**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**







**FORM 10-Q**







x
            **QUARTERLY
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934****For
                the quarter ended July 31,
                2008**




**-OR-**




o
            **TRANSITION
                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
                ACT
                OF 1934****For
                the transition period
                from:                              to**




**Commission
      File Number 0-14234**








**KINGS
      ROAD ENTERTAINMENT, INC.**


(Exact
      Name of Registrant as Specified in Its Charter)




**DELAWARE**
            
            **95-3587522**(State
                or other jurisdiction of
            
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)**468
                N. Camden Drive**
              **Beverly
                Hills, California**
            
            **90210**(Address
                of principal executive offices)
            
            (Zip
                Code)




**310-278-9975**


(Registrant’s
      telephone number, including area code)





(Former
      name, former address or former fiscal year, if changed since last
      report)





Check
      whether the issuer: (1) filed all reports required to be filed by
      Section 13 or 15(d) of the Exchange Act during the past 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 þ No o





Indicate
      by check mark whether the registrant is a shell company (as defined in
      Rule 12b-2 of the Exchange Act) o Yes þ No





The
      number of shares outstanding of the registrant’s common stock, as of September
      5, 2008 was 9,956,493.





**KINGS
      ROAD ENTERTAINMENT, INC.**


**FORM
      10-Q**


**Quarter
      Ended July 31, 2008**





**TABLE
      OF CONTENTS**





**PAGE****PART
                I - FINANCIAL INFORMATION**Item
                1. Financial StatementsIndex
                to Consolidated Financial Statements
            3Consolidated
                Balance Sheets as of July 31, 2008 and April 30, 2008
            4Consolidated
                Statements of Operations for the Three Months Ended July 31, 2008
                and
                2007
            5Consolidated
                Statements of Cash Flows for the Three Months Ended July 31, 2008
                and
                2007
            6Notes
                to Consolidated Financial Statements as of July 31, 2008
            7Item
                2.
            Management’s
                Discussion and Analysis or Plan of Operation
            13Item
                3.
            Controls
                and Procedures
            16**PART
                II - OTHER INFORMATION**Item
                1.
            Legal
                Proceedings
            17Item
                2.
            Unregistered
                Sales of Equity Securities and Use of Proceeds
            19Item
                3.
            Defaults
                Upon Senior Securities
            19Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            19Item
                5.
            Other
                Information
            19Item
                6.
            Exhibits
            19**SIGNATURES**
            **21**




2


**PART
      I - FINANCIAL INFORMATION**





**Item
      1. Financial Statements**





**KINGS
      ROAD ENTERTAINMENT, INC.**


**INDEX
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(UNAUDITED)**


**Page**Consolidated
                  Balance Sheets as of July 31, 2008 and April 30, 2008
              4Consolidated
                  Statements of Operations for the three months ended July 31, 2008
                  and
                  2007
              5Consolidated
                  Statements of Cash Flows for the three months ended July 31, 2008
                  and
                  2007
              6Notes
                  to Consolidated Financial Statements as of July 31, 2008
              7




3


**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      BALANCE SHEETS**


**AS
      OF JULY 31, 2008 AND APRIL 30, 2008**





July
                31, 2008
            
            April
                30, 2008(unaudited)
            
            (audited)**ASSETS****Current
                assets:**Cash
                and cash equivalents
            
            $
            56,332
            
            $
            149,765Accounts
                receivable, trade
            
            
            69,628
            
            
            69,594Prepayments
                and other current assets
            
            
            14,190
            
            
            14,190**Total
                current assets**
            
            
            140,150
            
            
            233,549**Other
                assets:**Film
                development costs, net
            
            
            563,861
            
            
            524,582**Total
                other assets**
            
            
            563,861
            
            
            524,582**TOTAL
                ASSETS**
            
            $
            704,011
            
            $
            758,131**LIABILITIES
                AND STOCKHOLDERS’ DEFICIT****Current
                liabilities:**Accounts
                payable
            
            $
            91,948
            
            $
            26,554Accrued
                expenses
            
            
            321,112
            
            
            345,083Deferred
                revenue
            
            
            780,320
            
            
            807,593**Total
                current liabilities**
            
            
            1,193,380
            
            
            1,179,230**Long
                term liabilities:**Shareholder
                Loans
            
            
            90,355
            
            
            0**Total
                long term liabilities**
            
            
            90,355
            
            
            0**Stockholders’
                deficit:**Common
                stock; 12,000,000 shares authorized at $0.01 par value; 9,956,493
                shares
                issued and outstanding at July 31, 2008 and 10,756,493 at April 30,
                2008
                respectively.
            
            
            99,564
            
            
            107,564Additional
                paid-in capital
            
            
            25,752,166
            
            
            25,828,166Accumulated
                deficit
            
            
            (26,356,829
            )
            
            (26,365,548
            )Net
                Profit (Loss) for Period
            
            
            (74,146
            )
            
            8,719Foreign
                Currency Translation
            
            
            (479
            )
            
            0**Total
                stockholders’ equity (deficit)**
            
            
            (579,724
            )
            
            (421,099
            )**TOTAL
                LIABILITIES AND STOCKHOLDERS’ DEFICIT**
            
            $
            704,011
            
            $
            758,131





See
      accompanying notes to consolidated financial statements.




