<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(Mark One)

   X     Quarterly report pursuant to section 13 or 15(d) of the Securities
 -----   Exchange Act of 1934 for the quarterly period ended September 30, 1996;
         or

         Transition report pursuant to section 13 or 15(d) of the Securities
 -----   Exchange Act of 1934 for the transition period from       to      .
                                                             -----    -----
Commission File Number 0-6106

                           UNITED LEISURE CORPORATION
             (Exact Name of Registrant as Specified in its Charter)

             DELAWARE                                     13-2652243
(State or Other Jurisdiction of                        (I.R.S. Employer
Incorporation or Organization)                        Identification No.)

               8800 IRVINE CENTER DRIVE, IRVINE, CALIFORNIA 92718
                    (Address of Principal Executive Offices)
                                   (Zip Code)

                                 (714) 837-1200
              (Registrant's Telephone Number, Including Area Code)

Check whether the Issuer (1) filed all reports to be filed by Section 13 or
15(d) 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 at least the past 90 days.

                         YES     X               NO
                               -----                  -----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.

             Class                          Outstanding at September 30, 1996
    COMMON STOCK, PAR VALUE                        12,368,849 SHARES
         $.01 PER SHARE

Transitional Small Business Disclosure Format (check one):

                         YES                     NO     X
                               -----                  -----
<PAGE>   2
                          PART I--FINANCIAL INFORMATION

                   UNITED LEISURE CORPORATION AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
                                                              SEPTEMBER 30, 1996   DECEMBER  31, 1995
                                                              ------------------   ------------------
                                                                  (UNAUDITED)      (DERIVED FROM
                                                                                   AUDITED FINANCIAL
                                                                                     STATEMENTS)
<S>                                                              <C>                 <C>
          ASSETS

CURRENT ASSETS
  Cash and cash equivalents                                      $  4,006,907        $  9,929,785
  Receivables                                                         545,422             417,368
  Inventory                                                            92,909              80,301
  Prepaid expenses                                                    217,202             178,009
                                                                 ------------        ------------
   TOTAL CURRENT ASSETS                                          $  4,862,440        $ 10,605,463

PROPERTY AND EQUIPMENT,
  less accumulated depreciation and amortization                    6,407,168           4,845,406

OTHER ASSETS
  Cash pledge for CD                                                  875,000
  Due from related parties                                            110,000             110,000
  Investment in limited partnership                                    15,000              15,000
  Investment in HEP II                                              1,750,000
  Investment in marketable securities                                  80,000                  --
  Pre-opening costs                                                    48,774                 405
  Intangible assets, net of
   accumulated amortization                                            42,100              68,440
  Deposits                                                            178,097             237,538
   TOTAL OTHER ASSETS                                               3,098,971             431,383
                                                                 ------------        ------------
   TOTAL ASSETS                                                  $ 14,368,579        $ 15,882,252
                                                                 ============        ============

                      LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
  Accounts payable and accrued expenses                          $    560,147        $    509,259
  Provision for disputed contingent claim                                               1,128,973
  Due to related party                                                102,074           1,003,265
  Deferred revenues                                                   115,643              31,320
  Deposits and Other                                                  124,275             124,275
                                                                 ------------        ------------
   TOTAL CURRENT LIABILITIES                                          902,139           2,797,092
  LONG TERM DEBT                                                      842,000             842,000
                                                                 ------------        ------------
   TOTAL LIABILITIES                                                1,744,139           3,639,092
                                                                 ------------        ------------

STOCKHOLDERS' EQUITY
  Common Stock                                                        123,688             123,688
  Capital in Excess of par value                                   24,326,458          24,326,458
  Accumulated deficit                                             (11,825,706)        (12,206,986)
                                                                 ------------        ------------
   TOTAL STOCKHOLDERS' EQUITY                                      12,624,440          12,243,160
                                                                 ------------        ------------
                                                                 $ 14,368,579        $ 15,882,252
                                                                 ============        ============
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.


