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 1934For
      the quarter ended October 31, 2008


-OR-







o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE ACT
      OF 1934For
      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





Large
      accelerated filer o
              Accelerated
      filer oNon-accelerated
      filer o (Do
      not check if a smaller reporting company)
              Smaller
      reporting company þ





Indicate
by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act)oYes   þNo





The
number of shares outstanding of the registrant’s common stock, as of December
12, 2008 was 9,956,493.














KINGS
ROAD ENTERTAINMENT, INC.


FORM
10-Q


Quarter
Ended October 31, 2008





TABLE
OF CONTENTS





PART
      I - FINANCIAL INFORMATION
                      PAGEItem
      1.
                      Financial
      StatementsConsolidated
      Balance Sheets as of October 31, 2008 and April 30, 2008
                      3Consolidated
      Statements of Operations for the Three Months Ended October 31, 2008 and
      2007
                      4Consolidated
      Statements of Operations for the Six Months Ended October 31, 2008 and
      2007
                      5Consolidated
      Statements of Cash Flows for the Six Months Ended October 31, 2008 and
      2007
                      6Notes
      to Consolidated Financial Statements as of October 31,
2008
                      7Item
      2.
                      Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                      12Item
      3.
                      Quantitative
      and Qualitative Disclosures About Market Risk
                      14Item
      4T.
                      Controls
      and Procedures
                      14PART
      II - OTHER INFORMATIONItem
      1.
                      Legal
      Proceedings
                      15Item
      2.
                      Unregistered
      Sales of Equity Securities and Use of Proceeds
                      15Item
      3.
                      Defaults
      Upon Senior Securities
                      15Item
      4.
                      Submission
      of Matters to a Vote of Security Holders
                      15Item
      5.
                      Other
      Information
                      15Item
      6.
                      Exhibits
                      15SIGNATURES
                      16











2




PART
I - FINANCIAL INFORMATION




Item 1. Financial Statements




KINGS
ROAD ENTERTAINMENT, INC.


CONSOLIDATED
BALANCE SHEETS


AS
OF OCTOBER 31, 2008 AND APRIL 30, 2008




October
      31, 2008
                  
                  
                  April
      30, 2008ASSETS
                  
                  (unaudited)
                  
                  
                  (audited)Current
      assets:Cash
      and cash equivalents
                  
                  $
                  18,985
                  
                  
                  $
                  149,765Accounts
      receivable, trade
                  
                  
                  42,359
                  
                  
                  
                  69,594Prepayments
      and other current assets
                  
                  
                  7,552
                  
                  
                  
                  14,190Total
      current assets
                  
                  
                  68,896
                  
                  
                  
                  233,549Other
      assets:Film
      development costs, net
                  
                  
                  569,602
                  
                  
                  
                  524,582Total
      other assets
                  
                  
                  569,602
                  
                  
                  
                  524,582TOTAL
      ASSETS
                  
                  $
                  638,498
                  
                  
                  $
                  758,131LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      liabilities:Accounts
      payable
                  
                  $
                  99,107
                  
                  
                  $
                  26,554Accrued
      expenses
                  
                  
                  272,449
                  
                  
                  
                  345,083Deferred
      revenue
                  
                  
                  766,048
                  
                  
                  
                  807,593Total
      current liabilities
                  
                  
                  1,137,604
                  
                  
                  
                  1,179,230Long
      term liabilities:
                    Stockholder
      loans
                  
                  
                  92,189
                  
                  
                  
                  0Total
      long term liabilities
                  
                  
                  92,189
                  
                  
                  
                  0Total
      liabilities
                  
                  
                  1,229,793
                  
                  
                  
                  0Stockholders’
      deficit:Common
      stock; 12,000,000 shares authorized at $0.01 par value; 9,956,493 shares
      issued and outstanding at October 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
                  
                  
                  (26,448,939
                  )
                  
                  
                  (26,356,829
                  )Accumulated
      other comprehensive income
                  
                  
                  5,914
                  
                  
                  
                  0Total
      stockholders’ equity (deficit)
                  
                  
                  (591,295
                  )
                  
                  
                  (421,099
                  )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                  
                  $
                  638,498
                  
                  
                  $
                  758,131







See
accompanying notes to consolidated financial statements.





