U.S. SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                   Form 10-QSB
                  Quarterly Report Under Section 13 or 15(d) of
                       the Securities Exchange Act of 1934



For the Quarterly Period Ended January 31, 1999      Commission File No. 0-14234



                         KINGS ROAD ENTERTAINMENT, INC.
                 (Name of small business issuer in its charter)


         Delaware                                               95-3587522
(State or other jurisdiction                                (I.R.S. Employer
       of incorporation)                                     Identification No.)


                      1901 Avenue of the Stars, Suite 1545
                          Los Angeles, California 90067
                     (Address of principal executive office)


Issuer's telephone number:  (310) 552-0057


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 X      NO ___


As of March 15, 1999 the  registrant  had  3,389,315  shares of its common stock
outstanding.


Transitional Small Business Disclosure Format:  YES ___    NO   X_
<PAGE>

PART I - FINANCIAL INFORMATION

Item 1 - Financial Statements


                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEET
                                   (UNAUDITED)

                                                       AS OF
                                                   JAN. 31, 1999
                                               --------------------
ASSETS
   Cash and Cash Equivalents                               $ 47,216
   Accounts and Notes Receivable, 
     net of allowance of $10,000                            388,108
   Film Costs, net of amortization 
     of $168,335,670                                        308,261
   Investment in Immediate 
     Entertainment Group                                  5,951,851
   Prepaid Expenses                                          72,101
   Fixed Assets                                              12,874
   Other Assets                                               2,500
                                                -------------------
TOTAL ASSETS                                             $6,782,911
                                                ===================


LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Accounts Payable                                        $205,017
   Note Payable to Related Parties                          210,803
   Accrued Expenses                                          10,586
   Deferred Revenue                                           8,400
                                                -------------------
     TOTAL LIABILITIES                                      434,806

COMMITMENTS AND CONTINGENCIES                                     0

SHAREHOLDERS' EQUITY
   Common Stock, $.01 par value, 
     12,000,000 shares authorized,
     3,389,315 shares issued and 
     outstanding at Jan. 31, 1999                            65,815
   Additional Paid-In Capital                            24,542,788
   Deficit                                              (18,260,498)
                                                -------------------
     TOTAL SHAREHOLDERS' EQUITY                           6,348,105
                                                -------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY               $6,782,911
                                                ===================

The accompanying notes are an integral part of this balance sheet.

                                       2
<PAGE>
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                   (UNAUDITED)
<TABLE>
<CAPTION>

                                                               THREE MONTHS                      NINE MONTHS
                                                             ENDED JANUARY 31,                 ENDED JANUARY 31,
                                                         1999                1998            1999            1998
                                                    --------------------------------  --------------------------------
<S>                                                       <C>                <C>                <C>              <C>
REVENUES
     Feature Films                                         $242,806        $668,513          $464,970      $1,339,575
     Interest Income                                          4,466          32,557            71,165         127,077
                                                      --------------     ----------   ---------------   --------------
                                                            247,272         701,070           536,135       1,466,652

COSTS AND EXPENSES
     Costs Related to Revenue                                81,997         186,161            90,854         488,658
     Selling Expenses                                         3,016          34,725            32,489          57,260
     General & Administrative Expenses                      235,604         282,320           548,191         781,291
     Interest                                                 2,426               0             2,426               0
     Cancellation of Stock Options                          113,754               0           113,754               0
                                                    ---------------     -----------   ---------------    ------------ 
                                                            436,797         503,206           787,714       1,327,209
                                                    ---------------     -----------   ---------------    ------------ 
     OPERATING (LOSS)/INCOME                               (189,525)        197,864          (251,579)        139,443

Equity in Losses of Affiliates                              (31,236)              0           (31,236)              0
                                                    ---------------     -----------   ---------------    ------------ 
      (LOSS)/INCOME BEFORE
      INCOME TAXES                                        (220,761)         197,864          (282,815)        139,443

