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:	46
For the Period FROM:	8/1/2005
TO:	8/31/2005

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	47,950
Salaries and Wages — Other Employees	19,385
Total Salaries and Wages			67,335
Employee Benefits and Pensions			3,612
Employer Payroll Taxes/Fees	2,693
Other Taxes
Total Taxes			2,693
Rent and Lease Expense (including parking)	3,972
Distribution/Delivery Expenses	843
Interest Expense
Insurance
Automobile Expense/Mileage
Utilities (incl. Phone, phone equipment, internet)	52
Depreciation and Amortization
Business Equipment Leases
Business Expense reimbursement	2,148
Storage Expense	7,708
Supplies, Office Expenses, Photocopies, etc.	33
Bad Debts
Miscellaneous Operating Expenses	916
Total Operating Expenses			89,311
Net Gain/Loss from Business Operations					(89,311	)
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
Other Non-Operating Expenses (Board/Trustee fees)
Total Non-Operating Expenses					—
NET INCOME/(LOSS) FOR PERIOD				$	(89,311	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 46 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		—		1,981,306
TOTAL		—		1,981,306

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	1/14/2006	1/14/2006
	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:
		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: $154,850.20
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