses. For the quarter ended
June 30, 2001, Zapata's consolidated selling, general and administrative
expenses decreased $142,000 or 3.6% compared to the quarter ended June 30, 2000.
This decrease was primarily due to the termination of the Internet operations
offset by Omega Proteins recognition of a provision of $856,000 related to
receivables due from an insurance company that were deemed uncollectible due to
their bankruptcy filing. (RESTATED)

Consulting Income. On October 20, 1999, Zap.Com granted to American
Internetwork Sports Company, LLC stock warrants in consideration for sports
related consulting services. Pursuant to the termination of the Internet
operations, these warrants became fully vested on December 15, 2000. As a
result, Zap.Com incurred no additional consulting expense for the three months
ended June 30, 2001. For the three months ended June 30, 2000, the Company
recognized $1.1 million in income to reflect the decline in the fair market
value of Zap.Com's common stock.

Interest Income, Net. Interest income, net decreased by $1.9 million
for the quarter ended June 30, 2001 as compared to the quarter ended June 30,
2000. The decrease was primarily due to lower interest rates on cash, cash
equivalents and short-term investments as compared to the previous quarter in
addition to a reduction in cash available for investment.

Realized Loss On Non-Investment Grade Securities. Realized loss on
non-investment grade securities for the quarter ending June 30, 2001 consisted
mainly of the write-down to market value of the non-investment grade debt held
in the Company's available for sale portfolio. The impairment for that portion
of the unrealized loss of an individual security is required to be recognized as
a realized loss in the accounting period when the holder determines that such
portion of the decline in the market value is other than temporary. Temporary
declines in the market value of Zapata's debt securities held to maturity do not
affect Zapata's carrying value of such securities, since Zapata has the ability
and the intent to hold these investments to maturity, at which time their full
face value is expected to be received at no loss to Zapata. Temporary
fluctuations in the market value of available for sale securities are reflected
in stockholders' equity as unrealized appreciation or depreciation net of
applicable deferred federal income taxes; however, any decline in the value of
the security below its cost considered to be "other than temporary" is reflected
as a realized loss in Zapata's income statement. Once an investment is written
down to reflect an "other than temporary" decline, the write-down establishes a
new cost basis for the security.

For the quarter ended June 30, 2001, Zapata had an other than temporary
write-down related to Pueblo Xtra, Inc.(Pueblo). Management deemed the decline
in the fair value of the Company's investments in Pueblo to be "other than
temporary" based on adverse financial trends and intense competitive pressures
on Pueblo. In connection with this impairment, the Company recognized a loss on
the investment of approximately $8.6 million resulting in a remaining book value
of approximately $4.0 million.

In addition to the other than temporary write-down on Pueblo, the
Company sold its investment in Newcor, Inc. in July 2001. In connection with
this sale, the Company recognized a loss of approximately $1.3 million. In
addition, during the second quarter of 2001, the Company completed its
transaction to sell its interest in Davel Communications, Inc. which resulted in
an additional loss of $120,000.

Impairment of Long-Lived Assets. For the quarter ended June 30, 2001,
the impairment of long-lived assets consisted mainly of the write-down of
Charged Productions, Inc.'s investment in Charged Productions LLC to zero. This
write-down resulted in a charge of $208,000 for the quarter ended June 30, 2001.
There was no impairment of long-lived assets for the comparable quarter of the
previous year.

Six Months Ended June 30, 2001 and 2000

Zapata experienced a consolidated net loss of approximately $11.1
million for the six months ended June 30, 2001 compared to net loss of
approximately $3.1 for the six months ended June 30, 2000. The loss was
primarily attributable to other than temporary losses on non-investment grade
securities and losses at Omega Protein, partially offset by interest income
earned by Zapata.

Revenues. For the six months ended June 30, 2001, Zapata's revenues
decreased approximately 5.4% from the quarter ended June 30, 2000. This decrease
was attributable to a 22.0% lower sales volume for Omega Protein's fish meal
during the current six months ended June 30, 2001 as compared to the six months
ended June 30, 2000. The decrease in revenues due to lower fish meal sale
volumes was partially offset by a 15.2% and a 1.2% increase in fish meal and
fish oil prices during the six months ended June 30, 2001, respectively.

