Exhibit 99.2

Office of the United States Trustee

In re:
      The Kushner-Locke Company

Chapter 11
Case No. LA 01-44828-SB (Administratively Consolidated with
Case Nos. LA 01-44829-SB through LA 01-44831-SB; LA 01-
44833-SB through LA 01-44836-SB; and LA 01-44841-SB)

DEBTOR IN POSSESSION OPERATING REPORT

Page 1 of 2

Report Number:	69
For the Period FROM:	7/1/2007
TO:	7/31/2007

1	Profit and Loss Statement (Accrual Basis Only)
		A.	Related to Business Operations
			Gross Sales		$	—
			Costs Related to Revenues (Film Cost Amortization)
			Gross Profit					—
			Less: Operating Expenses
			Officer Compensation	35,700
			Salaries and Wages — Other Employees	22,500
			Total Salaries and Wages			58,200
			Employee Benefits and Pensions			4,645
			Employer Payroll Taxes/Fees	2,783
			Other Taxes	115
			Total Taxes			2,897
			Rent and Lease Expense (including parking)	4,661
			Distribution/Delivery Expenses	1,016
			Interest Expense
			Insurance
			Automobile Expense/Mileage
			Utilities (incl. Phone, phone equipment, internet)	969
			Depreciation and Amortization
			Business Equipment Leases
			Business Expense reimbursement	315
			Storage Expense	1,255
			Supplies, Office Expenses, Photocopies, etc.	26
			Bad Debts
			Miscellaneous Operating Expenses	1,889
			Total Operating Expenses			75,873
			Net Gain/Loss from Business Operations					(75,873	)
		B.	Not related to Business Operations
			Income
			Interest Income
			Other Non-Operating Revenues			—
			Gross Proceeds on Sale of Assets
			Less: Original Cost of Assets plus expenses of sale
			Net Gain/Loss on Sale of Assets			—
			Total Non-Operating Income					—
			Expenses Not Related to Business Operations
			Legal and Professional Service Fees			12,215
			Other Non-Operating Expenses (Board/Trustee fees)
			Total Non-Operating Expenses					12,215
	NET INCOME/(LOSS) FOR PERIOD						$	(88,088	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 69 Page 2 of 2

2 Aging of Accounts Payable and Accounts Receivable (exclude prepetition accounts payable):

	Accounts		Accounts
	Payable		Receivable
Current Under 30 days				—
Overdue 31-60 days		—		—
Overdue 61-90 days		—
Overdue 91-120 days		—
Overdue Over 121 days		—
Due in the Future				1,386,439
TOTAL		—		1,386,439

3	Statement of Status of Payments to Secured Creditors and Lessors:
	No payments to Secured Creditors or Lessors were paid or payable during the reporting period.
4	Tax Liability
	No tax payments were paid or payable during the reporting period other than payroll taxes shown above.
5	Insurance Coverage

	Carrier/	Amount of		Policy		Premium Paid
	Agent Name	Coverage		Expiration Date		Through Date
Worker’s Compensation (RENEWED)	St. Paul		1,000,000		1/14/2008		1/14/2008
Commercial Property (RENEWED)	St. Paul		2,000,000		2/14/2008		2/14/2008
Errors & Omissions — Library (RENEWED)	St. Paul		3,000,000		3/3/2008		3/3/2008

6 Questions:

A. Has the Debtor in Possession provided compensation to any officers, directors, shareholders, or other principals without the approval of the Office of the United States Trustee?

o Yes      Explain:

x No

B. Has the Debtor in Possession, subsequent to the filing of the petition, made any payments on its prepetition unsecured debt, except as authorized by the Court?

o Yes     Explain:

x No

7	Statement on Unpaid Professional Fees (Postpetition Amounts Only)
	Total unpaid post-petition Professional Fees during the reporting period:     $ 190,853.29
8	Narrative Report of Significant Events and Events out of the Ordinary Course of Business:
	None.
9	Quarterly Fees:
	Paid

I, Alice Neuhauser, declare under penalty of perjury that the information contained in the above Debtor in Possession Interim Statement is true and correct to the best of my knowledge.

/s/ Alice P. Neuhauser 

Debtor in Possession