UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-QSB

(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934

For the quarterly period ended       March 31, 1997

                                       OR

[ ]  TRANSACTION  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d) OF THE  SECURITIES
EXCHANGE ACT OF 1934

For the transaction period from _______________ to ________________

Commission File Number   0 - 23136

                         COUNTRY STAR RESTAURANTS, INC.
             (Exact name of registrant as specified in its charter)

Delaware                                                         62-1536550
(State or other jurisdiction                                 (I.R.S. Employer
of incorporation or organization)                            Identification No.)

               11150 SANTA MONICA BOULEVARD, LOS ANGELES, CA 90025
            (Address of Principal Executive Offices)      (Zip Code)

                                 (310) 268-2200
              (Registrant's telephone number, including area code)

                                 Not applicable
              (Former name, former address, and former fiscal year,
                         if changed since last report)

     Indicate  by check mark  whether the  registrant  (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the  Securities  Exchange Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days.
                                                      Yes [X]     No [ ]

The number of shares of common stock outstanding as of May 14, 1997:  17,412,441

<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

                                      Index

                                                                            Page
                                                                            ----
PART I -  Financial Information

 Item 1.  Financial Statements

          Condensed Consolidated Balance Sheet at
              March 31, 1997 (unaudited)..............................        3

          Condensed Consolidated Statements of Operations
              for the Quarter Ended March 31, 1997
              and March 31, 1996  (unaudited).........................        5

          Condensed Consolidated Statements of Cash Flows
              for the Quarter Ended March 31, 1997
              and March 31, 1996  (unaudited).........................        6

          Notes to Condensed Consolidated Financial Statements
              (unaudited).............................................        7

  Item 2. Management's Discussion and Analysis of Financial Condition
              and Results of Operations...............................       10

PART II - Other Information

 Item 6. Exhibits and Reports on Form 8-K.............................       12

SIGNATURES     .......................................................       13


                                       2
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

                      Condensed Consolidated Balance Sheet

                                 March 31, 1997
                                   (Unaudited)

                                     ASSETS
CURRENT ASSETS
    Cash and cash equivalents                                       $   425,361
    Inventories                                                         448,394
    Preopening costs                                                     75,000
    Prepaid rent                                                        405,000
    Other current assets                                                291,581
                                                                    -----------
       Total current assets                                           1,645,336
                                                                    -----------

PROPERTY AND EQUIPMENT AT COST, net of
     accumulated depreciation of $435,143
    Leasehold improvements                                           14,283,650
    Furniture and equipment                                           1,985,323
    Memorabilia                                                         490,139
    Capital lease                                                       784,121
                                                                    -----------
       Total property and equipment                                  17,543,233
                                                                    -----------
OTHER ASSETS                                                            282,118
                                                                    ===========

       Total assets                                                 $19,470,687
                                                                    ===========

                                                                     (continued)

                 See accompanying notes to financial statements


                                       3
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

                 Condensed Consolidated Balance Sheet(continued)

                                 March 31, 1997
                                   (Unaudited)

                      LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
    Accounts payable                                              $  3,414,593 
    Accrued expenses                                                   646,867
    Capital lease obligations - current portion                        251,446
                                                                  ------------ 
       Total current liabilities                                     4,312,906
                                                               
DEFERRED RENTALS                                                       506,759
                                                               
CONVERTIBLE DEBT                                                     6,450,000
                                                               
CAPITAL LEASE OBLIGATIONS, NET OF CURRENT PORTION                      253,265
                                                                  ------------ 
       Total liabilities                                            11,522,930
                                                                  ------------ 
                                                               
COMMITMENTS AND CONTINGENCIES                                             --
                                                               
MINORITY INTERESTS                                                   1,711,396
                                                                  ------------ 
                                                               
STOCKHOLDERS' EQUITY                                           
    Preferred stock, $ 0.001 par value, 2,000,000 shares       
       authorized 6% Cumulative Convertible Series A -         
       235,181 shares issued and outstanding                               235
    Common stock, $0.001 par value, 25,000,000 shares          
       authorized, 15,363,644 shares issued and outstanding             15,364
    Additional paid-in-capital                                      36,180,881
    Unamortized stock option cost                                     (136,579)
    Accumulated deficit                                            (29,823,540)
                                                                  ------------ 
       Total stockholders' equity                                    6,236,361
                                                                  ------------ 
       Total liabilities and stockholders' equity                 $ 19,470,687
                                                                  ============ 