Provision for Income Taxes                                        0           4,452           (18,940)          5,274
                                                    ---------------     -----------   ---------------    ------------ 
     NET (LOSS)/INCOME                                    ($220,761)       $193,412         ($263,875)       $134,169
                                                    ===============     ===========   ===============    ============

     Net Loss Per Share - Basic                              ($0.07)          $0.10            ($0.11)          $0.07
                                                    ===============     ===========   ===============    ============

     Weighted Average Number of
     Common Shares - Basic                                3,389,315       1,884,141         2,404,270       1,864,423
                                                    ===============     ===========   ===============    ============

     Net Loss Per Share - Diluted                            ($0.07)          $0.10           ($0.11)          $0.07
                                                    ===============     ===========   ===============    ============

     Weighted Average Number of
     Common Shares and Common
     Share Equivalents - Diluted                          3,389,315       1,911,849         2,427,714       1,895,094
                                                    ===============     ===========   ===============    ============
</TABLE>
The accompanying notes are an integral part of these statements.

                                       3
<PAGE>
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                 Common                  Common           Additional          Retained             Total
                                  Stock                  Stock             Paid-In           Earnings/        Shareholders'
                                 Shares                  Amount             Capital           (Deficit)            Equity
                            ------------------ ------------------ ------------------ ------------------ -------------------
<S>                               <C>                     <C>                <C>                <C>                <C>
Balance,
   April 30, 1997                   1,706,581            $45,716        $24,902,177      ($18,035,440)          $6,912,453
   Exercise of
      Stock Options                   205,167              5,324            139,797              -----             145,121
   Distribution to
      Shareholders                      -----              -----        (3,956,696)             -----           (3,956,696)
   Net Income                           -----              -----              -----             38,817              38,817
                            -----------------  -----------------  -----------------  -----------------   -----------------
Balance,
   April 30, 1998                   1,911,748             51,040         21,085,278       (17,996,623)           3,139,695
   Issuance of Stock
      for Acquisitions              1,477,567             14,775          3,457,510              -----           3,472,285
   Net Loss                             -----              -----              -----          (263,875)            (263,875)
                            -----------------  -----------------  -----------------  -----------------   -----------------
Balance,
   Jan. 31, 1999                    3,389,315            $65,815        $24,542,788      ($18,260,498)          $6,348,105
                                   ==========         ==========        ===========      =============          ==========

</TABLE>

The accompanying notes are an integral part of these statements.



                                       4
<PAGE>

                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (UNAUDITED)

<TABLE>
<CAPTION>

                                                                              NINE MONTHS
                                                                            ENDED JAN. 31,
                                                                       1999                 1998
                                                                 --------------        ---------------
<S>                                                                    <C>                     <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Loss                                                        ($263,875)              $134,169
     Adjustments to reconcile Net Loss to
     Net Cash Provided by Operating Activities:
          Depreciation and Amortization                                 97,024                494,933
          Equity in Losses of Affiliates                                31,236                      0
     Changes in Assets and Liabilities:
          Increase in Accounts Receivable                              (14,645)               (30,724)
          Increase in Prepaid Expenses                                 (24,260)               (56,523)
          Decrease in Accounts Payable                                 (28,150)               (61,310)
          Decrease in Accrued Expenses                                  (4,414)                     0
          Decrease in Income Taxes Payable                                   0                 (3,482)
          Decrease in Deferred Revenue                                  (1,200)                (8,982)
                                                           -------------------    -------------------
     NET CASH AND CASH EQUIVALENTS (USED IN)/
     PROVIDED BY OPERATING ACTIVITIES                                 (208,284)               468,081

CASH FLOWS FROM INVESTING ACTIVITIES:
     Sale of Marketable Securities                                           0              3,480,266
     (Purchase)/Disposal of Fixed Assets                                (4,560)                 3,207
     Gross Additions to Film Costs                                     (98,441)              (102,740)
     Investment in Immediate Entertainment Group                    (5,983,087)                     0
                                                           -------------------    -------------------
     NET CASH AND CASH EQUIVALENTS (USED IN)/
     PROVIDED BY INVESTING ACTIVITIES                               (6,086,088)             3,380,733