Cost of Sales. Zapata's consolidated cost of sales for the quarter
ended June 30, 2001 was $35.0 million, a $4.5 million decrease from $39.5
million for the six months ended June 30, 2000. Cost of sales primarily includes
Omega Protein's direct fishing and processing costs. As a percent of revenues,
cost of sales was 91.9% for the six months ended June 30, 2001 as compared to
98.1% for the six months ended June 30, 2000. The decrease in cost of sales, as
a percentage of revenue is due primarily to a 15.2% and a 1.2% increase in fish
meal and fish oil prices, respectively. Per ton cost of sales was 2.6% higher
for the six month period ended June 30, 2001 as compared to the six month period
ended June 30, 2000, due primarily to higher cost inventories carried forward
from Fiscal 2000. (RESTATED)

Product Development. There were no product development costs for the
six months ended June 30, 2001, as compared to $1.5 million of such costs for
the six months ended June 30, 2000. This decrease is due to the decision to
terminate the Company's Internet operations in 2000.

Selling, General, and Administrative Expenses. For the six months ended
June 30, 2001, Zapata's consolidated selling, general and administrative
expenses decreased $1.4 million or 16.9% compared to the six months ended June
30, 2000. This decrease was primarily due to the termination of the Internet
operations and a reduction in employee staff and related employee costs at Omega
Protein, offset by Omega Proteins recognition of a provision of $856,000
related to receivables due from an insurance company that were deemed
uncollectible due to their bankruptcy filing. (RESTATED)

Consulting Expenses. On October 20, 1999, Zap.Com granted to American
Internetwork Sports Company, LLC stock warrants in consideration for sports
related consulting services. As a result of the termination of the Company's
Internet operations, these warrants became fully vested on December 15, 2000,
and Zap.Com incurred no additional consulting expense for the six months ended
June 30, 2001. For the six months ended June 30, 2000, the Company recognized
$1.1 million in consulting expense to reflect the increase in the fair market
value of Zap.Com's common stock.

Contract Termination Settlement. Based on Zap.Com's decision to
terminate Internet operations, certain contracts entered into by Zap.Com during
its development stage were deemed to have no future value to Zap.Com.
Accordingly, Zap.Com recognized the expenses and associated accrued liabilities
for these contracts in the fourth quarter of 2000. In March of 2001, Zap.Com
favorably settled its disputes over two of its contracts. Accordingly, Zap.Com
reversed previous accruals of $403,000 as income resulting from the settlement
amounts being less than the associated accrued liabilities. There were no
associated charges or benefits for the six months ended June 30, 2000.

Interest Income, net. Interest income, net decreased by $2.3 million
for the six months ended June 30, 2001 as compared to the six months ended June
30, 2000. The decrease was primarily due to lower interest rates on cash, cash
equivalents and short-term investments as compared to the previous quarter in
addition to a reduction in cash available for investment.

Realized Loss On Non-Investment Grade Securities. Realized loss on
non-investment grade securities for the six months ending June 30, 2001
consisted mainly of the write-down to market value of the non-investment grade
debt held in the Company's available for sale portfolio.

For the six months ended June 30, 2001, Zapata had other than temporary
write-downs related to Pueblo, Franks Nursery and Decora. Management deemed the
decline in the fair value of the Company's investments in Pueblo to be "other
than temporary" based on adverse financial trends and intense competitive
pressures on the company. In connection with this impairment, the Company
recognized a loss of approximately $8.6 million. Management deemed the decline
in the fair value of the Company's investments in Franks Nursery and Decora to
be "other than temporary" following both companies' announcements that they had
filed for protection under Chapter 11 of the U.S. Bankruptcy Code. In connection
with these impairments, the Company recognized a loss of approximately $917,000.

In addition to the other than temporary write-down on Pueblo, the
Company sold its investment in Newcor, Inc. in July 2001. In connection with
this anticipated sale, the Company recognized a loss of approximately $1.3
million to adjust the investment to fair market value at June 30, 2001. In
addition, during the second quarter of 2001, the Company completed its
transaction to sell its interest in Davel Communications, Inc. which resulted in
an additional loss of $120,000.

Impairment of Long-Lived Assets. For the six months ended June 30,
2001, the impairment of long-lived assets consisted mainly of the write-down of
Charged Productions, Inc.'s investment in Charged LLC to zero. This write-down
resulted in a charge of $208,000 for the six months ended June 30, 2001. There
was no impairment of long-lived assets for the comparable six months of the
previous year.