                                        2
<PAGE>   3
                   UNITED LEISURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
                                                  THREE MONTHS ENDED                        NINE MONTHS ENDED
                                                     SEPTEMBER 30,                            SEPTEMBER 30,
                                            --------------------------------        --------------------------------
                                                1996                1995                1996                1995
                                            ------------        ------------        ------------        ------------
<S>                                         <C>                 <C>                 <C>                 <C>
REVENUES
 Rentals                                    $    645,790        $    532,273        $  1,072,106        $  1,062,825
 Children's recreational activities            1,514,643           1,202,109           2,580,429           1,358,775
                                            ------------        ------------        ------------        ------------

  TOTAL REVENUES                               2,160,433           1,734,382           3,652,535           2,421,600
                                            ------------        ------------        ------------        ------------

OPERATING EXPENSES
 Occupancy                                     1,435,004           1,520,177           3,537,402           2,472,812
 Selling, General and Administrative             236,087             176,331             635,777             549,465
 Depreciation and amortization                   113,409              21,940             340,226              12,534
                                            ------------        ------------        ------------        ------------

  TOTAL OPERATING EXPENSES                     1,784,500           1,718,448           4,513,405           3,084,811

OPERATING INCOME (LOSS)                          375,933              15,934            (860,870)           (663,211)
                                            ------------        ------------        ------------        ------------

OTHER INCOME (EXPENSE)
 Interest income                                 106,493             170,578             299,597             556,251
 Interest expense                                (27,742)            (35,526)            (62,843)            (75,094)
 Legal costs-litigation                                              (48,132)           (152,521)           (253,165)
 Write-off-goodwill                                                                                         (115,603)
 Write-off-disputed contingency claim          1,128,973                               1,128,973
 Other                                               820             118,955              92,017             136,751
                                            ------------        ------------        ------------        ------------

  TOTAL OTHER INCOME
    (EXPENSE)                                  1,208,544             205,875           1,305,223             249,140
                                            ------------        ------------        ------------        ------------

NET INCOME (LOSS) BEFORE
 MINORITY INTEREST                             1,584,477             221,809             444,353            (414,071)

MINORITY INTEREST                                   --                  --                  --               115,620
                                            ------------        ------------        ------------        ------------

INCOME (LOSS) BEFORE INCOME TAXES              1,584,477             221,809             444,353            (298,451)

INCOME TAXES                                      51,453              15,626              63,073              27,351
                                            ------------        ------------        ------------        ------------

NET EARNINGS (LOSS)                         $  1,533,024        $    206,183        $    381,280        $   (325,802)
                                            ============        ============        ============        ============

WEIGHTED AVERAGE NUMBER OF
 COMMON SHARES OUTSTANDING                    12,368,849          12,212,428          12,368,849          12,212,428
                                            ============        ============        ============        ============

EARNINGS (LOSS) PER
 COMMON SHARE                               $       .124        $      .0168        $       .031        $     (.0266)
                                            ============        ============        ============        ============
</TABLE>

          See accompanying Notes to Consolidated Financial Statements.



                                        3
<PAGE>   4
                   UNITED LEISURE CORPORATION AND SUBSIDIARIES
                      CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
                                                     FOR THE NINE MONTHS ENDED SEPTEMBER 30,
                                                            1996                1995
                                                      -----------------------------------
<S>                                                    <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net profit (loss)                                     $   381,280        $   (325,802)
 Adjustments to reconcile net loss
   to net cash provided by operating activities:
 Depreciation and amortization
   or property and equipment                               313,886              36,192
 Amortization of intangibles                                26,340              26,342
 Gain from settlement of debt                                                  115,603
 Gain from writeoff of provision
    for disputed contingent claim                       (1,128,973)
 Minority interest in net loss of
   consolidated subsidiary                                                    (115,620)
 Changes in operating assets and liabilities:
    Receivables                                           (128,054)           (202,241)
    Inventory                                              (12,607)           (101,907)
    Prepaid expenses                                       (39,193)           (126,797)
    Pre-opening costs                                      (48,370)            (58,331)
    Deposits                                                59,442              35,159
    Accounts payable and accrued expenses                  (17,312)            (72,361)
    Related party accrued expenses                        (901,192)                 --
    Income taxes payable                                    68,200             (20,000)
    Deferred revenues and others                             4,324              (4,250)
                                                       -----------        ------------

NET CASH PROVIDED (USED) BY OPERATING
 ACTIVITIES                                             (1,422,229)           (814,013)

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                    (1,877,234)         (3,709,837)
  Lease acquisition costs                                    1,585              (6,113)
  Investment in HEP II                                  (1,750,000)
  Cash pledge for CD                                      (875,000)                 -- 
                                                       -----------        ------------

NET CASH USED BY INVESTING
 ACTIVITIES                                             (4,500,649)         (3,715,950)

CASH FLOWS FROM FINANCING ACTIVITIES
 Advances to related parties                              (675,000)                 -- 
 Exercise of stock warrants                                                      9,000
 Repayment of related party advances                       675,000           (295,360)
                                                       -----------        ------------

NET CASH PROVIDED (USED BY) FINANCING
 ACTIVITIES                                                      0            (286,360)
                                                       -----------        ------------

NET INCREASE (DECREASE) IN CASH AND
 CASH EQUIVALENTS                                       (5,922,878)         (4,816,323)

