EXHIBIT 99.4

Office of the United States Trustee

In re:	DEBTOR IN POSSESSION OPERATING REPORT
The Kushner-Locke Company
		Report Number:	62	Page 1 of 2
Chapter 11		For the Period FROM:	12/1/2006
Case No. LA 01-44828-SB (Administratively Consolidated with		TO:	12/31/2006
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	20,906
Salaries and Wages — Other Employees	21,323
Total Salaries and Wages			42,229
Employee Benefits and Pensions			387
Employer Payroll Taxes/Fees	2,706
Other Taxes
Total Taxes			2,706
Rent and Lease Expense (including parking)	4,175
Distribution/Delivery Expenses	215
Interest Expense
Insurance	2,637
Automobile Expense/Mileage
Utilities (incl. Phone, phone equipment, internet)	377
Depreciation and Amortization
Business Equipment Leases
Business Expense reimbursement	1,521
Storage Expense	1,258
Supplies, Office Expenses, Photocopies, etc.	70
Bad Debts
Miscellaneous Operating Expenses	610
Total Operating Expenses			56,184
Net Gain/Loss from Business Operations					(56,184	)
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			39,517
Other Non-Operating Expenses (Board/Trustee fees)
Total Non-Operating Expenses					39,517
NET INCOME/(LOSS) FOR PERIOD				$	(95,701	)

DEBTOR IN POSSESSION OPERATING REPORT NO: 62 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		—		1,349,643
TOTAL		—		1,349,643

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		2/14/2007		2/14/2007
	Errors & Omissions — Library (RENEWED)	St. Paul		3,000,000		3/3/2007		3/3/2007

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: $182,154.86
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