Note 1. Business and Organization
Zap.Com Corporation (“Zap.Com” or the “Company”) was formed for the purpose of creating and
operating a global network of independently owned websites. Harbinger Group Inc. (the Company’s “Principal Stockholder”) is the holder of approximately 98% of Zap.Com’s outstanding common stock and, prior to its reincorporation
in December 2009, was named Zapata Corporation. Zap.Com has no business operations other than complying with its reporting requirements under the Securities Exchange Act of 1934. Zap.com may search for assets or businesses to acquire so that it may
in the future become an operating company, or it may sell assets and/or liquidate our operations.
On July 9, 2009,
Harbinger Capital Partners Master Fund I, Ltd. (“Master Fund”), Global Opportunities Breakaway Ltd. (“Global Fund”) and Harbinger Capital Partners Special Situations Fund, L.P. (“Special Situations Fund” and, together
with the Master Fund and Global Fund, the “Harbinger Parties”) purchased 9,937,962 shares, or 51.6%, of the Principal Stockholder’s common stock and 757,907 shares, or 1.5%, of Zap.Com’s common stock. This transaction is referred
to as the “2009 Change of Control.” The Harbinger Parties subsequently purchased 740 additional shares of Zap.Com’s common stock and 12,099 additional shares of the Principal Stockholder’s common stock during 2009.
On January 7, 2011, the Principal Stockholder acquired a controlling financial interest in Spectrum Brands Holdings, Inc., a global
consumer products company, from the Harbinger Parties. In exchange, the Principal Stockholder issued 119,909,829 shares of its common stock to the Harbinger Parties. After completing this transaction, the Harbinger Parties hold approximately 93% of
the outstanding common stock of the Principal Stockholder, representing a voting interest of 69% in relation to the existing voting rights of all the Principal Stockholder's common and preferred shareholders.
Management believes that Zap.Com has sufficient resources to satisfy its existing and contingent liabilities and its anticipated
operating expenses for at least the next twelve months.