3




KINGS
ROAD ENTERTAINMENT, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


FOR
THE THREE MONTHS ENDED OCTOBER 31, 2008 AND 2007


(Unaudited)





Three
      months ended October 31,2008
                  
                  
                  2007REVENUESFeature
      film royalty revenue
                  
                  $
                  91,704
                  
                  
                  $
                  199,305Service
      productions
                  
                  
                  37,000
                  
                  
                  
                  0TOTAL
      REVENUE
                  
                  
                  128,704
                  
                  
                  
                  199,305OPERATING
      EXPENSES:General
      and administrative
                  
                  
                  128,634
                  
                  
                  
                  141,502Project
      expenses
                  
                  
                  16,200
                  
                  
                  
                  0Total
      operating expenses
                  
                  
                  144,834
                  
                  
                  
                  141,502INCOME
      (LOSS) FROM OPERATIONS
                  
                  
                  (16,130
                  )
                  
                  
                  57,803OTHER
      INCOME/EXPENSE:Interest
      income
                  
                  
                  0
                  
                  
                  
                  1,209Interest
      expense
                  
                  
                  (1,834
                  )
                  
                  
                  0Total
      other income
                  
                  
                  (1,834
                  )
                  
                  
                  1,209INCOME
      (LOSS) BEFORE INCOME TAXES
                  
                  
                  (17,964
                  )
                  
                  
                  59,012PROVISION
      FOR INCOME TAXES
                  
                  
                  0
                  
                  
                  
                  0NET
      INCOME (LOSS)
                  
                  $
                  (17,964
                  )
                  
                  $
                  59,012OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation
                  
                  
                  6,393
                  
                  
                  
                  0COMPREHENSIVE
      INCOME (LOSS)
                  
                  $
                  (11,571
                  )
                  
                  $
                  59,012Net
      income (loss) per share – Basic and Diluted
                  
                  $
                  (0.00
                  )
                  
                  $
                  0.01Basic
      weighted average number of shares outstanding during the
      period
                  
                  
                  9,956,493
                  
                  
                  
                  5,949,971








See
accompanying notes to consolidated financial statements.





4




KINGS
ROAD ENTERTAINMENT, INC.


CONSOLIDATED
STATEMENTS OF OPERATIONS


FOR
THE SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007


(Unaudited)





Six
      months ended October 31,2008
                          
                          
                          2007REVENUESFeature
      film royalty revenue
                          
                          $
                          162,498
                          
                          
                          $
                          243,359Service
      productions
                          
                          
                          37,000
                          
                          
                          
                          0TOTAL
      REVENUE
                          
                          
                          199,498
                          
                          
                          
                          243,359OPERATING
      EXPENSES:General
      and administrative
                          
                          
                          273,219
                          
                          
                          
                          219,425Project
      expenses
                          
                          
                          16,200
                          
                          
                          
                          0Total
      operating expenses
                          
                          
                          289,419
                          
                          
                          
                          219,425INCOME
      (LOSS) FROM OPERATIONS
                          
                          
                          (89,921
                          )
                          
                          
                          23,934OTHER
      INCOME/EXPENSE:Interest
      income
                          
                          
                          0
                          
                          
                          
                          3,156Interest
      expense
                          
                          
                          (2,189
                          )
                          
                          
                          0Total
      other income
                          
                          
                          (2,189
                          )
                          
                          
                          3,156INCOME
      (LOSS) BEFORE INCOME TAXES
                          
                          
                          (92,110
                          )
                          
