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



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



For the Quarterly Period Ended January 31, 1997     Commission File No.  0-14234



                         KINGS ROAD ENTERTAINMENT, INC.
             (Exact name of Registrant as specified in its charter)


<TABLE>
<S>                                                          <C>       
             Delaware                                      95-3587522
  (State or other jurisdiction                           (I.R.S. Employer
        of incorporation)                               Identification No.)
</TABLE>



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


Registrant's telephone number, including area code:  (310) 552-0057


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                                  YES  X  NO
                                      ---   ---

On March 7, 1997 the Registrant had 5,120,047 shares of its common stock, $.01
par value, issued and outstanding.

<PAGE>   2
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS


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


<TABLE>
<CAPTION>
                                                                 AS OF
                                                             JAN. 31, 1997
                                                            --------------
<S>                                                         <C>         
ASSETS
   Cash and Cash Equivalents                                $    389,665
   Marketable Securities, at market value                      5,210,448
   Accounts Receivable, net of allowance of $10,000              401,157
   Film Costs, net of amortization of $167,475,063               857,700
   Prepaid Expenses                                               19,053
   Fixed Assets                                                   14,999
   Other Assets                                                    2,500
                                                            ------------
TOTAL ASSETS                                                $  6,895,522
                                                            ============

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES
   Accounts Payable                                         $    301,006
   Accrued Expenses                                                5,000
   Deferred Revenue                                               86,814
                                                            ------------
     TOTAL LIABILITIES                                           392,820

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY
   Common Stock, $0.01 par value, 12,000,000 shares
      authorized, 5,120,047 shares issued and outstanding         45,716
   Additional Paid-In Capital                                 24,902,177
   Deficit                                                   (18,445,191)
                                                            ------------
     TOTAL SHAREHOLDERS' EQUITY                                6,502,702
                                                            ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                  $  6,895,522
                                                            ============
</TABLE>


The accompanying notes are an integral part of this statement.


                                       2
<PAGE>   3
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
               CONSOLIDATED STATEMENTS OF OPERATIONS - (UNAUDITED)



<TABLE>
<CAPTION>
                                       FOR THE THREE MONTHS                FOR THE NINE MONTHS
                                         ENDED JANUARY 31,                   ENDED JANUARY 31,
                                    1997               1996               1997            1996
                                 -----------       -----------       -----------       -----------
<S>                              <C>               <C>               <C>               <C>        
REVENUES:
   Feature Films                 $   181,588       $   850,588       $ 1,460,707       $ 2,907,856
   Interest Income                    80,276             7,623           215,288            15,056
   Other Income                          730             7,635             2,079            10,952
                                 -----------       -----------       -----------       -----------
                                     262,594           865,846         1,678,074         2,933,864

COSTS AND EXPENSES:
   Costs Related to Revenue          103,898           826,328           847,311         2,453,541
   Selling Expenses                   22,862            92,977            60,544           402,598
   General & Admin. Exp              139,238           290,027           596,449           813,928
   Interest                                0             1,762                 0            14,154
                                 -----------       -----------       -----------       -----------
                                     265,998         1,211,094         1,504,304         3,684,221

   INCOME/(LOSS) BEFORE
   INCOME TAXES                       (3,404)         (345,248)          173,770          (750,357)

Provision for Income Taxes            (9,092)            8,047            (5,446)           53,591
                                 -----------       -----------       -----------       -----------
   NET INCOME/(LOSS)             $     5,688       ($  353,295)      $   179,216       ($  803,948)
                                 ===========       ===========       ===========       ===========


Net Earnings Per Share           $      0.00       ($     0.07)      $      0.03       ($     0.16)
                                 ===========       ===========       ===========       ===========

Weighted Average Number
of Common Shares                   5,120,047         5,120,047         5,120,047         5,120,047
                                 ===========       ===========       ===========       ===========
</TABLE>



The accompanying notes are an integral part of these statements.




                                       3
<PAGE>   4
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
          CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - (UNAUDITED)



<TABLE>
<CAPTION>
                             Common          Common          Additional                               Total
                              Stock           Stock            Paid-In                            Shareholders'
                             Shares           Amount           Capital            Deficit             Equity
                         ------------      ------------      ------------      ------------       ------------
<S>                      <C>               <C>               <C>               <C>                <C> 
Balance,
   April 30, 1995           5,120,047      $     45,716      $ 24,902,177      ($20,596,138)      $  4,351,755
   Net Income                    --                --                --           1,971,731          1,971,731
                         ------------      ------------      ------------      ------------       ------------
Balance,
   April 30, 1996           5,120,047            45,716        24,902,177       (18,624,407)         6,323,486
   Net Income                    --                --                --             179,216            179,216
                         ------------      ------------      ------------      ------------       ------------
Balance,
   January 31, 1997         5,120,047      $     45,716      $ 24,902,177      ($18,445,191)      $  6,502,702
                         ============      ============      ============      ============       ============
</TABLE>



The accompanying notes are an integral part of these statements.