CASH FLOWS FROM FINANCING ACTIVITIES:
     Issuance of Stock for Investment in Immediate                   3,472,285                      0
     Borrowings from Related Parties                                   210,803                      0
     Exercise of Stock Options                                               0                145,121
     Distribution to Shareholders                                            0             (3,956,696)
                                                           -------------------    -------------------
     NET CASH AND CASH EQUIVALENTS PROVIDED
     BY/(USED IN) FINANCING ACTIVITIES                               3,683,088             (3,811,575)
                                                           -------------------    -------------------
NET DECREASE IN CASH AND CASH
EQUIVALENTS                                                         (2,611,284)                 37,239

CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD                                                  2,658,500                248,204
                                                           -------------------    -------------------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD                                                          $47,216               $285,443
                                                           ===================    ===================
</TABLE>

The accompanying notes are an integral part of these statements.

                                       5
<PAGE>

                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BASIS OF PRESENTATION

The  consolidated  financial  statements  include  the  accounts  of Kings  Road
Entertainment,  Inc.  and its  subsidiaries.  The  Company  has  one  affiliate,
Immediate  Entertainment Group, Inc., which is 20% owned by the Company, that is
accounted for using the equity method.

The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting  principles 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, 1998, included in the Kings Road Entertainment,  Inc. ("Company"
or "Registrant") 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 as of January 31, 1999 and the results of operations and cash flows for
the three and nine  month  periods  ended  January  31,  1999 and 1998 have been
included.

The results of operations for the three and nine month periods ended January 31,
1999 are not  necessarily  indicative of the results to be expected for the full
fiscal year.  For further  information,  refer to the financial  statements  and
footnotes thereto included in the Company's annual report on Form 10-KSB for the
year ended April 30, 1998.

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  periods.
Actual results could differ from those estimates.

The Company has adopted  Statement  of  Financial  Accounting  Standard No. 128,
Earnings  Per Share  ("SFAS No.  128"),  which became  effective  for  financial
statements issued for periods ending after December 15, 1997. In accordance with
SFAS No. 128, prior year earnings per share ("EPS")  amounts have been restated.
SFAS No. 128 was issued to simplify the standards for calculating EPS previously
set forth in Accounting  Principles  Board No. 15, Earnings Per Share.  SFAS No.
128 replaces the  presentation of primary EPS with basic EPS. The new rules also
require dual presentation of basic and diluted EPS on the face of the statements
of operations.

In  April  1998,  the  Company  effected  a  1-for-3  reverse  stock  split  for
shareholders  of record on April 17,  1998.  All share and per share data in the
financial statements reflect the reverse stock split for all periods presented.

                                       6
<PAGE>

                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE B - FILM COSTS

Film costs consist of:
                                                              As Of
                                                         Jan. 31, 1999
                                                         -------------

     Released Films, less amortization                       $115,663
     Films in Production                                            0
     Films in Development                                     192,598
                                                              -------
                                                             $308,261
                                                              =======

NOTE C - INVESTMENT IN IMMEDIATE ENTERTAINMENT GROUP

On November 9, 1998,  the Company  acquired 20% of the common stock of Immediate
Entertainment Group, Inc.  ("Immediate") for an aggregate of $2,300,000 in cash,
1,477,567  newly issued shares of the Company's  stock and a note payable to the
sellers for $210,803  bearing interest at 5% per annum due upon demand but in no
event  earlier than April 30, 2000.  The  Company's  investment in Immediate has
been  accounted  for using the equity  method.  At January 31, 1999,  the quoted
market  value  of  the  Company's  investment  in  Immediate  was  approximately
$8,675,477.  This valuation  represents a mathematical  calculation based on the
closing price of Immediate's common stock on the NASD over-the-counter  bulletin
board  market and is not  necessarily  indicative  of the amounts  that could be
realized upon sale. Accounts and Notes Receivable include $97,000 of amounts due
from Immediate.  Immediate is a diversified  entertainment  holding company that
provides   services   relating  to  music   production,   audio  recording,   CD
manufacturing,  film soundtrack and script development and operates a mail order
music club.