4


**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      STATEMENTS OF OPERATIONS**


**FOR
      THE THREE MONTHS ENDED JULY 31, 2008 and 2007**


**(Unaudited)**




Three
                  months ended July 31,2008
              
              2007**REVENUES**Feature
                  films
              
              $
              70,794
              
              $
              44,054**TOTAL
                  REVENUE**
              
              
              70,794
              
              
              44,054**OPERATING
                  EXPENSES:**General
                  and administrative
              
              
              144,585
              
              
              77,923**Total
                  operating expenses**
              
              
              144,585
              
              
              77,923**INCOME
                  (LOSS) FROM OPERATIONS**
              
              
              (73,791
              )
              
              (33,869
              )**OTHER
                  INCOME/EXPENSE:**Interest
                  income
              
              
              0
              
              
              1,947Interest
                  expense
              
              
              (355
              )
              
              0**Total
                  other income**
              
              
              (355
              )
              
              1,947**INCOME
                  (LOSS) BEFORE INCOME TAXES**
              
              
              (74,146
              )
              
              (31,922
              )**PROVISION
                  FOR INCOME TAXES**
              
              
              0
              
              
              0**NET
                  INCOME (LOSS)**
              
              $
              (74,146
              )
              $
              (31,922
              )**OTHER
                  COMPREHENSIVE INCOME**Foreign
                  Currency Translation
              
              $
              (479
              )
              $
              0**COMPREHENSIVE
                INCOME**
              
              
              (74,625
              )
              
              (31,922
              )Net
                  income (loss) per share – Basic
              
              $
              (0.01
              )
              $
              (0.01
              )Basic
                  weighted average number of shares outstanding during the
                  period
              
              
              10,617,362
              
              
              5,806,493





See
      accompanying notes to consolidated financial statements.


5





**KINGS
      ROAD ENTERTAINMENT, INC.**


**CONSOLIDATED
      STATEMENTS OF CASH FLOWS**


**FOR
      THE THREE MONTHS ENDED JULY 31, 2008 and 2007**


**(Unaudited)**




Three
                  months ended July 31,2008
              
              2007**CASH
                  FLOWS FROM OPERATING ACTIVITIES:**Income
                  (loss) from continuing operations
              
              $
              (74,146
              )
              $
              (31,922
              )Adjustments
                  to reconcile income (loss) from continuing operations to net cash
                  (used
                  in) provided by operating activities:Common
                  stock issued for services
              
              
              0
              
              
              0Change
                  in operating assets and liabilities:Accounts
                  receivable, trade
              
              
              (34
              )
              
              0Prepayments
                  and other current assets
              
              
              0
              
              
              0Film
                  Development Costs
              
              
              (39,279
              )
              
              0Accounts
                  payable
              
              
              65,394
              
              
              (359,795
              )Accrued
                  expenses
              
              
              (23,971
              )
              
              233Deferred
                  revenue
              
              
              (27,273
              )
              
              (40,523
              )**NET
                  CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES**
              
              
              (99,309
              )
              
              (432,007
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES:**Increase/(Decrease)
                  in Shareholder Loans
              
              
              90,355Common
                  Stock Issued/(Returned) for Cash (Net)
              
              
              (84,000
              )
              
              0**NET
                  CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES**
              
              
              6,355
              
              
              0**FOREIGN
                  CURRENCY TRANSLATION**
              
              
              (479
              )
              
              0**NET
                  CHANGE IN CASH AND CASH EQUIVALENTS**
              
              
              (93,433
              )
              
              (432,007
              )**CASH
                  AND CASH EQUIVALENTS, BEGINNING OF PERIOD**
              
              
              149,765
              
              
              553,648**CASH
                  AND CASH EQUIVALENTS, END OF PERIOD**
              
              $
              56,332
              
              $
              121,641





See
      accompanying notes to consolidated financial statements.




6




KINGS
      ROAD ENTERTAINMENT, INC.


**Notes
      to Consolidated Financial Statements**


**As
      of July 31, 2008**





**NOTE
      1 – NATURE OF OPERATIONS**





Kings
      Road Entertainment, Inc., and its three wholly-owned subsidiaries (the "Company"
      or "Registrant"), have been engaged primarily in the development, financing
      and
      production of motion pictures for subsequent distribution in theaters, to pay,
      network and syndicated television, on home video, and in other ancillary media
      in the United States (the "domestic market") and all other countries and
      territories of the world (the "international market"). Kings Road Entertainment,
      Inc., incorporated in Delaware in 1980, began active operations in January
      1983
      and released its first motion picture in 1984. Since 1984, it has released
      17
      additional pictures in the domestic market, and released seven pictures directly
      to the domestic home video or pay television market. The Company operates out
      of
      offices in the USA and in Germany.




**NOTE
      2 - SIGNIFICANT ACCOUNTING POLICIES**





a.
      Basis
      of Presentation





The
      accompanying unaudited consolidated financial statements have been prepared
      in
      accordance with accounting principles generally accepted in the United States
      of
      America for interim financial statements. Accordingly, they do not include
      all
      of the information and disclosures required for annual financial statements.
      These financial statements should be read in conjunction with the financial
      statements and related footnotes for the year ended April 30, 2008, included
      in
      the Kings Road Entertainment, Inc. annual report on Form 10-KSB for that period.





In
      the
      opinion of the Company's management, all adjustments (consisting of normal
      recurring accruals) necessary to present fairly the Company's financial position
      at July 31, 2008, the results of operations for the three month period ended
      July 31, 2008 and cash flows for the three month period ended July 31, 2008
      have
      been included. The results of operations for the three month period ended July
      31, 2008, are not necessarily indicative of the results to be expected for
      the
      full fiscal year. All inter-company items and transactions have been eliminated
      in consolidation.





b.
      Accounting Method





The
      Company's consolidated financial statements are prepared using the accrual
      method of accounting. The Company has elected an April 30 year-end.





c.
      Principals of Consolidation





The
      consolidated financial statements include the accounts of the Company and its
      wholly-owned subsidiaries. As of July 31, 2008, we had three wholly-owned
      subsidiaries: Ticker, Inc., (a California corporation), The Big Easy II Film,
      LLC (a California limited liability corporation) and Kings Road Entertainment
      Europe GmbH (a German limited liability company). Ticker, Inc. and The Big
      Easy
      II Film, LLC, were inactive during the three month period ending July 31, 2008.
      Kings Road Entertainment Europe GmbH was active and facilitates international
      co-productions. The consolidated financial statements include those of Kings
      Road Entertainment, Inc. and its subsidiaries. All material intercompany
      balances and transactions have been eliminated on consolidation.