                                       4
<PAGE>   5

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


<TABLE>
<CAPTION>
                                                            FOR THE NINE MONTHS
                                                              ENDED JANUARY 31,
                                                           1997              1996
                                                        -----------       -----------
<S>                                                     <C>               <C>         
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income/(Loss)                                  $   179,216       ($  803,948)
     Adjustments to reconcile Net Income/(Loss) to
     Net Cash Provided by Operating Activities:
          Depreciation and Amortization                     851,089         2,456,106
     Change in Assets and Liabilities:
          Decrease in Accounts Receivable                   206,962           351,971
          Increase in Prepaid Expenses                      (15,342)             (727)
          Decrease in Other Assets                            3,000                 0
          Decrease in Accounts Payable                       (1,171)         (191,189)
          Decrease in Accrued Expenses                      (86,582)         (148,648)
          Decrease in Income Taxes Payable                  (47,941)          (13,957)
          (Decrease)/Increase in Deferred Revenue          (208,200)          179,000
                                                        -----------       -----------
     NET CASH AND CASH EQUIVALENTS
     PROVIDED BY OPERATING ACTIVITIES                       881,031         1,828,608

CASH FLOWS FROM INVESTING ACTIVITIES:
     Purchase of Marketable Securities                     (763,065)         (500,118)
     Purchase of Fixed Assets                                (7,082)           (9,460)
     Gross Additions to Film Cost                          (126,758)         (472,470)
                                                        -----------       -----------
     NET CASH AND CASH EQUIVALENTS
     USED IN INVESTING ACTIVITIES                          (896,905)         (982,048)

CASH FLOWS FROM FINANCING ACTIVITIES:
     Repayments to Related Party                                  0          (443,132)
                                                        -----------       -----------
     NET CASH AND CASH EQUIVALENTS USED IN
     FINANCING ACTIVITIES                                         0          (443,132)
                                                        -----------       -----------
NET (DECREASE)/INCREASE IN CASH AND
CASH EQUIVALENTS                                            (15,874)          403,428

CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD                                                   405,539           153,920
                                                        -----------       -----------
CASH AND CASH EQUIVALENTS AT END
OF PERIOD                                               $   389,665       $   557,348
                                                        ===========       ===========
</TABLE>

The accompanying notes are an integral part of these statements.


                                       5
<PAGE>   6
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE A - BASIS OF PREPARATION

The accompanying unaudited consolidated 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 consolidated financial
statements and related footnotes for the year ended April 30, 1996, 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, 1997 and the results
of operations and cash flows for the three and nine month periods ended January
31, 1997 and 1996 have been included.

The results of operations for the nine month period ended January 31, 1997 are
not necessarily indicative of the results to be expected for the full fiscal
year. For further information, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form 10-KSB for
the year ended April 30, 1996.

Net Income or Loss per share amounts have been calculated using the weighted
average number of common shares outstanding. Stock options have been excluded as
common stock equivalents because of their antidilutive or non-material effect.

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.

NOTE B - MARKETABLE SECURITIES

In accordance with Statement of Financial Accounting Standards (SFAS) No. 115,
the Company determines the classification of marketable securities at the time
of purchase and reevaluates such designation at each balance sheet. Marketable
securities have been classified as available for sale and are stated at market
value. It is currently the Company's policy to purchase only US Government
securities with maturities less than one year.

NOTE C - FILM COSTS

Film Costs consist of:

<TABLE>
<CAPTION>
                                           As of
                                       Jan. 31, 1997
                                       -------------
<S>                                      <C>     
Released Films, less amortization        $776,784
Films in Production                             0
Films in Development                       80,916
                                         --------
                                         $857,700
                                         ========
</TABLE>



                                       6
<PAGE>   7
                 KINGS ROAD ENTERTAINMENT, INC. AND SUBSIDIARIES
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)


NOTE C - FILM COSTS (CONTINUED)

In accordance with Financial Accounting Standards No. 34, interest costs are
capitalized to feature film productions until the date of completion. No
interest expense was capitalized to Film Costs during the three or nine month
periods ended January 31, 1997 and 1996.