                          
                          27,090PROVISION
      FOR INCOME TAXES
                          
                          
                          0
                          
                          
                          
                          0NET
      INCOME (LOSS)
                          
                          $
                          (92,110
                          )
                          
                          $
                          27,090OTHER
      COMPREHENSIVE INCOMEForeign
      currency translation
                          
                          
                          5,914
                          
                          
                          
                          0COMPREHENSIVE
      INCOME (LOSS)
                          
                          $
                          (86,196
                          )
                          
                          $
                          27,090Net
      income (loss) per share – Basic and Diluted
                          
                          $
                          (0.01
                          )
                          
                          $
                          0.00Basic
      weighted average number of shares outstanding during the
      period
                          
                          
                          10,286,928
                          
                          
                          
                          5,878,624








See
accompanying notes to consolidated financial statements.





5




KINGS
ROAD ENTERTAINMENT, INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE SIX MONTHS ENDED OCTOBER 31, 2008 AND 2007


(Unaudited)





Six
      months ended October 31,2008
                                
                                
                                2007CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      Income (loss)
                                
                                $
                                (92,110
                                )
                                
                                $
                                27,090Adjustments
      to reconcile net income (loss) to net cash (used in)operating
      activities:Common
      stock issued for services
                                
                                
                                0
                                
                                
                                
                                41,000Change
      in operating assets and liabilities:Accounts
      receivable, trade
                                
                                
                                27,235
                                
                                
                                
                                0Prepayments
      and other current assets
                                
                                
                                6,638
                                
                                
                                
                                0Film
      development costs
                                
                                
                                (45,020
                                )
                                
                                
                                0Accounts
      payable
                                
                                
                                72,553
                                
                                
                                
                                (379,795
                                )Accrued
      expenses
                                
                                
                                (72,634
                                )
                                
                                
                                10,933Deferred
      revenue
                                
                                
                                (41,545
                                )
                                
                                
                                (77,713
                                )NET
      CASH USED IN OPERATING ACTIVITIES
                                
                                
                                (144,883
                                )
                                
                                
                                (378,485
                                )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from stockholder loans
                                
                                
                                92,189
                                
                                
                                
                                0Common
      stock purchased for cash
                                
                                
                                (84,000
                                )
                                
                                
                                (8,000
                                )NET
      CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
                                
                                
                                8,189
                                
                                
                                
                                (8,000
                                )FOREIGN
      CURRENCY TRANSLATION
                                
                                
                                5,914
                                
                                
                                
                                0NET CHANGE IN CASH AND CASH
      EQUIVALENTS
                                
                                
                                (130,780
                                )
                                
                                
                                (386,485
                                )CASH
      AND CASH EQUIVALENTS, BEGINNING OF PERIOD
                                
                                
                                149,765
                                
                                
                                
                                553,648CASH
      AND CASH EQUIVALENTS, END OF PERIOD
                                
                                $
                                18,985
                                
                                
                                $
                                167,163






See
accompanying notes to consolidated financial statements.








6







KINGS
ROAD ENTERTAINMENT, INC.


Notes
to Consolidated Financial Statements


As
of October 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.  Kings Road Entertainment, Inc. was
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 United States 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
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 necessary to present fairly
the Company's financial position at October 31, 2008, the results of operations
for the three month and six month periods ended October 31, 2008 and cash flows
for the six month period ended October 31, 2008 have been included. The results
of operations for the three and six month periods ended October 31, 2008, are
not necessarily indicative of the results to be expected for the full fiscal
year.




b.
Principles of Consolidation





The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiaries. As of October 31, 2008, the Company 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 October 31, 2008. Kings Road
Entertainment Europe GmbH was active and facilitates international
co-productions. All material intercompany balances and transactions have been
eliminated in consolidation.




c. 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.