7


d.
      Use of
      Estimates





The
      preparation of financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amounts of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.





e.
      Newly
      Issued Accounting Pronouncements




In
      December 2007, the FASB issued SFAS No. 141-R, “Business Combinations”
(revised 2007) (SFAS 141-R). This Statement provides greater consistency in
      the
      accounting and financial reporting of business combinations. It requires the
      acquiring entity in a business combination to recognize all assets acquired
      and
      liabilities assumed in the transaction, establishes the acquisition-date fair
      value as the measurement objective for all assets acquired and liabilities
      assumed, and requires the acquirer to disclose the nature and financial effect
      of the business combination. SFAS 141-R is effective for fiscal years beginning
      after December 15, 2008, or January 1, 2009 for the Company. The
      Company does not anticipate that adoption of this standard will have a material
      effect on its financial statements.




In
      December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
      Consolidated Financial Statements” (SFAS 160). This Statement amends Accounting
      Research Bulletin No. 51, “Consolidated Financial Statements,” to establish
      accounting and reporting standards for the noncontrolling interest in a
      subsidiary and for the deconsolidation of a subsidiary. SFAS 160 is effective
      for fiscal years beginning after December 15, 2008, or January 1, 2009
      for the Company. The Company does not anticipate that adoption of this standard
      will have a material effect on its financial statements.




In
      November of 2007 the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159). Under
      this standard, the Company may elect to report financial instruments and
      certain other items at fair value on a contract-by-contract basis with changes
      in value reported in earnings. This election is irrevocable. SFAS 159 provides
      an opportunity to mitigate volatility in reported earnings that is caused by
      measuring hedged assets and liabilities that were previously required to use
      a different accounting method than On February 15, 2007, the FASB issued
      SFAS No. 159, “The Fair Value Option for Financial Assets and the related
      hedging contracts when the complex provisions of SFAS 133 hedge accounting
      are
      not met. SFAS 159 is effective for years beginning after November 15, 2007.
      Early adoption within 120 days of the beginning of the Company’s 2007 fiscal
      year is permissible, provided the Company has not yet issued interim financial
      statements for 2007 and has adopted SFAS 157. The Company does not
      anticipate that adoption of this standard will have a material effect on its
      financial statements.




In
      September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(SFAS 157). SFAS 157 provides enhanced guidance for using fair value to measure
      assets and liabilities. It does not require any new fair value measurements,
      but
      does require expanded disclosures to provide information about the extent to
      which fair value is used to measure assets and liabilities, the methods and
      assumptions used to measure fair value, and the effect of fair value measures
      on
      earnings. In February 2008, the FASB issued FASB Staff Position FAS 157-2,
      “Effective Date of FASB Statement No. 157” (the FSP). The FSP delayed, for
      one year, the effective date of SFAS 157 for all nonfinancial assets and
      liabilities, except those that are recognized or disclosed in the financial
      statements on at least an annual basis. This statement is effective for the
      Company beginning January 1, 2008. The deferred provisions of SFAS 157 will
      be effective for the Company’s fiscal year 2009. The Company is currently
      evaluating the impact, if any, of the entirety of SFAS 157 on its financial
      position and results of operation.





f.
      Earnings (Net Loss) Per Share




In
      accordance with FASB Statement No. 128, Earnings Per Share, we calculate
      basic net loss per share using the weighted average number of common shares
      outstanding during the periods presented. We do not have any potentially
      dilutive common stock equivalents, such as options or warrants and we do not
      have any preferred shares.




8


g.
      Foreign Currency Translation





Monetary
      assets and liabilities denominated in currencies other than the functional
      currency of US Dollars are translated at exchange rates in effect at the balance
      sheet date. Resulting unrealized translation gains and losses are included
      in
      the consolidated statements of operations. Foreign company assets and
      liabilities in foreign currencies are translated into U.S. dollars at the
      exchange rate in effect at the balance sheet date. Foreign company revenue
      and
      expense items are translated at the average rate of exchange for the fiscal
      year. Gains or losses arising on the translation of the accounts of foreign
      companies are included in accumulated other comprehensive income (loss), a
      separate component of shareholders’ equity.





**NOTE
      3 – CURRENT ASSETS**





a.
      Cash
      and Cash Equivalents




Cash
      equivalents consist of cash on hand and cash due from banks. For purposes of
      the
      statements of cash flows, the Company considers all highly-liquid debt
      instruments with original maturities of three months or less to be cash
      equivalents. The Company maintains its cash balances at financial institutions
      that are federally insured. However, at times, these balances could exceed
      federally insured limits.





b.
      Concentration of Credit Risk





The
      Company licenses various rights in its films to distributors throughout the
      world. Generally, payment is received in full or in part prior to the Company's
      delivery of the film to the applicable distributor. Once calculated royalties
      from actual sales have exceeded such an advance, the Company receives royalty
      income at the end of a specific reporting period (usually three, six or twelve
      months) based on actual sales from the preceding reporting period. As of July
      31, 2008, the Company had $69,628 in accounts receivable, none of which were
      with foreign distributors.





