Exhibit 99.1

Office of the United States Trustee

In re:	DEBTOR IN POSSESSION OPERATING REPORT
The Kushner-Locke Company
	Report Number:	11	Page 1 of 2
Chapter 11	For the Period FROM:	9/1/2002
Case No. LA 01-44828-SB (Administratively Consolidated with
Case Nos. LA 01-44829-SB through LA 01-44831-SB; LA 01-	TO:	9/30/2002
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			16,725
	Salaries and Wages — Other Employees			14,685
		Total Salaries and Wages				31,410
		Employee Benefits and Pensions				2,302
	Employer Payroll Taxes/Fees			1,395
	Other Taxes			—
		Total Taxes				1,395
	Rent and Lease Expense (including parking)			2,360
	Distribution/Delivery Expenses			2,482
	Interest Expense			—
	Insurance
	Automobile Expense/Mileage
	Utilities (incl. Phone, phone equipment, internet)			3,222
	Depreciation and Amortization
	Business Equipment Leases			260
	Business Expense reimbursement			58
	Storage Expense			6,790
	Supplies, Office Expenses, Photocopies, etc.			1,010
	Bad Debts
	Miscellaneous Operating Expenses			1,387
		Total Operating Expenses				52,676
			Net Gain/Loss from Business Operations					(52,676	)
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				71,408
		Other Non-Operating Expenses (Board/Trustee fees)
		Total Non-Operating Expenses						71,408
NET INCOME/(LOSS) FOR PERIOD							$	(124,085	)

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				—		1,433,167
	TOTAL			—		1,433,167

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	Nat’l Union		5,000,000	10/31/2002	10/31/2002

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: $666,486.45
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