LIQUIDITY AND CAPITAL RESOURCES

Prior to Omega Protein's 1998 initial public offering, Zapata, as the
sole stockholder of Omega Protein, caused cash to be moved between it and Omega
Protein as each company had cash needs. As a result of the offering, Zapata and
Omega Protein are now separate public companies. Similarly, since Zapata's
distribution of Zap.Com shares to Zapata stockholders in November 1999, Zapata
and Zap.Com are separate public companies. Accordingly, the capital resources
and liquidity of Omega Protein and Zap.Com are legally independent of Zapata.
The working capital and other assets of Omega Protein and Zap.Com are dedicated
to their respective operations and are not expected to be readily available for
the general corporate purposes of Zapata, except for any dividends that may be
declared and paid to their respective stockholders. For the foreseeable future,
Zapata does not expect to receive cash dividends on its Omega Protein or Zap.Com
shares.

Zapata's current source of liquidity is its cash, cash equivalents and
short-term investments and the interest income it earns on its investments.
Zapata's investments consist of U.S. Government agency securities, cash
equivalents and non-investment grade debt. At June 30, 2001, the Company's cash,
cash equivalents and short-term investments were $84.0 million (including $16.0
million attributable to Omega Protein) as compared to $96.0 million (including
$16.9 million attributable to Omega Protein) as of the same period in the
previous fiscal year.

Through June 2000, Zapata had invested its excess cash reserves in U.S.
Government agency securities and cash equivalents. In June 2000, Zapata
management determined that the non-investment grade debt market provided an
opportunity for the Company to meet the funding requirements of its Internet
business and corporate overhead activities while leveraging its available funds
for future acquisitions. Specifically, Zapata management believed that this debt
would yield sufficient income to support its direct operations and free-up
capital otherwise committed for this purpose for deployment in future
acquisitions. The Company's future investment income related to non-investment
grade securities is expected to decline due to the sale of certain
non-investment grade securities and may decline further due to additional sales
of such securities. In addition, the Company suffered losses in principal due to
sales of non-investment grade securities and may suffer additional losses in
principal if the Company decides to sell other securities that have declined in
market value.

In addition to its cash, cash equivalents, investments and interest
income, Zapata has a potential secondary source of liquidity in its publicly
traded securities of Omega Protein, Zap.Com and Viskase. Zapata's holdings of
Omega Protein and Zap.Com stock constitute "restricted stock" under SEC Rule 144
and may only be sold in the public market pursuant to an effective registration
statement under the Securities Act of 1933 and under any required state
securities laws or pursuant to an available exemption. Zapata's Viskase holdings
may also be considered to be "restricted securities" under Rule 144. These and
other securities law restrictions could prevent or delay any sale by Zapata of
these securities or reduce the amount of proceeds that might otherwise be
realized there from.

Currently, all of Zapata's equity securities holdings are eligible for
sale under Rule 144. Zapata also has demand and piggyback registration rights
for its Omega Protein and Zap.Com shares and Zapata has registered with the SEC
for resale 1,000,000 shares of Zap.Com common stock. As of the date of this
report, it has not sold any of its Zap.Com shares and there is no assurance that
it will or can sell these shares. Although Zap.Com is publicly traded, the
market for its shares has to date been thin.

At June 30, 2001, Zapata had $15.5 million in consolidated
indebtedness, all of which was Omega Protein's indebtedness. Zapata's liquidity
needs are primarily for operating expenses, litigation and insurance reserves,
possible stock repurchases and acquisitions or investments. The Company also
intends to invest a

significant portion of its cash assets in investments or operating businesses as
soon as practicable. To pay for or fund these acquisitions, Zapata may need to
raise additional capital through the issuance of equity or debt. There is no
assurance, however, that such capital will be available at the time, in the
amounts necessary or with terms satisfactory to Zapata.

In the absence of unforeseen developments, Zapata believes that it has
sufficient liquidity to fund its operating expenses and other operational
requirements at least for the 12 months following the date of this report.

Cash Flows From Operating Activities

Cash provided by operating activities was $8.0 million for the first
six months of 2001, compared to $6.9 million for the same period in 2000. The
increase in cash provided by operation activities was due primarily to the
reduction in inventory purchases and receivable levels at Omega Protein as
compared to the prior period.

Cash Flows From Investing Activities

Cash provided by investing activities was $37.3 million for the first
six months of 2001, compared to $3.2 million for the comparable period in 2000.
The increase of cash provided by investing activities was due primarily to
maturities of short-term investments which were reinvested and are now
classified as Cash and Cash Equivalents. See Item 3 -- "Quantitative and
Qualitative Disclosures About Market Risk."