**NOTE
      4 – FIXED & OTHER ASSETS**





a.
      Fixed
      Assets





Fixed
      assets of the Company at July 31, 2008, consisted of various items of office
      equipment with a historical cost of $5,993 and a $0 book value. All of these
      items were fully depreciated at July 31, 2008.





b.
      Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of





The
      Company has adopted the provisions of SFAS No. 121, “Accounting for the
      Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of” and
      SFAS No. 142 "Goodwill and Other Intangible Assets." These statements require
      that long-lived assets and certain identifiable intangible assets be reviewed
      for impairment whenever events or changes in circumstances indicate that the
      carrying amount of an asset may not be recoverable. Recoverability of assets
      to
      be held and used is measured by a comparison of the carrying amount of an asset
      to future net cash flows expected to be generated by the asset. If such assets
      are considered to be impaired, the impairment to be recognized is measured
      by
      the amount by which the carrying amounts of the assets exceed their respective
      fair values. Assets to be disposed of are reported at the lower of the carrying
      amount of fair value less the costs to sell.




9


c.
      Film
      Development Costs





Film
      development costs are costs incurred for movie projects not yet in production.
      Film development costs, including any related interest and overhead, are
      capitalized as incurred. Profit participations and residuals, if any, are
      accrued in the proportion that revenue for a period bears to the estimated
      future revenues. Costs are amortized using the individual film forecast method
      set forth in FASB Statement No. 53 ("SFAS 53"), which bases the costs on the
      ratio of revenue earned in the current period to the Company's estimate of
      total
      revenues to be realized. Management periodically reviews its estimates on a
      film-by-film basis and, when unamortized costs exceed net realizable value
      for a
      film, that film's unamortized costs are written down to net realizable
      value.





At
      July
      31, 2008, film development costs totaled $563,861 which was net after an
      allowance of $30,000. During the three month period ended July 31, 2008, no
      film
      development costs were determined to be impaired.





**NOTE
      5 – DEFERRED REVENUE**





As
      of
      July 31, 2008, the Company has deferred revenue totaling $780,320. The Company
      is following the guidelines of SOP 00-02 for film production and distribution.





**NOTE
      6 - COMMITMENTS AND CONTINGENCIES**





a.
      Rent





The
      Company rents its registered office space at 468 N. Camden Drive, Beverly Hills
      and an additional office space in Santa Monica, California. The Company also
      rents flexible storage space for its archives. In Europe, the Company’s
      subsidiary rents office space in a shared facility. Office Rent expense for
      the
      Company's offices and archive storage space was $11,743 and $10,793 during
      the
      three months ended July 31, 2008 and 2007, respectively. All rental agreements
      may be terminated upon one month’s notice.





b.
      Contingent Losses & Litigation





At
      July
      31, 2008, we were not involved in any litigation. The Company settled its
      litigation with a former Officer and Director during the three months ending
      July 31, 2008. Legal fees associated with litigation are recorded or accrued
      in
      the period in which they occur.




c.
      Writing Agreement




As
      a
      result of a writing agreement signed on February 19, 2008, in connection with
      a
      currently untitled feature length motion picture remake/sequel of one of the
      films in the Company’s library, the Company is obligated to pay the writer a
      further $66,667 in installments upon completion of certain writing milestones
      which may occur during the course of the agreement. As these milestones occur,
      the amounts due will be paid or accrued for.





d.
      Shareholder Loans





As
      of
      July 31, 2008, the Company had borrowed $90,000 from its two largest
      shareholders under the terms of an arrangement dated July 15, 2008, which
      authorized the borrowing of up to $500,000 from shareholders of the Company
      to
      fund working capital and other needs (the “Shareholder Loans”). The interest
      charge is accrued with the principal amount of the loans on the Balance Sheet
      and expensed on the Statement of Operations.




10


e.
      Other
      Commitments and Contingencies





In
      the
      ordinary course of business, the Company may become involved in matters of
      dispute which in the aggregate are not believed by management to be material
      to
      its financial position or results of operations. As of July 31, 2008, the
      Company was not involved in any active or passive litigation.





**NOTE
      7 – RECOGNITION OF REVENUES**





Revenue
      from the sale or licensing of films is recognized in accordance with Statement
      of Position 00-2 “Accounting by Producers or Distributors of Films” (“SOP
      00-2”). Revenue from the theatrical release of feature films is recognized at
      the time of exhibition based on the Company’s participation in box office
      receipts. Revenue from the sale of DVDs rights under licensing agreements is
      recognized on the later of receipt by the customer or “street date” (when it is
      available for sale by the customer). Under revenue sharing arrangements, rental
      revenue is recognized when the Company is entitled to receipts and such receipts
      are determinable. Revenues from television licensing are recognized when the
      feature film or television program is available to the licensee for telecast.
      For television licenses that include separate availability “windows” during the
      license period, revenue is allocated over the “windows.” Revenue from sales to
      international territories are recognized when access to the feature film or
      television program has been granted or delivery has occurred, as required under
      the sales contract, and the right to exploit the feature film has commenced.
      Cash payments received are recorded as deferred revenue until all the conditions
      of revenue recognition have been met.





The
      Company’s revenues are derived primarily from distribution agreements in the US
      domestic market place and are amortized during the reporting period for which
      the revenue is applicable. Revenues derived from purchase option agreements
      are
      amortized over the period of the option granted. Revenues from theatrical
      exhibition are recognized on the dates of exhibition. Revenues from
      international, home video, video-on-demand, television and pay-television
      license agreements are recognized when the license period begins and the film
      is
      available for exhibition or exploitation pursuant to the terms of the applicable
      license agreement. Once complete, a typical film will generally be made
      available for licensing as follows:





Months After
            
            ApproximateMarketplace
            
            Initial Release
            
            Release PeriodDomestic
                theatrical
            
            
            
            
            
            0-3
                monthsAll
                international markets
            
            
            
            
            
            1-12
                yearsDomestic
                home video/DVD/ Video on Demand
            
            
            3-6
                months
            
            
            3-12
                monthsDomestic
                cable/pay television
            
            
            12-18
                months
            
            
            18
                monthsDomestic
                syndicated/free television
            
            
            24-48
                months
            
            
            1-n
                years





These
      periods are dynamic and as new media, distribution platforms and consumer
      behavior dictate, they will continue to change.