NOTE D - LITIGATION AND CONTINGENCIES

In the ordinary  course of business,  the Company has or may become  involved in
disputes or litigation.  On the basis of information available to it, management
believes such  contingencies  will not have a materially  adverse  impact on the
Company's financial position or results of operations.

NOTE E - STOCK OPTIONS

The  Company's  1998 Stock Option Plan ("1998  Plan")  provides for the grant of
options to purchase  up to 400,000  shares of the  Company's  common  stock.  At
January 31, 1999, no options were  outstanding  under the 1998 Plan. On November
6, 1998,  in  connection  with a November  6, 1998 Stock  Acquisition  Agreement
("Acquisition  Agreement"),  all of the then outstanding  options under the 1998
Plan were canceled.  For such cancellation,  the option holders received, in the
aggregate,  the sum of $113,754,  representing the difference between $2.35, the
per share purchase price under the Acquisition Agreement, and the exercise price
of $1.22 times 100,667, the number of then outstanding options.

                                       7
<PAGE>
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE E - STOCK OPTIONS (CONTINUED)

The Company has elected to follow  Accounting  Principles  Board Opinion No. 25,
Accounting for Stock Issued to Employees ("APB 25"), and related interpretations
in accounting for its employee stock options because the alternative  fair value
accounting method provided for under Statement of Financial Accounting Standards
No. 123, Accounting for Stock-Based Compensation,  requires the use of valuation
models that were not developed for use in valuing employee stock options.  Under
APB 25,  because the exercise  price of the  Company's  employee  stock  options
equals  the  market  price of the  underlying  stock on the  date of  grant,  no
compensation expense is recognized.

Pro forma information regarding net income and earnings per share under the fair
value  accounting  method for the three and nine month periods ended January 31,
1999 and 1998 has not been presented as the amounts are immaterial.

NOTE F - INCOME TAXES

A  reconciliation  of the provision for income taxes to the expected  income tax
expense at the statutory federal tax rate of 34% is as follows:

                                            Nine Months Ended  Nine Months Ended
                                              Jan. 31, 1999      Jan. 31, 1998

 Computed Expected Tax at Statutory Rate         ($96,157)             $67,274
 Benefit of Prior Years Amended Returns           (19,286)                   0
 State and Local Income Taxes                           0                4,220
 Foreign Taxes                                        346                  232
 Valuation Allowance                               96,157              (67,274)
                                                 ---------             -------- 
                                                 ($18,940)              $4,452
                                                 =========              ======= 

The Company  filed  amended  federal and state tax returns for the fiscal  years
ended April 30, 1997 and 1996 that resulted in a reduction in income tax expense
of $19,286 recorded during the nine month period ended January 31, 1999.

For  federal  income tax  purposes,  the Company has  available  investment  tax
credits of  approximately  $2,166,000  after being reduced by 35% as a result of
the Tax Reform Act of 1986  (expiring  between 2000 and 2002) and net  operating
loss carryforwards of approximately $16,626,000 (expiring between 2001 and 2007)
to offset future income tax liabilities.

Deferred tax assets result from temporary  differences between financial and tax
accounting in the recognition of revenue and expenses. Temporary differences and
carryforwards which give rise to deferred tax assets are as follows:

                                       8
<PAGE>
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE F - INCOME TAXES (CONTINUED)

                                                             As Of
                                                         Jan. 31, 1999
                                                         -------------

   Deferred Revenue                                        $4,000
   Film Cost Amortization                                  18,000
   Net Operating Loss Carryforwards                     6,650,000
   Investment Tax Credit Carryforwards                  2,166,000
   Foreign Tax Credit Carryforwards                       400,000
                                                        ---------
                                                        9,238,000
   Valuation Allowance                                 (9,238,000)
                                                        ---------
                                                               $0
                                                        =========

A valuation allowance of $9,238,000 has been recorded to offset the net deferred
tax assets due to the uncertainty of realizing the benefits of the tax assets in
the future.