CASH AND CASH EQUIVALENTS,
 Beginning of year                                       9,929,785          15,955,140
                                                       -----------        ------------

CASH AND CASH EQUIVALENTS, End of year                 $ 4,006,907        $ 11,138,817
                                                       ===========        ============
</TABLE>

SUPPLEMENTAL DISCLOSURES OF CASH  FLOW INFORMATION:
         Interest paid              $  62,843
         Income taxes paid          $  13,073

           See accompanying Notes to Consolidated Financial Statements



                                        4
<PAGE>   5
                   UNITED LEISURE CORPORATION AND SUBSIDIARIES


                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.       The results of interim periods are not necessarily indicative of
         results to be expected for the year, due to the seasonal nature of the
         Company's business. In the opinion of the Company, the accompanying
         consolidated financial statements reflect all adjustments (which are
         normal recurring adjustments) necessary for a fair presentation of the
         results for the interim period and the comparable period presented.
         These condensed financial statements do not purport to be full
         presentations and do not include all requirements in accordance with
         generally accepted accounting principles, but include all information
         required by the instructions to Form 10-QSB.

         Concentration of Risk - The Company invests its excess cash in
         certificates of deposit and money market funds, which, at times, may
         exceed federally insured limits. The Company maintains its accounts
         with financial institutions with high credit ratings.

         Inventory - Inventory consists primarily of merchandise held for sale
         at the Company's play learning centers. Inventory is stated at the
         lower of cost (first-in, first-out) or market.

2.       DISCLOSURE OF CERTAIN SIGNIFICANT RISKS AND UNCERTAINTIES

         Termination of Ground Lease - The Company's major asset, a ground lease
         (the "Ground Lease"), covering approximately 300 acres of real estate
         in Irvine, California (the "Irvine Property") will expire in February
         1997. The Company, through its subsidiary, Lion Country Safari, Inc.,
         has been engaged in protracted and expensive litigation with its
         landlord relating to the Ground Lease. The Ground Lease will not be
         renewed at the expiration of its term. Historically, the Company has
         derived most of its income from its sublease activities with respect to
         the Ground Lease. During the last two years the Company has sought to
         diversify its operations by increasing its children's recreational
         activities which are unrelated to the Ground Lease, in particular, with
         respect to the establishment of its childrens' play-learning centers
         known as "Planet Kids," and the establishment of additional childrens'
         day camps, known as "Camp Frasier" on locations other than the Irvine
         Property. However, income from the Ground Lease has continued to remain
         significant and it is anticipated that the Company's income from
         operations will significantly decrease upon the expiration of the
         Ground Lease, although the Company's operating expenses should also
         decrease significantly upon expiration of the Ground Lease.

         Merger/Acquisition Plans - The Company plans to engage in a merger and
         acquisition program in order to merge with or acquire companies engaged
         in similar or complementary businesses. The Company is not engaged in
         any negotiations to merge with or acquire any such target companies,
         but the Company is continually in the process of endeavoring to
         identify potential acquisition or merger candidates. The Company can
         make no assurances that it will be able to merge with or acquire any
         companies.

3.       LEGAL PROCEEDINGS

         The Company's primary operating subsidiary, Lion Country Safari, Inc. -
         California, has been engaged in protracted litigation with the landlord
         of Irvine Property since 1986. After a six week trial in October and
         November 1993, the Company was awarded a jury verdict in the total
         approximate amount of $42,000,000. The jury found that the landlord had
         breached the covenant of good faith and fair dealing in the ground
         lease with the



                                        5
<PAGE>   6
         subsidiary and awarded the subsidiary approximately $37,000,000 in
         compensatory damages for such breaches. The jury also found that the
         landlord acted with "fraud and malice" in interfering with the
         subsidiary's relationship with the operator of the water park on the
         premises and awarded an additional $5,000,000 in punitive damages. In
         the rent dispute between the landlord and the subsidiary, the jury
         found that the subsidiary owed no rent whatsoever because of the
         landlord's own unexcused material breaches of the ground lease. The
         jury also found that one of the key amendments to the ground lease had
         been entered into by the subsidiary under duress and without
         consideration.

         In April 1994, after hearing a post verdict motion brought by the
         landlord for a new trial and/or judgment notwithstanding the verdict,
         the court granted a new trial on all issues and denied the landlord's
         motion for judgment notwithstanding the verdict, on the basis that the
         evidence was not sufficient to justify the verdict brought by the jury.
         The Company has appealed this order and intends to vigorously continue
         its prosecution of this litigation. The Company anticipates that the
         appeal will be heard and a decision rendered sometime in mid-1997.
         There can be no assurance as to the outcome of this litigation. The
         Company incurred legal costs in connection with this litigation during
         the years ended December 31, 1995 and 1994 of $365,207 and $340,679,
         respectively.