**NOTE
      8 - COMMON STOCK**





At
      July
      31, 2008, the Company had 12,000,000 authorized shares of common stock, of
      which
      9,956,493 shares were issued and outstanding.





On
      July
      15, 2008, pursuant to lawsuit settlement agreements with former President and
      officer Mr. H. Martin DeFrank and shareholder Mr. John M. Burnley, the Company
      repurchased 500,000 shares of its common stock from Mr. DeFrank and 300,000
      shares of its common stock from Mr. Burnley. The total of 800,000 shares were
      returned to the Company and cancelled.


11


**N0TE
      9 – DEPRECIATION AND AMORTIZATION**





Depreciation
      of fixed assets is computed by the straight-line method over the estimated
      useful lives of the assets ranging from three to five years. Leasehold
      improvements are amortized over the useful life of the improvements or the
      term
      of the applicable lease, whichever is less.





**NOTE
      10 - GOING CONCERN**





The
      Company's consolidated financial statements are prepared using accounting
      principles generally accepted in the United States of America applicable to
      a
      going concern which contemplates the realization of assets and liquidation
      of
      liabilities in the normal course of business. However at July 31, 2008, the
      Company has sustained recent losses from operations, has a deficit in working
      capital of $1,053,230 and has an accumulated deficit of approximately
      $26,431,454. These conditions raise substantial doubt about the Company's
      ability to continue as a going concern. The Company has discontinued certain
      operations that historically produced negative cash flow and plans to raise
      capital through equity-based investment instruments, which will provide funding
      for the development of future projects and operating expenses.




**NOTE
      11 - SUBSEQUENT EVENTS**





On
      August
      1, 2008, Mr. Branko Lustig agreed to serve on the Company’s Board of Directors.
      Mr. Lustig was elected to fill a vacancy on the Board in accordance with the
      Company’s bylaws and by a unanimous vote of the directors. Mr. Lustig, will
      serve on the Board of Directors until the next annual shareholder meeting or
      until his successor has been elected. Mr. Lustig has no family relationships
      with any board member or affiliate.





By
      unanimous vote, the Board has agreed to indemnify Mr. Lustig for any
      losses incurred by him in connection with his service on the Company’s Board of
      Directors.




12





**ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
      OPERATION**





The
      following review concerns the periods ended July 31, 2008 and July 31, 2007,
      which should be read in conjunction with the financial statements and notes
      thereto presented in the Form 10-Q and the Form 10-KSB for the fiscal year
      ending April 30, 2008.





*Forward
      Looking Statements*





*The
      information in this discussion contains forward-looking statements within the
      meaning of Section 27A of the Securities Act of 1933, as amended, and Section
      21E of the Securities Exchange Act of 1934, as amended. These forward-looking
      statements involve risks and uncertainties, including statements regarding
      our
      capital needs, business strategy and expectations. Any statements contained
      herein that are not statements of historical facts may be deemed to be
      forward-looking statements. In some cases, you can identify forward-looking
      statements by terminology such as "may", "will", "should", "expect", "plan",
      "intend", "anticipate", "believe", “estimate", "predict", "potential" or
      "continue", the negative of such terms or other comparable terminology. Actual
      events or results may differ materially. We disclaim any obligation to publicly
      update these statements, or disclose any difference between its actual results
      and those reflected in these statements.*





The
      following discussion should be read in conjunction with the Company's financial
      statements and related notes. Certain matters discussed herein may contain
      forward-looking statements that are subject to risks and uncertainties. Such
      risks and uncertainties include, but are not limited to, the following:


-
      the
      volatile and competitive nature of the film industry,


-
      the
      uncertainties surrounding the rapidly evolving markets in which the Company
      competes,


-
      the
      uncertainties surrounding technological change of the industry,


-
      the
      Company's dependence on its intellectual property rights,


-
      the
      success of marketing efforts by third parties,


-
      the
      changing demands of customers and


-
      the
      arrangements with present and future customers and third parties.





Should
      one or more of these risks or uncertainties materialize or should any of the
      underlying assumptions prove incorrect, actual results of current and future
      operations may vary materially from those anticipated.




**Recent
      Developments**





Subsequent
      to the fiscal year ended April 30, 1996, the Company has produced no new films
      and has derived its film revenues almost exclusively from the exploitation
      of
      films produced in prior years. The Company continues to fund and develop motion
      picture projects, with the intention of either producing the motion picture,
      establishing a partnership or joint venture with another film production company
      to develop and/or produce the project or an outright sale of the project. The
      Company’s present development activities include development of screenplays with
      the aim of producing or co-producing three to five feature films per year.
      The
      scope of these development activities are heavily dependent on attaining funding
      for the business plan.





On
      December 17, 2007, the Company appointed Mr. Sven Ebeling, Principal of West
      Coast Pictures LLC to be its Head of Production. On July 29, 2008, the Company
      entered into a Production Services Agreement (the “PSA”) with West Coast
      Pictures, LLC (“WCP”). As of the date of this report, WCP owns approximately
      40.1% of the outstanding shares of the Company’s common stock and has a proxy to
      vote another approximately 4.6% of the outstanding shares of the Company’s
      common stock. Sven Ebeling serves as both the Company’s Head of Production and
      as the manager of WCP. Monika Nosic is a director of the Company and a member
      of
      WCP.


13


On
      July
      15, 2008, the Board of Directors of the Company authorized the borrowing of
      up
      to $500,000 from shareholders of the Company to fund working capital and other
      needs (the “Shareholder Loans”). As of July 31, 2008, the Company had borrowed
      $90,000 at a rate of 3% above the published Wall Street Journal Prime Rate
      for a
      one year term, unless renewed.