7





d. Newly
Issued Accounting Pronouncements




In
December 2007, the Financial Accounting Standards Board (“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 after April 30, 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 after
April 30, 2009 for the Company. 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 FAS No. 157, “Fair Value Measurements”
(“FAS 157”). FAS 157 establishes a common definition of fair value to be used
whenever GAAP requires (or permits) assets or liabilities to be measured at fair
value, and does not expand the use of fair value in any new circumstances. It
also requires expanded disclosure about the extent to which companies measure
assets and liabilities at fair value, the information used to measure fair
value, and the effect of fair value measurements on earnings. On
February 12, 2008, the FASB issued FASB Staff Position No. FAS
No. 157-2, “Effective Date of FASB Statement No. 157” (“FSP 157-2”)
which defers the effective date for all nonfinancial assets and nonfinancial
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis (that is, at least annually), to
fiscal years beginning after November 15, 2008. In addition, in February
2007, the FASB issued FAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities-including an amendment of FASB
Statement No. 115” (“FAS 159”). FAS 159 expands the use of fair value
accounting but does not affect existing standards that require assets or
liabilities to be carried at fair value. Under FAS 159, a company may elect to
use fair value to measure most financial assets and liabilities and any changes
in fair value are recognized in earnings. The fair value election is irrevocable
and generally made on an instrument-by-instrument basis, even if a company has
similar instruments that it elects not to measure based on fair value. The
Company does not anticipate that adoption of these standards will have a
material effect on its financial statements.




e.
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 have not issued any preferred shares.





f.
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 stockholders’ equity.


8





NOTE
3 – CURRENT ASSETS





a. Cash
and Cash Equivalents




Cash
equivalents consist of cash on hand and cash on deposit at 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 October
31, 2008, the Company had $42,359 in accounts receivable, none of which were
with foreign distributors.






NOTE
4 – FIXED & OTHER ASSETS





a. Fixed
Assets





Fixed
assets of the Company at October 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 October 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. 144, “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 or fair value less the costs to sell.





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 Statement of Financial Accounting Standard No. 139.
("SFAS 139"), 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
October 31, 2008, film development costs totaled $569,602 which was
net after an allowance of $30,000. During the three month period ended October
31, 2008, no film development costs were determined to be impaired.








9








NOTE
5 – DEFERRED REVENUE





Deferred
revenue recognized in accordance with Statement of Position 00-2 “Accounting by
Producers or Distributors of Films” (“SOP 00-2”). As of October 31, 2008, the
Company has deferred revenue totaling $766,048.






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 $13,873 and
$10,793 during the three months ended October 31, 2008 and 2007, respectively
and $25,616 and $21,586 during the six months ended October 31, 2008 and 2007,
respectively. All rental agreements may be terminated upon one month’s
notice.




b.
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.





c.
Stockholder Loans





As of
October 31, 2008, the Company had borrowed $90,000 from its two largest
stockholders under the terms of an arrangement dated July 15, 2008, which
authorized the borrowing of up to $500,000 from stockholders of the Company to
fund working capital and other needs (the “Stockholder Loans”). The interest
charge is accrued with the principal amount of the loans on the Balance Sheet
and expensed on the Statement of Operations.  The Company disclosed
the preceding transaction in a Form  8-K filed on July 21,
2008.




d. Other
Commitments and Contingencies





The
Company settled 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.   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 October 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. 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.


10


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.





The
Company may also derive revenues from service production contracts. Third
parties may engage the Company to develop or produce film projects on a
consulting basis. These revenues will generally be recognized in the period
in which the work is performed and accrued. The timing difference between the
cash flows and the recognition of revenue is recorded as deferred revenue where
the cash received exceeds the actual work performed or as accounts receivable
where work performed exceeds the payments received.