                 See accompanying notes to financial statements


                                       4
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

                 Condensed Consolidated Statements of Operations
                                   (Unaudited)

                                               For the Quarter Ended March 31,
                                              --------------------------------
                                                  1997                1996
                                              ------------        ------------
Revenues                                      $  2,264,475        $  1,004,191
                                              ------------        ------------
Costs and expenses                                             
      Cost of revenues                             920,436             328,446
      Operating                                  2,092,392             771,762
      General and administrative                 1,401,356             988,089
      Depreciation and amortization                385,522             116,676
                                              ------------        ------------
                                                 4,799,706           2,204,973
                                              ------------        ------------
      Loss from operations                      (2,535,231)         (1,200,782)

Non-operating (expense) income                                 
      Interest                                     (67,757)            (17,165)
      Minority interests                           413,050     
                                              ------------        ------------
      Net Loss                                $ (2,189,938)       $ (1,217,947)
                                              ============        ============
      NET LOSS PER SHARE                      $      (0.15)       $      (0.17)
                                              ============        ============
      WEIGHTED AVERAGE NUMBER OF                               
           SHARES OUTSTANDING                   14,707,598           7,377,064
                                              ============        ============

                 See accompanying notes to financial statements


                                       5
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

                 Condensed Consolidated Statements of Cash Flows
                                   (Unaudited)

                                                For the Quarter Ended March 31,
                                                -------------------------------
                                                    1997               1996
                                                -----------        -----------  
                                                                    
NET CASH USED IN OPERATING ACTIVITIES           $  (996,175)       $  (551,601)
                                                -----------        -----------
                                                                    
CASH FLOWS FROM INVESTING ACTIVITIES:                               
  Investment in property and equipment                                (505,763)
                                                -----------        -----------
       Net cash used by investing activities                          (505,763)
                                                -----------        -----------
                                                                   
CASH FLOWS FROM FINANCING ACTIVITIES:                               
  Net proceeds from issuance of common and              
     preferred stock                                  7,857            597,257
  Proceeds from convertible debt                    500,000      
  Capital lease payments                            (35,526)           (20,139)
                                                -----------        -----------
       Net cash provided by financing 
        activities                                  472,331            577,118
                                                -----------        -----------
NET (DECREASE) IN CASH                             (523,844)          (480,246)
                                                -----------        -----------
Cash and cash equivalents, beginning 
  of period                                         949,205          9,760,675
                                                -----------        -----------
Cash and cash equivalents, end of period        $   425,361        $ 9,280,429
                                                ===========        ===========

                 See accompanying notes to financial statements


                                       6
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

NOTE A  -         BASIS OF PRESENTATION

                  The accompanying  unaudited condensed  consolidated  financial
                  statements  of  Country  Star  Restaurants,   Inc.  have  been
                  prepared by the Company  pursuant to the rules and regulations
                  of the Securities and Exchange Commission.

                  The information  furnished  herein  reflects all  adjustments,
                  consisting of only normal  recurring  accruals and adjustments
                  which are, in the opinion of  management,  necessary to fairly
                  state  the  operating  results  for  the  respective  periods.
                  Certain information and footnote disclosures normally included
                  in annual  financial  statements  prepared in accordance  with
                  generally  accepted  accounting  principles  have been omitted
                  pursuant  to such  rules  and  regulations.  The  notes to the
                  condensed  consolidated financial statements should be read in
                  conjunction  with  the  notes  to the  consolidated  financial
                  statements contained in the Company's Form 10-KSB for the year
                  ended December 31, 1996. Company management  believes that the
                  disclosures  are  sufficient for interim  financial  reporting
                  purposes.

NOTE B -          CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT

                  On February 12, 1997, the Company  entered into a secured loan
                  agreement with Dan Rubin  ("Rubin") and Cameron  Capital Ltd.,
                  an institutional investor ("Cameron").