On
      July
      15, 2008, the Company settled the lawsuits with its former President and officer
      Mr. H. Martin DeFrank, shareholder Mr. John M. Burnley, an entity purportedly
      owned or controlled by Mr. DeFrank and Mr. John Burnley. The settlement includes
      the dismissal of several complaints and cross complaints among the Company,
      its
      officers, directors, and Mr. H. Martin DeFrank, shareholder Mr. John M. Burnley
      and other persons and entities (See Settlement of DeFrank and Shareholder
      Burnley Lawsuits).





**Results
      of Operations**





**The
      Three Months Ended July 31, 2008 vs. the Three Months Ended July 31, 2007**





For
      the
      quarter ended July 31, 2008, feature film revenues were $70,794 as compared
      to
      $44,054 for the quarter ended July 31, 2007. The increase of $26,740 results
      primarily from increased revenue from distribution of the Company's feature
      film
      library. The Company has licensed its films to various, third party distributors
      and revenue is reported by these distributors on a regular basis and is based
      on
      actual sales for a preceding period. Revenue fluctuations from distribution
      are
      therefore mainly influenced by consumer demand and the activities of the
      distributor and the Company has generally no further influence on the sales
      success of those movies and the resulting fluctuations in revenue.





Costs
      and
      expenses amounted to 144,585 for the quarter ended July 31, 2008 as compared
      to
      $77,923 during the quarter ended July 31, 2007. This increase of $66,662 is
      primarily due to increases in external consultant fees, producer and
      administrative payroll, and travel expenses.





The
      Company had a net loss of $74,146 for the quarter ended July 31, 2008 as
      compared to a net loss of $31,922 for the quarter ended July 31, 2007. This
      increase in net loss of $42,224 results primarily from an increase in external
      consultant fees, producer and administrative payroll, and travel expenses,
      which
      was only partly compensated by an increase in revenue.





**Liquidity
      and Capital Resources**





The
      Company's principal source of working capital during the three month period
      ended July 31, 2008 was motion picture royalty income. The Company does not
      currently have sufficient working capital to fund its operations. If the Company
      fails to raise additional capital, increase revenues, or sell certain assets,
      the Company will, in all likelihood, be forced to significantly reduce its
      operations or liquidate.





On
      July
      15, 2008, the Board of Directors of the Company authorized the borrowing of
      up
      to $500,000 from shareholders of the Company to fund working capital and other
      needs (the “Shareholder Loans”). As of July 31, 2008, the Company had borrowed
      $45,000 from each of its two largest shareholders. Shareholder loans are
      necessary to finance the working capital needs of the Company for an interim
      period, specifically to continue its reorganization and remain compliant in
      its
      financial reporting. The Company’s business plan is based on development and
      production of new movies and will require further capital. Both the
      reorganization of the Company, which includes attracting and retaining key
      personnel and movie assets as well as remaining in financial compliance, will
      optimize the opportunities available to the Company in attaining the financing
      required to fully implement its business plan.




14


For
      the
      three months ended July 31, 2008, the Company's net cash flow used in operating
      activities was $99,309 compared to net cash used in operating activities of
      $432,007 during the period ended July 31, 2007. At July 31, 2008, the Company
      had cash of $56,332 as compared to $121,641 at July 31, 2007.





**Future
      Commitments**





As
      a
      result of a writing agreement signed on February 19, 2008, in connection with
      a
      currently untitled feature length motion picture remake/sequel of one of the
      films in the Company’s library, the Company is obligated to pay the writer a
      further $66,667 in installments upon completion of certain writing milestones
      which may occur during the course of the agreement. As these milestones occur,
      the amounts due will be either paid or accrued.





The
      Company does not have, nor is it aware of, any other material future
      commitments.




15


**ITEM
      3. CONTROLS AND PROCEDURES.**




We
      have
      adopted and maintain disclosure controls and procedures (as such term is defined
      in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934,
      as
      amended (the “Exchange Act”) that are designed to ensure that information
      required to be disclosed in our reports under the Exchange Act, is recorded,
      processed, summarized and reported within the time periods required under the
      SEC’s rules and forms and that the information is gathered and communicated to
      our management, including our Chief Executive Officer (Principal Executive
      Officer) and Chief Financial Officer (Principal Financial Officer), as
      appropriate, to allow for timely decisions regarding required
      disclosure.




As
      required by SEC Rule 15d-15(b), our Principal Executive Officer and Chief
      Financial Officer carried out an evaluation under the supervision and with
      the
      participation of our management, of the effectiveness of the design and
      operation of our disclosure controls and procedures pursuant to Exchange Act
      Rule 15d-14 as of the end of the period covered by this report. Based on the
      foregoing evaluation, they have concluded that as of July 31, 2008, our
      disclosure controls and procedures were effective.




*Changes
      in Internal Control over Financial Reporting*





There
      was
      no change in our internal control over financial reporting that occurred during
      the three months ended July 31, 2008, that has materially affected, or is
      reasonably likely to materially affect, our internal control over financial
      reporting. However, since April 30, 2008, we have begun the following remedial
      measures relating to our internal control over financial reporting:





·
            In
                May 2008, we appointed Mr. Philip Holmes, our President and Director,
                to
                the position of Chief Executive Officer to oversee and control the
                organizational process required to remedy the material weakness that
                was
                identified.





·
            In
                June 2008, we hired a consultant with extensive experience in public
                company accounting, operations and financial reporting that has functioned
                as our corporate controller.





·
            We
                are actively seeking to hire additional personnel with knowledge
                of, and
                technical expertise in U.S. GAAP.