Cash Flows From Financing Activities

Cash used in financing activities was $533,000 for the first six months
of 2001, compared to $578,000 for the comparable period in 2000. Both uses of
cash were for the repayments of long-term obligations.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company's investment policy is designed to continue to meet
Zapata's liquidity needs while enhancing returns by supplementing its investment
grade securities with non-investment grade debt.

Zapata's investment grade securities include obligations of the U.S.
Government or agencies thereof guaranteed by the U.S. Government, certificates
of deposit and money market deposits. In addition, Omega Protein holds
commercial paper with a rating of A-2 or P-2. Zapata defines non-investment
grade debt to include debt rated BB+ or lower as well as non-rated loans. These
non-investment grade instruments generally involve greater risk than investment
grade securities due to credit considerations and default risks, lack of
liquidity in secondary trading markets and vulnerability to general economic
conditions. The Company generally expects to hold this debt to maturity unless
market conditions or other circumstances warrant the disposition of the debt
prior to such time.

As of June 30, 2001, Zapata held $84.0 million in investment grade
securities. Changes in interest rates affect the investment income the Company
earns on its investment grade securities and, therefore, impacts its cash flows
and results of operations. 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.

As of June 30, 2001, Zapata held $5.4 million in non-investment grade debt.
Changes in interest rates can affect the market value of the Company's
non-investment grade debt. For example, a hypothetical 10% adverse change in the
quoted market prices for this debt would amount to a $540,000 potential decline
in the fair value of these assets as of June 30, 2001. The Company generally
expects to hold this debt to maturity unless market conditions or other
circumstances warrant the disposition of the debt prior to such time.

In the normal course of business, the financial condition of the Company is
exposed to minimal market risk associated with interest rate movements on Omega
Protein's borrowings. A one percent increase or decrease in the levels of
interest rates on variable rate debt would not result in a material change to
the Company's results of operations.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Company is involved in litigation relating to claims arising out of its
past and current operations in the normal course of its business. The Company
maintains insurance coverage against such potential ordinary course claims in an
amount that it believes to be adequate. While the results of any ultimate
resolution cannot be predicted, in the opinion of the Company's management,
based on discussion with counsel, any losses resulting from these matters will
not have a material adverse effect on Zapata's results of operations, cash flows
or financial position.

Environmental Matters

The Company is subject to various possible claims and lawsuits
regarding environmental matters. Management believes that costs, if any, related
to these matters will not have a material adverse affect on the results of
operations, cash flows or financial position of the Company.

ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

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

The Company's Annual Meeting of Stockholders' was held on June 6, 2001.
In connection with the Annual Meeting of Stockholders, the following are the
results of the vote taken on the various matters presented to the Company's
stockholders.

(1) All of the Board's nominees for directors were elected as follows:

For Withhold No Vote
--- -------- -------

Class III Directors: Term ending 2004

Edward S. Glazer 1,947,256 342,178 101,415

Robert V. Leffler, Jr. 2,057,904 231,530 101,415

(2) The proposal to ratify the appointment of PricewaterhouseCoopers LLP as
independent auditors was passed with the following vote:

For Against Abstain No Vote
--- ------- ------- -------

1,234,574 13,044 2,278 1,140,953

ITEM 5. OTHER INFORMATION

On June 11, 2001 the Company's Board of Directors elected John R.
Halldow to the Board of Directors as a Class II director and appointed him to
serve on the Board's audit committee. Mr. Halldow is currently employed as the
Director of Government Relations for Erdman Anthony, an engineering firm, in its
Rochester, New York office. He has held that position since January 1999. Prior
to that time, from 1992 through December 1998, Mr. Halldow served as the Eastern
Regional Manager in the Office of U.S. Representative Bill Paxon, in Victor, New
York. Mr. Halldow has no shareholdings in the Company.

Mr. Halldow was elected to fill the sole vacancy on the Board. Mr.
Halldow qualifies as "independent" under New York Stock Exchange rules governing
audit committees.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits:

11.0 Statement Regarding Computation of Per Share Earnings

(b) Reports on Form 8-K:

None

SIGNATURES

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

ZAPATA CORPORATION (REGISTRANT)

Dated: March 28, 2002 By:/s/ Leonard DiSalvo
--------------------------------------
(Vice President and Chief Financial
Officer)