4.       RELATED PARTY TRANSACTIONS

         In the fiscal quarter ended June 30, 1996, the Company made an
         investment in the amount of $1,500,000 in HEP II L.P., a California
         limited partnership engaged in the motion picture production business.
         In the fiscal quarter ended September 30, 1996, the Company made an
         additional investment of $250,000 in HEP II L.P. The general partner of
         HEP II L.P. is Hit Entertainment, Inc., a California corporation of
         which Harry Shuster, the Chairman of the Board and Chief Executive
         Officer of the Company, is a principal shareholder.

         Also in the fiscal quarter ended June 30, 1996, the Company made an
         advance of $675,000 to Harry Shuster. As of September 30, 1996, an
         aggregate of $102,074 remained payable by the Company to Harry Shuster
         from prior advances made by Mr. Shuster to the Company.

         In the fiscal quarter ended September 30, 1996 the Company put up a
         certificate of deposit in the amount of $875,000 in order to provide
         collateral for a letter of credit for an affiliate of the Company,
         United Restaurants, Inc. ("United Restaurants"). United Restaurants was
         required to provide such letter of credit in connection with a lease
         entered into by such corporation. United Restaurants has agreed to
         replace the collateral provided by the Company in full by March 1998.
         In consideration for providing such collateral, United Restaurants has
         agreed to pay an amount to the Company equal to 10% per annum on the
         amount of the pledged cash collateral, as it exists from time to time.
         As additional consideration, United Restaurants issued 100,000 shares
         of its restricted common stock to the Company as well as a warrant to
         the Company to purchase an additional 100,000 shares of the common
         stock of United Restaurants. The Chairman of the Board, President and
         Chief Executive Officer of the Company is the Chairman of the Board,
         President and Chief Executive Officer of United Restaurants.

         On October 2, 1996 the Company acquired 333,333 shares of the
         capital stock of United Restaurants and warrants to purchase an
         additional 333,333 shares of the capital stock of United Restaurants
         for an aggregate purchase price of $250,000.


                                        6
<PAGE>   7
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
         RESULTS OF OPERATIONS

                  This Quarterly Report on Form 10-QSB contains forward-looking
                  statements. A forward-looking statement may contain words
                  such as "will continue to be," "will be," continue to,"
                  "expect to," "anticipates that," "to be" or "can impact."
                  Management cautions that forward- looking statements are
                  subject to risks and uncertainties that could cause the
                  Company's actual results to differ materially from those
                  projected in forward-looking statements.

LIQUIDITY AND FINANCIAL CONDITION

                  At September 30. 1996, the Company had cash or cash
                  equivalents in the amount of $4,006,907. Given the stability
                  of revenues from its current operations, the Company expects
                  that its operations will continue to generate sufficient cash
                  flow to continue its operations through the end of the term of
                  the Irvine Company Ground Lease (February 28, 1997). See Note
                  2 to Notes to Consolidated Financial Statements. The Company
                  intends to continue to expend the funds raised in its public
                  offering in 1994 in order to expand its business in childrens'
                  recreational activities unrelated to the Ground Lease in order
                  to create additional sources of future cash flow. The Company
                  believes the cash still available to it from its 1994 public
                  offering will be sufficient to meet its needs for at least the
                  next twelve months of operations.

THE IRVINE COMPANY LITIGATION

                  Since 1987, the Company's wholly-owned subsidiary, Lion
                  Country Safari, Inc. - California has been engaged in
                  protracted and expensive litigation with its landlord, The
                  Irvine Company , in Orange County Superior Court (Case No.
                  49-12-02). The case is styled The Splash v. The Irvine Company
                  and Marsh & McLennan; The Irvine Company v. The Splash and
                  Lion Country Safari, Inc. - California, Lion Country Safari,
                  Inc. - California v. The Irvine Company. On April 15, 1994,
                  the court granted a new trial on all issues. The Company has
                  appealed this order and intends to vigorously continue its
                  prosecution of this litigation. It is anticipated that the
                  ruling on this appeal may take until mid-1997. See Note 3 to
                  Notes to Consolidated Financial Statements.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 1996 Compared to Nine Months Ended September 30,
1995 and Three Months Ended September 30, 1996 Compared to Three Months Ended
September 30, 1995

                  The Company's business has historically been highly seasonal,
                  with the second and third quarters of each year being the
                  strongest quarters of operation. During the quarter ended
                  September 30, 1996, the Company received total revenues of
                  $2,160,433, compared to total revenues of $1,734,382 for the
                  third quarter of 1995. During the nine month period ended
                  September 30, 1996, the Company received total revenues of
                  $3,652,535 as compared to total revenues of $2,421,600 for the
                  first nine months of 1995. This increase in revenues is due
                  primarily to increases in admissions and concessions resulting
                  from the Company's opening one additional Planet Kids and one
                  additional Camp Frasier during the nine month period ended
                  September 30, 1996. As of September 30, 1996, there are three
                  Planet Kids, three Camp Frasiers and one Frasier's Frontier,
                  an amusement park.

