Exhibit 99.2

Office of the United States Trustee

In re:	DEBTOR IN POSSESSION OPERATING REPORT
The Kushner-Locke Company
	Report Number:		51	Page 1 of 2
Chapter 11	For the Period FROM:		1/1/2006
Case No. LA 01-44828-SB (Administratively Consolidated with		TO:	1/31/2006
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)

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	31,344
Salaries and Wages — Other Employees	14,215
Total Salaries and Wages			45,559
Employee Benefits and Pensions			8,747
Employer Payroll Taxes/Fees	5,274
Other Taxes
Total Taxes			5,274
Rent and Lease Expense (including parking)	3,972
Distribution/Delivery Expenses	6,028
Interest Expense
Insurance	3,320
Automobile Expense/Mileage
Utilities (incl. Phone, phone equipment, internet)	1,957
Depreciation and Amortization
Business Equipment Leases
Business Expense reimbursement	1,251
Storage Expense	6,583
Supplies, Office Expenses, Photocopies, etc.
Bad Debts
Miscellaneous Operating Expenses	230
Total Operating Expenses			82,921
Net Gain/Loss from Business Operations					(82,921	)
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			50,000
Other Non-Operating Expenses (Board/Trustee fees)
Total Non-Operating Expenses					50,000
NET INCOME/(LOSS) FOR PERIOD				$	(132,921	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 51    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					1,698,076
TOTAL			—		1,698,076
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				Policy
	Carrier/ Agent Name	Amount of Coverage		Expiration Date		Premium Paid Through Date
Worker’s Compensation (RENEWED)	St. Paul		1,000,000		1/14/2007		1/14/2007
Commercial Property (RENEWED)	St. Paul		2,000,000		2/14/2006		2/14/2006
Errors & Omissions — Library (RENEWED)	St. Paul		3,000,000		3/3/2006		3/3/2006

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:
		þNo
	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:
		þ No
7	Statement on Unpaid Professional Fees (Postpetition Amounts Only)
	Total unpaid post-petition Professional Fees during the reporting period:                     $202,258.36
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