NOTE G - RELATED PARTY TRANSACTIONS

On November  6, 1998,  pursuant to a Stock  Acquisition  Agreement,  FAB Capital
Corporation ("FAB"),  MBO Music Verlag GmbH ("MBO"),  Western Union Leasing Ltd.
("Western") and RAS Securities Corp.  (collectively,  the "Acquirors") purchased
421,949, 373,350, 159,461 and 100 shares, respectively,  of the Company's common
stock from the  Estate of Stephen  Friedman  ("Estate")  and FAB  simultaneously
purchased 7,500 shares from Christopher  Trunkey, the Chief Financial Officer of
the  Company,  for a  purchase  price of $2.35  per share or  $2,261,546  in the
aggregate.  Such shares  represented  approximately  50.3% of the Company's then
outstanding common stock.  Phillip Cook,  Chairman,  Chief Executive Officer and
25%  shareholder  of FAB  became  Chairman  and Chief  Executive  Officer of the
Company.

Music Action Ltd.  ("MAC") agreed that it would,  as soon as practicable  but in
any event  within 120 days after  November 6, 1998,  make or cause to be made an
offer to each of the Company's shareholders other than the Acquirors, the Estate
and  Mr.  Trunkey,  for the  purchase  of up to  ninety  percent  (90%)  of such
shareholder's  shares  at a price of $2.35  per share  ("Purchase  Offer").  MAC
agreed  that,  in the event the Purchase  Offer was not made within  ninety days
after  November 6, 1998, it would deposit  $1,800,000  into escrow to be applied
toward the Purchase Offer. FAB agreed to make the $1,800,000 deposit into escrow
in the event MAC did not do so.  On  February  3,  1999,  the Stock  Acquisition
Agreement was amended to eliminate  the Purchase  Offer due to the fact that the
Company's  closing share price  exceeded the $2.35  Purchase Offer price for the
previous ten (10) trading days.

On November 9, 1998,  the Company  acquired 20% of the common stock of Immediate
from FAB,  MBO and Western for an  aggregate of  $2,300,000  in cash,  1,477,567
newly  issued  shares of the  Company's  stock and a note payable to the sellers
("Note") for $210,803 bearing interest at 5% per annum due upon demand but in no
event  earlier than April 30, 2000.  Pursuant to such  transaction  FAB, MBO and
Western,  respectively,  received  $1,016,679,  $898,875  and  $384,446 in cash,
653,131,  577,479 and 246,957  shares of the Company's  common stock and are due
$93,175, $82,424 and $35,204 under the Note.

                                       9
<PAGE>
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE G - RELATED PARTY TRANSACTIONS (CONTINUED)

The Company also entered into a non-binding letter of intent,  pursuant to which
Immediate will merge into a newly formed, wholly owned subsidiary of the Company
in  a  proposed  tax-free  transaction.  The  merger  is  conditioned  upon  the
negotiation and execution of definitive final agreements and the satisfaction of
any legal  requirements  including  the consent of  shareholders,  if  required.
During the quarter  ending  January  31,  1999,  interest  expense of $2,426 was
accrued on the Note. Michael Berresheim,  Chairman,  Chief Executive Officer and
significant   shareholder  of  Immediate  is  the  Managing  Director  and  sole
shareholder of MBO.

On December 17,  1998,  the Company  paid  $25,000 to FAB as  reimbursement  for
expenses it incurred in connection with the pending merger negotiations  between
the Company and Immediate.  On February 9, 1999, the Company paid $25,000 to FAB
as  reimbursement  for legal fees incurred in connection with the pending merger
negotiations between the Company and Immediate.

Subsequent  to November 9, 1998,  the Company has  advanced to Immediate or made
payments to third parties on Immediate's behalf of $97,000. Immediate has agreed
to repay such advances in the event the pending merger negotiations  between the
Company and Immediate are terminated.


