Office of the United States Trustee

In re: The Kushner-Locke Company	DEBTOR IN POSSESSION OPERATING REPORT
	Report Number	12	Page 1 of 2
Chapter 11	For the Period FROM:	10/1/2002
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)	TO:	10/31/2002

1 Profit and Loss Statement (Accrual Basis Only)
	A. Related to Business Operations
		Gross Sales				$	—
		Costs Related to Revenues (Film Cost Amortization)					25,356
			Gross Profit						(25,356	)
		Less: Operating Expenses
		Officer Compensation			25,275
		Salaries and Wages — Other Employees			18,717
			Total Salaries and Wages				43,992
			Employee Benefits and Pensions				6,450
		Employer Payroll Taxes/Fees			1,426
		Other Taxes			—
			Total Taxes				1,426
		Rent and Lease Expense (including parking)			4,720
		Distribution/Delivery Expenses			29
		Interest Expense
		Insurance
		Automobile Expense/Mileage			64
		Utilities (incl. Phone, phone equipment, internet)			528
		Depreciation and Amortization
		Business Equipment Leases			260
		Business Expense reimbursement
		Storage Expense			6,937
		Supplies, Office Expenses, Photocopies, etc
		Bad Debts
		Miscellaneous Operating Expenses			1,458
			Total Operating Expenses				65,864
				Net Gain/Loss from Business Operations					(91,219	)
	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				14,984
			Other Non-Operating Expenses (Board/Trustee fees)
			Total Non-Operating Expenses						14,984
	NET INCOME/(LOSS) FOR PERIOD							$	(106,203	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 9 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		—		1,349,000
TOTAL		—		1,349,000

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 1/11/02)	St. Paul		1,000,000	1/14/2003	1/14/2003
Commercial Property (RENEWED)	St. Paul		2,000,000	2/14/2003	2/14/2003
Errors & Omissions — Library (RENEWED)	St. Paul		3,000,000	3/3/2003	3/3/2003
Employment Practices Liability (RENEWED-RUN OFF)	Nat’l Union		5,000,000	10/30/2003	10/30/2003

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:          $ 758,069.20

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 Neuhauser

Debtor in Possession