                  The secured loan agreement provided that Cameron had the fully
                  assignable  right to name  three (3)  members  of the Board of
                  Directors of the Company and that the Board of Directors shall
                  not consist of more than five (5)  members.  Cameron  assigned
                  this  right to  Rubin  as its  agent.  Immediately  after  the
                  closing of the secured  financing,  Rubin's  nominees,  Darren
                  Rice, William Wei and Robert Nardone were elected to the Board
                  of Directors of the Company.  The Board then elected  Rubin to
                  fill the last seat on the Board of Directors.

                  The Board then  elected Dan Rubin as Chief  Executive  Officer
                  and  President,  and Robert L.  Davidson as  Secretary  of the
                  Company. Mr. Rubin assumed control of day-to-day operations of
                  the  Company.  Mr. Rubin is being  compensated  at the rate of
                  $20,000  per  month,  payable  in cash or common  stock of the
                  Company,  valued at market value at the time of issuance.  Mr.
                  Rubin's employment is terminable at will.

                  Rubin now owns warrants to acquire and convertible  debt which
                  if  converted  would  allow him to  acquire  an  aggregate  of
                  929,510 shares of the Company's common stock. Upon exercise of
                  such warrants and conversion of the  convertible  debt,  Rubin
                  would  own  5.7%  of the  common  stock  of the  Company  then
                  outstanding. None of the other newly elected directors own any
                  shares or  warrants  or other  rights to acquire any shares of
                  the Company's common stock.

                                                                     (continued)


                                       7
<PAGE>

                         COUNTRY STAR RESTAURANTS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

NOTE B -          CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT(continued)

                  Under  the  secured  financing  agreement,  Rubin  has  made a
                  $3,500,000  line of credit loan  available to the Company,  of
                  which an initial advance of $500,000 was committed at closing.
                  Rubin, in his sole discretion, may make additional advances to
                  the Company under this line of credit,  but is not required to
                  make any such additional advances. All advances under the line
                  of credit  loan bear  interest  at the rate of prime plus four
                  percent (4%),  semi-annually commencing December 31, 1997. The
                  principal  balance of all line of credit  advances are due and
                  payable on October 9, 1999. In  consideration  for the initial
                  line of credit  advance  of  $500,000,  the  Company  issued a
                  warrant to acquire  166,667  shares of its common  stock at an
                  exercise price of $.625 per share,  which was the market value
                  of the Company's common stock on February 12, 1997.

                  All  additional  line  of credit  advances shall have the same
                  terms and  conditions  as the initial line of credit  advance.
                  For each such additional advance,  Rubin shall receive one (1)
                  common  stock  purchase  warrant  for every $3  advanced.  The
                  exercise  price for these  warrants  shall be $.625 per share.
                  All of the  warrants  issued or to be issued to Rubin shall be
                  subject  to  adjustment  in the event of stock  splits,  stock
                  dividends,  mergers,  consolidations,   or  similar  corporate
                  events.

                  Cameron  exchanged  its 4,000  shares of Series B  Convertible
                  Preferred Stock of the Company,  with an aggregate liquidation
                  preference of $4,000,000,  for a convertible  term note in the
                  principal  amount of  $4,000,000.  The  convertible  term note
                  bears  interest at the rate of seven  percent  (7%) per annum,
                  payable  semi-annually   commencing  December  31,  1997.  The
                  principal  balance is due and payable on October 9, 1999.  Any
                  portion or all of the principal amount of the note outstanding
                  may be converted  into common stock of the Company  commencing
                  ninety  (90) days after the date of closing of the  financing.
                  Upon conversion, the Company shall issue that number of shares
                  of its common stock obtained by dividing the principal  amount
                  of the loan converted by the lesser of (i) $1.33,  or (ii) 80%
                  of the average  closing bid price of the common  stock for the
                  five  (5)  consecutive  trading  days  preceding  the  date of
                  conversion.  The  maximum  number  of  shares  into  which the
                  convertible note may be converted shall not exceed  3,000,000.
                  The  conversion  formula is subject to adjustment in the event
                  of stock splits, stock dividends, mergers, consolidations,  or
                  similar transactions.