·
            We
                are implementing personnel resource plans and training programs designed
                to have sufficient personnel with knowledge, experience and training
                in
                the application of U.S. GAAP.


16





**PART
      II - OTHER INFORMATION**





**ITEM
              1.**
            **LEGAL
                PROCEEDINGS**





Shareholder
      Complaint against the Company and Derivative Suit





On
      December 16, 2006, shareholder John M. Burnley, filed a complaint in the State
      of Delaware to compel an Annual Meeting of shareholders. The complaint alleged
      that certain members of the Board of Directors were acting in a manner that
      may
      be for their own interests and detrimental to that of the shareholders at large.
      Legal counsel for the Company has reviewed the case and deemed that the
      necessary steps have not been completed to effectuate this petition and likewise
      deemed the matter to be inactive at that time.





On
      April
      18, 2007, shareholder Burnley filed a complaint in the U.S. District Court
      of
      California for and on behalf of the Shareholders of Kings Road Entertainment,
      Inc. The complaint brought a derivative suit against four Directors of the
      Company, alleging that they had breached their fiduciary duties to the Company
      and claiming compensatory damages in the amount of $7,500,000. Subsequent to
      this report, the case was dismissed without prejudice pursuant to local rule
      7-9
      on June 12, 2007.





On
      July
      24, 2007, shareholder Burnley, in the right and for the benefit of Kings Road
      Entertainment Inc., re-filed the above derivative suit in the Los Angeles
      Superior Court (against four Directors of the Company as well as the Company
      as
      a nominal defendant). The complaint alleges that the named Directors breached
      their fiduciary duties to the Company in conspiring to sell a majority interest
      in the Company without the benefit of an evaluation of the assets of the Company
      being performed and at a price considered by Plaintiff to be unreasonable and
      detrimental to the company and its shareholders, in that the price received
      for
      the majority interest was far below certain rival offers existing at the time
      of
      the transaction and claiming compensatory damages in the amount of $7,500,000.





On
      September 28, 2007, the Company filed a demurrer on the grounds that the
      Plaintiff failed to set forth facts sufficient to state a cause of action
      against Defendants or disprove that the Directors acted in valid exercise of
      their business judgment according to Delaware Law. Subsequent to this report,
      on
      January 4,  2008,
      the
      Plaintiff dismissed the case without prejudice.





On
      July
      15, 2008, the Company settled the lawsuits with shareholder Mr. John M. Burnley.
      (See Settlement of DeFrank and Shareholder Burnley Lawsuits”).





Litigation
      with Director and Former Officer





On
      June
      13, 2007, the Company filed a lawsuit against Director, H. Martin DeFrank,
      and
      Sloan Squared, LTC, (“Sloan”), alleging, amongst others, breach of fiduciary
      duty, constructive fraud, usurping corporate opportunity, and conversion.





On
      August
      15, 2007, Mr. DeFrank filed a complaint against the Company and three Directors
      alleging wrongful termination, negligence and violation of the Fair Employment
      and Housing Act. This complaint was amended on October 12, 2007.





On
      November 13, 2007, the Company and the three named Directors filed a demurrer
      against this amended complaint. On January 7, 2008, the court issued a tentative
      ruling upholding the individual Directors’ demurrer on all counts without leave
      to amend. Subsequent to this report, on February 14, 2008, the court dismissed
      Mr. DeFrank’s complaint in its entirety.





On
      July
      15, 2008, the Company settled the lawsuits with former President and Director
      DeFrank. (See “Settlement of DeFrank and Shareholder Burnley Lawsuits”).




17


Settlement
      of DeFrank and Shareholder Burnley Lawsuits





On
      July
      15, 2008, the Company settled the lawsuits with its former President and officer
      Mr. H. Martin DeFrank and shareholder Mr. John M. Burnley by repurchasing
      500,000 shares of its common stock from Mr. DeFrank and 300,000 shares of its
      common stock from Mr. Burnley. The purchase price of Mr. DeFrank’s Shares was
      $60,000 and the purchase price of the Mr. Burnley’s shares was $24,000.





The
      Company repurchased these shares as part of a settlement between the Company,
      its Chief Executive Officer, Mr. Holmes, Mr. DeFrank, Sloane Squared Ltd.,
      an
      entity purportedly owned or controlled by Mr. DeFrank and Mr. John Burnley.
      In
      addition to the Company’s repurchase of Mr. DeFrank’s shares and Mr. Burnley’s
      shares, the settlement requires (i) the dismissal with prejudice by the Company
      of the complaint filed by the Company in the matter of Kings
      Road Entertainment, Inc. vs. H. Martin DeFrank, Sloane Squared Ltd., et.
      Al. ;
      (ii)
      the dismissal with prejudice by the Company and Mr. Holmes of the complaint
      filed by the Company, Mr. Holmes and Mr. George Moseman, a former officer and
      Director of the Company in the matter of Kings
      Road Entertainment, Inc. v. H. Martin DeFrank, John Burnley, et
      al. ;
      (iii) the dismissal with prejudice by Mr. DeFrank of the cross-complaint
      filed against the Company, Mr. Holmes and Brad Hoffman, former Director, in
      the
      matter of DeFrank
      vs. Kings Road Entertainment, Inc. and Certain Directors and
      the
      dismissal by Mr. DeFrank without prejudice of the cross-complaint filed against
      Mr. Moseman in such matter; (iv) the dismissal with prejudice by Mr. Burnley
      of
      his complaint against the Company, Mr. Holmes and all other parties other than
      Mr. Moseman in the matter of John
      Burnley vs. Kings Road Entertainment, Inc., George Moseman and Phil Holmes,
      et.
      al. and the
      dismissal by Mr. Burnley of his complaint in such matter against Mr. Moseman
      without prejudice; (v) the release by the Company and Mr. Holmes of any
      claims (other than any claims created by the settlement) against Mr. DeFrank,
      Sloane Squared Ltd, Mr. Burnley and their respective affiliates; (vi) the
      release by Mr. DeFrank, Sloane Squared Ltd., Mr. Burnley and their respective
      affiliates of any claims (other than any claims created by the settlement)
      against the Company, Mr. Holmes and the Company’s current and former officers,
      Directors and shareholders other than Mr. Moseman; and (vii) Mr. DeFrank and
      Sloane agreeing to pay the Company fifty percent (50%) of all compensation
      and
      proceeds (if any) received by Mr. DeFrank or Sloane under the “All of
      Me”/Producer Agreement, dated April 23, 2004, by and among Sloane Squared Ltd.,
      Mr. DeFrank, Katja Motion Picture Corp., Eclectic Filmworks, Inc. and Mr. Ira
      Posnansky.