                 
                 
                                        7
<PAGE>   8
                  The Company had a net profit of $381,280 or $.031 per share,
                  with respect to the first nine months of 1996 as compared to a
                  net loss of $325,802 or ($.0266) per share, for the comparable
                  period of the previous year, for an aggregate increase in
                  profits of $707,082. This increase in profits was due to a
                  one-time write-off of goodwill in the amount of $115,603 which
                  occurred in the nine-month period ended September 30, 1995, a
                  distribution to minority interest of $115,620 which occurred
                  in the nine month period ended September 30, 1995 with no
                  corresponding distribution to minority interest occurring in
                  the nine month period ended September 30, 1996, and a
                  write-off of a disputed contingency claim in the amount of
                  $1,128,973 in the nine-month period ended September 30, 1996.

                  Interest income for the nine-months ended September 30, 1996
                  was $299,597 as compared to $556,251 for the comparable period
                  in 1995, a decrease of $254,654. This decrease was due to
                  increased capital and other expenditures (including
                  expenditures involving related party transactions) by the
                  Company.

                  Operating Expenses increased from $3,084,811 for the
                  nine-month period ended September 30, 1995 compared to
                  $4,513,405 for the nine-month period ended September 30, 1996,
                  or an aggregate increase in operating expenses of $1,428,594.
                  Depreciation and amortization expense increased to $340,226
                  for the nine month period ended September 30, 1996 from
                  $12,534 for the nine month period ended September 30, 1995, or
                  an aggregate of $327,692, due primarily to improvements made
                  by the Company to its Frasier's Frontier location, Camp
                  Frasier locations and the building of one new Planet Kids
                  location. Increases in occupancy expenses from $2,472,812 for
                  the nine-month period ended September 30, 1995 compared to
                  $3,537,402 for the comparable period in 1996, an increase of
                  $1,064,590, and increases in selling, general and
                  administrative expenses, from $549,465 for the nine-month
                  period ended September 30, 1996 to $635,777 for the nine-month
                  period ended September 30, 1995, or an increase of $86,312, is
                  due primarily to increased expenses related to the opening of
                  one new Planet Kids and one new Camp Frasier in the nine-month
                  period ended September 30, 1996 and increased expenses
                  associated with carrying out these two new operations.

                  For the quarter ended September 30, 1996, the Company incurred
                  a net profit of $1,533,024 or $.124 per share, as compared to
                  a net profit of $206,183 or $.0168 per share for the
                  comparable period of 1995. This increase in profits is due
                  primarily to the Company's determination to reverse the
                  accrual for a disputed contingent claim with respect to the
                  litigation involving the Ground Lease since Management
                  determined the disputed contingent claim would most likely
                  never have to be paid due to the running of the applicable
                  statute of limitations. See Note 3 to Consolidated Financial
                  Statements.

                  Lion Country Safari incurred legal costs of $152,521 during
                  the nine-month period ended September 30, 1996 as compared to
                  $253,165 during the nine-month period ended September 30,
                  1995, a decrease of $100,644. The decrease in legal costs is
                  due to the decreased costs associated with the appeal pending
                  in the litigation with the Irvine Company.





                                        8
<PAGE>   9
PART II--OTHER INFORMATION



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.

Exhibits

         (27)     Financial Data Schedule


Reports on Form 8-K

         The Company filed no Reports on Form 8-K during the period covered by
         this Quarterly Report on Form 10-QSB.

         No other Items of Part II are applicable to the Registrant for the
         period covered by this Quarterly Report on Form 10-QSB.




                                        9
<PAGE>   10
                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.

                           UNITED LEISURE CORPORATION



Dated: November 11, 1996                    By    /s/Harry Shuster
                                                  ---------------------------
                                                  Harry Shuster, Chairman of the
                                                  Board and Chief Executive
                                                  Officer

Dated: November 11, 1996                    By    /s/Sondra G. Koegler
                                                  ---------------------------
                                                  Sondra G. Koegler, Acting
                                                  Chief Accounting Officer





                                       10