NOTE
8 – COMMON AND PREFERRED STOCK





At
October 31, 2008, the Company had 12,000,000 authorized shares of common stock,
of which 9,956,493 shares were issued and outstanding.  On November 3,
2008, the Company filed a Certificate of Amendment (the “Amendment”) to its
Restated Certificate of Incorporation with the Secretary of State of the State
of Delaware. Pursuant to the Amendment, the Company’s authorized capital was
increased from 12,000,000 shares to 52,000,000 shares, including 50,000,000
shares of Common Stock, $.01 par value and 2,000,000 shares of “blank check”
Preferred Stock, $.01 par value.








N0TE
9 – 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 October 31, 2008, the
Company has sustained recent losses from operations, has a deficit in
working capital of $1,068,708 and has an accumulated deficit of
approximately $26,448,939. 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.





11




ITEM
2.   MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS





The
following discussion concerns the periods ended October 31, 2008 and October 31,
2007, which should be read in conjunction with the financial statements and
notes thereto appearing elsewhere in this document as well as the Form 10-KSB
for the fiscal year ending April 30, 2008.





Results of Operations





The
Three Months Ended October 31, 2008 vs. the Three Months Ended October 31,
2007





For the
quarter ended October 31, 2008, operating revenues were $128,704 as compared to
$199,305 for the quarter ended October 31, 2007. The decrease of $70,601 results
primarily from decreased revenue from distribution of the Company's feature film
library which was only partly offset by an increase in service production
revenues of $37,000.  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 $144,834 for the quarter ended October 31, 2008 as compared
to $141,502 during the quarter ended October 31, 2007. This slight increase of
$3,332 is primarily due to an increase in direct project expenses of $16,200
associated with the increase in service production revenues, an increase in
selling expenses of approximately $20,000 and an increase in producer and
administrative payroll of approximately $18,000. These increases were partially
offset by a decrease in consulting fees of approximately $20,000, the value of
shares issued to Directors for services of approximately
$16,000,  travel expenses of approximately $10,000 and a reduction in
legal fees of approximately $5,000.  Although legal fees associated
with litigation have significantly decreased, the Company incurred legal fees
during the quarter due to the fees associated with an SEC administrative process
concerning the Company’s previous filing delinquency. With the resolution of
past lawsuits and the SEC administrative procedure, the Company has been able to
focus its activities on its core business and the implementation of its business
plan. This has resulted in the aforementioned increase in selling expenses and
producer and administrative payroll in comparison to the corresponding period in
2007.





The
Company had a net loss of $17,964 for the quarter ended October 31, 2008 as
compared to net income of $59,012 for the quarter ended October 31, 2007. The
increase in net loss of $76,976 results primarily from the decrease in
revenues.





The
Six Months Ended October 31, 2008 vs. the Six Months Ended October 31,
2007





For the
six months ended October 31, 2008, operating revenues were $199,498 as compared
to $243,359 for the six months ended October 31, 2007. The decrease of $43,861
results primarily from decreased revenue from distribution of the Company's
feature film library which was only partly offset by an increase in service
production revenues.





Costs and
expenses amounted to $289,419 for the six months ended October 31, 2008 as
compared to $219,425 during the six months ended October 31, 2007. This increase
of $69,994 is primarily due to increases in direct project expenses of $16,200
associated with the increase in service production revenues, an increase in
selling expenses of approximately $20,000 and an increase in producer and
administration payroll of approximately $36,000.





The
Company had net loss of $92,110 for the six months ended October 31, 2008 as
compared to net income of $27,090 for the six months ended October 31, 2007.
This increase in net loss of $119,200 results primarily from the decrease in
revenues, increases in project expenses, and producer and administrative
payroll.





12


Liquidity
and Capital Resources





The
Company's principal source of working capital during the three and six month
periods ended October 31, 2008 was feature film royalty revenues and stockholder
loans. The Company does not currently have sufficient working capital to fund
its operations. The Company is presently investing in new film projects and is
seeking external financing and other alternatives necessary to raise
capital.  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.