                                       10
<PAGE>

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

Recent Developments

         Subsequent to the fiscal year ended April 30, 1995, the Company has not
produced  any new films and has derived  revenues  almost  exclusively  from the
exploitation  of films produced prior to April 30, 1995.  Following the death on
October 4, 1996 of Mr. Stephen Friedman, the Company's founder and then Chairman
of the Board of Directors and Chief Executive Officer,  the Company has explored
various business options,  including, among other things, the liquidation of the
Company,  the sale of the Company as a going  concern to an outside  party,  the
sale of  substantially  all of the assets of the Company to an outside party and
the issuance of shares of common stock to an outside party which would provide a
new source of financing for the Company.  The Company had discussions  with over
twenty outside parties which expressed  varying degrees of interest in acquiring
all or part of the Company or in supplying  additional  capital in return for an
equity interest in the Company.

         On November 6, 1998,  pursuant to a Stock  Acquisition  Agreement,  FAB
Capital  Corporation  ("FAB"),  MBO Music  Verlag GmbH  ("MBO"),  Western  Union
Leasing  Ltd.   ("Western")  and  RAS  Securities   Corp.   (collectively,   the
"Acquirors")   purchased   962,360   shares  of  the   Company's   common  stock
(approximately  50.3% of the Company's then  outstanding  common stock) from the
Estate  of  Stephen  Friedman  ("Estate")  and  Christopher  Trunkey,  the Chief
Financial  Officer of the  Company,  for a purchase  price of $2.35 per share or
$2,261,546 in the aggregate. In addition,  Music Action Ltd. ("MAC") agreed that
it would, as soon as practicable but in any event within 120 days after November
6, 1998, make or cause to be made an offer to each of the Company's shareholders
other than the Acquirors,  the Estate and Mr. Trunkey, for the purchase of up to
ninety percent (90%) of such shareholder's  shares at a price of $2.35 per share
("Purchase  Offer").  MAC agreed that,  in the event the Purchase  Offer was not
made within ninety days after November 6, 1998, it would deposit $1,800,000 into
escrow  to be  applied  toward  the  Purchase  Offer.  FAB  agreed  to make  the
$1,800,000  deposit  into  escrow in the event MAC did not do so. On February 3,
1999,  the Stock  Acquisition  Agreement  was amended to eliminate  the Purchase
Offer due to the fact that the Company's  closing share price exceeded the $2.35
Purchase Offer price for the previous ten (10) trading days.

         On November 9, 1998,  the Company  acquired  20% of the common stock of
Immediate  from FAB,  MBO and Western for an aggregate  of  $2,300,000  in cash,
1,477,567  newly issued shares of the Company's  stock and a note payable to the
sellers  ("Note") for $210,803  bearing interest at 5% per annum due upon demand
but in no event  earlier  than April 30,  2000.  The Company also entered into a
non-binding  letter of intent,  pursuant  to which  Immediate  will merge into a
newly  formed,  wholly owned  subsidiary  of the Company in a proposed  tax-free
transaction.  The merger is conditioned  upon the  negotiation  and execution of
definitive  final  agreements  and the  satisfaction  of any legal  requirements
including  the  consent of  shareholders,  if  required.  Immediate's  principal
business is the production, acquisition and distribution of audio and video CD's
as well as CD-ROM by engaging  artists and  producers  to create  recordings  or
acquiring previously completed recordings.

Results of Operations

The Three Months Ended  January 31, 1999 vs. the Three Months 
Ended January 31, 1998

         For the quarter  ended  January 31, 1999  feature  film  revenues  were
approximately  $243,000 as compared to  approximately  $669,000  for the quarter
ended  January 31, 1998.  The  substantial  decrease in feature film revenues of

                                       11
<PAGE>

approximately  64%  results  primarily  from the fact that the  Company  has not
produced  any new films since the fiscal year ended April 30,  1995.  Until such
time as the Company  either  produces new films or develops and implements a new
overall  strategic plan, the Company expects that its feature film revenues will
continue to decline.  Interest income decreased to  approximately  $4,000 during
the quarter  ended  January 31, 1999 versus  approximately  $33,000 for the same
period last year.  This decrease  results from the  substantial  decrease in the
Company's  cash and  marketable  securities  during the quarter  versus the same
period last year.