                  In connection  with the  commitment to make the line of credit
                  loan,  Rubin and other investors in the Company have agreed to
                  settle  certain  claims  against the Company for the amount of
                  $1,950,000, plus $50,000 in fees and expenses. The Company has
                  issued its convertible  term notes in the aggregate  amount of
                  $1,950,000  and  agreed  to pay  $50,000  to Rubin  and  these
                  investors, in settlement of their claims. These convertible

                                                                     (continued)


                                       8
<PAGE>
                         COUNTRY STAR RESTAURANTS, INC.

              Notes to Condensed Consolidated Financial Statements
                                   (Unaudited)

NOTE B -          CAPITAL TRANSACTIONS AND CHANGE IN MANAGEMENT(continued)

                  term  notes  contain  the same  terms  and  conditions  as the
                  convertible  term note  issued  to  Cameron,  except  that the
                  holders of these  convertible  term notes may  exercise  their
                  conversion feature at any time following the closing.

                  The  agreements  described  above  relating to the exchange of
                  Convertible  Preferred  Stock and the issuance of  convertible
                  term notes have been accounted for effective December 31, 1996
                  because  substantially all of the conditions  precedent to the
                  occurrence  of these  transactions  had taken place as of that
                  date.

                  The line of credit  advances by Rubin,  Cameron's  convertible
                  term note and the convertible  term notes issued in settlement
                  of claims are all  secured by a lien on  substantially  all of
                  the tangible  and  intangible  assets of the  Company.  In the
                  event of default, the secured parties shall participate in the
                  proceeds of the collateral in proportion to their  outstanding
                  debt.

                  In connection  with the secured financing transaction,  Robert
                  Schuster  ("Schuster"),   Chairman  of  the  Board  and  Chief
                  Executive Officer of the Company,  resigned as Chief Executive
                  Officer and agreed to release the Company from all obligations
                  under   his   Employment   Agreement,    including   severance
                  obligations.  Schuster  continued to serve as a Director until
                  February 13, 1997.  Immediately  upon notice from the Company,
                  Schuster  has agreed that he will become a  consultant  to the
                  Company for a nine (9) month period with  compensation  at the
                  rate of $250,000 per annum,  plus the  continuation  of fringe
                  benefits consisting of his automobile allowance and payment of
                  health insurance.

                  In connection  with  the secured  financing  transaction,  Mr.
                  Peter  Feinstein  resigned as  Director,  President  and Chief
                  Financial Officer of the Company and released the Company from
                  all  obligations  under his  Employment  Agreement,  including
                  severance  obligations.  Mr.  Feinstein has agreed to become a
                  consultant  to the  Company  for a nine (9) month  period with
                  compensation  at the  rate of  $240,000  per  annum  plus  the
                  continuation of fringe  benefits  consisting of his automobile
                  allowance and payment of health insurance.


                                       9
<PAGE>

Item 2.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

Three months ended March 31, 1997 compared to three months ended March 31, 1996

Revenues.

Total revenues  increased to $2.264 million for the three months ended March 31,
1997, compared with $1.004 million for the three months ended March 31, 1996, an
increase of $1.260 million or 125%, primarily due to the opening of Country Star
Las Vegas and  Country  Star  Atlanta.  Same  store  revenues  (Hollywood)  were
substantially unchanged.

Costs and expenses.

Cost of revenues  increased  from $328 thousand for the three months ended March
31, 1996 to $920  thousand for the three  months  ended March 31, 1997.  Cost of
revenues as a percentage of revenues  increased from 33% to 41% primarily due to
the negative impact of the  unsatisfactory  operations of the Atlanta  facility.
Country Star Atlanta was closed on February 22, 1997, and current plans call for
its reopening in the summer of 1997.

Operating expenses increased from $772 thousand for the three months ended March
31, 1996 to $2.092  million for the three  months  ended  March 31,  1997.  As a
percentage  of  revenues,  operating  expenses  increased  from  77% to 92%  due
primarily to operating difficulties with Atlanta.