For the
six months ended October 31, 2008, the Company's net cash flow used in operating
activities was $144,883 compared to net cash used by operating activities of
$378,485 during the six month period ended October 31, 2007. Net cash flow
provided by financing activities was $8,189 for the six months ended October 31,
2008 compared to net cash used by financing activities of $8,000 during the six
month period ended October 31, 2007. At October 31, 2008, the Company had cash
of $18,985 as compared to $167,163 at October 31, 2007.  The Company’s
decline in cash is primarily attributable to operating losses and investments in
film projects.








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.








Disclosure Regarding Forward Looking
Statements





This
quarterly report on Form 10-Q 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





Forward-looking
statements 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.   We
disclaim any obligation to publicly update these statements, or disclose any
difference between its actual results and those reflected in these
statements.








13





ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





Not
applicable.





ITEM
4T. CONTROLS AND PROCEDURES.





Disclosure
Controls And Procedures





As
required by SEC Rule 13a-15 or Rule 15d-15, our Chief Executive and Chief
Financial Officers 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 as of the end of the period
covered by this report. Based on the foregoing evaluation, they have concluded
that our disclosure controls and procedures were not effective as of October 31,
2008 since they do not allow for information required to be disclosed by us in
the reports that we file or submit under the Exchange Act to be recorded,
processed, summarized and reported, within the time periods specified in the
SEC's rules and forms. Specifically, we identified  material
weaknesses in our internal control over financial reporting as described in Item
8A and 8A(T) in our Annual Report on Form 10-KSB for our fiscal year ended April
30, 2008 and those deficiencies have not yet been remediated by us. Disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by us in the
reports that we file or submit under the Exchange Act is accumulated and
communicated to our management, including our Chief Executive and Chief
Financial Officers as appropriate to allow timely decisions regarding required
disclosure.





Internal
Control Over Financial Reporting




Pursuant
to Rule 13a-15(d) or Rule 15d-15(d) of the Exchange Act, our management, with
the participation of the Company’s Chief Executive and Chief Financial Officers,
is responsible for evaluating any change in the Company's internal control over
financial reporting (as defined in Rule 13a-15(f) or Rule 15d-15(f) under the
Exchange Act), that occurred during the Company’s fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Company's
internal control over financial reporting.





Based on
the foregoing evaluation, we have concluded that there was no change in our
internal control over financial reporting that occurred during the fiscal
quarter ended October 31, 2008, that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.  We continue to have  material weaknesses in our
internal control over financial reporting as described in Item 8A and 8A(T) in
our Annual Report on Form 10-KSB filed for our fiscal year ended April 30, 2008
and those deficiencies have not yet been remediated by us.








14





PART
II - OTHER INFORMATION





ITEM
      1.
            LEGAL
      PROCEEDINGS





As of
December 12, 2008, the Company was not aware of any pending claims or
assessments, which may have a material adverse impact on the Company's financial
position or results of operations.





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





None.





ITEM
      3.
            DEFAULTS
      UPON SENIOR SECURITIES





None.





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





On
October 24, 2008, the Company’s stockholders approved by written consent an
amendment to the Company’s Restated Certificate of Incorporation (the
“Amendment”).  Stockholders holding 7,320,346 shares (representing
73.5% of the shares entitled to vote) executed and delivered to us written
consents approving the Amendment. Stockholders holding 300,000 shares
(representing 3.9% of the shares entitled to vote) withheld their
vote.   The Amendment increased the number of authorized shares
of common stock, $0.01 par value, from 12,000,000 to 50,000,000 and authorized
2,000,000 shares of “blank check” preferred stock, $0.01 par value.




ITEM
      5.
            OTHER
      INFORMATION





None.








ITEM
      6.
            EXHIBITS








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
            Certifications
      of Chief Executive Officer and Chief Financial Officer pursuant to Section
      906 of the Sarbanes-Oxley Act of
2002.






15


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.Date:  December
      15, 2008
                By:
                /s/
      Philip HolmesPhilip
      Holmes, Chief Executive Officer




16