         Costs  related to  revenue as a  percentage  of feature  film  revenues
increased  to  approximately  34% for the  quarter  ended  January 31, 1999 from
approximately  28% for the quarter ended January 31, 1998. These costs represent
the amortization of production costs of films that generated  revenue during the
period.  Selling expenses  decreased to approximately  $3,000 during the quarter
ended January 31, 1999 versus approximately $35,000 during the same quarter last
year.  This  decrease in selling  expenses  results from the decrease in feature
film revenues of approximately 65%.

          General and  administrative  costs decreased by  approximately  17% to
approximately  $236,000  during  the  quarter  ended  January  31,  1999  versus
approximately  $282,000 during the same period last year. This decrease  results
primarily  from  a  substantial  decrease  of  approximately  $65,000  in  legal
expenditures  due to the  resolution  in December 1997 and April 1998 of certain
litigation   involving  the  Company  partially  offset  by  increased  investor
relations expenses. In connection with the Stock Acquisition  Agreement,  all of
the then  outstanding  options under the  Company's  1998 Stock Option Plan were
canceled.  For such  cancellation,  the option  holders  received  approximately
$114,000  that was recorded as an expense  during the quarter  ended January 31,
1999.

         The Company had a net loss of  approximately  $221,000  for the quarter
ended January 31, 1999 including equity in losses of affiliates of approximately
$31,000  versus net  income of  approximately  $193,000  for the  quarter  ended
January 31, 1998  reflecting  the Company's  lower  revenues  during the current
quarter versus the same quarter last year.

The Nine Months Ended January 31, 1999 vs. the Nine Months 
Ended January 31, 1998

         For the nine months ended  January 31, 1999 feature film  revenues were
approximately  $465,000  as compared to  approximately  $1,340,000  for the nine
months ended January 31, 1998. The substantial decrease in feature film revenues
of  approximately  65% results  primarily from the fact that the Company has not
produced  any new films since the fiscal year ended April 30,  1995.  Until such
time as the Company  either  produces new films or develops and implements a new
overall  strategic plan, the Company expects that its feature film revenues will
continue to decline.  Interest income decreased to approximately $71,000 for the
nine months ended January 31, 1999 from  approximately  $127,000 during the same
nine month  period last year,  reflecting  the  decrease in cash and  marketable
securities held during the nine month period ended January 31, 1999.

         Costs  related to  revenue as a  percentage  of feature  film  revenues
decreased to  approximately  20% for the nine months ended January 31, 1999 from
approximately  37% for the nine months  ended  January 31, 1998.  This  decrease
results from the fact that a significant  portion of the costs  associated  with
the Company's films have previously been amortized.  Selling expenses  decreased
to  approximately  $32,000  during the nine months ended January 31, 1999 versus
approximately $57,000 during the same nine month period last year.

                                       12
<PAGE>

         General and  administrative  costs  decreased by  approximately  30% to
approximately  $548,000  during the nine  months  ended  January 31, 1999 versus
approximately  $781,000  during  the same nine  month  period  last  year.  This
decrease results primarily from a substantial decrease of approximately $277,000
in legal  expenditures  due to the resolution in December 1997 and April 1998 of
certain litigation involving the Company which was partially offset by increased
investor relations expenses. In connection with the Acquisition  Agreement,  all
of the then outstanding  options under the Company's 1998 Stock Option Plan were
canceled.  For such  cancellation,  the option  holders  received  approximately
$114,000  that was recorded as an expense  during the nine months ended  January
31, 1999.

         The  Company  had a net  loss of  approximately  $264,000  for the nine
months  ended  January  31, 1999  including  equity in losses of  affiliates  of
approximately  $31,000  versus  net  income of  approximately  $134,000  for the
quarter ended January 31, 1998  reflecting the Company's  lower revenues  during
the current nine month period versus the same period last year.