General  and  administrative  expenses  increased  from $988  thousand to $1.401
million.  As a  percentage  of  revenues,  general and  administrative  expenses
decreased from 98% of revenues to 62% of revenues.

Depreciation and amortization  increased from $117 thousand for the three months
ended March 31, 1996 to $386 thousand for the three months ended March 31, 1997,
reflecting  the increase in the number of  restaurants  from one to three.  As a
percentage of total revenues,  depreciation and amortization  increased from 12%
to 17%.

Interest  expense  increased  from $17 thousand to $68 thousand,  reflecting the
convertible debt financing arrangements entered into on February 12, 1997.

                                                                     (continued)


                                       10
<PAGE>

                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS
                                   (continued)

Minority  interest  for the three  months  ended  March 31,  1997  reflects  the
Company's controlling interest of 50.05% in Country Star Las Vegas LLC triggered
by the  opening  of the Las  Vegas  facility  in  July,  1996.  Previously,  the
Company's investment in Las Vegas was accounted for under the cost method.

LIQUIDITY AND CAPITAL RESOURCES

Net cash used in investing  activities  in the three months ended March 31, 1996
and  1997 was $506  thousand  and $0,  respectively,  reflecting  the  Company's
development of the Las Vegas and Atlanta facilities in 1996.

Net cash provided by financing  activities  for the three months ended March 31,
1996 and March 31, 1997 of $577 thousand and $472 thousand  respectively  is due
primarily  to the net  proceeds  from the  issuance of common  stock in 1996 and
convertible debt in 1997.

Net cash used in operating  activities for the three months ended March 31, 1996
and March 31, 1997  increased  from $552 thousand to $996 thousand due primarily
to the greater loss in 1997.

New management  took over the Company on February 12, 1997 and determined that a
major  overhaul of corporate  strategy  was required to deal with the  Company's
financial  problems.  Measures taken by new management include (i) the temporary
closing and planned  reopening  of Country  Star  Atlanta in the summer of 1997,
(ii) the expansion of the "country" theme, (iii) planned expansion through joint
ventures and licensing rather than expensive  construction,  and (iv) settlement
with the trade creditors at 40% of the amounts owed.

Management  has also made  operational  changes  to  improve  revenues,  control
operating costs, and limit corporate overhead.  The impact of these measures and
changes will not be realized  until the second  quarter of calendar  1997 and in
subsequent periods.  The Company will need to raise additional capital before it
can obtain profitability from operations.  Management believes it can raise this
capital  through  private  placements  of equity and the  granting by lenders of
discretionary advances under outstanding lines of credit.


                                       11
<PAGE>

                                     Part II

                                OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     On or about April 21, 1997, 3030 Peachtree, LLC ("Landlord"),  the Landlord
of the Company's Atlanta restaurant, commenced an action in the Magistrate Court
of Fulton  County,  Georgia,  regarding  possession of the Atlanta  restauraunt.
Additional  information concerning this litigation is set forth in the Company's
Report on Form 8-K dated April 21, 1997.

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

     (b) Reports on Form 8-K

     On January  16,  1997,  the Company  filed a Current  Report on Form 8-K in
connection  with  the  engagement  of  Deloitte  &  Touche  LLP as  Registrant's
independent auditor.

     On  February  12, 1997 the  Company  filed a current  report on Form 8-K in
connection with the February 12, 1997 Financing and Change in Control.

     On March  29,  1997,  the  Company  filed a  current  report on Form 8-K in
connection  with the  termination  of  Deloitte  & Touche  LLP as the  Company's
independent auditors and the retention of Cacciamatta Accountancy Corporation as
the Company's independent auditors.


                                       12
<PAGE>

                                   SIGNATURES

     Pursuant to the  requirements  of the Securities  Exchange Act of 1934, the
Registrant has duly authorized and caused the undersigned to sign this Report on
the Registrant's behalf.

                                            COUNTRY STAR RESTAURANTS, INC.

                                            By: /s/  Dan J. Rubin
                                               -------------------------
                                                Dan J. Rubin
                                                Chief Executive Officer

Dated:  May 19, 1997