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

Report Number:	68	Page 1 of 2
For the Period FROM:	6/1/2007
TO:	6/30/2007

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	22,000
		Salaries and Wages - Other Employees	15,000
		Total Salaries and Wages			37,000
		Employee Benefits and Pensions
		Employer Payroll Taxes/Fees	2,069
		Other Taxes	8,800
		Total Taxes			10,869
		Rent and Lease Expense (including parking)	440
		Distribution/Delivery Expenses	238
		Interest Expense
		Insurance
		Automobile Expense/Mileage
		Utilities (incl. Phone, phone equipment, internet)	400
		Depreciation and Amortization
		Business Equipment Leases
		Business Expense reimbursement	619
		Storage Expense	989
		Supplies, Office Expenses, Photocopies, etc.	36
		Bad Debts
		Miscellaneous Operating Expenses	292
		Total Operating Expenses			50,884
		Net Gain/Loss from Business Operations					(50,884	)
	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			49,621
		Other Non-Operating Expenses (Board/Trustee fees)
		Total Non-Operating Expenses					49,621
NET INCOME/(LOSS) FOR PERIOD						$	(100,505	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 68 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				1,360,189
TOTAL		—		1,360,189

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:
	þ 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:
	þ No

7	Statement on Unpaid Professional Fees (Postpetition Amounts Only)
	Total unpaid post-petition Professional Fees during the reporting period:      $195,400.52

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.

Debtor in Possession