Liquidity and Capital Resources

         The production of motion  pictures  requires  substantial  capital.  In
producing a motion picture, the Company may expend substantial sums for both the
production  and  distribution  of a  picture,  before  that film  generates  any
revenues.  In many instances the Company may obtain  advances or guarantees from
its distributors  but these advances and guarantees  generally may defray only a
portion of a film's cost.  The  Company's  principal  source of working  capital
during the nine  months  ended  January 31,  1999 was motion  picture  licensing
income.  Except for the financing of film production costs,  management believes
that  its  existing  cash  resources  will be  sufficient  to fund  its  ongoing
operations.

         For the nine months ended January 31, 1999, the Company's net cash flow
used in its  operating  activities  was  approximately  $208,000,  a decrease of
approximately  $676,000 as compared to  approximately  $468,000 of net cash flow
provided by operating  activities during the nine months ended January 31, 1998.
This decrease is due primarily to the substantial  decrease of approximately 67%
in feature film revenues  during the nine month period ended January 31, 1999 as
compared to the same period in 1998.

          During the nine months ended  January 31, 1999,  the Company  invested
approximately $5,984,000 for the purchase of 20% of the outstanding common stock
of Immediate.  This investment was funded through the issuance of  approximately
$3,472,000 worth of the Company's common stock,  $2,300,000 of existing cash and
cash equivalents and approximately  $211,000 of borrowings from related parties.
During the nine months  ended  January  31,  1998,  the Company  used cash flow,
primarily  generated  by the  sale  of  marketable  securities,  to  make a cash
distribution to shareholders of approximately $3,957,000 on June 27, 1997. As of
January 31, 1999,  the Company had cash and cash  equivalents  of  approximately
$47,000 as compared to approximately $2,772,000 as of January 31, 1998.

Future Commitments

         The Company has no material commitments for capital  expenditures.  The
Company  will  evaluate the  adequacy of and need for capital  resources  once a
final strategic plan has been developed. (See "Recent Developments").

                                       13
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Forward-Looking Statements

         The  foregoing  discussion,  as  well  as the  other  sections  of this
Quarterly  Report  on Form  10-QSB,  contains  forward-looking  statements  that
reflect the Company's  current views with respect to future events and financial
results.  Forward-looking  statements  usually include the verbs  "anticipates,"
believes," "estimates," "expects," "intends," "plans," "projects," "understands"
and other verbs suggesting  uncertainty.  The Company reminds  shareholders that
forward-looking  statements  are merely  predictions  and  therefore  inherently
subject to uncertainties  and other factors which could cause the actual results
to differ materially from the forward-looking statements. Potential factors that
could  affect  forward-looking  statements  include,  among  other  things,  the
Company's  ability to identify,  produce and  complete  film  projects  that are
successful in the marketplace, to arrange financing,  distribution and promotion
for these  projects  on  favorable  terms in various  markets and to attract and
retain qualified personnel. In addition, the Company is currently seeking merger
and acquisition  proposals for the Company and its plans,  strategies and future
results are subject to the outcome of any such proposals.

PART II - OTHER INFORMATION

Item 2 -  Changes in Securities and Use of Proceeds

     (c) On November  9, 1998,  the Company  issued  1,477,567  shares of Common
Stock as partial  consideration  for its  acquisition of 20% of the  outstanding
common stock of Immediate. See the third paragraph under Note G to the Financial
Statements, above.

Item 6 - Exhibits and Reports on Form 8-K

(a)  Exhibits

         27        Financial Data Schedule.

(b)  Forms 8-K

          On November 20, 1998,  the Company  filed a Form 8-K  reporting  under
Item 1 thereof a change in control of the Company.

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<PAGE>



                                   SIGNATURES

         Pursuant to the  requirements  of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.



Date:  March 15, 1999                       KINGS ROAD ENTERTAINMENT, INC.


                                            By: /s/Phillip Cook
                                                --------------------------
                                               Phillip Cook
                                               Chief Executive Officer