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 AND WARRANTS

The Company's 1987 Non-qualified Stock Option Plan ("1987 Plan") provides for
the grant of options to purchase up to 850,000 shares. At January 31, 1997,
options to purchase up to 635,500 shares were outstanding under the 1987 Plan at
exercise prices ranging from $.25 to $.56 per share. Of the outstanding options
under the 1987 Plan, 485,500 are held by the estate of the Company's founder,
Stephen Friedman, 100,000 by the chief executive officer and 50,000 by another
officer of the Company. Of the outstanding options, 502,375 expire in August
1997, 50,000 expire in November 1999 and 83,125 expire in October 2001.

NOTE F - INCOME TAXES

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

<TABLE>
<CAPTION>
                                                       For the Three
                                                        Months Ended
                                                       Jan. 31, 1997
                                                       -------------
         <S>                                             <C>
         Computed Expected Tax at Statutory Rate         ($ 1,157)
         Federal Income Tax Refund                        (15,812)
         State and Local Income Taxes                       4,020
         Foreign Taxes                                      2,700
         Valuation Allowance                                1,157
                                                         --------
                                                         ($ 9,092)
                                                         ========
</TABLE>
                                                    
For federal income tax purposes, the Company has available investment tax
credits of approximately $2,166,000, after being reduced 35% by the Tax Reform
Act of 1986 (expiring between 2000 and 2002) and net operating loss
carryforwards of approximately $14,100,000 (expiring between 2001 and 2007) to
offset future income tax liabilities.





                                       7
<PAGE>   8
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND RESULTS 
         OF OPERATIONS

RESULTS OF OPERATIONS

                  THREE MONTHS ENDED JANUARY 31, 1997 COMPARED
                     TO THREE MONTHS ENDED JANUARY 31, 1996

         Revenues for the three months ended January 31, 1997 decreased to
approximately $263,000 from approximately $866,000, a decrease of approximately
$603,000, or 70%, over the comparable period of the prior year, primarily as a
result of the Company's decision not to produce or release any new films during
this three month period. During the three months ended January 31, 1997, the
Company primarily derived revenues from films that were not included in the sale
of foreign distribution rights to the Company's film library ("Foreign Sale")
during the prior fiscal year. Future revenues are dependent upon the Company's
ability to develop, produce and release successful motion pictures, which in
turn is dependent upon the Company's ability to generate working capital for the
development, production and release of such motion pictures. (SEE "LIQUIDITY AND
CAPITAL RESOURCES").

         Costs and expenses for the three months ended January 31, 1997
decreased to approximately $266,000 from approximately $1,211,000, a decrease of
approximately $945,000 or 78%, over the comparable period of the prior year.
Costs related to revenue for the three months ended January 31, 1997 decreased
to approximately $104,000 from approximately $826,000, a decrease of
approximately $722,000, or 87%, over the comparable period of the prior year,
primarily due the Company's decision not to produce new films during this three
month period and a corresponding decrease in amortization of production costs.
Selling expenses for the three months ended January 31, 1997 decreased to
approximately $23,000 from approximately $93,000, a decrease of approximately
$70,000, or 75%, over the comparable period of the prior year, due in large part
to the Company's reduced sales activities following the Foreign Sale. General
and administrative expenses for the three months ended January 31, 1997
decreased to approximately $139,000 from approximately $290,000, a decrease of
approximately $151,000, or 52%, over the comparable period of the prior year,
primarily due to significantly reduced salary expenditures and the Company's
relocation to smaller and more cost-effective office space.

         The above factors contributed to net income of approximately $6,000 for
the three months ended January 31, 1997 as compared to a net loss of
approximately $353,000, or $0.07 per share, for the three months ended January
31, 1996.

                   NINE MONTHS ENDED JANUARY 31, 1997 COMPARED
                      TO NINE MONTHS ENDED JANUARY 31, 1996

         Revenues for the nine months ended January 31, 1997 decreased to
approximately $1,678,000 from approximately $2,934,000, a decrease of
approximately $1,256,000, or 43%, over the comparable period of the prior year,
primarily as a result of the Company's decision not to produce or release any
new films during this nine month period. The Company derived revenues primarily
from films that were not included in the Foreign Sale.

         Costs and expenses for the nine months ended January 31, 1997 decreased
to approximately $1,504,000 from approximately $3,684,000, a decrease of
approximately $2,180,000, or 59%, over the comparable period of the prior year.
Costs related to revenue for 




                                       8
<PAGE>   9

the nine months ended January 31, 1997 decreased to approximately $847,000 from
approximately $2,454,000, a decrease of approximately $1,607,000, or 65% over
the comparable period of the prior year, primarily due to a decrease in the
amortization of production costs during the nine month period ended January 31,
1997. Selling expenses for the nine months ended January 31, 1997 decreased to
approximately $61,000 from approximately $403,000, a decrease of approximately
$342,000 or 85% over the comparable period of the prior year, due in large part
to the Company's reduced sales activities following the Foreign Sale. General
and administrative expenses for the nine months ended January 31, 1997 decreased
to approximately $596,000 from approximately $814,000, a decrease of
approximately $218,000 or 27% over the comparable period of the prior year,
primarily due to the aforementioned reduction in salary and office expenditures.