In
      addition, as part of the settlement, Mr. DeFrank acknowledged that the common
      law trademark of the name Kings Road Entertainment is owned exclusively by
      the
      Company. Mr. DeFrank further agreed to refrain from any use of the name “Kings
      Road,” “Kings Road Entertainment,” “KREN,” “Kingsroadscreen,” “Kingsroadmedia,”
or any derivations, acronym or words or abbreviations of similar import, in
      any
      way or context, including but not limited to email addresses. Mr. DeFrank also
      agreed to refrain from associating himself with the production of any of the
      Company’s movie assets except for the possible New Line/Katja remake project of
“All of Me.”





**Other
      litigation**





As
      of
      July 31, 2008, the Company was not aware of any pending claims or assessments,
      other than as described above or related to the matters described above, which
      may have a material adverse impact on the Company's financial position or
      results of operations.




18


**ITEM
              2.**
            **UNREGISTERED
                SALES OF EQUITY SECURITIES AND USE OF
                PROCEEDS**





There
      were no unregistered sales of equity securities during the three months ending
      July 31, 2008. Repurchases of shares are described in the table
      below:





**REPURCHASES OF EQUITY SECURITIES (1)**




**Period**
            
            **Total**
              **Number of**
              **Shares (or**
              **Units)**
              **Purchased**
            
            **Average**
              **Price**
              **Paid per**
              **Share (or**
              **Unit)**
            
            **Total Number of**
              **Shares (or**
              **Units)**
              **Purchased as**
              **Part of Publicly**
              **Announced**
              **Plans or**
              **Programs**
            
            **Maximum Number**
              **(or Approximate**
              **Dollar Value) of**
              **Shares (or Units) that**
              **May Yet Be**
              **Purchased Under the**
              **Plans or Programs (2)**May
                1 – May 31, 2008
            
            
            0
            
            
            0
            
            
            0
            
            
            0June
                1 – June 30, 2008
            
            
            0
            
            
            0
            
            
            0
            
            
            0July
                1 – July 31, 2008
            
            
            800,000
            
            $
            0.105
            
            
            0
            
            
            0Total
            
            
            800,000
            
            $
            0.105
            
            
            0
            
            
            0





(1)
            All
                repurchases of shares were pursuant to the settlement of lawsuits
                with
                former President and officer Mr. H. Martin DeFrank and shareholder
                Mr.
                John M. Burnley. (See “Settlement of DeFrank and Burnley
                Lawsuits”)


(2)
            There
                were no repurchase plans or programs in the three months ending July
                31,
                2008





**ITEM
              3.**
            **DEFAULTS
                UPON SENIOR SECURITIES**





None.




**ITEM
              4.**
            **SUBMISSION
                OF MATTERS TO A VOTE OF SECURITY HOLDERS**





No
      matters were submitted to security holders for a vote as of July 31,
      2008.




**ITEM
              5.**
            **OTHER
                INFORMATION**





None.





**ITEM
                6.**
            **EXHIBITS**3.2
            Bylaws
                of Kings Road Entertainment, Inc. as amended (incorporated by reference
                to
                Exhibit 3.2 to form 8-K filed on June 18,
                2008)




19




10.1
            Settlement
                Agreement and Mutual General Release, effective as of June 25, 2008,
                by and among, Kings Road Entertainment, Inc., Philip Holmes, H. Martin
                Defrank, Sloan Squared Ltd. and John Burnley (incorporated by reference
                to
                Exhibit 10.1 to Form 8-K filed on July 18, 2008)10.2
            Stock
                Purchase Agreement, entered into as of June 25, 2008, by and between
                H.
                Martin DeFrank and Kings Road Entertainment, Inc. (Incorporated by
                reference to Exhibit 10.2 to Form 8-K filed on July 18,
                2008)10.3
            Stock
                Purchase Agreement, entered into as of June 25, 2008, by and between
                John
                Burnley and Kings Road Entertainment, Inc. (incorporated by reference
                to
                Exhibit 10.3 to Form 8-K filed on July 18, 2008)10.4
            Production
                Services Agreement entered into as of July 29, 2008 between West
                Coast
                Pictures, LLC and Kings Road Entertainment, Inc. (incorporated by
                reference to Exhibit 10.1 to Form 8-K filed on August 4,
                2008)31.1
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Executive
                Officer.31.2
            Rule
                13a-14(a)/15d-14(a) Certification of Chief Financial
                Officer.32
            1350
                Certification of Chief Executive Officer and Chief Financial
                Officer.




20


**SIGNATURES**





In
      accordance with the requirements of the Exchange Act, the Registrant caused
      this
      report to be signed on its behalf by the undersigned, thereunto duly
      authorized.





**KINGS
                ROAD ENTERTAINMENT, INC.**(Registrant)Date:
                September 15, 2008
            By:
            /s/
                Philip HolmesPhilip
                Holmes, Chief Executive Officer




21