         The above factors contributed to net income of approximately $179,000,
or $0.03 per share, for the nine months ended January 31, 1997 as compared to a
net loss of approximately $804,000, or $0.16 per share, for the nine months
ended January 31, 1996.

LIQUIDITY AND CAPITAL RESOURCES

         The production of motion pictures requires substantial capital. The
Company may expend substantial amounts of money for both the production and
distribution of a motion picture before any revenues are generated by that
motion picture. In many instances the Company obtains advances or guarantees
from its distributors but these advances and guarantees generally defray only a
small portion of a motion picture's total cost. During the three month period
ended January 31, 1997, the Company's principal source of working capital was
motion picture licensing income. Except for the financing of motion picture
production costs, management believes that its existing cash resources will be
sufficient to fund the Company's ongoing operations.

         For the nine month period ended January 31, 1997, the Company's net
cash flow provided by operating activities was approximately $881,000 compared
to approximately $1,829,000 for the comparable period ended January 31, 1996.
For the nine months ended January 31, 1997, net cash and cash equivalents used
in investing activities, primarily the purchase of marketable securities, was
approximately $897,000 compared to approximately $982,000, primarily used for
the purchase of marketable securities and gross additions to film costs, for the
comparable period ended January 31, 1996.

         Cash and cash equivalents decreased to approximately $390,000 at
January 31, 1997 from approximately $557,000 at January 31, 1996. Marketable
securities increased to approximately $5,210,000 at January 31, 1997 from
approximately $500,000 at January 31, 1996.

FUTURE COMMITMENTS

         The Company's expected significant financial commitments relate to the
future production and release of motion pictures. The Company's most recent
films were low-budget productions. Although the Company may continue to produce
low-budget films, it may elect to produce higher budget films if the Company is
able to secure sufficient third party financing and management determines the
reasonableness of the risks associated with a higher budget production. Although
management believes that the Company will be able to obtain financing for the
production of new motion pictures, the Company's financial position and
operations have been, and will continue to be, limited by the availability of
adequate financing from third party sources.





                                       9
<PAGE>   10


         On October 4, 1996, Stephen Friedman, the Company's chief executive
officer and chairman of the Company's board of directors, died. Kenneth Aguado,
an officer of the Company and a member of its board of directors since 1989, was
named chief executive officer and elected chairman by the board of directors.
The Company is continuing operations, but the death of Mr. Friedman, the
Company's founder and key employee, may significantly affect the Company's
financial position and results of operations.

         Following Mr. Friedman's death, the Company's board of directors
reviewed the Company's business plan and determined that additional capital
resources, beyond those currently available to the Company, were necessary to
pursue management's business strategy. On February 12, 1997, the Company
announced that it had begun actively seeking acquisition and merger proposals
for the Company. The Company's inability to locate an appropriate acquisition or
merger candidate would significantly affect management's ability to pursue its
business strategy and could significantly affect the Company's financial
position and results of operations.

         Pursuant to the Purchase and Sale Agreement between the Company and
World Icon Distribution Enterprises C.V ("Icon") dated October 3, 1995,
$1,245,000 was placed in escrow pending completion of Icon's due diligence on
the Foreign Sale. On December 5, 1996, the Company and Icon reached an agreement
in principle ("Agreement") regarding certain claims made by Icon resulting from
their due diligence. Under the terms of the Agreement, the Company would receive
approximately $692,500 of the escrowed funds, plus interest accrued thereon
since February 1996, upon signature of the Agreement. In addition, the Company
would be obligated to pay certain costs associated with the Agreement estimated
to be approximately $155,000. Both parties have agreed to execute the Agreement
following the execution by Icon and various third parties of assumption
agreements whereby Icon would assume certain obligations of the Company under
various industry-wide collective bargaining agreements.


PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS

         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.


ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (A) EXHIBITS

                  None.


         (B) FORMS 8-K

                  None.



                                       10
<PAGE>   11
                                   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.



Dated: March 7, 1997                   KINGS ROAD ENTERTAINMENT, INC.



                                       /s/Christopher M. Trunkey
                                       ------------------------------------
                                       Christopher M. Trunkey
                                       Vice President, Chief Financial and
                                       Administrative Officer and Secretary
                                       (Principal Financial and Accounting 
                                       Officer)




                                       11